Question

UMSS University of Modorn Saiences Q1 (4 Marks) [CLO K1] Elucidate the basic principle of the Resource-Based View approach in achieving and sustaining competitive advantage Q2 (14 Marks) [CLO S 1, C1, C2] The below Extermal Factor Evaluation matrix evaluates the external environment of a leading business in UAE. External Factor Evaluati trix for a leading business in UAE Key External Factors Weight Rating Weighted Score Opportunities 1. Increase in Air Travel 0.12 0.36 2. Industry Consolidation 0.11 0.44 3. Privatisation in CE countries 0.10 0.20 4. Growth of Low Cost sector 0.08 0.32 5. Increase demand in China 0.16 0.48 Threats 1. Declining Margins 0.10 0.10 2. Government Oversight 0.05 0.15 0.08 2 0.6 3. Climbing prices of key inputs 4. New security tax 0.05 0.10 5. Economic Downturn 0.15 Total 2.46 Using the External Factor Evaluation matrix given above, answer the following questions to help the business make appropriate plans and take effective decisions A. Enumerate the two most important factors and two least important factors to be successful in this business. 4 Marks)

Answer 1

(A.)

The two most important factors to be successful in this business:

(1.) Industry Consolidation

(2.) Growth of Low Cost Sector.

Explanation

The factor which has highest rating, indicates important factor to be successful in this business. In this external factor Evaluation Matrix, Industry Consolidation and Growth of Low Cost Sector is the two most important factors to be successful in this business.

The two least important factors to be successful in this business:

(1.) Declining Margins

(2.) Economic Downturn.

Explanation

The factor which has lowest rating, indicates least important factor to be successful in this business. In this external factor Evaluation Matrix, Declining Margins and Economic Downturn is the two least important factors to be successful in this business.