Core Activity B: Evaluate the business ecosystem and business environment

Question 1

If we have a new product and new market what growth strategy do we adopt?

Answer 1

Diversification

Question 2

If we have a new product and existing market what growth strategy do we adopt?

Answer 2

Product development

Question 3

If we have a existing product and new market what growth strategy do we adopt?

Answer 3

Market development

Question 4

If we have a existing product and existing market what growth strategy do we adopt?

Answer 4

Market Penetration

Question 5

What are the drivers of environmental change?

Answer 5

Technology
Unpredictable demand
Globalisation
Emerging economies
Geopolitics
Changing demographics
Customer empowerment
Automation
Sustainability

Question 6

What does PESTEL stand for?

Answer 6

Political
Economic
Social
Technological
Environmental/Social Responsibility
Legal

Question 7

What are Porter’s 5 forces?

Answer 7

Threat of new entrants
Power of suppliers
Threat of substitutes
Power of buyers
Rivalry

Question 8

What is the four stage of the product life cycle?

Answer 8

Intro
Growth
Maturity
Decline

Question 9

What are Porter’s diamond?

Answer 9

Demand Conditions
Related and Supporting Industries
Factor Conditions
Strategy, Structure and Rivalry

Question 10

What are the 9M’s of resource audit?

Answer 10

Manpower
Money
Management
Machinery
Markets
Materials
Methods
MIS
Make-up

Question 11

What are the 5 types of power?

Answer 11

Positional
System
Expert
Resource
Personal

Question 12

How do we deal with conflict resolution?

Answer 12

Satisficing
Side Payments
Exercise of power
Sequential Attention

Question 13

What are the three building blocks?

Answer 13

Dimensions
Standards
Rewards

Question 14

What is internal benchmarking?

Answer 14

Same company different department

Question 15

What is process benchmarking?

Answer 15

Different company similar process

Question 16

What is competitor benchmarking?

Answer 16

Similar process direct competition

Question 17

What does SLOWCAT stand for with shareholder value added (SVA)?

Answer 17

Sales growth rate
Life of the project
Operating margin
Working capital
Cost of capital
Asset investment
Taxation

Question 18

What are the 3P’s of triple bottom line?

Answer 18

People
Planet
Profit

Question 19

What are the 3 types of risk?

Answer 19

Political risk
Currency risk
Interest rate risk

Question 20

What is political risk management?

Answer 20

Entering into foreign joint ventures
Obtaining agreements and contracts with foreign governments
Using local financing
Eventual ownership/part-ownership by foreign country’s investors

Question 21

What is currency risk types?

Answer 21

Translation risk
Transaction risk
Economic risk

Question 22

What are some internal methods of transaction risk management?

Answer 22

Home currency
Leading/lagging
Matching/netting
Countertrade

Question 23

What is the external methods of transaction risk management?

Answer 23

Forward contracts
Money market hedges
Currency futures
Currency options
Currency swaps

Question 24

What are some external hedging techniques?

Answer 24

Forward
Money market hedge
Future
Options

Question 25

What are forward hedging technique?

Answer 25

Fixed date Fixed rate Tailor made Contractual obligation

Question 26

Whats a money market hedge?

Answer 26

Bring forward conversion of currency to today Create matching asset/liability

Question 27

What are futures?

Answer 27

Standardised contract Tradable Range of future dates Effectively fixes the rate

Question 28

What are options?

Answer 28

Standardised contract Tradable Insurance Downside risk covered by option

Question 29

What are some internal method of interest rate risk management?

Answer 29

Smoothing Matching Netting

Question 30

What are some external methods of interest rate risk management?

Answer 30

Forward rate agreements Interest rate guarantees Interest rate futures Exchange traded interest rate options Interest rate swaps