MCQs- CHAPTER 7- COMPANY ANALYSIS

Cess is an additional levy charged on the taxes plus surcharge, and it is meant to be used for specific purposes for which it is levie

The six factors included in PESTLE Analysis are Political, Economic, Sociocultural, Technological, Legal and Environmental.

Cash Cows are segments in a business which require low cash infusion for investment to maintain market shares because of low growth prospects but at the same time, generate a significant amount of cash for the business.

The overall size of the tyre market in the country can be estimated as: Rs 24,000 crore / (1 - 0.20) = Rs 30,000 crore. Therefore, option is the closest estimate to the fair size of the tyre market in that country for the year 2019.

In an industry where rivalry is high, the competition among the players increases, leading to lower pricing power and lower incomes for the industry participants. Therefore, option is the correct answer.

Suppliers’ bargaining power would be high if the number of suppliers are limited and buyers are many.

Excise duty is an example of an indirect tax, whereas income tax, corporate tax, and wealth tax are examples of direct taxes.

PESTLE analysis is a tool used to analyze the external macro-environmental factors that affect an organization. Economic factors, such as forex reserves, monetary policies of the RBI, and a country's dependence on other countries for natural resources, are important economic factors that impact an organization. Therefore, option is the correct answer.

The performance analysis of SCP analysis involves studying the financials of the industry and the key performance indicators (KPIs) that are specific to that industry.

The government of Kerala introduced a fat tax in 2017 to discourage the junk food industry by levying 14.5% additional tax on junk foods.

STEEPLED stands for Sociological, Technological, Environmental, Economic, Political, Legal, Ethical and Demographi Some models extend PESTLE to include these factors, thus modifying the acronym to STEEPLE

Suppliers’ bargaining power would be high if the products/services do not have threat of substitutes.

Small changes in regulatory framework can have a big impact on businesses, and therefore, analysts should pay enough attention to the regulatory aspects of businesses

Buyers’ bargaining power would be high if the products/services are standardized with little or no differentiation.

An industry that has low competition would have strong pricing power and high profit margins, which is attractive to investors.

Political factors are important to consider as countries can have different political structures. For example, communist countries would have social objectives above anything else while capitalist ones would not necessarily have all responsibilities of a welfare state. Political stability, minimal corruption, bureaucracy, communal tensions and violence, and maximum freedom of press, ease of doing business and quick turnaround time are some of the factors which investors would look at in a country.

PESTLE Analysis is an analysis done more from the perspective of a business which is looking to set up a unit offshore and analyzing several countries to choose from. This model primarily analyzes the external environmental factors that will act as influencers for a business.

Stars are segments in a business where the market is growing rapidly and the company is having a large market share.

SWOT Analysis is a strategic planning tool used to analyze the external factors that could impact a company's growth and success.

The first step in the marketing research process is problem identification, which involves identifying and defining the marketing problem that the research is intended to solve.

A mission statement defines a company's goals, objectives, and approach to achieve them, while a vision statement describes a company's future aspirations and its desired future state.

The structure analysis of SCP analysis involves studying the competitive intensity in the industry, the concentration of business, the relationship among various players, and the market size, growth rate, dominance of few players in the industry, and other related factors.

Governments use direct taxes as a tool for promoting or discouraging certain activities. For instance, in India, companies are allowed to claim an expense that is 1.5 times of actual expenditure incurred on certain scientific research activity to promote research and development.

SCP analysis involves considering the key constraining factors such as demand side constraints, supply side constraints, and regulatory constraints while analyzing the industry.

BCG Matrix is a portfolio analysis model developed by Boston Consulting Group.

SCP analysis is a method of analyzing industries based on their structure, conduct, and performance.

The conduct analysis of SCP analysis involves studying the factors that define the conduct of businesses such as pricing and product innovation.

Entry barriers in an industry would be high if patents and copyrights prevent new entrants.

Certain disruption may create new competitive advantage for one company or may remove a competitive advantage enjoyed by an existing player. This may result is value migrating from one company to another. Before

Buyers’ bargaining power would be high if the competitive intensity in the industry is strong, as continuous pricing pressure would exist on industry participants.

In a market where there are a large number of sellers with similar products or services, consumers have more bargaining power and can exert pressure on the sellers to lower prices. Therefore, option is the correct answer.

Structure Conduct Performance (SCP) analysis is a framework that examines the structure, conduct, and performance of an industry. The "structure" in SCP analysis refers to the relationship among the various players in the industry, such as the number and size of firms, entry and exit barriers, and degree of product differentiation. Therefore, option is the correct answer.