ACCA Strategic Business Leader (SBL) Practice Exam

What is one source of risk when acquiring resources for a strategy?

1. Consumer demand

2. Foreign exchange fluctuations

3. Technological changes

4. Regulatory requirements

The correct answer is: Foreign exchange fluctuations

The chosen answer highlights the importance of foreign exchange fluctuations as a source of risk when acquiring resources for a strategy. When a company operates in a global environment, it may need to purchase resources or services from foreign suppliers. In such cases, the cost of these resources can be significantly affected by changes in exchange rates. This means that if a currency fluctuates, the price a company pays in its local currency can increase or decrease unpredictably, impacting budget forecasts and potentially leading to higher than anticipated costs. Understanding foreign exchange risk is crucial for strategic planning, as it can affect profit margins, pricing strategies, and overall financial stability. Companies that do not account for this risk in their financial projections may suffer financial losses, affecting their ability to implement strategies effectively. While consumer demand, technological changes, and regulatory requirements are all important considerations in risk assessment, they pertain to different aspects of resource acquisition. Consumer demand focuses on market dynamics and the need for certain products or services. Technological changes involve innovations and advancements that can affect the operational efficiency of acquiring resources. Regulatory requirements relate to compliance and legal frameworks that govern how resources can be sourced and utilized. However, these factors do not specifically address the financial implications tied to currency exchange rates as foreign exchange fluctuations do.