CIPS Level 4 Diploma in Procurement and Supply L4M6 Updated Exam

Explanation

This is a threat of a new entrant. The competitor has now entered the washing machine market and is competing directly with you. This is not a threat of substitution as it is the same product. A substitution would be if they invented a new product that washed clothes and people started buying this instead of washing machines. There are many questions in the exam on Porter's 5 Forces - see p. 39

Explanation

The correct answer is ‘no- as this was not the lollypop sticks intended purpose’. When deciding if something is fit for purpose, you must consider its intended and common purpose. In this case it would be for making lollypops. As the garden centre is using them for something other than their intended purpose, they can’t complain if it doesn’t work. Fit for purpose is discussed on p.65 p.s. there’s a QUESTION NO: like this in the real exam – it’s just not lollypop sticks ; )

Comprehensive and Detailed Explanation:

Joint venturesandstrategic alliancesare common forms of partnerships between companies:

Joint Venture:A business arrangement where two or more parties agree to pool their resources for a specific task, creating a new entity.

Strategic Alliance:An agreement between companies to pursue objectives while remaining independent organizations.

"Sole trader," "limited company," and "public limited company" refer to business structures, not partnership arrangements.

Effective partnership governance requires balanced representation from both buyer and supplier. If the supplier has fewer members than the buyer, decision-making power becomes unequal, potentially undermining collaboration.