Day: November 13, 2024

The specialist services division of Alex pic uses highly-qualified professional staff to provide its government-accredited service to its customers.

The division is developing its business plan and is reviewing a Five Forces Analysis that was conducted by a consultant, Lucy.

This identifies that rivalry between the very few providers of the specialist service will soon intensify.

The report contained two statements about factors that indicate increased rivalry among providers.

Statement 1 – Government subsidies for existing providers are to be removed

Statement 2 – Two key customers of the specialist service are to merge

Are these statements accurate or inaccurate?

Select ONE answer:

1. Statement 1 – Accurate / Statement 2 – Not accurate
2. Statement 1 – Accurate / Statement 2 – Accurate
3. Statement 1 – Not accurate / Statement 2 – Not accurate
4. Statement 1 – Not accurate / Statement 2 – Accurate

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Notcorrect
2. Correct == > A concentration of customers will increase rivalry since the power of customers is therefore increased. Removal of government subsidies creates a more level playing field amongst competitors hence also increasing rivalry.
3. Not correct
4. Not correct

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