Association of Chartered Certified Accountants (ACCA) Certification Practice Test

Which organizational activity is directly linked to its competitiveness?

1. Brand loyalty

2. Market research

3. Purchasing

4. Customer feedback

The correct answer is: Purchasing

The correct choice is purchasing because it plays a crucial role in determining an organization's operational efficiency and cost structure, which are directly linked to its competitiveness. Effective purchasing strategies can lead to lower costs for materials and supplies, enhancing profit margins and allowing the organization to offer competitive pricing to customers. Additionally, strategic sourcing can contribute to building strong supplier relationships, ensuring consistent quality and availability of products, which is essential for maintaining competitive advantage in the market. While brand loyalty, market research, and customer feedback are important for an organization's overall success, they primarily focus on understanding customer preferences and enhancing customer experience rather than directly influencing the organization's operational capabilities and cost management, which are at the core of competitiveness. By excelling in purchasing, an organization strengthens its foundation to compete effectively.