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CIPS L6M2 Exam Syllabus Topics:

Topic	Details
Topic 1	Understand and apply the concept of commercial global strategy in organizations: This section measures the skills of Global Strategy Analysts and focuses on evaluating the characteristics of strategic decisions in organizations. It includes understanding strategic versus operational management, strategic choices, and the vocabulary of strategy. A key skill measured is effectively differentiating between strategic and operational management.
Topic 2	Understand strategy formulation and implementation: This section evaluates the skills of Strategic Planners in understanding how corporate and business strategies impact supply chains. It covers strategic directions, diversification, portfolio matrices, and methods for pursuing strategies like mergers or alliances. It also examines aligning supply chains with organizational structures and managing resources like people, technology, and finance. A key skill measured is implementing strategies under uncertain conditions.
Topic 3	Understand financial aspects that affect procurement and supply: This section measures the skills of Financial Analysts in assessing how costs, funding, and economic objectives impact supply chains. It includes managing currency volatility through exchange rate instruments like forwards or derivatives and addressing commodity price fluctuations using futures or hedging. A critical skill assessed is managing financial risks in global supply chains effectively.
Topic 4	Understand and apply tools and techniques to address the challenges of global supply chains: This section targets Supply Chain Analysts and covers methods for analyzing global supply chains, such as STEEPLED analysis, benchmarking, and performance metrics. It also evaluates regulatory influences, including import export controls, tariffs, and employment regulations like equality, health, and safety. A critical skill assessed is applying STEEPLED analysis to supply chain challenges.

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CIPS Global Commercial Strategy Sample Questions (Q39-Q44):

NEW QUESTION # 39
SIMULATION
Evaluate the following approaches to strategy formation: intended strategy and emergent strategy

Answer:

Explanation:
Evaluation of Intended Strategy vs. Emergent Strategy
Introduction
Strategy formation is a critical process that determines how businesses achieve their objectives. Two contrasting approaches exist:
Intended Strategy - A deliberate, planned approach, where management defines a clear course of action.
Emergent Strategy - A flexible, adaptive approach, where strategy evolves in response to external changes.
Both approaches have advantages and constraints, and organizations often combine both to maintain strategic direction while adapting to market uncertainties.
1. Intended Strategy(Planned Approach to Strategy Formation)
Definition
An intended strategy is a structured, pre-planned approach where an organization sets long-term goals and develops a roadmap to achieve them.
✅ Key Characteristics:
Clearly defined mission, vision, and objectives.
Top-down decision-making with structured implementation plans.
Focus on forecasting, market research, and competitor analysis.
Example:
McDonald's follows an intended strategy by expanding its franchise model using structured business plans and operational guidelines.
Advantages of Intended Strategy
✔ Provides a clear vision and direction - Ensures all departments align with corporate goals.
✔ Supports long-term resource allocation - Helps in budgeting and investment planning.
✔ Enhances risk management - Allows organizations to prepare for potential challenges.
✔ Ensures consistency - Ideal for stable industries with predictable market conditions.
Constraints of Intended Strategy
❌ Inflexible in dynamic markets - Struggles with unforeseen changes (e.g., economic crises, technology shifts).
❌ Can lead to missed opportunities - Focuses on execution rather than adaptation.
❌ Slow response time - Delays decision-making in fast-changing industries.
Key Takeaway: Intended strategy works best in stable environments where long-term planning can be executed without major disruptions.
2. Emergent Strategy(Flexible & Adaptive Approach to Strategy Formation) Definition An emergent strategy is a responsive, flexible approach where businesses adapt their strategies based on real-time changes in the market.
✅ Key Characteristics:
Strategy emerges from trial and error, experimentation, and learning.
Encourages bottom-up decision-making, allowing employees to contribute.
Focuses on short-term flexibility and continuous adjustments.
Example:
Amazon's move into cloud computing (AWS) was an emergent strategy, as it originally started as an online bookstore but adapted to market opportunities.
Advantages of Emergent Strategy
✔ Highly adaptable - Allows businesses to pivot in response to market shifts.
✔ Encourages innovation and experimentation - Promotes new ideas and flexible problem-solving.
✔ Reduces risk of failure - Companies can adjust strategies before fully committing to large-scale investments.
✔ Works well in unpredictable environments - Essential for industries like technology, fashion, and e-commerce.
Constraints of Emergent Strategy
❌ Lack of clear direction - Can create confusion in organizations with no defined strategic goals.
❌ Resource inefficiency - Constant adjustments may lead to wasted time and investment.
❌ Difficult to scale - Unstructured decision-making can cause inconsistencies.
Key Takeaway: Emergent strategy is ideal for fast-changing industries where adaptability is more valuable than rigid planning.
3. Comparison: Intended Strategy vs. Emergent Strategy

Key Takeaway: Most successful organizations blend both approaches, using intended strategy for stability and emergent strategy for adaptability.
4. Conclusion
Both intended and emergent strategies have strengths and weaknesses.
✅ Intended strategy is best for structured, long-term growth in stable industries.
✅ Emergent strategy allows for rapid adaptation in volatile markets.
✅ Most businesses use a combination of both approaches, balancing planning with flexibility.
By integrating intended and emergent strategies, organizations can maintain stability while responding effectively to market changes.

NEW QUESTION # 40
SIMULATION
XYZ is a large manufacturing organisation which employs 200 skilled staff in its factory in Bolton. It has a large global supply chain with raw materials sourced from Asia and Africa. Discuss five areas of policy that can affect the people working in the supply chain

Answer:

Explanation:
Five Areas of Policy Affecting People in the Supply Chain - XYZ Manufacturing Introduction A global supply chain involves multiple stakeholders, including suppliers, logistics providers, and factory workers. Policies at corporate, national, and international levels impact the working conditions, rights, and well-being of people within the supply chain.
For XYZ, a large manufacturing company with a factory in Bolton and suppliers in Asia and Africa, key policy areas affecting its workforce and supply chain workers include labor rights, health and safety, wages, environmental regulations, and ethical sourcing.
1. Labor Laws and Workers' Rights Policies
Policies related to employment laws, working hours, and fair treatment impact supply chain workers' rights.
✅ Key Areas of Impact
Child labor and forced labor laws ensure ethical sourcing.
Working hours and overtime regulations prevent worker exploitation.
Freedom of association (e.g., the right to join trade unions) allows collective bargaining.
Example: The International Labour Organization (ILO) conventions set global labor standards, influencing suppliers in Asia and Africa.
✅ Impact on XYZ
Must audit suppliers to ensure compliance with fair labor policies.
Risk of reputational damage if suppliers engage in unethical labor practices.
2. Health and Safety Regulations
Policies ensuring safe working conditions in manufacturing and supply chain operations protect employees from hazards.
✅ Key Areas of Impact
Workplace safety (e.g., protective equipment, fire prevention, accident reporting).
Factory compliance with OSHA (Occupational Safety and Health Administration) standards.
COVID-19 and pandemic-related health protocols in global supply chains.
Example: Bangladesh's Rana Plaza factory collapse (2013) highlighted the dangers of weak safety regulations, prompting global reforms in factory safety policies.
✅ Impact on XYZ
Needs to conduct supplier audits to ensure compliance with safety laws.
May need to invest in better safety training for factory workers in Bolton.
3. Wages and Fair Pay Policies
Regulations and policies on minimum wages, equal pay, and fair compensation influence worker conditions in global supply chains.
✅ Key Areas of Impact
Minimum wage laws in supplier countries affect labor costs.
Fair pay policies ensure workers are not underpaid or exploited.
Gender pay equity promotes inclusive employment practices.
Example: The UK's National Minimum Wage ensures fair pay, but wages in Asia and Africa may be significantly lower.
✅ Impact on XYZ
Needs to ensure suppliers pay living wages to avoid reputational risks.
Could face supply chain disruptions if wage disputes lead to strikes or protests.
4. Environmental and Sustainability Policies
Environmental policies regulate how businesses source raw materials, manage waste, and reduce carbon emissions.
✅ Key Areas of Impact
Deforestation and raw material sourcing laws (e.g., FSC-certified timber, conflict minerals regulations).
Carbon emissions policies affect logistics and transportation.
Waste disposal and pollution regulations impact factory operations.
Example: The EU's Carbon Border Adjustment Mechanism (CBAM) affects importers sourcing from high-carbon-emitting regions.
✅ Impact on XYZ
Must ensure suppliers meet environmental standards to avoid legal penalties.
Needs to reduce carbon footprint by choosing sustainable transport and materials.
5. Ethical Sourcing and Corporate Social Responsibility (CSR) Policies
Ethical sourcing policies ensure companies buy from responsible suppliers that uphold human rights and environmental protection.
✅ Key Areas of Impact
Modern Slavery Act (UK, 2015) requires firms to report on anti-slavery efforts.
Fairtrade and ethical certification policies ensure responsible supply chain practices.
CSR commitments require businesses to engage in community welfare programs.
Example: Nestlé has an Ethical Sourcing Program for cocoa, ensuring child labor-free supply chains.
✅ Impact on XYZ
Needs to conduct supplier due diligence to comply with ethical sourcing laws.
Ethical policies can enhance brand reputation and customer trust.
Conclusion
Policies on labor rights, health and safety, fair wages, environmental sustainability, and ethical sourcing directly impact people working in XYZ's supply chain. To ensure compliance, XYZ must adopt robust supplier audits, transparent reporting, and ethical business practices to protect workers' rights while maintaining a resilient and responsible supply chain.

NEW QUESTION # 41
SIMULATION
XYZ is a construction firm which builds houses in Birmingham. Discuss a tool that it can use to assess the remote environment and discuss a tool it can use to evaluate the operating environment.

Answer:

Explanation:
Environmental Analysis Tools for XYZ Construction Firm
To make strategic decisions, XYZ Construction needs to assess both the remote environment (external macro factors) and the operating environment (industry-specific and competitive factors). Two widely used tools for these assessments are:
PESTLE Analysis - for analyzing the remote environment
Porter's Five Forces - for evaluating the operating environment
1. Assessing the Remote Environment: PESTLE Analysis
Tool: PESTLE Analysis helps organizations evaluate macro-environmental factors that impact long-term business strategy.
Why use PESTLE?
It identifies external influences (political, economic, social, technological, legal, and environmental) that XYZ cannot control but must respond to.
PESTLE Analysis for XYZ Construction:

Example: If the UK government introduces new housing grants, XYZ may expand operations to capitalize on increased demand.
2. Evaluating the Operating Environment: Porter's Five Forces
Tool: Porter's Five Forces helps XYZ analyze industry-specific competition and market dynamics.
Why use Porter's Five Forces?
It helps assess competitive pressures that impact XYZ's profitability and positioning.
Porter's Five Forces Analysis for XYZ Construction:

Example: If supplier power is high due to rising material costs, XYZ must negotiate better contracts or explore alternative suppliers.
Conclusion
✅ PESTLE Analysis helps XYZ understand the external environment affecting the construction industry.
✅ Porter's Five Forces enables XYZ to evaluate industry competition and make informed strategic choices.

NEW QUESTION # 42
SIMULATION
Explain, with examples, why supply and demand fluctuate in the commodities market

Answer:

Explanation:
Why Supply and Demand Fluctuate in the Commodities Market
Introduction
The commodities market is highly volatile, with prices and availability constantly influenced by fluctuations in supply and demand. These fluctuations arise due to factors such as climate conditions, geopolitical events, economic cycles, and technological advancements.
Understanding why supply and demand shift helps businesses, investors, and policymakers anticipate market trends and mitigate risks.
1. Factors Affecting Supply in the Commodities Market
1.1 Weather and Climate Conditions (Impact on Agricultural Commodities)
✅ Why It Affects Supply?
Droughts, floods, hurricanes, or frosts can damage crops, reducing supply.
Favorable weather leads to higher yields and increased supply.
Example:
In 2019, severe droughts in Australia reduced wheat production, increasing global wheat prices.
A strong coffee harvest in Brazil led to higher supply and lower coffee prices.
Key Takeaway: Agricultural commodity supply is highly dependent on weather variability.
1.2 Geopolitical Events and Trade Restrictions Impact on Energy & Metals)
✅ Why It Affects Supply?
Political instability, sanctions, and wars disrupt supply chains.
Trade policies, tariffs, and embargoes restrict exports/imports.
Example:
Russia-Ukraine war (2022) led to a major disruption in wheat and oil exports, causing global shortages.
US-China trade tensions affected the availability of rare earth metals used in electronics.
Key Takeaway: Supply chains in energy, metals, and food commodities are vulnerable to geopolitical risks.
1.3 Production Costs & Technological Advancements (Impact on Oil, Metals, and Agricultural Goods)
✅ Why It Affects Supply?
Higher production costs (e.g., fuel, labor, mining operations) reduce supply.
New technologies improve extraction and farming efficiency, increasing supply.
Example:
Shale oil extraction technology in the US increased crude oil supply, leading to lower global oil prices.
Higher fertilizer costs in 2023 led to reduced crop production in some countries.
Key Takeaway: Technological advancements increase supply, while rising production costs limit it.
2. Factors Affecting Demand in the Commodities Market
2.1 Economic Growth & Industrial Demand (Impact on Oil, Metals, and Construction Materials)
✅ Why It Affects Demand?
Economic booms drive higher demand for oil, metals, and raw materials.
During recessions, demand for industrial commodities falls.
Example:
China's rapid industrialization (2000s) increased demand for iron ore, copper, and coal, pushing prices up.
COVID-19 lockdowns (2020) caused a sharp drop in oil demand, leading to negative oil prices in April 2020.
Key Takeaway: Commodity demand rises during economic expansion and falls during downturns.
2.2 Changing Consumer Preferences & Market Trends (Impact on Food & Energy Commodities)
✅ Why It Affects Demand?
Shifts in diet, lifestyle, and energy use affect commodity demand.
Green energy transitions reduce fossil fuel demand but increase demand for alternative materials.
Example:
Increased veganism in Western markets boosted demand for soybeans, almonds, and plant-based protein.
Electric vehicle (EV) adoption increased demand for lithium, cobalt, and nickel used in EV batteries.
Key Takeaway: Demand changes due to consumer preferences, technological advancements, and sustainability trends.
2.3 Speculation & Investment Activity (Impact on Gold, Oil, and Agricultural Commodities)
✅ Why It Affects Demand?
Investors and hedge funds buy commodities as a hedge against inflation or currency fluctuations.
Speculative trading increases volatility, driving short-term price spikes.
Example:
Gold prices surge during economic crises as investors seek a safe-haven asset.
Oil price spikes in 2008 and 2022 were partly due to speculative trading.
Key Takeaway: Commodity demand is influenced by financial markets and speculation.
3. How Supply & Demand Interact to Affect Prices

Key Takeaway: Prices are determined by the balance between supply availability and consumer demand.
4. Conclusion
The commodities market experiences constant fluctuations in supply and demand, driven by:
✅ Weather & Climate - Affects agricultural output.
✅ Geopolitical & Trade Issues - Disrupts supply chains.
✅ Economic Cycles & Industrial Growth - Determines demand levels.
✅ Consumer Preferences & Technological Trends - Changes demand patterns.
✅ Speculation & Investor Activity - Influences short-term price volatility.
Understanding these factors allows businesses to forecast commodity price movements, manage procurement risks, and optimize supply chain strategies.

NEW QUESTION # 43
SIMULATION
Examine how an organisation can strategically position itself within the marketplace.

Answer:

Explanation:
How an Organization Can Strategically Position Itself in the Marketplace Strategic positioning is the process by which an organization differentiates itself from competitors and establishes a strong, sustainable presence in the market. It involves making key decisions regarding branding, pricing, customer engagement, and competitive advantage to attract and retain customers.
Below are the key strategies an organization can use to position itself strategically in the marketplace:
1. Competitive Strategy (Porter's Generic Strategies)
Organizations can use Michael Porter's Competitive Strategies to define their market position:
Cost Leadership - Competing on price by offering the lowest-cost products or services.
Differentiation - Offering unique, high-quality, or innovative products that stand out.
Focus (Niche Strategy) - Targeting a specific market segment with specialized products or services.
Example:
Aldi (Cost Leadership) keeps prices low by optimizing supply chains.
Apple (Differentiation) uses innovation and brand exclusivity to dominate the premium tech market.
Rolls-Royce (Focus Strategy) targets a niche luxury segment instead of mass markets.
2. Strong Branding and Market Perception
Organizations must build a strong brand identity to differentiate themselves. This includes:
✅ Consistent Branding - Using logos, colors, and messaging that reinforce identity.
✅ Emotional Connection - Telling a brand story that resonates with customers.
✅ Trust and Reputation - Delivering quality products and services to establish credibility.
Example:
Coca-Cola uses global branding to evoke happiness and refreshment, maintaining strong market dominance.
Tesla markets itself as an innovative, eco-friendly brand, appealing to environmentally conscious consumers.
3. Innovation and Product Development
To maintain a competitive edge, companies must invest in innovation and continuously improve their products/services.
✅ Technology Adoption - Implementing cutting-edge solutions (e.g., AI, automation).
✅ Customer-Centric Innovation - Developing products based on customer needs.
✅ First-Mover Advantage - Being the first to introduce groundbreaking products.
Example:
Amazon's AI-driven supply chain ensures fast deliveries and high customer satisfaction.
Netflix's streaming model revolutionized entertainment consumption, making it an industry leader.
4. Digital Transformation and Market Reach
Organizations can use digital tools and platforms to enhance their strategic positioning:
✅ E-commerce & Online Presence - Expanding reach beyond physical locations.
✅ Social Media & Influencer Marketing - Engaging with customers through digital channels.
✅ Data Analytics - Using customer insights to make strategic decisions.
Example:
Nike's e-commerce growth and direct-to-consumer (DTC) model strengthened its competitive position.
Zara's fast fashion strategy, driven by data analytics, allows quick response to trends.
5. Sustainability and Corporate Social Responsibility (CSR)
Modern consumers prefer brands that demonstrate social and environmental responsibility. Companies can differentiate themselves by:
✅ Sustainable Sourcing - Using eco-friendly materials and ethical suppliers.
✅ Corporate Ethics - Promoting fair labor practices and social initiatives.
✅ Carbon Footprint Reduction - Committing to green energy and carbon neutrality.
Example:
Patagonia's sustainability-first strategy attracts eco-conscious consumers.
Unilever's "Sustainable Living Plan" enhances brand loyalty through ethical business practices.
6. Strategic Partnerships and Market Expansion
Organizations can strengthen their market position through collaborations and global expansion:
✅ Mergers & Acquisitions - Gaining market share by acquiring competitors.
✅ Joint Ventures - Partnering with companies for mutual growth.
✅ New Market Entry - Expanding into emerging markets.
Example:
Google acquiring YouTube enhanced its presence in digital content.
Starbucks' partnership with Nestlé expanded its global coffee distribution.
Conclusion
Strategic positioning requires a clear understanding of competitive advantage, market needs, and innovative growth strategies. By leveraging cost leadership, differentiation, branding, innovation, digital transformation, sustainability, and partnerships, organizations can sustain long-term success in a competitive market.

NEW QUESTION # 44
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