Non-financial analysis

Question 1

What are the four main industry sectors?

Answer 1

1 - Manufacturing

2 - Wholesales and distribution

3 - Retailing

4 - Services industry

Question 2

What are the stages during an industry life cycle?

Answer 2

1 - Emerging

2 - Mature

3 - Declining

Question 3

Critical success factors indicate the success of an industry.

What are the 5 generic examples of Critical Success Factors? (CSFs)

Answer 3

1 - Management

2 - Sales

3 - Marketing

4 - Operational

5 - Finance

Question 4

What are Porter’s Five Forces?

Answer 4

1 - Threat of new entrants

2 - Bargaining power of suppliers

3 - Bargaining power of buyers

4 - Availability of substitute products

5 - Rivalry among other operators in the sector

Question 5

Once you’ve analysed the industry using porters 5 forces you must pick your market strategy.

What are the four main approaches to market strategy?

Answer 5

Broad cost - reduce cost by managing areas of the business that have a major impact on cost

Broad differentiation - finding aspects of the product that the customers finds most valuable

Focus cost - focussing on a particular target sector where you can be more cost efficient

4 - Targeting a narrow market and concentrating on servicing it better than than your broad targeting competitors

Question 6

What is the objective of Porter’s Five forces?

Answer 6

To understand the dynamics of the competitive structure of an industry

Question 7

What is the objective of PESTEL?

Answer 7

It is a forward looking tool that can help to analyse future developments and issues affecting the macro-enviroment

Question 8

What does PESTEL stand for?

Answer 8

Political 
Economic
Social
Technology
Environmental
Legal

Question 9

Core competencies are capabilities that are critical to a business achieving a competitive advantage.

Examples of these competency include?

Answer 9

• Technical innovation
• Processing efficiency
• Research
• Design
• Superior talent

Question 10

The three critical criteria for a core competency to fulfil are?

Answer 10

1 - Difficult for a competitor to copy

2 - It can be used across a variety of products

3 - It gives benefits to the end user

Question 11

What is market penetration?

Answer 11

• Existing products in existing markets

Question 12

What is product development?

Answer 12

New product in existing markets

Question 13

What is market development?

Answer 13

Existing product in new markets

Question 14

Diversifaction

Answer 14

New product in new markets

Question 15

What is on the x and y axis of the Directional Policy Matrix (DPM)?

Answer 15

x - Competitive advantage

y - Market attractiveness

Question 16

What are the 7 stages of a product lifecycle?

Answer 16

1  - Birth
2 - Introduction
3 - Development
4 - Growth
5 - Maturity
6 - Decline
7 - Death

Question 17

What is Ansoff Growth Matrix?

Answer 17

Existing product New Product

Existing Market MP MD

New Market PD D

The Ansoff Growth Matrix (AGM) is a tool that helps companies decide their product and
market growth strategies.