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NEW QUESTION # 173
'tail spend' is a common category used in procurement and describes a category of items. What characteristics do theses items have?
Answer: C
Explanation:
Tail spend items are low value, high volume. P. 132
NEW QUESTION # 174
A supermarket is struggling with sales and has done an analysis on its competitors. It has discovered that it has two major competitors; one provides groceries at a much cheaper price and another that provides only organic products. The supermarket has decided that it wants to continue providing groceries to a wide target audience but that it will compete by offering superior customer service. What is the supermarket's source of competitive advantage?
Answer: A
Explanation:
This is differentiation as the target market is broad. Differentiation focus would be if the supermarket was targeting a niche market. There's a couple of questions on Porter's Generic Strategies in the exam- there's a useful diagram of this on P.13
NEW QUESTION # 175
Red Ltd and Blue Ltd have had a disagreement over a high value project they have been partnering on. They have been unable to resolve the issues inhouse and Red Ltd has suggested Mediation as an option. Is this a good option?
Answer: B
Explanation:
The correct answer is 'Yes- mediation involves a neutral third party and gets both parties to attempt to reach a compromise'. Be careful not to confuse mediation with arbitration - arbitration is when the buyer and supplier agree to accept a third party's decision which will solve the disagreement issues. See p.112 for more information on solving disputes
NEW QUESTION # 176
Togo Bongos is a manufacturer of percussion instruments, in particular of bongo drums. It requires electricity to run its factories and this is a major factor of cost impact. There are lots of suppliers of electricity in the market and there is no switching costs if Togo Bongos wanted to switch suppliers. What type of supplier is Togo Bongo's electricity supplier?
Answer: A
Explanation:
This is a leverage supplier on the Kraljic Matrix; high cost impact and low risk impact. The diagram on p.20 gives the example of utility services such as electricity as a common leverage supplier. There are lots of questions on Kraljic in the exam - do revise this topic and ensure you understand each of the four quadrants of the matrix
NEW QUESTION # 177
Kinky Boots Ltd provides high heeled shoes in large sizes. Their target market are Drag Queens. There are a couple of rival shoe manufacturers in this market and Kinky Boots Ltd offer the cheapest high heels. What strategy is Kinky Boots Ltd employing in terms of competitive advantage?
Answer: B
Explanation:
This is 'cost focus' - Kinky Boots is both focusing on being a cost leaser (by providing the cheapest products) and focusing on a niche market (drag queens). When these two strategies are combined it is called 'cost focus'.
There's a couple of questions on Porter's Generic Strategies in the exam- there's a useful diagram of this on P.
13
NEW QUESTION # 178
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