FINALTERM EXAMINATION
Fall 2008
MGT603- Strategic Management (Session - 2)
Question No: 1 ( Marks: 1 ) - Please choose one
R&D expertise should be obtained through acquisition of a well-established firm in the industry in which of the following situation?
If both technical progress and market growth are fast
If technology is changing slowly but the market is growing fast
If the technical progress is slow, market growth the rate is moderate
If technology is changing rapidly and the market is growing slowly
Question No: 2 ( Marks: 1 ) - Please choose one
A desired future state that the organization attempts to realize . Identify the term relevant to the given statement.
Policy
Procedure
Goal
Strategy
Question No: 3 ( Marks: 1 ) - Please choose one
The purpose of a mission statement is to declare all of the following EXCEPT:
A reason of being
A statement of purpose
An annual financial plan
A statement of beliefs
Question No: 4 ( Marks: 1 ) - Please choose one
Ethnic balance changes due to the migration of the people from different areas to different areas. This affects the ethical behavior very much , this is the effect of
which of the following forces?
Economic forces
Social, cultural, and demographic forces
Technological forces
Competitive forces
Question No: 5 ( Marks: 1 ) - Please choose one
Which of the following can be considered as barriers to entering a market or industry?
The lack of economies of scale and experience and low levels of brand loyalty
The presence of large number of rivals already in the industry
Relatively large capital requirements and industry have economies of scale
The absence of tariffs, trade restrictions, and/or government-mandated regulations
Question No: 6 ( Marks: 1 ) - Please choose one
Which one of the statements is a good example of the competitive power of substitute products?
The competition between contact lens and eyeglasses
the competition between Amazon.com and traditional off-line bookstores
The competition between cellular phones and computers
The competition between Aspirin and joshanda
Question No: 7 ( Marks: 1 ) - Please choose one
Assigning 1 rating to a key external factor indicates that:
Response is average
Response is poor
Response is superior
Response is above average
Question No: 8 ( Marks: 1 ) - Please choose one
What is the difference between CPM and EFE?
CPM includes both internal and external issues
The weight and total weighted score mean opposite
CPM ratings range from 1 to 10
CPM is performed only for the large businesses
Question No: 9 ( Marks: 1 ) - Please choose one
Which of the following can be the strength of an organization?
A developing market
A new international market
Loosening of regulation
Strong management team
Question No: 10 ( Marks: 1 ) - Please choose one
Max Rent-a-Car is opening car rental shops in Wal-Mart stores, is an example of
which type of strategy?
Forward integration
Backward integration
Related diversification
Unrelated diversification
Question No: 11 ( Marks: 1 ) - Please choose one
Which of the followings involves the substantial modification of existing products or the creation of new but related products that can be marketed to current customers through established channels?
Innovation
Differentiation
Product development
Market development
Question No: 12 ( Marks: 1 ) - Please choose one
Abdullah Group of Industries is involved in the sale of its marginal business. It is
most likely to say that Abdullah Group is implementing _____________________
strategy.
Join venture
Acquisition
Liquidation
Retrenchment
Explanation: Retrenchment can entail selling off land and buildings to raise needed cash, pruning product lines, closing marginal businesses, closing obsolete factories, automating processes, reducing the number of employees, and instituting expense control systems.
Question No: 13 ( Marks: 1 ) - Please choose one
Which strategy should be implemented when a division is responsible for an
Organization’s overall poor performance?
Divestiture
Forward integration
Cost leadership
Related diversification
Question No: 14 ( Marks: 1 ) - Please choose one
Matching stage of strategy formulation framework comprises of formulation of which of the following set of matrices?
BCG, SPACE, QSPM matrix
BCG, SPACE, TWOS Matrix
SPACE, TWOS and IFE matrix
BCG, SPACE, EFE Matrix
Question No: 15 ( Marks: 1 ) - Please choose one
Other than ranking strategies to achieve the prioritized list, only one analytical technique in strategy formulation which is designed to determine the relative attractiveness of feasible alternative actions is known as:
SPACE
QSPM
IFE
CPM
Explanation: QSPM stands for Quantitative Strategic Planning Matrix. A quantitative method used to collect data and prepare a matrix for strategic planning. It is based on identified internal and external crucial success factors.
Question No: 16 ( Marks: 1 ) - Please choose one
ABC Corporation can have competitive advantage over its competitor by taking all of the following actions EXCEPT:
By increasing product quality
By having debt to equity ratio=1
By altering product life cycle
By increasing customer base
Question No: 17 ( Marks: 1 ) - Please choose one
What type of strategies would you recommend when a firm s SPACEMatrix
directional vector has the coordinates (-4, -4)?
Aggressive
Conservative
Competitive
Defensive
Question No: 18 ( Marks: 1 ) - Please choose one
A position vector with (-6, +6) coordinates describes which one of the following
statement regarding SPACE analysis matrix?
A financially weak and highly competitively firm
A financially strong and highly competitively firm
A Financially strong firm but competitively weak
A financially as well as competitively weak firm
Question No: 19 ( Marks: 1 ) - Please choose one
Business units that have low market share and are operating in slow-growing
industry should choose all of the following EXCEPT:
New investments
Production efficiency
Distribution efficiency
Product innovation
Question No: 20 ( Marks: 1 ) - Please choose one
On the x-axis of IE Matrix, an IFE total weighted score of 3.75 depicts what?
A weak internal position
An average internal position
A strong internal position
A low internal position
Explanation: On the x-axis of the IE Matrix, an IFE total weighted score of 1.0 to 1.99 represents a weak internal position; a score of 2.0 to 2.99 is considered average; and a score of 3.0 to 4.0 is strong.
Question No: 21 ( Marks: 1 ) - Please choose one
Which of the following is TRUE about weights assigned in QSPM?
This refers to preference assigned to the internal and external factors
This refers to relative importance of the internal and external factors
This refers to the insignificance of the internal and external factors
This refers to the relative size of the internal and external factors
Question No: 22 ( Marks: 1 ) - Please choose one
What can be the limitation of QSPM?
Only a few strategies can be evaluated simultaneously
The cost of doing the analysis is very high
Intuitive judgments and educated assumption are required
It requires equal participation of everyone in organization
Question No: 23 ( Marks: 1 ) - Please choose one
Which of the following is NOT a part of resource allocation plan?
Basic allocation decision
Contingency mechanisms
Primary allocation mechanism
None of the given options
Explanation: In strategic planning, a resource-allocation decision is a plan for using available resources, especially human resources especially in the near term, to achieve goals for the future. It is the process of allocating resources among the various projects or business units. The plan has two parts: Firstly, there is the basic allocation decision and secondly there are contingency mechanisms.
Question No: 24 ( Marks: 1 ) - Please choose one
Which one of the following is not an approach to resolve conflicts?
Avoidance
Defusion
Confrontation
Ignorance
Question No: 25 ( Marks: 1 ) - Please choose one
Which approach for managing and resolving conflict involves playing down
differences between conflicting parties while stressing on similarities and common interests?
Avoidance
Compliance
Defusion
Confrontation
Question No: 26 ( Marks: 1 ) - Please choose one
Which of the following is best identified as being an adaptation of the divisional
structure?
Vertical Integration
Strategic business units
Joint venture
None of the given options
Rationale: Medium-size firms tend to be divisionally structured (decentralized). Whereas above mentioned 3 form of organizations fall under the category of large size organizations which adopt SBU.
Question No: 27 ( Marks: 1 ) - Please choose one
All of the following would be considered as true statements regarding the matrix
organizational structure EXCEPT which one?
It reduces managerial positions
It shares authority and responsibility among managers
It distributes stress among the team members
It maintains better balance between time and performance
Rationale: A matrix structure can result in higher overhead because it creates more management positions.
Question No: 28 ( Marks: 1 ) - Please choose one
The inventory is viewed as which of the following in Just In Time Inventory system:
Incurring costs
Adding value
Disburse expense
None of the given options
Explanation: First off inventory is seen as incurring costs instead of adding value, contrary to traditional thinking. Therefore, under the philosophy businesses are encouraged to eliminate inventory that doesn’t add value to the product.
Question No: 29 ( Marks: 1 ) - Please choose one
What is NOT a major benefit of having a diverse workforce?
Improvement of the bottom line
An increase in training costs
An increase in productivity
A decrease in complaints
Question No: 30 ( Marks: 1 ) - Please choose one
Market segmentation is especially used in implementing strategies by which of the following firms?
Small firms
Large firms
Medium-size firms
All of the given options
Reference: Market segmentation is widely used in implementing strategies, especially for small and specialized firms. Market segmentation can be defined as the subdividing of a market into distinct subsets of customers according to needs and buying habits.
Question No: 31 ( Marks: 1 ) - Please choose one
All of the following are the requirements for successful segmentation EXCEPT:
Segment is large enough to be profitable
Homogeneity between the segments
Segments are accessible and actionable
Heterogeneity between segments
Rationale: Homogeneity within the segment
Question No: 32 ( Marks: 1 ) - Please choose one
The process of dividing markets into groups of consumers who are similar to each other .Which of the following terms describes the statement?
Positioning
Segmentation
Marketing
Targeting
Question No: 33 ( Marks: 1 ) - Please choose one
Which of the following statements is FALSE about mass marketing?
Mass marketing reduces costs through economies of scale by the increased volume
Mass marketing does not try to please all customers with same offering
Mass marketing allows economies of scale to be realized through mass production
Mass Marketing means attempting to sell the same product to a wider audience
Rationale: The drawback of mass marketing is that customer needs and preferences differ and the same offering is unlikely to be viewed as optimal by all customers.
Question No: 34 ( Marks: 1 ) - Please choose one
Which of these is the most common type of budgeting time frame?
Daily
Monthly
Quarterly
Annually
Explanation: Annual budgets are most common, although the period of time for a budget can range from one day to more than ten years.
Question No: 35 ( Marks: 1 ) - Please choose one
At least how many R & D approaches are used for the implementation of strategy?
Three
Four
Five
Two
Question No: 36 ( Marks: 1 ) - Please choose one
Which one of the following is not a rivalry determinant of Porter s model?
Differentiation of inputs
Industry growth
Diversity of competitors
Switching costs
Rationale: It is threat of substitute product.
Question No: 37 ( Marks: 1 ) - Please choose one
What is the purpose of strategy evaluation?
Increase the budget annually
Alert management of problems
Make budget changes
Evaluate employees performance
Question No: 38 ( Marks: 1 ) - Please choose one
All of the following are the examples of technology development EXCEPT:
Research and Development
Quality management
Process automation
Design and redesign
Question No: 39 ( Marks: 1 ) - Please choose one
Strategy evaluation is based on which of the following?
Quantitative and empirical criteria
Empirical and qualitative criteria
Qualitative and objective criteria
Qualitative and quantitative criteria
Question No: 40 ( Marks: 1 ) - Please choose one
Which of the following statement is TRUE about most of the quantitative criteria of evaluating strategies?
These are geared to annual objective
These are geared to short-term objective
These are geared to long-term objective
These are geared to social objectives
Reference: most quantitative criteria are geared to annual objectives rather than long-term objectives.
Question No: 41 ( Marks: 1 ) - Please choose one
What is the basis for quantitative financial evaluation?
The EPS/EBIT Analysis
Capital Asset Pricing Model
Financial ratios
Present value analysis
Explanation: Quantitative criteria commonly used to evaluate strategies are financial ratios, which strategists use to make three critical comparisons:
Question No: 42 ( Marks: 1 ) - Please choose one
The people who perform audit can be categorized as all of the following EXCEPT:
Independent auditors
Financial auditors
Government auditors
Internal auditors
Question No: 43 ( Marks: 3 )
Formulation framework is considered to be the input stage of a Comprehensive
Strategy-Formulation Framework. You are required to identify the strategy
formulation tools included in this stage.
Question No: 44 ( Marks: 3 )
One of the approaches to implement change says: People are basically compliant and will generally do what they are told or can be made to do and change is based on the exercise of authority and the imposition of sanctions. Identify that approach and explain.
Question No: 45 ( Marks: 3 )
Net worth can be used to determine credit worthiness because it gives a snapshot of the company's investment history. Identify three approaches for determining the worth of a business.
Question No: 46 ( Marks: 5 )
Explain the benefits and limitations of developing a Boston Consulting Group Matrix.
Question No: 47 ( Marks: 5 )
Describe the kind of strategy-evaluation system, a large and a small organization
require?
Question No: 48 ( Marks: 10 )
Suppose you are a strategist in a company and you want to evaluate the effectiveness of your contingency planning? How will you do it?
Question No: 49 ( Marks: 10 )
The Management of Voyager Pvt.Ltd. has been facing a decline in sales and profits since 9 months due to strong competitors. Now the management has decided to restructure the company. You being a management consultant are required to guide them in the following areas:
The process of restructuring. (2)
In which cases they should use this option? (2)
What would be the benefits of restructuring to the organization? (3)
What possible actions the management should take while restructuring the
company? (3)
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