Podcast
Questions and Answers
What is the main difference between incorporated and unincorporated companies in the private sector?
What is the main difference between incorporated and unincorporated companies in the private sector?
What is the main characteristic of a sole trader in the private sector?
What is the main characteristic of a sole trader in the private sector?
Why might an unincorporated company be the best option for many businesses despite the personal risk of liability?
Why might an unincorporated company be the best option for many businesses despite the personal risk of liability?
What does it mean when it is said that owners of an incorporated company are not liable for any debts over and above the amount they have paid for their share of the company or for any loans they have guaranteed?
What does it mean when it is said that owners of an incorporated company are not liable for any debts over and above the amount they have paid for their share of the company or for any loans they have guaranteed?
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What percentage of turnover do manufacturing SMEs receive from cross-border sources?
What percentage of turnover do manufacturing SMEs receive from cross-border sources?
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What percentage of total sales of SMEs in developing countries' manufacturing sector do direct exports represent?
What percentage of total sales of SMEs in developing countries' manufacturing sector do direct exports represent?
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What is the core objective of the private sector?
What is the core objective of the private sector?
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What creates opportunities for SMEs according to the text?
What creates opportunities for SMEs according to the text?
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What is an indicator of efficiency, resource allocation, and drives economic growth according to the text?
What is an indicator of efficiency, resource allocation, and drives economic growth according to the text?
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What percentage of revenue do some multi-nationals have from overseas subsidiaries?
What percentage of revenue do some multi-nationals have from overseas subsidiaries?
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What accounts for over half of the world's total trade according to the text?
What accounts for over half of the world's total trade according to the text?
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What creates opportunities for SMEs according to the text?
What creates opportunities for SMEs according to the text?
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What has a significant impact on business profitability and return on investment according to the text?
What has a significant impact on business profitability and return on investment according to the text?
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What is the role of multi-national corporations according to the text?
What is the role of multi-national corporations according to the text?
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What is the impact of market share on profitability attributed to according to the text?
What is the impact of market share on profitability attributed to according to the text?
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What do SMEs form to pool resources and access technology and business skills according to the text?
What do SMEs form to pool resources and access technology and business skills according to the text?
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Which business structure does not have a separate legal identity from the owner?
Which business structure does not have a separate legal identity from the owner?
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In which country can foreign nationals be sole traders?
In which country can foreign nationals be sole traders?
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What is a common use of the sole trader business structure?
What is a common use of the sole trader business structure?
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What is an advantage of being a sole trader?
What is an advantage of being a sole trader?
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What can partnerships share among partners?
What can partnerships share among partners?
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Which type of incorporated company can have its shares traded on a stock exchange without the consent of owners?
Which type of incorporated company can have its shares traded on a stock exchange without the consent of owners?
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What is a common characteristic of private limited companies?
What is a common characteristic of private limited companies?
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Who administers the register of companies in the UK?
Who administers the register of companies in the UK?
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What does Figure 1.2 in the text show?
What does Figure 1.2 in the text show?
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What is a disadvantage of partnerships?
What is a disadvantage of partnerships?
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What can both types of incorporated companies raise capital through?
What can both types of incorporated companies raise capital through?
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What is a characteristic of sole proprietor enterprises in China?
What is a characteristic of sole proprietor enterprises in China?
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What does the cash flow statement show?
What does the cash flow statement show?
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What do investors assess when dividing the dividend per share by the price per share?
What do investors assess when dividing the dividend per share by the price per share?
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What is the most common type of shares in an incorporated company?
What is the most common type of shares in an incorporated company?
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What gives shares in a company value?
What gives shares in a company value?
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What led to a sudden increase in the valuation and share prices of many small technology companies in the late 1990s?
What led to a sudden increase in the valuation and share prices of many small technology companies in the late 1990s?
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What resulted in a general panic among speculators and a significant fall in share prices in the late 1990s?
What resulted in a general panic among speculators and a significant fall in share prices in the late 1990s?
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How does the stock market affect the economy?
How does the stock market affect the economy?
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What has performance management by private sector organizations evolved to consider?
What has performance management by private sector organizations evolved to consider?
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What is the key factor in determining the viability of an organization through cash flow analysis?
What is the key factor in determining the viability of an organization through cash flow analysis?
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What do shares in a company represent?
What do shares in a company represent?
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What is the primary reason for making investment decisions in businesses, such as purchasing new machinery?
What is the primary reason for making investment decisions in businesses, such as purchasing new machinery?
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What is the main factor that affects share prices?
What is the main factor that affects share prices?
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What type of business entity provides legal identity separate from owners, allowing business continuity and potential sale value?
What type of business entity provides legal identity separate from owners, allowing business continuity and potential sale value?
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What is the classification for 'small' and 'medium' enterprises according to the OECD?
What is the classification for 'small' and 'medium' enterprises according to the OECD?
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What percentage of businesses in the UK in 2017 were micro, small, and medium-sized enterprises (MSMEs)?
What percentage of businesses in the UK in 2017 were micro, small, and medium-sized enterprises (MSMEs)?
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What sector do most SMEs operate in, according to the text?
What sector do most SMEs operate in, according to the text?
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What is a common challenge for SMEs mentioned in the text?
What is a common challenge for SMEs mentioned in the text?
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What is the potential liability of owners in an incorporated company?
What is the potential liability of owners in an incorporated company?
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What is the newer classification for small and medium-sized enterprises?
What is the newer classification for small and medium-sized enterprises?
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What type of businesses were noted to contribute significantly to employment and turnover in the UK?
What type of businesses were noted to contribute significantly to employment and turnover in the UK?
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What is the potential role of MSMEs in local economies as mentioned in the text?
What is the potential role of MSMEs in local economies as mentioned in the text?
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What is a disadvantage of incorporation mentioned in the text?
What is a disadvantage of incorporation mentioned in the text?
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What is the main characteristic of an incorporated company mentioned in the text?
What is the main characteristic of an incorporated company mentioned in the text?
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What is the impact of technology advancement on the potential contribution of MSMEs in local economies?
What is the impact of technology advancement on the potential contribution of MSMEs in local economies?
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What type of business entity provides legal identity separate from owners?
What type of business entity provides legal identity separate from owners?
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What type of business entity offers credibility, permanence, and reduced risk for suppliers?
What type of business entity offers credibility, permanence, and reduced risk for suppliers?
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How is the owner's liability in an incorporated company limited?
How is the owner's liability in an incorporated company limited?
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What is a disadvantage of incorporation for businesses?
What is a disadvantage of incorporation for businesses?
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How are SMEs classified based on size?
How are SMEs classified based on size?
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According to the OECD, how many employees define a 'small' business?
According to the OECD, how many employees define a 'small' business?
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In which sector do most SMEs operate?
In which sector do most SMEs operate?
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What percentage of businesses in the UK were MSMEs in 2017?
What percentage of businesses in the UK were MSMEs in 2017?
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What role do MSMEs play in local economies?
What role do MSMEs play in local economies?
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What are the challenges for SMEs according to the text?
What are the challenges for SMEs according to the text?
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What can hold smaller companies back according to the text?
What can hold smaller companies back according to the text?
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What does the cash flow statement demonstrate?
What does the cash flow statement demonstrate?
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How do investors assess the risk and return from buying shares?
How do investors assess the risk and return from buying shares?
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What is the most common type of shares in an incorporated company?
What is the most common type of shares in an incorporated company?
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What gives shares in a company value?
What gives shares in a company value?
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What led to a sudden increase in the valuation and share prices of small technology companies in the late 1990s?
What led to a sudden increase in the valuation and share prices of small technology companies in the late 1990s?
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What resulted in a general panic among speculators, leading to a significant fall in share prices in the dot com bust?
What resulted in a general panic among speculators, leading to a significant fall in share prices in the dot com bust?
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How does the stock market affect the economy?
How does the stock market affect the economy?
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What has performance management by private sector organizations evolved to consider?
What has performance management by private sector organizations evolved to consider?
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Why are revenue and profit considered to be less reflective of an organization's true financial health compared to cash?
Why are revenue and profit considered to be less reflective of an organization's true financial health compared to cash?
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What is the primary reason for investment decisions in businesses, such as purchasing new machinery?
What is the primary reason for investment decisions in businesses, such as purchasing new machinery?
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What is the key factor influencing share prices fluctuation?
What is the key factor influencing share prices fluctuation?
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What led to the sudden increase in the valuation and share prices of many small technology companies in the late 1990s?
What led to the sudden increase in the valuation and share prices of many small technology companies in the late 1990s?
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What is the main purpose of market intelligence as outlined in the text?
What is the main purpose of market intelligence as outlined in the text?
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What are some key aspects that market intelligence research aims to gather data on?
What are some key aspects that market intelligence research aims to gather data on?
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What does market intelligence research enable organizations to do?
What does market intelligence research enable organizations to do?
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Why is it important to find facts and data about the suppliers in the market and their products?
Why is it important to find facts and data about the suppliers in the market and their products?
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What is an essential aspect of good contract management for developing meaningful key performance indicators (KPIs)?
What is an essential aspect of good contract management for developing meaningful key performance indicators (KPIs)?
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What is a crucial factor for contract completion activities?
What is a crucial factor for contract completion activities?
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What is a valuable way to achieve continuous improvement collaboratively with key suppliers?
What is a valuable way to achieve continuous improvement collaboratively with key suppliers?
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What is an important aspect of contract administration?
What is an important aspect of contract administration?
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What is crucial for contract performance?
What is crucial for contract performance?
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What should contracts be subject to as circumstances change?
What should contracts be subject to as circumstances change?
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What is the primary purpose of spend analysis in sourcing strategy?
What is the primary purpose of spend analysis in sourcing strategy?
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What is the main focus of field research in the context of sourcing strategy?
What is the main focus of field research in the context of sourcing strategy?
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What is a crucial aspect of transparent and open-book communication for a good relationship between parties?
What is a crucial aspect of transparent and open-book communication for a good relationship between parties?
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What is a critical element of contract management for capturing opportunities for continuous improvement?
What is a critical element of contract management for capturing opportunities for continuous improvement?
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What is the key tip for conducting effective field research?
What is the key tip for conducting effective field research?
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What should a sourcing strategy include an analysis of?
What should a sourcing strategy include an analysis of?
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What is important for contract performance in terms of communication and benchmarking?
What is important for contract performance in terms of communication and benchmarking?
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What does Figure 1.8 illustrate in the context of sourcing strategy?
What does Figure 1.8 illustrate in the context of sourcing strategy?
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What is a valuable way to achieve continuous improvement collaboratively with key suppliers?
What is a valuable way to achieve continuous improvement collaboratively with key suppliers?
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What is a crucial aspect of good contract management for developing meaningful key performance indicators (KPIs)?
What is a crucial aspect of good contract management for developing meaningful key performance indicators (KPIs)?
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What is a benefit of spend analysis in sourcing strategy?
What is a benefit of spend analysis in sourcing strategy?
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What is crucial for contract completion activities?
What is crucial for contract completion activities?
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What is crucial for identifying opportunities to save money and ranking suppliers for preferred status in sourcing strategy?
What is crucial for identifying opportunities to save money and ranking suppliers for preferred status in sourcing strategy?
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What should be minimized to avoid creating bottlenecks in sourcing strategy?
What should be minimized to avoid creating bottlenecks in sourcing strategy?
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What is important to consider for effective data collection in sourcing strategy?
What is important to consider for effective data collection in sourcing strategy?
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What is the main focus of desk research in sourcing strategy?
What is the main focus of desk research in sourcing strategy?
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What is the primary source for desk research in sourcing strategy?
What is the primary source for desk research in sourcing strategy?
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What is the key purpose of field research in sourcing strategy?
What is the key purpose of field research in sourcing strategy?
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What should the sourcing strategy document include?
What should the sourcing strategy document include?
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What is an integral part of the sourcing strategy?
What is an integral part of the sourcing strategy?
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What does the procurement event involve?
What does the procurement event involve?
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What does contract management ensure?
What does contract management ensure?
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What is essential in contract design for effective evaluation and selection of suppliers?
What is essential in contract design for effective evaluation and selection of suppliers?
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How should the contract allocate risk, service level, and value for money?
How should the contract allocate risk, service level, and value for money?
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What should both parties be willing to adapt to?
What should both parties be willing to adapt to?
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What should be included in the contract to ensure the quality of service delivered?
What should be included in the contract to ensure the quality of service delivered?
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What should the payment mechanism and conditions of the contract enable the supplier to do?
What should the payment mechanism and conditions of the contract enable the supplier to do?
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What is the method used for strategic sourcing involving steps such as brainstorming, setting a target, and producing a proposal?
What is the method used for strategic sourcing involving steps such as brainstorming, setting a target, and producing a proposal?
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What is depicted in a life cycle to ensure compliance with the terms of the contract?
What is depicted in a life cycle to ensure compliance with the terms of the contract?
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What should be included in the sourcing strategy document to ensure clarity and effectiveness?
What should be included in the sourcing strategy document to ensure clarity and effectiveness?
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What are the two main factors used to analyze purchases in the Kraljic matrix?
What are the two main factors used to analyze purchases in the Kraljic matrix?
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What is the focus of the strategic core quadrant in the Kraljic matrix?
What is the focus of the strategic core quadrant in the Kraljic matrix?
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What is the supply strategy for cleaning services based on the case study?
What is the supply strategy for cleaning services based on the case study?
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What does the Kraljic matrix aim to capitalize on in the supply strategy?
What does the Kraljic matrix aim to capitalize on in the supply strategy?
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What does the Kraljic matrix segment based on, in addition to competition and ease of supplier substitution?
What does the Kraljic matrix segment based on, in addition to competition and ease of supplier substitution?
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What is the focus of the tactical profit items in the Kraljic matrix?
What is the focus of the tactical profit items in the Kraljic matrix?
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What is the primary aim of the Kraljic matrix?
What is the primary aim of the Kraljic matrix?
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What does the cleaning services case study highlight as a factor for the supply strategy?
What does the cleaning services case study highlight as a factor for the supply strategy?
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What is the focus of the tactical acquisition items in the Kraljic matrix?
What is the focus of the tactical acquisition items in the Kraljic matrix?
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What is the primary purpose of the Kraljic matrix?
What is the primary purpose of the Kraljic matrix?
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What is the key focus of the Kraljic matrix?
What is the key focus of the Kraljic matrix?
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What is the primary characteristic of the strategic core quadrant in the Kraljic matrix?
What is the primary characteristic of the strategic core quadrant in the Kraljic matrix?
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What does the Kraljic matrix assess to categorize purchases?
What does the Kraljic matrix assess to categorize purchases?
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What is the focus of the strategic core quadrant in the Kraljic matrix?
What is the focus of the strategic core quadrant in the Kraljic matrix?
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What is the primary strategy for reducing prices of tactical profit items?
What is the primary strategy for reducing prices of tactical profit items?
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What does the cleaning services case study highlight as a factor for supply strategy?
What does the cleaning services case study highlight as a factor for supply strategy?
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What is the aim of the supply strategy for cleaning services?
What is the aim of the supply strategy for cleaning services?
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How can the Kraljic matrix be further segmented?
How can the Kraljic matrix be further segmented?
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What characterizes tactical acquisition items in the Kraljic matrix?
What characterizes tactical acquisition items in the Kraljic matrix?
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What is the primary focus of the Kraljic matrix in analyzing purchases?
What is the primary focus of the Kraljic matrix in analyzing purchases?
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What is the primary factor for categorizing items in the strategic core quadrant of the Kraljic matrix?
What is the primary factor for categorizing items in the strategic core quadrant of the Kraljic matrix?
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What is the primary characteristic of tactical profit items in the Kraljic matrix?
What is the primary characteristic of tactical profit items in the Kraljic matrix?
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What is the primary focus of the tactical acquisition items in the Kraljic matrix?
What is the primary focus of the tactical acquisition items in the Kraljic matrix?
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What is the aim of the supply strategy for cleaning services according to the text?
What is the aim of the supply strategy for cleaning services according to the text?
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What are the two main factors used to evaluate purchases in the Kraljic matrix?
What are the two main factors used to evaluate purchases in the Kraljic matrix?
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What is the focus of the strategic core quadrant in the Kraljic matrix?
What is the focus of the strategic core quadrant in the Kraljic matrix?
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What is the supply strategy for cleaning services, as per the case study mentioned?
What is the supply strategy for cleaning services, as per the case study mentioned?
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What does the Kraljic matrix suggest for tactical profit items?
What does the Kraljic matrix suggest for tactical profit items?
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What does the cleaning services case study highlight about the supply strategy?
What does the cleaning services case study highlight about the supply strategy?
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What is the main aim of the supply strategy for cleaning services?
What is the main aim of the supply strategy for cleaning services?
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What does the Kraljic matrix segment based on, in addition to importance and supply risk?
What does the Kraljic matrix segment based on, in addition to importance and supply risk?
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What is the focus of tactical acquisition items in the Kraljic matrix?
What is the focus of tactical acquisition items in the Kraljic matrix?
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What is the primary characteristic of the tactical profit quadrant in the Kraljic matrix?
What is the primary characteristic of the tactical profit quadrant in the Kraljic matrix?
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What is the key factor in evaluating purchases in the Kraljic matrix?
What is the key factor in evaluating purchases in the Kraljic matrix?
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What is the focus of the strategic core quadrant in the Kraljic matrix?
What is the focus of the strategic core quadrant in the Kraljic matrix?
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What is the supply strategy for cleaning services, as per the case study mentioned?
What is the supply strategy for cleaning services, as per the case study mentioned?
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Study Notes
Understanding Cash Flow, Return on Investment, and Stock Market Impact
- Revenue and profit can be adjusted in profit and loss accounts, but cash reflects the true financial health of an organization.
- The cash flow statement is a crucial document showing how cash has been utilized by the business during the accounting period.
- Cash flow analysis, using ratios, demonstrates the viability of an organization.
- Investors assess the risk and return from buying shares by dividing the dividend per share by the price per share.
- Investment decisions in businesses, such as purchasing new machinery, are made in expectation of additional profit.
- The ownership of an incorporated company is divided into shares, and the most common type is ordinary shares, which do not guarantee a dividend but provide a right to vote at the AGM.
- Shares in a company have value due to the expectation of future dividend payments, and their trading is done via a stock exchange.
- Share prices fluctuate based on market perceptions of future dividend payments and company prospects.
- The dot com boom in the late 1990s led to a sudden increase in the valuation and share prices of many small technology companies, fueled by speculative buying and excessive venture capital funding.
- The dot com bust resulted in a general panic among speculators, leading to a significant fall in share prices and rendering many small companies worthless almost overnight.
- The stock market affects the economy through the wealth effect, impact on pensions, and a company's ability to raise finance by issuing more shares.
- CIMA highlights that performance management by private sector organizations has evolved to consider more multi-dimensional approaches beyond purely financial measures.
Strategic Sourcing and Contract Management in Procurement
- Situation-Target-Proposal (STP) is a method used for strategic sourcing, involving steps such as brainstorming, setting a target, and producing a proposal.
- An example of STP outlines a problem, situation, target, and proposal for reducing costs and improving quality in procurement.
- The sourcing strategy document should include a clear depiction of the current situation, the desired outcome, the plan, responsibilities, and performance measures.
- A Business Requirements Definition (BRD) and risk analysis are integral parts of the sourcing strategy.
- The procurement event involves activities to go out to the market and let a contract that meets the sourcing strategy's requirements.
- The transaction element of purchasing involves placing orders against the contract and ensuring compliance with its terms.
- Contract management, depicted in a life cycle, ensures the delivery of goods and services complies with the terms of the contract.
- Outcome-focused specifications are essential in contract design for effective evaluation and selection of suppliers.
- Clear allocation of risk, service level, and value for money in the contract reduces future disputes and encourages innovation from suppliers.
- Both parties should be willing to adapt to unforeseen circumstances, and the contract should not be so tight as to become inflexible.
- Detailed agreement of required outputs and expected performance should be included in the contract to ensure the quality of service delivered.
- The payment mechanism and conditions of the contract should be such that the supplier can make a reasonable profit and meet its business objectives.
Supply Positioning Model: The Kraljic Matrix
- The Kraljic matrix was developed by Peter Kraljic of McKinsey to analyze purchases based on their importance and commercial supply risk.
- It assesses importance using factors such as value of spend, importance to the organization's product or service delivery, and universality.
- Commercial supply risk is evaluated based on the complexity of buying from the market and the number of capable suppliers available.
- The combination of importance and supply risk results in four main segments of a purchasing portfolio.
- The strategic core quadrant focuses on high-risk and high-importance items, which are key for sourcing strategy.
- Tactical profit items have low risk and high competition, making e-auctions an effective strategy to reduce prices.
- Tactical acquisition items have low supply risk and low spend, requiring efficient buying processes or bundling strategies.
- The matrix can be further segmented based on competition and ease of supplier substitution.
- A case study on cleaning services demonstrates how the matrix is applied, considering factors like spend value, market competition, and substitution cost.
- The cleaning services case study highlights the low service criticality, high spend value, high market competition, and low substitution cost.
- The supply strategy for cleaning services includes leveraging purchasing power, competitive tendering, outsourcing, and maximizing efficiencies.
- The strategy aims to capitalize on the competitive market, sustain cost and quality pressure, and maximize efficiencies through standard specifications and additional services.
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Description
Test your knowledge of business structures and entities with this quiz. Explore the characteristics of sole traders, partnerships, and incorporated companies, and learn about the different types of business entities and their impact on the private sector. From the advantages and disadvantages of each structure to the challenges faced by small and medium-sized enterprises, this quiz covers essential aspects of business organization and size classification.