Question 1 a. Michael Porter’s five forces model (Porter 1980) can be used as a tool for screening and interpreting data about the external environment. It is perhaps the best-known and most widely used tool in business strategy. The rationale behind the five forces model can be described as follows.In doing external analysis, it is important to keep in mind that the purpose of external analysis is to identify: ← the more attractive industries; or ← the more attractive positions within an industry The five forces model is a very useful tool for both purposes. But one problem with it is that it is so straightforward that people do not feel the need to appreciate the more subtle issues in applying it

b. Motor Vehicle First Registration Tax Motor Vehicle First Registration Tax is levied by the Transport Department. On the first registration of a motor vehicle, a first registration tax is charged, the sale of used cars are not paying taxes.

As the HK (SAR) government increases the levy of Motor Vehicle First Registration Tax, Vehicle First Registration and Taxation

其他涉及稅項措施 • 為保障公眾健康，每支香煙的煙草稅調高五角，並按同等比例提高其他煙草產品的稅率。 • 為控制私家車數目的增長，增加私家車首次登記稅約15%。

Question 2 a. A firm’s ability to satisfy customer needs depends on its resources, capabilities and core competencies. Resources ‘are inputs into a firm’s production process such as capital equipment, the skills of individual employees, patents, finance, and talented managers.’ Capabilities represent the firm’s capacity to deploy resources ‘to perform a task or an activity in an integrative manner’. Resources are usually divided into tangible and intangible and by their nature (financial, physical, etc.) and use (reputation, innovation, etc.). Capabilities are usually related to functional areas. Analogous to the earlier comment on the inadequacies of STEP analysis,