CIPS Updated L4M6 Exam Questions and Answers by romie

Comprehensive and Detailed Explanation:

By acquiring an Australian office furniture manufacturer, COFM can:

Access the Restricted Local Market:Acquisition allows COFM to operate as a local entity, thereby overcoming barriers to entry and benefiting from any local government support available to domestic manufacturers.

Improve Knowledge of the Local Market:The acquired company brings with it an understanding of local customer preferences, regulatory requirements, and market dynamics, which is invaluable for successful operations.

However, the acquisition does not remove government support for other local manufacturers, nor does it necessarily decrease competition.

Comprehensive and Detailed Explanation:

The Kraljic Matrix is a strategic tool used to segment the supply base and develop differentiated purchasing strategies based on two key dimensions:

Profit Impact (Level of Spend):This refers to the financial significance of the item or service to the organization. High expenditure items have a greater impact on profitability and thus require more strategic sourcing approaches.

Supply Risk (Market Structure):This pertains to the complexity and dynamics of the supply market, including factors like the number of suppliers, market competitiveness, and potential for supply disruptions. Understanding the market structure helps in assessing the risk associated with sourcing particular items.

By analyzing these two factors, organizations can categorize their purchases into four quadrants—non-critical, leverage, bottleneck, and strategic items—and tailor their sourcing strategies accordingly.

Explanation

Pablo should use a ‘cross-functional team’. CIPS love ‘cross-functional teams’ and refer to them frequently throughout the study guide. A cross-functional team is people from different departments who come together for a purpose, such as to evaluate a tender. The benefit of using a cross-functional team is that you get people with different experiences and knowledge. So in this example a Cross-Functional team could compose of people from various departments such as procurement, logistics, manufacturing and legal. P.76

Complex and technical suppliers often involve high financial risks due to the critical nature of their products. A close relationship ensures better collaboration, risk management, and value generation.