CIPS Exam L4M6 Topic 3 Question 57 Discussion

Actual exam question for CIPS's L4M6 exam

Question #: 57
Topic #: 3

[All L4M6 Questions]

A competitor develops an alternative type of vacuum cleaner to one produced by your organization. Is this an example of the threat of substitutes, one of the five forces of competition described by competitive forces theory?

AYes, customers may switch to alternative products

BYes, there are no barriers to entry; it is an oligopoly

CNo, it does not serve the same purpose

DNo, it is a threat from a new entrant to the market

Show Suggested Answer

Suggested Answer: B, C

The correct answers are information sharing and trust. Further qualitative KPIs are listed on p.102. Deliveries in full and on time would be a quantitative KPI and early supplier involvement is not a KPI at all.

by Noel at Jan 12, 2025, 04:09 PM

Limited Time Offer

25%

Off

Get Premium L4M6 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Man

4 months ago

Ha! Alternative vacuum cleaner? What, is it like a Roomba but also does the dishes? I'd be careful with that one, it might just suck up your entire kitchen!

upvoted 0 times

Chantay

2 months ago

We should keep an eye on it and see how it impacts our market share.

upvoted 0 times

...

Theron

2 months ago

I agree, if it can do more than just vacuum, it could definitely pose a threat to our product.

upvoted 0 times

...

Argelia

3 months ago

Haha, that would be something! But yeah, it sounds like a potential threat of substitutes.

upvoted 0 times

...

Willodean

4 months ago

I'm not sure about that. Doesn't the question mention that the competitor's vacuum cleaner is 'alternative'? Doesn't that mean it might not serve the same purpose? I'd go with C - No, it does not serve the same purpose.

upvoted 0 times

Leonora

3 months ago

C) No, it does not serve the same purpose

upvoted 0 times

...

Dorthy

3 months ago

B) Yes, there are no barriers to entry; it is an oligopoly

upvoted 0 times

...

Leota

3 months ago

A) Yes, customers may switch to alternative products

upvoted 0 times

...

Hailey

4 months ago

I agree with Phuong. This is a classic case of the threat of substitutes, where a competitor's product can potentially replace the one produced by the organization.

upvoted 0 times

Jamal

3 months ago

A) Yes, customers may switch to alternative products

upvoted 0 times

...

Luisa

3 months ago

B) Yes, there are no barriers to entry; it is an oligopoly

upvoted 0 times

...

Elli

4 months ago

A) Yes, customers may switch to alternative products

upvoted 0 times

...

Phuong

4 months ago

The correct answer is A. The development of an alternative vacuum cleaner is definitely an example of the threat of substitutes, as customers may switch to the competitor's product.

upvoted 0 times