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Free response · 4.4 Strategic Frameworks: Porter's Five Forces and SWOT Analysis
Exam-style concept-application task: apply the topic to a new business scenario. Suggested time 12–13 minutes.
FRQ — Business Decision using strategic frameworks (3 points)
Northside Bikes is considering opening a second shop in a nearby town. Research shows: three similar bike shops already operate there with comparable prices (little differentiation); opening a shop requires a dealership agreement that takes competitors 8–12 months to secure; a large employer just announced 2,000 new jobs starting next year; and Northside's current shop has an experienced repair staff and strong supplier relationships, but an outdated website that frequently loses online orders.
(A) Using Porter's Five Forces, classify TWO of the facts about the new town's market and state whether each makes the market more or less attractive. 1 pt
(B) Using SWOT, classify TWO of the facts about Northside Bikes itself and its environment (one internal, one external) and explain which quadrant each belongs in. 1 pt
(C) Recommend whether Northside Bikes should open the second shop, using at least one finding from Five Forces AND one from SWOT to justify the recommendation. 1 pt