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Transcription of this question: 5.7 months laterReach Out’s financial situation under Neil Johnson’s control was secure and Andrew Grandinwas coping better with managing the therapists. In March 2011, Reach Out received a prize forits work in raising the awareness Of autism (Item I). Laura Chan began to appear on severaltelevision shows. Her blog was becoming increasingly popular. Reach Out had also begun to sellPECS cards at a reduced price of $88.However, by conducting a new STEEPLE analysis (Item 2), Neil became aware that threenew competitors, private publishing companies X, Y and Z, were also planning to sell PECS cards toparents at an even lower price than Reach OutS S88_ Neil also learned that there was a considerablechange in the external environment, especially in social attitudes towards autism. Despite theconsiderable brand loyalty to Reach Out, recent comments on Laura’s blog (Item 3) revealed thata number Of families were thinking Of purchasing PECS cards from the new competitors and werestarting to question Reach Out ethical credentials.Laura was concerned. She felt that the new companies were taking advantage Of the goodwillgenerated by Reach Out. Unless quick action was taken, Reach Out S mission statement wouldbe compromised. Although she did not understand the full implications Of predatory pricing forthe PECS cards, Laura argued that they should further reduce Reach Out’s prices. Neil respondedthat the current changes in social attitudes to autism would ensure that all providers Of PECS cardswould benefit. The mission and vision Of Reach Out need not change. Without informing Neil,Laura began giving interviews to the national media and stating that Reach Out was the only”true ethical” provider Of PECS cards.TO produce its PECS cards, Reach Out was using a local printing company that employed adultswith autism. Neil contacted two overseas producers Of PECS cards to obtain information onproduction costs (Item 4). Reach Out could outsource production overseas in order to lowerthe price Of its PECS cards. Neil considered that this strategic move could benefit Reach Out,allowing them to continue to be a price leader in the provision ofPECS cards. In their last meeting,Laura and Neil argued yet again. Laura did not agree with the strategic move and its impact onReach Out’s stakeholders.(Question 5 continued)(a)(b)(c)(d)Referring to Item 2, identify two new additional factors that Neil Johnsoncould include in his STEEPLE analysis of Reach out.Explain how changes in social behaviour towards autism (Items I and 2) couldimpact on Reach Out and its competitors.Analyse the appropriateness for Reach Out Of using a predatory pricing methodfor its PECS cards.Using information contained in the case study and Items 1 to 5, discuss whetherReach Out should outsource the production Of its PECS cards to an overseas[2 marks/[7 marks][9 marks]producer as part Of a new strategy.[12 marks]

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