Page 143 - BA1 Integrated Workbook STUDENT 2018

Supplementary objective test questions

CHAPTER 4 – EXTERNAL ENVIRONMENTAL ANALYSIS

4.1 Y plc wishes to analyse its external position. Y’s management is confident that
there is little change to the company’s macro-environment, but it is concerned
that the industry that Y operates in is undergoing significant change. Y’s
management feels that it is important for the company to identify and analyse
these changes in detail.

Which of the following options is the most suitable model of external
environmental analysis for Y to use?

A Porter’s diamond

B PEST

C Porter’s five forces

D Product life cycle

4.2 XCX is a film studio based in country V. The industry is dominated by several
large studios which have large budgets for their movies and have a 75% market
share. Films are released very regularly in the market, with each competing to
attract viewers. Total viewer numbers have remained static for many years.

XCX is an independent studio and has struggled to compete with its larger
rivals, managing to achieve a 2% market share in the previous year.

However, last month XCX was offered the exclusive film rights to a very popular
series of books. While acquiring the rights would be expensive, the
management of XCX believe that the films would be extremely successful and
earn a large return for the studio, which could then be reinvested in more films
to compete with those produced by XCX’s larger rivals.

Which of the following options correctly identify the effect that the
acquisition of the book rights would have on XCX’s five forces analysis?
Select ALL that apply.

A Supplier power will rise

B Threat of substitutes will rise

C Customer power will rise

D Customer power will fall

E Threat of substitutes will fall

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