Podcast
Questions and Answers
What determines the market structure in Porter's Five Forces model?
What determines the market structure in Porter's Five Forces model?
- Competitive rivalry and substitute products
- Buyer power and barriers to entry
- Number of competitors and relative quality of products
- Threat of new entrants and existing competitors (correct)
What determines the cost structure of the supply chain in Porter's Five Forces model?
What determines the cost structure of the supply chain in Porter's Five Forces model?
- Threat of new entrants and existing competitors
- Number of competitors and relative quality of products
- Suppliers-existing competitors-buyers (correct)
- Competitive rivalry and substitute products
What factor can lead to a fragmented market with many small suppliers according to Porter's Five Forces model?
What factor can lead to a fragmented market with many small suppliers according to Porter's Five Forces model?
- High threat of new entrants and high profitability (correct)
- High bargaining power of buyers and low costs down the supply chain
- Low number of competitors and low service levels
- Low threat of substitutes and low competitive rivalry
What can lead to healthy profits for competitors in a market according to the text?
What can lead to healthy profits for competitors in a market according to the text?
What does the text identify as a barrier to entry in the market?
What does the text identify as a barrier to entry in the market?
What is identified as a weakness in financial control in the supply chain according to the text?
What is identified as a weakness in financial control in the supply chain according to the text?
What factor is driving the move from residential to non-residential care according to the text?
What factor is driving the move from residential to non-residential care according to the text?
What is a potential future trend that may double prices by 2025 according to the text?
What is a potential future trend that may double prices by 2025 according to the text?
What does PEST criteria stand for in the context of the external environment affecting procurement and supply?
What does PEST criteria stand for in the context of the external environment affecting procurement and supply?
Which model is used to analyze competitive market forces in the context of procurement and supply?
Which model is used to analyze competitive market forces in the context of procurement and supply?
What macro-economic criteria can affect organizations in terms of procurement and supply?
What macro-economic criteria can affect organizations in terms of procurement and supply?
What do the implications of political criteria include in the context of procurement and supply?
What do the implications of political criteria include in the context of procurement and supply?
What do the implications of social criteria include in the context of procurement and supply?
What do the implications of social criteria include in the context of procurement and supply?
What is the use of the STEEPLED criteria in the context of the external environment affecting procurement and supply?
What is the use of the STEEPLED criteria in the context of the external environment affecting procurement and supply?
What role do ethical and social criteria play in affecting procurement and supply?
What role do ethical and social criteria play in affecting procurement and supply?
What does environmental scanning involve?
What does environmental scanning involve?
What does SWOT analysis evaluate?
What does SWOT analysis evaluate?
What does PEST/PESTLE analysis examine?
What does PEST/PESTLE analysis examine?
Why should the interpretation of market information be cautious?
Why should the interpretation of market information be cautious?
What can cause significant shifts in supply markets and affect organizational strategy?
What can cause significant shifts in supply markets and affect organizational strategy?
Which external factors can influence supply markets?
Which external factors can influence supply markets?
What does PESTLE analysis provide a comprehensive view of?
What does PESTLE analysis provide a comprehensive view of?
Why is understanding external influences crucial for organizations?
Why is understanding external influences crucial for organizations?
What is the importance of the big picture provided by PESTLE analysis?
What is the importance of the big picture provided by PESTLE analysis?
What is the focus of procurement and supply practitioners?
What is the focus of procurement and supply practitioners?
What must organisations understand to grow their business?
What must organisations understand to grow their business?
What does PEST/PESTLE analysis examine in relation to markets?
What does PEST/PESTLE analysis examine in relation to markets?
Which model is widely used for analyzing market competitiveness?
Which model is widely used for analyzing market competitiveness?
What did the uncoupling of the Swiss franc from the euro in 2015 significantly impact?
What did the uncoupling of the Swiss franc from the euro in 2015 significantly impact?
What does the Porter's Five Forces model consist of?
What does the Porter's Five Forces model consist of?
What type of factors does technology analysis include?
What type of factors does technology analysis include?
Which factors can affect pricing models and demand for an industry's products or services?
Which factors can affect pricing models and demand for an industry's products or services?
What plays a significant role in an industry's operations according to the text?
What plays a significant role in an industry's operations according to the text?
What is crucial for strategic planning according to the text?
What is crucial for strategic planning according to the text?
What does environmental factors include according to the text?
What does environmental factors include according to the text?
What is a potential disruptor of supply chains according to the text?
What is a potential disruptor of supply chains according to the text?
What does legal factors encompass according to the text?
What does legal factors encompass according to the text?
What influences the industry's market perception and behavior according to the text?
What influences the industry's market perception and behavior according to the text?
What can impact the industry's stability according to the text?
What can impact the industry's stability according to the text?
What makes suppliers powerful in a supply chain according to the text?
What makes suppliers powerful in a supply chain according to the text?
What is the main factor that determines the power of a group in a supply chain according to the text?
What is the main factor that determines the power of a group in a supply chain according to the text?
What does power in the sense of market forces refer to according to the text?
What does power in the sense of market forces refer to according to the text?
What contributes to the power of suppliers in a supply chain according to the text?
What contributes to the power of suppliers in a supply chain according to the text?
What can act as a barrier to entry for new market entrants in the insurance market?
What can act as a barrier to entry for new market entrants in the insurance market?
What is a potential impact of buyer dominance in the insurance market?
What is a potential impact of buyer dominance in the insurance market?
What is a characteristic of new market entrants disrupting the insurance market?
What is a characteristic of new market entrants disrupting the insurance market?
What is a potential threat to the insurance market from new market entrants like Google and Amazon?
What is a potential threat to the insurance market from new market entrants like Google and Amazon?
What can deter new market entrants in the insurance market due to the required minimum sales quantity?
What can deter new market entrants in the insurance market due to the required minimum sales quantity?
What is a characteristic of vertical integration in the insurance market?
What is a characteristic of vertical integration in the insurance market?
What can impact supplier profitability in the insurance market?
What can impact supplier profitability in the insurance market?
What is a potential advantage of new market entrants over traditional insurance companies in the insurance market?
What is a potential advantage of new market entrants over traditional insurance companies in the insurance market?
What can act as a barrier to entry for new market entrants in the insurance market due to the relationship between quantity produced and cost per unit?
What can act as a barrier to entry for new market entrants in the insurance market due to the relationship between quantity produced and cost per unit?
What can occur when buyers have low switching costs for purchasing standard or undifferentiated products in the insurance market?
What can occur when buyers have low switching costs for purchasing standard or undifferentiated products in the insurance market?
What is a potential impact of large existing customer base for new market entrants in the insurance market?
What is a potential impact of large existing customer base for new market entrants in the insurance market?
What is a perceived advantage of retail firms and technology companies over traditional insurance providers in the insurance market?
What is a perceived advantage of retail firms and technology companies over traditional insurance providers in the insurance market?
Which factor can act as a barrier for small- and medium-sized businesses in industries like computers, pharmaceuticals, and airlines?
Which factor can act as a barrier for small- and medium-sized businesses in industries like computers, pharmaceuticals, and airlines?
What can create customer loyalty and act as a barrier for new entrants in a market?
What can create customer loyalty and act as a barrier for new entrants in a market?
What determines the profitability of a market and sets expectations for profit targets for each organization?
What determines the profitability of a market and sets expectations for profit targets for each organization?
What can influence access to distribution channels, like supermarket shelves?
What can influence access to distribution channels, like supermarket shelves?
What can result in lower financing costs for larger organizations?
What can result in lower financing costs for larger organizations?
What can impact market structure and profitability?
What can impact market structure and profitability?
What can be a significant cost advantage for early entrants in a market?
What can be a significant cost advantage for early entrants in a market?
What determines whether a buyer moves to a substitute and acts as a barrier to price increases?
What determines whether a buyer moves to a substitute and acts as a barrier to price increases?
What contributes to intense competitive rivalry in a market?
What contributes to intense competitive rivalry in a market?
What helps in understanding the power dynamics in a supply market and its implications for procurement and supply?
What helps in understanding the power dynamics in a supply market and its implications for procurement and supply?
What can create barriers to entry for new businesses?
What can create barriers to entry for new businesses?
What can impact market structure and profitability?
What can impact market structure and profitability?
What does the law of demand state?
What does the law of demand state?
What is the equilibrium point in the context of supply and demand?
What is the equilibrium point in the context of supply and demand?
What does excess demand indicate in the market?
What does excess demand indicate in the market?
What does a shift in supply represent?
What does a shift in supply represent?
What is market capability defined as?
What is market capability defined as?
What does the sourcing strategy need to be according to the text?
What does the sourcing strategy need to be according to the text?
What does the analysis of supply risk enable the organization to assess?
What does the analysis of supply risk enable the organization to assess?
What is the importance of understanding market structure and Porter's Five Forces?
What is the importance of understanding market structure and Porter's Five Forces?
What does technology capability encompass?
What does technology capability encompass?
What does the ability to use different financial instruments and choose an appropriate one to lower overall costs refer to?
What does the ability to use different financial instruments and choose an appropriate one to lower overall costs refer to?
What is the significance of understanding external influences for organizations?
What is the significance of understanding external influences for organizations?
What does the ability to recognize when change is needed and successfully deliver it refer to?
What does the ability to recognize when change is needed and successfully deliver it refer to?
What happens when excess demand occurs in the market?
What happens when excess demand occurs in the market?
What does market capability encompass?
What does market capability encompass?
What is the focus of procurement in the context of supply risk assessment?
What is the focus of procurement in the context of supply risk assessment?
Why is understanding market structure, supply, and demand essential for businesses?
Why is understanding market structure, supply, and demand essential for businesses?
What does excess supply lead to in the market?
What does excess supply lead to in the market?
What does market structure refer to in the context of Porter's Five Forces?
What does market structure refer to in the context of Porter's Five Forces?
What does supply risk assessment prompt organizations to do in their sourcing strategy?
What does supply risk assessment prompt organizations to do in their sourcing strategy?
What represents the agreed-upon price for transacting a trade in the market?
What represents the agreed-upon price for transacting a trade in the market?
What is the relationship between the quantity of a product purchased and its price according to the law of demand?
What is the relationship between the quantity of a product purchased and its price according to the law of demand?
What does the demand curve illustrate in the market?
What does the demand curve illustrate in the market?
What does the supply curve show in the market?
What does the supply curve show in the market?
What occurs when shifts in either demand or supply happen in the market?
What occurs when shifts in either demand or supply happen in the market?
What can act as a barrier to price increases in a market?
What can act as a barrier to price increases in a market?
What can create barriers to entry for new businesses?
What can create barriers to entry for new businesses?
What determines the profitability of a market and sets profit targets for organizations?
What determines the profitability of a market and sets profit targets for organizations?
What can be a prohibitive factor for small- and medium-sized businesses in certain industries?
What can be a prohibitive factor for small- and medium-sized businesses in certain industries?
What can impact market structure and profitability?
What can impact market structure and profitability?
What contributes to intense competitive rivalry in a market?
What contributes to intense competitive rivalry in a market?
What can give early entrants significant cost advantages?
What can give early entrants significant cost advantages?
What can be influenced by brand loyalty and product placement?
What can be influenced by brand loyalty and product placement?
What helps in understanding the power dynamics in a supply market?
What helps in understanding the power dynamics in a supply market?
What results in lower financing costs for larger organizations?
What results in lower financing costs for larger organizations?
What creates customer loyalty and can be a barrier for new entrants?
What creates customer loyalty and can be a barrier for new entrants?
What can act as a disadvantage for new entrants in a market?
What can act as a disadvantage for new entrants in a market?
What is the main objective for organizations in the Maturity stage of a product's life cycle?
What is the main objective for organizations in the Maturity stage of a product's life cycle?
What group fuels sales growth in the Growth stage of a product's life cycle?
What group fuels sales growth in the Growth stage of a product's life cycle?
At what stage of a product's life cycle do competitors start to enter the market with their own versions?
At what stage of a product's life cycle do competitors start to enter the market with their own versions?
What is the main focus of businesses in the Decline stage of a product's life cycle?
What is the main focus of businesses in the Decline stage of a product's life cycle?
How can businesses mitigate the impact of interest rate fluctuations on working capital and finance costs?
How can businesses mitigate the impact of interest rate fluctuations on working capital and finance costs?
What can businesses do to manage fluctuating interest rates?
What can businesses do to manage fluctuating interest rates?
What impact can higher interest rates have on consumers' spending?
What impact can higher interest rates have on consumers' spending?
How can businesses mitigate the impact of interest rate rises on operations?
How can businesses mitigate the impact of interest rate rises on operations?
What impact can inflation have on businesses' borrowing costs and profits?
What impact can inflation have on businesses' borrowing costs and profits?
What should businesses do during periods of inflation?
What should businesses do during periods of inflation?
How can government stimulation of the economy impact businesses?
How can government stimulation of the economy impact businesses?
What do fluctuating exchange rates impact for businesses involved in import/export?
What do fluctuating exchange rates impact for businesses involved in import/export?
What can fluctuating inflation impact for businesses?
What can fluctuating inflation impact for businesses?
What should businesses do to minimize the impact of fluctuating interest rates on finance costs?
What should businesses do to minimize the impact of fluctuating interest rates on finance costs?
What impact can inflation have on businesses' profits and competitiveness in international markets?
What impact can inflation have on businesses' profits and competitiveness in international markets?
What can businesses anticipate to manage fluctuating interest rates?
What can businesses anticipate to manage fluctuating interest rates?
What are common reasons for product decline in the product life cycle?
What are common reasons for product decline in the product life cycle?
What is a characteristic of the decline stage of a product?
What is a characteristic of the decline stage of a product?
What is attributed to the decline of the iPod, once iconic?
What is attributed to the decline of the iPod, once iconic?
How did the success of iPhones and iPads contribute to the decline of the iPod?
How did the success of iPhones and iPads contribute to the decline of the iPod?
What macro-economic factors affecting organizations are mentioned in the text?
What macro-economic factors affecting organizations are mentioned in the text?
How do changes in interest rates impact organizations?
How do changes in interest rates impact organizations?
What do business cycles, measured by GDP, impact?
What do business cycles, measured by GDP, impact?
What do strong economies boost, leading to increased demand for goods and services?
What do strong economies boost, leading to increased demand for goods and services?
What does the product life cycle consist of?
What does the product life cycle consist of?
What are examples of macro-economic factors affecting organizations?
What are examples of macro-economic factors affecting organizations?
What do laggards continue to do in the decline stage of a product?
What do laggards continue to do in the decline stage of a product?
What is the impact of changes in technology and consumer tastes on product decline?
What is the impact of changes in technology and consumer tastes on product decline?
What is the impact of a devaluation of the euro against the US dollar on the cost of importing raw materials from the US?
What is the impact of a devaluation of the euro against the US dollar on the cost of importing raw materials from the US?
What is the main concern regarding the devaluation of a country's currency in the longer term?
What is the main concern regarding the devaluation of a country's currency in the longer term?
What does price elasticity measure in relation to the demand for goods and services?
What does price elasticity measure in relation to the demand for goods and services?
What does a negative price elasticity indicate about a product?
What does a negative price elasticity indicate about a product?
In the context of currency devaluation, which goods and services are most affected by the devaluation?
In the context of currency devaluation, which goods and services are most affected by the devaluation?
What should a country consider when thinking about devaluing its currency to stimulate the economy?
What should a country consider when thinking about devaluing its currency to stimulate the economy?
How can businesses mitigate the effects of currency movements when importing raw materials?
How can businesses mitigate the effects of currency movements when importing raw materials?
What is the difference between gross domestic product (GDP) and gross national product (GNP)?
What is the difference between gross domestic product (GDP) and gross national product (GNP)?
What does a larger GDP compared to GNP indicate about a country?
What does a larger GDP compared to GNP indicate about a country?
How do governments use GDP as a measure of the state of the economy?
How do governments use GDP as a measure of the state of the economy?
What is the main purpose of investors looking at GDP?
What is the main purpose of investors looking at GDP?
What is the impact of a devaluation of a country's currency on businesses?
What is the impact of a devaluation of a country's currency on businesses?
What determines the impact of currency devaluation on demand for goods and services?
What determines the impact of currency devaluation on demand for goods and services?
What helps in understanding the actual consumption spending of households, government spending, and business investment?
What helps in understanding the actual consumption spending of households, government spending, and business investment?
How do businesses mitigate the effects of currency movements for raw material imports?
How do businesses mitigate the effects of currency movements for raw material imports?
How do global economic conditions, such as a global depression, influence the effectiveness of devaluing a currency to stimulate the economy?
How do global economic conditions, such as a global depression, influence the effectiveness of devaluing a currency to stimulate the economy?
What is the difference between GDP and GNP?
What is the difference between GDP and GNP?
How do governments use GDP for decision-making?
How do governments use GDP for decision-making?
How do businesses use GDP for decision-making?
How do businesses use GDP for decision-making?
What does GNP serve as a measure of?
What does GNP serve as a measure of?
Why is China's GDP $300 billion greater than its GNP?
Why is China's GDP $300 billion greater than its GNP?
Why is the US's GNP $250 billion greater than its GDP?
Why is the US's GNP $250 billion greater than its GDP?
What does GNP help in understanding?
What does GNP help in understanding?
Which of the following is NOT a key characteristic of corporate law?
Which of the following is NOT a key characteristic of corporate law?
What does securities law primarily cover?
What does securities law primarily cover?
What is the main purpose of foreign exchange management law?
What is the main purpose of foreign exchange management law?
What is the role of a securities commission?
What is the role of a securities commission?
What does the Plan-Do-Check-Act methodology in business link to?
What does the Plan-Do-Check-Act methodology in business link to?
What does social capital refer to in the context of business?
What does social capital refer to in the context of business?
What is the key focus of Corporate Social Responsibility (CSR) in business?
What is the key focus of Corporate Social Responsibility (CSR) in business?
What does selecting suppliers based on employment, health, and environmental practices emphasize?
What does selecting suppliers based on employment, health, and environmental practices emphasize?
What does business ethics primarily guide in a business setting?
What does business ethics primarily guide in a business setting?
What is the primary impact of larger organizations auditing their suppliers for responsible practices?
What is the primary impact of larger organizations auditing their suppliers for responsible practices?
What is the main focus of implementing an ethical approach in business?
What is the main focus of implementing an ethical approach in business?
What does social criteria primarily impact in the context of procurement and supply?
What does social criteria primarily impact in the context of procurement and supply?
What does Business Link advise regarding communication with customers?
What does Business Link advise regarding communication with customers?
What does Corporate Social Responsibility (CSR) involve contributing to?
What does Corporate Social Responsibility (CSR) involve contributing to?
What is the primary impact of business on Corporate Social Responsibility (CSR)?
What is the primary impact of business on Corporate Social Responsibility (CSR)?
What is the main difference between business ethics and legality?
What is the main difference between business ethics and legality?
Which organization set a target to reduce emissions to 5% below 1990 levels?
Which organization set a target to reduce emissions to 5% below 1990 levels?
What does business law cover?
What does business law cover?
What do finance laws affecting businesses include?
What do finance laws affecting businesses include?
What do employment laws ensure?
What do employment laws ensure?
What does the United Nations Framework Convention on Climate Change focus on?
What does the United Nations Framework Convention on Climate Change focus on?
What do environmental and ethical criteria affect in procurement and supply?
What do environmental and ethical criteria affect in procurement and supply?
What do natural risks such as floods, hurricanes, earthquakes, and flash fires impact?
What do natural risks such as floods, hurricanes, earthquakes, and flash fires impact?
What does the Paris Agreement involve?
What does the Paris Agreement involve?
What do modern businesses need to manage to remain successful?
What do modern businesses need to manage to remain successful?
What does the UNFCCC aim to stabilize?
What does the UNFCCC aim to stabilize?
What is the focus of employment protection laws?
What is the focus of employment protection laws?
What is the primary concern of climate change concerns?
What is the primary concern of climate change concerns?
What is the ISO 50001:2011 standard proposed to help businesses with?
What is the ISO 50001:2011 standard proposed to help businesses with?
What does the sustainability of raw materials involve?
What does the sustainability of raw materials involve?
What impact does pollution, particularly air and water emissions, have on productivity?
What impact does pollution, particularly air and water emissions, have on productivity?
How can business procurement and supply play a role in reducing world energy consumption?
How can business procurement and supply play a role in reducing world energy consumption?
What is the potential consequence of natural disasters on finances and future revenues for businesses?
What is the potential consequence of natural disasters on finances and future revenues for businesses?
What did Hurricane Katrina's aftermath lead to for various industries?
What did Hurricane Katrina's aftermath lead to for various industries?
What do waste emissions from manufacturing businesses require?
What do waste emissions from manufacturing businesses require?
What is the primary impact of pollution on the environment?
What is the primary impact of pollution on the environment?
What did Hurricane Katrina cause in terms of oil and gas supplies?
What did Hurricane Katrina cause in terms of oil and gas supplies?
What is emphasized by Richard Gurley regarding natural disasters and supply chains?
What is emphasized by Richard Gurley regarding natural disasters and supply chains?
What does the proper disposal of waste emissions from manufacturing businesses involve?
What does the proper disposal of waste emissions from manufacturing businesses involve?
What is the significance of assessing the risk of natural disasters to supply chains?
What is the significance of assessing the risk of natural disasters to supply chains?
What can businesses achieve by involving employees in community work?
What can businesses achieve by involving employees in community work?
How can businesses benefit from collaborating with the local community?
How can businesses benefit from collaborating with the local community?
What impact can a good CSR image have on a publicly quoted organization?
What impact can a good CSR image have on a publicly quoted organization?
How can procurement practitioners significantly impact the environment?
How can procurement practitioners significantly impact the environment?
What can implementing CSR lead to in terms of cost savings?
What can implementing CSR lead to in terms of cost savings?
What is a potential consequence of negative publicity related to CSR?
What is a potential consequence of negative publicity related to CSR?
How can businesses demonstrate their expertise and human face?
How can businesses demonstrate their expertise and human face?
What can the growth of CSR's importance to the public be attributed to?
What can the growth of CSR's importance to the public be attributed to?
How can businesses gauge attitudes towards CSR?
How can businesses gauge attitudes towards CSR?
What can businesses achieve by supporting local charities and sponsoring events?
What can businesses achieve by supporting local charities and sponsoring events?
What can environmental scanning and tools like the PESTLE approach and Michael Porter's Five Forces help businesses analyze?
What can environmental scanning and tools like the PESTLE approach and Michael Porter's Five Forces help businesses analyze?
What directly impacted BP's share price almost halved?
What directly impacted BP's share price almost halved?
What can businesses do to gauge attitudes towards Corporate Social Responsibility (CSR)?
What can businesses do to gauge attitudes towards Corporate Social Responsibility (CSR)?
What can businesses gain by involving employees in community work?
What can businesses gain by involving employees in community work?
How can businesses demonstrate their expertise and human face through CSR?
How can businesses demonstrate their expertise and human face through CSR?
How can procurement practitioners impact the environment?
How can procurement practitioners impact the environment?
What are some benefits of a socially responsible approach?
What are some benefits of a socially responsible approach?
How can implementing CSR lead to cost savings?
How can implementing CSR lead to cost savings?
How can a good CSR image impact a publicly quoted organization's share price?
How can a good CSR image impact a publicly quoted organization's share price?
What can help businesses analyze and understand the impact of external environments on procurement and supply?
What can help businesses analyze and understand the impact of external environments on procurement and supply?
How did BP's share price demonstrate the direct impact of CSR?
How did BP's share price demonstrate the direct impact of CSR?
What can businesses use to analyze competitive market forces in the context of procurement and supply?
What can businesses use to analyze competitive market forces in the context of procurement and supply?
How can businesses mitigate the impact of interest rate rises on operations?
How can businesses mitigate the impact of interest rate rises on operations?
What can businesses use to understand the actual consumption spending of households, government spending, and business investment?
What can businesses use to understand the actual consumption spending of households, government spending, and business investment?
What are the four key tasks associated with the 'Need' step in the procurement operational cycle?
What are the four key tasks associated with the 'Need' step in the procurement operational cycle?
What does the operational cycle in procurement and supply involve?
What does the operational cycle in procurement and supply involve?
What is the focus of this chapter in the context of procurement and supply?
What is the focus of this chapter in the context of procurement and supply?
What is the purpose of establishing price and terms in the procurement operational cycle?
What is the purpose of establishing price and terms in the procurement operational cycle?
What is the purpose of a goods received note in the procure to pay process?
What is the purpose of a goods received note in the procure to pay process?
In the case of services, what document does the requisitioner sign off on to confirm satisfactory completion?
In the case of services, what document does the requisitioner sign off on to confirm satisfactory completion?
What specific details must be included in invoices for payment processing?
What specific details must be included in invoices for payment processing?
What is the purpose of the bill of materials (BOM) in procurement?
What is the purpose of the bill of materials (BOM) in procurement?
What is the role of the specification in the procurement process?
What is the role of the specification in the procurement process?
What are the two types of specifications mentioned in the text?
What are the two types of specifications mentioned in the text?
What is the primary purpose of a delivery note in the procure to pay process?
What is the primary purpose of a delivery note in the procure to pay process?
What is the three-way matching process in the context of procurement?
What is the three-way matching process in the context of procurement?
What additional procurement documents are mentioned in the text?
What additional procurement documents are mentioned in the text?
What role does the BOM play in the procurement process?
What role does the BOM play in the procurement process?
What is the significance of the specification in the procurement process?
What is the significance of the specification in the procurement process?
Which document is used to inform the procurement department that an item is needed?
Which document is used to inform the procurement department that an item is needed?
What is the purpose of a purchase order?
What is the purpose of a purchase order?
What is the final stage in the procurement process?
What is the final stage in the procurement process?
What is the starting point for researching available suppliers?
What is the starting point for researching available suppliers?
What is the main advantage of a computerised procurement system?
What is the main advantage of a computerised procurement system?
What is the purpose of a requisition in procurement?
What is the purpose of a requisition in procurement?
What is the purpose of physically receiving the goods or service in procurement?
What is the purpose of physically receiving the goods or service in procurement?
What is the purpose of checking the invoice in the procurement process?
What is the purpose of checking the invoice in the procurement process?
What is the purpose of updating all relevant records in procurement?
What is the purpose of updating all relevant records in procurement?
What is the purpose of a purchase order in procurement?
What is the purpose of a purchase order in procurement?
What is the purpose of a requisition in procurement?
What is the purpose of a requisition in procurement?
What is the purpose of physically receiving the goods or service in procurement?
What is the purpose of physically receiving the goods or service in procurement?
What is the purpose of the request for information (RFI) in the procurement process?
What is the purpose of the request for information (RFI) in the procurement process?
What is the primary purpose of the request for quotation (RFQ) in the procurement process?
What is the primary purpose of the request for quotation (RFQ) in the procurement process?
What should be included in the documents accompanying a request for quotation (RFQ)?
What should be included in the documents accompanying a request for quotation (RFQ)?
What is the main objective of framing questions in the request for information (RFI) stage?
What is the main objective of framing questions in the request for information (RFI) stage?
What is the purpose of the pre-qualifying questionnaire (PQQ) in the procurement process?
What is the purpose of the pre-qualifying questionnaire (PQQ) in the procurement process?
What should be the focus of questions during the request for information (RFI) stage?
What should be the focus of questions during the request for information (RFI) stage?
What is the main purpose of the pricing template accompanying a request for quotation (RFQ)?
What is the main purpose of the pricing template accompanying a request for quotation (RFQ)?
What is the primary purpose of the description of what is needed in the request for quotation (RFQ)?
What is the primary purpose of the description of what is needed in the request for quotation (RFQ)?
What is the significance of including the proposed contract in template form with the request for quotation (RFQ)?
What is the significance of including the proposed contract in template form with the request for quotation (RFQ)?
What is the primary purpose of the statement describing the selection criteria in the request for quotation (RFQ)?
What is the primary purpose of the statement describing the selection criteria in the request for quotation (RFQ)?
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Study Notes
Industry Analysis and Market Forces
- Bureaucracy in trading with a specific country can impact the industry's operations
- Availability of funding and grants for the industry and potential changes over the coming years are crucial for strategic planning
- Regional conflicts, wars, and terrorism can disrupt supply chains and impact the industry's stability
- The industry's relationships with trading partners and nearby countries play a significant role in its operations
- Economic factors such as inflation, interest rates, and economic trends can affect pricing models and demand for the industry's products or services
- The Swiss franc's uncoupling from the euro in 2015 had a significant impact on Swiss companies' competitiveness and growth outlook
- Social factors like demographics, culture, and consumer attitudes influence the industry's market perception and behavior
- Technology analysis includes current technology, innovation levels, and barriers to entry for new products or services
- Legal factors encompass internal and external rules, regulations, and policies governing the industry's operations
- Environmental factors include both geographical and business impact aspects, affecting the industry's operations and product demand
- Porter's Five Forces model is a widely used tool for analysing market competitiveness, consisting of supplier power, buyer power, new entrants, substitutes, and competitive rivalry
- Each element of the Porter's Five Forces model, such as supplier power, buyer power, and new entrants, has specific factors that determine market competitiveness
Barriers to Entry and Competitive Rivalry in Markets
- Larger companies have bigger advertising budgets, giving them an advantage in consumer markets.
- Financial economies of scale result in lower financing costs for larger organizations.
- Product differentiation creates customer loyalty and can be a barrier for new entrants.
- Capital requirements, especially in industries like computers, pharmaceuticals, and airlines, can be huge and prohibitive for small- and medium-sized businesses.
- Early entrants may have significant cost advantages, such as access to the best raw materials and legally enforceable patents.
- Access to distribution channels, like supermarket shelves, can be influenced by brand loyalty and product placement.
- Government policies, regulations, and tariffs can create barriers to entry for new businesses.
- Threat of substitution can impact market structure and profitability.
- Switching costs and price are key determinants of whether a buyer moves to a substitute, acting as a barrier to price increases.
- Competitive rivalry in a market determines its profitability and sets expectations for profit targets for each organization.
- Market growth, product differentiation, high fixed costs, and exit barriers contribute to intense competitive rivalry.
- Assessing the Porter's Five Forces model helps in understanding the power dynamics in a supply market and its implications for procurement and supply.
Product Life Cycle and Economic Criteria in Procurement and Supply
- Changes in technology and consumer tastes are common reasons for product decline
- Laggards continue to buy products in the decline stage
- Profits in the decline stage can be reasonable due to premium pricing and low promotional costs
- The decline of the iPod, once iconic, is attributed to changing consumer preferences
- Apple's iPod sales have dwindled, with a 52% decline in 2013
- The success of iPhones and iPads contributed to the iPod's decline
- The product life cycle consists of introduction, growth, maturity, and decline stages
- Macro-economic factors affecting organizations include interest rates, inflation, and exchange rates
- Interest rates impact organizations through borrowing, bank deposits, and customer credit
- Changes in interest rates are influenced by supply and demand for money
- Business cycles, measured by GDP, impact whole sectors and individual companies
- Strong economies boost confidence, leading to increased demand for goods and services and potential inflation
Impact of Currency Devaluation and GDP/GNP on the Economy
- Currency devaluation can affect the cost of imports and exports, making products cheaper or more expensive in different countries.
- A devaluation of the euro against the US dollar can make European products cheaper to buy in the US, even if the price in Europe remains the same.
- Devaluation of a country's currency may lead to increased profits for businesses but could reduce the incentive to cut costs and increase productivity.
- Price elasticity determines the impact of currency devaluation on demand for goods and services.
- Global economic conditions, such as a global depression, can influence the effectiveness of devaluing a currency to stimulate the economy.
- Businesses can mitigate the effects of currency movements by using fixed-price contracts for raw material imports.
- Economic activity is measured through gross domestic product (GDP) and gross national product (GNP), with differences in how they define citizens and businesses.
- China's GDP is $300 billion greater than its GNP due to the large number of foreign companies manufacturing in the country, while the US's GNP is $250 billion greater than its GDP due to production outside its borders.
- Governments use GDP to make decisions on interest rates and money supply, which can impact economic growth.
- Businesses use GDP to make investment decisions and manage cash, while investors use it to adjust their investment portfolios based on the economy's growth prospects.
- GNP serves as a measure of supply and demand, with components including consumption, government spending, investment spending, and net exports.
- GNP helps in understanding the actual consumption spending of households, government spending, and business investment, which collectively influence the economy's performance.
Importance of Corporate Social Responsibility in Procurement and Supply
- Businesses can gauge attitudes towards CSR by engaging with employees and suppliers, treating them fairly, and supporting their involvement in community activities.
- Involving employees in community work can enhance community relations, motivate employees, and develop their interpersonal and team skills.
- Collaborating with the local community can benefit businesses through increased sales, improved reputation, and easier recruitment, as well as gaining favor with local government for contract awards.
- Businesses can support local charities, sponsor events, and engage in activities related to their products to demonstrate their expertise and human face.
- Procurement practitioners can significantly impact the environment by minimizing waste, using recycled materials, and encouraging suppliers to do the same.
- The benefits of a socially responsible approach include a more motivated workforce, improved public image, cost savings, long-term thinking, customer engagement, and employee engagement.
- The growth of CSR's importance to the public is evident through the emergence of pressure groups and increasing media coverage on the subject.
- Implementing CSR can lead to cost savings by cutting out waste and encourages long-term thinking for the sustainability of the organization.
- CSR contributes to better customer and employee engagement, as well as creating an acceptable public image, which influences sales.
- A good CSR image can positively impact a publicly quoted organization's share price and attract investment from governments to support CSR work.
- Environmental scanning and tools like the PESTLE approach and Michael Porter's Five Forces can help businesses analyze and understand their external environments' impact on procurement and supply.
- BP's share price almost halved due to negative publicity from the Gulf of Mexico disaster, demonstrating the direct impact of CSR on share prices.
Procure to Pay Process in Procurement
- The procurement of services is managed by the department that requested the service, while a copy of the purchase order is sent to the supplier.
- For physical goods, suppliers use the purchase order to organize the goods for pick, pack, and dispatch according to the terms of the purchase order.
- Upon receiving goods, warehouse staff verify quantities, perform quality control checks, and complete a goods received note for matching with the purchase order and supplier's invoice in a three-way matching process.
- After the three-way match, the supplier's invoice is processed and paid according to the payment terms.
- In the case of services, the requisitioner signs off on the invoice to confirm satisfactory completion, as opposed to signing off on a delivery note for physical goods.
- Delivery notes list the contents and quantities of shipped goods, signed by the recipient as proof of delivery and possession.
- Invoices are paid after verifying the received items against the purchase order, delivery note, and invoice through a three-way match.
- Invoices must contain specific details, including unique identification number, company details, customer details, description of items, supply date, invoice date, amount, VAT/sales tax, and legal entity specifics.
- Additional procurement documents include the bill of materials (BOM) listing items needed for product assembly and the specification detailing the organization's needs for the supplier.
- The BOM is used by engineering for product design, manufacturing as assembly guidance, and procurement for sourcing items and quantities.
- The specification is a statement of needs provided to the supplier to avoid misinterpretation of requirements and plays a crucial role in the procurement process.
- There are two types of specifications: technical (conformance) specifying methods, materials, and suppliers, and outcome-focused specifying desired results and capabilities.
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