ACA Business Strategy

Question 1

According to Porter's Five Forces framework, which of the following would INCREASE the bargaining power of buyers in a UK industry?

Accepted Answer

Availability of many substitute products

Answer

High switching costs for buyers

Answer

Low concentration of buyers

Answer

Strong brand loyalty among customers

Question 2

In Ansoff's Growth Matrix, which strategy involves selling new products to existing markets?

Accepted Answer

Product development

Answer

Market penetration

Answer

Market development

Answer

Diversification

Question 3

Under the UK Companies Act 2006, what is the primary duty of company directors?

Accepted Answer

To act in a way they consider would be most likely to promote the success of the company for the benefit of its members as a whole

Answer

To maximise short-term share price

Answer

To follow all instructions from shareholders without question

Answer

To maximise their own remuneration

Question 4

What does a PESTEL analysis examine?

Accepted Answer

Political, Economic, Social, Technological, Environmental, and Legal external factors

Answer

The internal strengths and weaknesses of a company

Answer

The competitive position of a company relative to its rivals

Answer

The financial ratios of a company over time

Question 5

Which of the following best describes a 'cost leadership' strategy as defined by Michael Porter?

Accepted Answer

Becoming the lowest-cost producer in the industry while maintaining acceptable quality

Answer

Charging the highest prices in the market for premium products

Answer

Targeting a small niche market with specialised products

Answer

Rapidly diversifying into unrelated markets

Question 6

In the context of UK corporate governance, what is the 'comply or explain' principle?

Accepted Answer

Listed companies should comply with the UK Corporate Governance Code or explain why they have not

Answer

Companies must comply with all governance codes or face legal penalties

Answer

Companies can ignore governance requirements if they explain their business model

Answer

Only the largest companies need to comply with governance rules