CPA Australia

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Global Strategy and Leadership
Self Assessment Test
The following self-assessment questions are provided to help you review your Global Strategy and Leadership studies.

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28/02/2011

CPA Australia

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Exercise
Question 1 Which one of the following statements captures most accurately the relationship between industry profitability and Porter's five forces? A. Industry profitability is likely to be highest when there is high supplier power. B. The higher the threat of new entrants, the higher industry profitability is likely to be. C. Moderate buyer power and moderate level of rivalry is likely to increase industry profitability. D. Low levels of rivalry and low supplier power are likely to be associated with higher industry profitability. E. Industry profitability is likely to be lowest when the threat of substitutes is declining. Question 2 Which one of the following statements about supplier power is most likely to be correct? A. The smaller the quantities of supplies purchased by companies in the industry, the higher the supplier power relative to industry rivals. B. The higher the threat by suppliers’ to forward integrate, the lower their power relative to industry rivals. C. The higher the importance of the suppliers’ input to rivals, the more power industry rivals have in negotiating with suppliers. D. The higher the number of suppliers, the more power suppliers will have in negotiating prices with companies in the industry. E. The higher the concentration among companies in the industry, the lower will be the power of these companies in negotiating the price they pay for supplies. Question 3 In what circumstances are buyers most likely to be powerful in relation to organisations within the industry? A. When there is a