Additional Knowledge

Question 1

6 Factors that move the stock market

Answer 1

1. FED or Central banks
2. Higher prices
3. Change in inflation
4. Recession expectations
5. Earnings
6. Momentum

Question 2

7 External disrupting factors

Answer 2

1. Weather
2. Worldwide health pandemics
3. Geopolitical events
4. Politicians going after and industry or company
5. Transportation
6. Changes in $ value (income, interest, consumer confidence)
7. Technology

Question 3

6 disrupting Geopolitical events

Answer 3

1. Climate change
2. Brexit
3. Tariffs
4. # MeToo
5. Workers taking to social media against the policies of their own company
6. Tweets

Question 4

Three groups of synergies

Answer 4

1. Revenue
2. Costs
3. Financials

Question 5

Revenue synergies (4)

Answer 5

1. Distribution channels/networks
2. Access to new markets
3. Broaden customer base
4. Broaden customer solutions

Question 6

Cost synergies (5)

Answer 6

1. SG&A savings, eliminate redundancies
2. Improving scale
3. Supply chain
4. Bulk ordering
5. Negotiating and buying power

Question 7

Financials synergies (2)

Answer 7

1. Selling off redundant assets

2. Tax advantages

Question 8

Uncontrolled risks (12)

Answer 8

1. A new entrant to the market, disruptor
2. Price war as a competitive response initiated by a competitor
3. New government regulations, focused on the industry
4. Manageability of different regions, costs or workforce needs
5. Tariffs, coming and going, shifting suppliers
6. Increased fuel or commodity prices
7. Supply chain inconsistencies, bankruptcy of supplier
8. Currency shifts
9. Geopolitical events
10. Workforce gaps, not enough skilled workers, higher wages because of low unemployment
11. Population shifts
12. Environmental disasters

Question 9

Controlled risks (9)

Answer 9

1. Salesforce risks, shifting priorities based on commission, capping commissions
2. Systems risks, particularly during a merger or conversion
3. Inventory risks, too much or too little on hand, changing needs, storage, tied up capital
4. Public image after a crisis or an endorser’s mishaps
5. Other revenue streams collapsing
6. Cannibalisation
7. Losing brand loyalty and consumer trust
8. Lower product quality because of cost cuts
9. Workforce turnover

Question 10

Three areas to cut costs

Answer 10

1. Labour
2. Production
3. Finance

Question 11

Cutting costs in labour (8)

Answer 11

1. Cross-train workers
2. Cut overtime
3. Reduce employer 401(k) or 403(b) match
4. Raise employee contribution to healthcare premiums
5. Institute four 10-hour days instead of five 8-hour days
6. Convert workers into owners
7. Contemplate layoffs
8. Institute across-the-board pay decreases

Question 12

Cutting costs in production (8)

Answer 12

1. Invest in technology
2. Consolidate production space to gain scale and create accountability
3. Create flexible production lines
4. Reduce inventories
5. Outsource
6. Renegotiate with suppliers
7. Consolidate suppliers
8. Import parts

Question 13

Cutting costs in finance (5)

Answer 13

1. Have customers pay sooner
2. Refinance your debt
3. Sell nonessential assets
4. Hedge currency rates
5. Redesign health insurance