1 Consider the following statements and identify the correct code of true statements:
(a) When an organization’s survival is threatened and it is not competing effectively, retrenchment strategies are often needed
(b) Turnaround strategy is used when an organization is performing well but has not yet reached a critical stage.
(c) Divestment strategy involves selling the business or setting it up as a separate corporation.
(d) Liquidation strategy involves closure of business which is no longer profitable
Codes: (1) Only (a), (b) and (c) are correct.
(2) Only (b), (c) and (d) are correct.
(3) Only (a), (c) and (d) are correct.
(4) Only (a) and (d) are correct.
Answer: (3)
2. Statement – I: Most businesses start off as “Question Marks”, in that they enter a highgrowth market in which there is already a market leader.
Statement – II: A “Star” is the market leader in a high-growth market, but it does not necessarily provide much cash.
(1) Statement – I is correct but Statement – II is incorrect.
(2) Statement – II is correct but Statement – I is incorrect.
(3) Both the Statements are incorrect.
(4) Both the Statements are correct.
Answer: (4)
3. Apple computers uses a differentiation competitive strategy that emphasizes innovative product with creative design. This is an example of
(1) Functional strategy
(2) Business strategy
(3) Operating strategy
(4) Product strategy
Answer: (2)
4 Assertion (A): A company’s positioning and differentiation strategy must change over the product life cycle.
Reason (R): A company’s product, market and competitors change over the product life cycle.
Codes: (1) (A) is correct, but (R) is incorrect.
(2) (A) is incorrect but (R) is correct.
(3) Both (A) and (R) are correct, but (R) is not the right explanation of (A).
(4) Both (A) and (R) are correct, and (R) is the right explanation of (A).
Answer: (4)
5 Statement – I: Competitors analysis begins with identification of potential competitors.
Statement – II: An industry analysis gives information regarding probable sources of competition.
Codes: (1) Statement – I is correct but II is incorrect.
(2) Statement – II is correct but I is incorrect.
(3) Both the Statements are correct.
(4) Both the Statements are incorrect
Answer: (2)
6 Strategic management consists of which one of the following combinations:
(a) Environmental scanning
(b) Strategy for outplay
(c) Strategy formulation
(d) Strategy implementation
(e) Evaluation and control
Codes:
(1) (a), (b), (c) and (d) only
(2) (b), (c), (d) and (e) only
(3) (a), (c), (d) and (e) only
(4) (b), (c) and (d) only
Answer: (3)
7 Michael Porter’s Five Forces Model includes which one of the following combinations?
(a) Threat of new potential entrants
(b) Threat of substitute product / service
(c) Bargaining power of suppliers
(d) Bargaining power of buyers
(e) Rivalry among current competitors
(f) Rivalry among prospective competitors
Codes:
(1) (a), (c), (d), (e) and (f)
(2) (a), (b), (d), (e) and (f)
(3) (a), (b), (c), (e) and (f)
(4) (a), (b), (c), (d) and (e)
Answer: (4)
8 Which one of the following is the report of the company’s strengths and weaknesses relative to various competitors?
(1) Competitor value analysis
(2) Customer value analysis
(3) Customer profitability analysis
(4) Customer perceived value
Answer: (2)
9. Which of the following is not Porter’s generic strategy?
(A) Focus
(B) Cost Leadership
(C) Differentiation
(D) Market segmentation Answer: (D)
10. Globalization involves
(A) Free flow of technology from one country to another
(B) Free flow of investment from one country to the other
(C) Free flow of people from one country to the other (D) All the above
Answer: (D)
11. Which is a short-term strategy for a firm?
(A) Corporate strategy
(B) Business strategy
(C) Company mission
(D) Functional strategy
Answer: (D)
12.Which is not a global entry strategy?
(A) Exporting
(B) Joint venture
(C) Merger and Acquisition
(D) Blue ocean strategy
Answer: (D)
13. Which of the following is not included in the five forces of competition?
(A) Bargaining power of suppliers
(B) Bargaining power of consumers
(C) Threat of substitutes
(D) Strategic planning
Answer: (D)
14. Which of the following strategies requires a com- pany to concentrate its efforts in one or more nar- row segments instead of a broad based strategy?
(A) Cost-Leadership strategy
(B) Differentiation strategy
(C) Focus strategy
(D) None of the above
Answer: (C)
15. What describes the market, product and techno- logical area of business?
(A) Company’s mission
(B) Company’s vision
(C) Strategic plan
(D) None of the above
Answer: (A)
16. Which of the following statements is correct?
(1) Balanced score cards always report using the same time periods as the financial accounting system.
(2) One fundamental idea of balanced score card is to increase the number of performance indicators used to manage the business.
(3) Organisations some times use a “traffic light” system on their balanced score card to help them prioritise their activities.
(4) The fundamental idea of balanced score cards is to create corporate strategy.
Answer: (3)
17. What metaphor is used to describe the competi- tive space where product are not yet well defined, competitors are not well-organised and the mar- ket is relatively unknown?
(1) Blue Lagoon
(2) Blue Ocean
(3) Red Sea
(4) Red Ocean
Answer: (2)
18. Michael E. Porter’s five generic strategies are:
(1) Differentiation (Best Value). Differentiation (Low Cost), Cost Leadership (Large), Cost Leadership (Small), Focus
(2) Focus (Large), Focus (Small), Cost Leadership (Small), Cost Leadership (Large), Differentiation
(3) Cost Leadership (Low Cost), Cost Leadership (Best Value), Differentiation, Focus (Low Cost), Focus (Best Value)
(4) Cost Leadership (Large), Cost Leadership (Small), Differentiation (Large), Differentiation (Small), Focus
Answer: (3)
19. One of the strategic decisions relating to the value chain concerns vertical integration. This would involve:
(1) Deciding to link all activities using Enterprise Resource Planning.
(2) Deciding whether the activity should be per- formed within the organisation or by a different firm.
(3) Deciding whether to locate operation in the home country or in a foreign location.
(4) Deciding whether to share certain activities across different products and markets.
Answer: (2)
20. Pepsi Co launched a hostile take over of Pepsi Bottling Group after its $ 4.2 billion offer was rejected”. Which strategy was used in this case?
(1) Market Penetration
(2) Backward Integration
(3) Horizontal Integration
(4) Forward Integration
Answer: (4)
21. Pan Amsat developed a joint venture with Jsat Corporation to develop and send into orbit a small satellite. Which type of alliance the above statement represents?
(1) Diversifying Alliance
(2) Franchising
(3) SynergisticAlliance
(4) None of the above
Answer: (3)
22. Which of the following alternatives represents the Five - Forces Model of Competition developed by Michael Porter?
(1) Suppliers, buyers, competitive rivalry among firms in industry, product substitutes and poten- tial entrants.
(2) Employees, buyers, competitive rivalry among firms in industry, product substitutes and poten- tial entrants.
(3) Suppliers, buyers, employees, product substitutes and potential entrants.
(4) Buyers, employees, suppliers, product substitutes and potential entrants.
Answer: (1)
23. Who among the following has given the state- ment: “transition from single function focus to a multi function focus is essential for successful strategic management”?
(1) Robert Grant
(2) J.B. Barney
(3) IgorAnsoff
(4) Edgar Schein
Answer: (3)
24. __________ signals a strategic inflection point necessitating a radical strategic shift.
(1) Ambidexterity
(2) Strategic Dissonance
(3) Stretch Targets
(4) Organizational Adaptation Answer: (2)
25. Grand Strategy Matrix refers to __________.
(1) development of analysis for the strengths, weak- nesses, opportunities and threats of organisation
(2) development of strategic position and action eval- uation
(3) development of strategy for plotting organiza- tion division in a schematic diagram
(4) development of a popular tool for formulating alternative strategies
Answer: (4)
26. Grand Strategy Matrix refers to __________.
(1) development of analysis for the strengths, weak- nesses, opportunities and threats of organisation
(2) development of strategic position and action eval- uation
(3) development of strategy for plotting organiza- tion division in a schematic diagram
(4) development of a popular tool for formulating alternative strategies
Answer: (4)
27. A company manages multiple strategies for it’s multiple markets and multiple products through which one of the following?
(1) Strategic Planners
(2) Strategic Business Units
(3) Strategic Windows
(4) Strategic Technology
Answers: (2)
28. Which one of the following matrix graphically portrays differences among divisions in terms of relative market share position and industry growth rate?
(1) SPACE Matrix
(2) BCG Matrix
(3) SWOT Matrix
(4) IE Matrix
Answer: (2)
29 Which of the following is an example of an exter- nal threat?
(A) Decreased competition
(B) New Trade Regulations
(C) Global Sales Potential
(D) Economies of Scale
Answer: (B)
30 According to Michael Porter’s Generic strategies, the three different basis of gaining competitive advantage by an organization are which of the fol- lowing?
(1) Integration, diversification and acquisitions.
(2) Growing, building and sustaining.
(3) Cost leadership, differentiation and focus.
(4) Positioning, capturing and changing.
Answer: (3)
38. Match the items given in List – I with the items of List – II.
List – I
(a) Objectives i) Reveal priorities
(b) Strategies (ii) Retreats
(c) Policies (iii) Potential actions
(d) Periodical conduct (iv) Mainly address
of strategic management repetitive/rec- urring situat-
meetingions
Codes:
(a) (b) (c) (d)
(1) (i) (iii) (iv) (ii)
(2) (iii) (ii) (i) (iv)
(3) (iv) (i) (iii) (ii)
(4) (ii) (iv) (i) (iii)
Answer: (1)
39. Which strategy requires a company to concentrate its efforts in one or more narrow segments instead of broad based strategy?
(A) Cost leadership
(B) Focus
(C) Differentiation
(D) None of the above
Answer (B)
40. Which element identities the strategic factors that determine the future of a firm?
(A) Environmental Scanning
(B) Strategy Formulation
(C) Strategy Implementation
(D) Strategy Evaluation and Control
Answer (A)
41. Which strategy provides a means for achieving a company‟s annual objectives?
(A) Marketing Strategy
(B) Business Strategy
(C) Operating Strategy
(D) Corporate Strategy
Answer (B)
42. Which of the following is not a primary activity in a value chain?
(A) Human Resource Management
(B) Marketing and Sales
(C) Operations
(D) Outbound logistics
Answer (A)
43. Which one of the following represents the best long run opportunity in a firm‟s business portfolio?
(A) Star
(B) Cash COW
(C) Question Mark
(D) DOG
Answer (C)
44. A firm tries to achieve the lowest cost of production and distribution so that it can set its prices at a lower level than its competitors. Which generic strategy it is following?
(A) Cost leadership
(B) Differentiation
(C) Focus
(D) All of the above
Answer (A)
45. Which method of product portfolio analysis helps in deciding which products are to be retained and which are not to be retained?
A) Ansoff‘s Matrix
(B) Environment Matrix
(C) BCG Matrix
(D) All of the above
Answer (C)
46. Which analysis helps to understand the strength and weaknesses of a firm?
(A) Environment analysis
(B) Business analysis
(C) SWOT analysis
(D) None of the above
Answer (C)
47. Which of the following helps a manager to identify the opportunities and threats in the competitive industry environment?
(A) Analysis of organizational structure.
(B) Analysis of competitive forces.
(C) Analysis of operations.
(D) Market Research
Answer(D)
48. Essence of strategy at strategic Business Unit level is
(A) How to build core competency
(B) How to gain competitive advantage
(C) How to gain market share
(D) All of the above
Answer(D)
49. Which one of the following is a primary activity in a value chain?
(A) Operations
(B) Firm infrastructure
(C) Technology development
(D) Procurement
Answer(A)
50. Business unit which holds a large market share in a mature and slow growing industry is called
(A) Star
(B) Dog
(C) Question Mark
(D) Cash cow
Answer(D)
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