Question

Assessing Drivers of Business Growth

5-Read the following passage and determine which of the PESTEL factors the described business is facing:

Mountain Transportation is a trucking company that provides in-door deliveries of electronic products purchased through large consumer electronics retailers in the US. Shawn, a truck driver at Mountain Transportation, has filed a lawsuit with the company regarding a violation of the Hours of Service regulations for commercial drivers. Shawn claims that he has been forced to work over 70 hours for the past couple weeks, due to a high volume of customer orders. According to the Hours of Service regulations, all commercial drivers may not drive after 60 hours on duty in 7 consecutive days and may only restart after taking 34 or more consecutive hours off duty.

A-Environmental factors

B-Technological factors

C-Political factors

D-Legal factors

E-Economic factors

F-Social factors

6-When competition within an industry is high, which of the following is most likely to be true?

Review Later

A-Market concentration is low

B-Many substitutes are available

C-Switching costs are higher

D-Buyers have low bargaining power

7-Which of the following is most likely true for companies at the maturity stage of the industry lifecycle?

Review Later

A-Sales > Cash Flow > Profit

B-Cash Flow > Sales > Profit

C-Sales > Profit > Cash Flow

8-According to the growth/share matrix, companies at maturity have:

Review Later

A-High market growth and low market share

B-Low market growth and high market share

C-Low market growth and low market share

D-High market growth and high market share

Answer 1

Answer :

5. Option - D, Legal factors

Explanation : Legal factors of PESTEL analysis include laws and regulations, health & safety guidelined tec.

6. Option - B, Many substitutes are available

Explanation : In case of high competition in market, number of availability of goods increases in market. In this market consumers are in a situation of having large no. of substitute goods with high bargaining power.

7. Option - A, Sales > Cash Flow > Profit

Explanation : At maturity stage, sales are at higher level due to which cash flow is increasing and a stage ultimately comes where profit starts decreasing.

8. Option - B, Low market growth and high market share

Explanation : As per growth share matrix, at maturity level investments are called cash cows, which indicates Low market growth and high market share.