LO4 Foundation Dip (Unit 3)

Why will a small business struggle to compete it a mass market served largely by big businesses?

• Big businesses provide better products

• Big businesses experience economies of scale

• Small businesses don't understand mass markets

• Small businesses can't recruit talent

In Porter's Five Forces, if the threat of new entrants is high, industry profits are likely to be low. Which two are reasonable explanations for this?

• Barriers to entry are low

• New entrants will struggle to provide substitute products

• New entrants will provide competition leading to lower prices

• New entrants will steal market share from existing businesses

In the Boston Matrix, a product with a high market share, but low market growth is which type of product?

• Star

• Cash cow

• Question mark

• Dog

In the Boston Matrix a business's product has a low market share but is in a market offering high growth potential. Which product is this?

• Star

• Cash cow

• Question mark

• Dog

One criticism of the Boston Matrix is that it focuses too much on market share and market growth. This type of product, whilst might be let go by mass market producers, could be very profitable for a niche business.

• Star

• Cash cow

• Question mark

• Dog

Which type of product in the Boston Matrix is most likely to require the most investment from the revenues of cash cows if to be successful?

• Star

• Cash cow

• Question mark

• Dog

A business in a highly profitable industry is most likely to experience which of Porters Five Forces?

• High bargaining power of suppliers

• High bargaining power of customers

• High barriers to entry

• High threat of substitutes?

Which is NOT a valid reason for dismissing Quantitative sales forecasting methods? (time series analysis and extrapolation)

• History doesn't always repeat itself

• Intuition may be more accurate

• Changing external factors often mean quantitative forecasts will be inaccurate

• Past trend information is usually pretty inaccurate

Customer bargaining power is likely to be highest when?

• The business is satisfying the needs of just one or a few customers who have choice of suppliers

• The business is satisfying the needs of one or just a few customers who have little choice of suppliers

• The business is satisfying the needs of many consumers who have lots of choice

• The business is satisfying the needs of many consumers who don't have lots of choice

All are ways in which a differentiator may compete except which one?

• Faster delivery

• Higher quality

• Having lower costs

• Offering Multi-channels of distribution