1.3 - Identify the competitive forces that impact on relationships in supply chain

Question 1

Name porters 5 forces

Answer 1

1. Potential substitutes
2. Threat of new entrants
3. Bargaining strength of suppliers
4. Bargaining strength of buyers
5. competitive rivalry

Question 2

Is porters 5 forces micro or macro

Answer 2

Micro-environmental analysis

Question 3

Name 8 types of market

Answer 3

1. Monopoly
2. Duopoly
3. Oliogopoly
4. Imperfect competition
5. Monopolistic competition
   6.Perfect competition
6. Oligopsony
7. Monopsony

Question 4

Monopoly

Answer 4

A situation where one supplier has the entire market share and there is no competition

Question 5

Sole-source

Answer 5

When the buyer has no choice and has only one potential supplier to contract with in the marketplace

Question 6

Merger

Answer 6

A mutual decision for organisations to form a joint ownership

Question 7

Acuisition

Answer 7

The method by which an organisation takes ownership of another organisation

Question 8

Price elasticity

Answer 8

A measure of the change in demand for a product or service in relation to changes in its price. If a product is price elastic, the more the price is reduced the more demand will rise. Generally for a product to be price elastic there will need to be a number of substitute products. price elasticity of demand is a measure of how responsive the demand for a product is in relation to its price

Question 9

Barriers to entry

Answer 9

An economic term describing the existence of obstacles (such as high start up costs) that prevent new competitors from entering an industry or business sector

Question 10

Name the supplier power, buyer power and example of a monopoly

Answer 10

1. Very high
2. Very low
3. Utilities such as water

Question 11

Name the supplier power, buyer power and example of a duopoly

Answer 11

1. High
2. Low
3. Commercial alliance such as airbus and boeing

Question 12

Name the supplier power, buyer power and example of a oligpopoly

Answer 12

1. High
2. Low
3. Oil and gas companies

Question 13

Name the supplier power, buyer power and example of a imperfect competition

Answer 13

1. Weakening
2. Strengthening
3. See examples for monopoly and oligopoly

Question 14

Name the supplier power, buyer power and example of a monopolistic competition

Answer 14

1. Strengthening
2. Weakening
3. Possible where supplier can differentiate, such as restaurants and hotels

Question 15

Name the supplier power, buyer power and example of a perfect competition

Answer 15

1. Low
2. Very High
3. Agricultural produce

Question 16

Name the supplier power, buyer power and example of a Oligopsony

Answer 16

1. Low
2. Very High
3. NHS example with premier league club investment

Question 17

Name the supplier power, buyer power and example of a Monopsony

Answer 17

1. very low
2. Very high
3. Large retail supermarket retailers such as Walmart

Question 18

Name 5 factors that affect rivalry between companies

Answer 18

1. Industry growth or decline
2. Product differences/brand identities
3. Switching costs
4. Diversity of competitors
5. Exit barriers

Question 19

Name 7 barriers to entry

Answer 19

1. Economies of scale
2. Access to capital and high start up costs
3. Licences and permits
4. Strong brand identities already dominant in the marketplace
5. High switching costs for buyers to switch to alternative products and services
6. Access to distribution networks
7. Government policy

Question 20

Name 4 factors that affect substitution

Answer 20

1. Relative price performance of substitutes
2. Switching costs for buyers
3. Fashion, technology and market trends including the dominance of influencers and marketing investment
4. Buyer propensity to substitute nd how they evaluate the economic benefits

Question 21

Name 4 factors that mean supplier power is strong

Answer 21

1. Supplier can differentiate it offering
2. Switching costs for buyers are high
3. There is a lack of substitute products or services
4. There are a number of suppliers in the marketplace

Question 22

Monopsony

Answer 22

A market with only one buyer

Question 23

Backward integration

Answer 23

A situation where the buying organisation purchases one of its suppliers of raw materials. The raw materials supplier is further back in the supply chain

Question 24

Forward integration

Answer 24

A situation where an organisation purchases a customer or agent managing its customer delivery mechanisms

Question 25

Vertical intergration

Answer 25

When a buyer owns companies within its supply chain. there could be forward vertical integration where a buyer owns a distributor, or backward vertical integration where a buyer owns one of its suppliers of raw materials

Question 26

Horizontal integration

Answer 26

A situation when an organisation buys or merges with a competitor in the marketplace usually to increase its competitive volume

Question 27

Name 6 factors that affect buyer power

Answer 27

1. The number of buyers in the marketplace versus the number of suppliers 2. The volume of purchases made by buyers 3. Costs for buyers 4. Availability of information for decision making 5. Ability to integrate, whether backwards, forwards, vertically or horizontally 6. Substitution of products and services

Question 28

Name the 4 sections of the matrix developed by Cox 2000 (effect of buyer and supplier power)

Answer 28

1. Buyer dominance 2. Interdependence 3. Independence 4. Supplier dominance

Question 29

What does STEEPLED analyse?

Answer 29

Potentail external influences and risks that could affect a company or marketplace

Question 30

What does STEEPLED stand for?

Answer 30

Social Technological Economic Environmental Political Legislative Ethical Demographical

Question 31

Disruptive technologies

Answer 31

New or enhanced technologies that replace or affect existing technology making it obsolete. An example is cloud computing services which are a disruptive technology for in-house services

Question 32

Business cycle

Answer 32

The rise and fall over time of output in an economy as measured by gross domestic product

Question 33

Globalisation

Answer 33

The process by which the world is becoming more interconnected, which means that events in one location are shaped by things that happen many miles away. Companies are also increasingly affected by global and long wave economic cycles

Question 34

Name the 4 stages of the business cycle

Answer 34

1. Peak 2. Recession 3. Slump 4. Recovery

Question 35

Force majeure

Answer 35

A contract exclusion clause, limiting liability when a party is unable to fulfil its obkigations under a contract due to genuinely unforeseen and unpreventable circumstances such as earthquakes. Force majeure events are often referred to as acts of god

Question 36

Corporate social responsibility (CSR)

Answer 36

An organisational sustainability framework to embed into strategy and operations and supply chains to have a positive global impact

Question 37

Ethical sourcing

Answer 37

Ensuring that products are obtained in a responsible and sustainable way that demonstrates respect for the people who produce them and for the environment