Certification in Supplier Diversity Practice Exam

Which of the following factors is NOT mentioned as promoting sourcing in a market analysis?

1. Increase in market capacity

2. Weak economy

3. Introduction of new substitutes

4. High consumer demand

The correct answer is: High consumer demand

In the context of market analysis, sourcing is often influenced by various external and internal factors that can either promote or hinder it. High consumer demand typically stimulates sourcing, as businesses aim to acquire more materials or products to meet consumer needs. Therefore, it would not be classified as a factor that promotes sourcing in a market analysis but rather as a condition that supports increased sourcing efforts. In contrast, factors like an increase in market capacity, a weak economy, and the introduction of new substitutes are commonly discussed elements that can influence sourcing strategies. For instance, an increase in market capacity could lead to more opportunities for sourcing, whereas a weak economy may force companies to reconsider their sourcing strategies or look for cost savings. The introduction of new substitutes can alter the competitive landscape and influence how companies view their sourcing options. Since these factors typically appear in market analysis discussions around sourcing, high consumer demand stands out as not fitting within those promotional factors.