CIPS L5M6 Exam Dumps

Industries differ in terms of barriers to entry, which are obstacles that make it difficult for new competitors to enter a market. The restaurant industry has relatively low barriers---it requires less upfront capital, fewer regulatory approvals, and allows easier entry compared to industries such as airlines or pharmaceuticals. In contrast, pharmaceuticals involve stringent legal regulations, high R&D costs, and patents, while airlines require massive capital investment and regulatory compliance. The soft drinks industry, while not as capital-intensive, has strong barriers due to brand loyalty, global supply chains, and marketing costs. For procurement, recognising barriers to entry is important because it affects supply market competitiveness. In industries with low barriers like restaurants, buyer power is generally higher because new suppliers can enter easily. In high-barrier industries, suppliers hold greater power due to limited alternatives. This ties directly into Porter's Five Forces, which procurement professionals use to evaluate market attractiveness and develop category strategies.

Buyer strength increases when order volumes are large, as this gives leverage in negotiations and can improve pricing and terms. The other options do not necessarily strengthen buyer power.

A General Ledger [GL] is the central accounting record used by businesses to prepare financial reports. It categorises all financial transactions into cost codes, allowing managers to track expenditure, revenue, assets, and liabilities.

For category managers, the General Ledger provides visibility into spend categories. This information supports spend analysis and helps in mapping organisational costs against suppliers, categories, and business functions. It differs from line item detail by offering a higher-level financial view.

Other options are misleading:

Option A [tenders] relates to e-procurement platforms, not financial records.

Option C [catalogue] refers to item listings, not ledgers.

Option D [supplier lists] relates to approved supplier databases.

By using GL data, procurement can ensure alignment with finance, strengthening compliance, budgeting, and strategic sourcing decisions.

[Ref: CIPS L5M6 Study Guide, p.135 -- Use of General Ledger in procurement analysis]

Cialdini's 7 Principles of Persuasion are key behavioural insights relevant to procurement negotiations and stakeholder management. They are:

Reciprocity

Commitment/consistency

Social proof/consent

Authority

Liking

Scarcity

Unity

Options social proof, commitment, and liking are directly part of this framework. These principles are used to influence supplier behaviour, build stakeholder alignment, and negotiate effectively. For example, demonstrating that other organisations have adopted a strategy (social proof) can increase acceptance, while establishing rapport (liking) improves cooperation. Procurement professionals who understand these principles can navigate complex stakeholder environments more effectively.

The correct answer is Maturity. In the industry lifecycle model, markets evolve through stages: birth, growth, maturity, and decline. Tulipa Ltd initially saw high growth, reflecting the growth stage, where demand is rising, and market share is expanding. However, for the past two years, share has plateaued, suggesting the market has stabilised, which is a key characteristic of the maturity stage.

At maturity, the market is often saturated, with limited opportunities for expansion. Competition becomes more intense, innovation slows, and firms compete largely on efficiency, branding, or incremental improvements. Unlike decline, the market is still viable and profitable, but growth rates are flat.

The study guide also introduces an intermediate stage called shakeout, occurring between growth and maturity, where weaker competitors exit. Tulipa's situation has passed growth but has not yet entered decline, making maturity the correct classification.

[Ref: CIPS L5M6 Study Guide, p.175 -- Industry Lifecycle and Procurement Strategy]