Learning Outcome 2

Question 1

What are the two main groups that manufacturing companies fall into?

Answer 1

Group 1 - Made up of a few very large organisations with high bargaining power. For example, Steel.
Group 2 - fragmented, with many smaller suppliers, with little bargaining power. For example, components.

Question 2

What are the biggest barriers to new entries into the construction market?

Answer 2

Barriers are considered very high. Experience and reputation of establised suppliers.

Question 3

What are the three main segments of the financial services industry?

Answer 3

1. Financial services - banks, credit unions, building societies.
2. Insurance & Pension funding - health, property.
3. Auxiliary activities - commodity, stock exchange, brokerages

Question 4

One process for collecting and analysing data is the OWN-IT process. This is an acronym for the five steps in the process. What are the five steps?

Answer 4

1. Outline
2. Wide search
3. Narrow Search
4. Increase stockpile of infomation.
5. Transform information into new knowledge.

Question 5

List the factors that determine the intensity of rivalry among competitors.

Answer 5

1. Many or Equal size suppliers
2. Slow industry growth
3. High fixed costs
4. Lack of differentiation and switching costs
5. Capacity is added in significant amounts.
6. High exit barriers.