FINALTERM EXAMINATION
Fall 2008
MGT603- Strategic Management (Session - 1)
Marks: 81
Question No: 1 ( Marks: 1 ) - Please choose one
Strategic management integrates all of the following areas EXCEPT:
Management
Marketing
Research and development
Human resource management
Explanation: The study of strategic management integrates different topics. Different courses are integrated due to the study of this course so that businesses become successful in every sector. It integrates the following:
¾ Marketing
¾ Management
¾ Finance
¾ Research and development
Question No: 2 ( Marks: 1 ) - Please choose one
Strategist is an individual who is involved in the strategic management process, thus may be known as:
Member board of director
President
Division manager
All of the given options
Question No: 3 ( 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: 4 ( Marks: 1 ) - Please choose one
Which of the following business actions is NOT considered to be unethical?
Poor product or service safety
Using non-union labor in a union shop
Misleading advertising
Too expensive products
Note:We are not in a position to solve it either. If any member can solve it properly, Please post it on the group or at email address
Question No: 5 ( Marks: 1 ) - Please choose one
Which type of trend can be exemplified by the increase in average level of education in a society?
Cultural
Technological
Economic
Social
Question No: 6 ( Marks: 1 ) - Please choose one
Allocation and reallocation of capital and resources to projects, products, assets,
and divisions of an organization is known as:
Investment decisions
Financing decisions
Restructuring decisions
Strategic decision
Explanation: Also called capital budgeting.
Question No: 7 ( Marks: 1 ) - Please choose one
All of the following fall under the category of Process function of production
management EXCEPT:
Choice of technology
Quality assurance
Process flow analysis
Transportation analysis
Expalantion: Process decisions concern the design of the physical production system. Specific decisions include choice of technology, facility layout, process flow analysis, facility location, line balancing, process control, and transportation analysis.
Question No: 8 ( Marks: 1 ) - Please choose one
A planned activity aimed at discovery of new knowledge with the hope of developing new or improved products and services and translation of its findings into a plan or design of new or improved products and services is known as:
Marketing
Research and development
Production
Management information system
Question No: 9 ( Marks: 1 ) - Please choose one
________________ become/s information only when it/they is/are evaluated, filtered, condensed, analyzed and organized for a specific purpose, problem, individual, or time.
Material
Data
Competitive advantages
Competitor analysis
Question No: 10 ( Marks: 1 ) - Please choose one
The Web sites that sell products directly to the consumers are the examples of which type of strategy?
Backward integration
Product development
Forward integration
Horizontal integration
Explanation: Forward integration strategy refers to the transactions between the customers and firm.
Question No: 11 ( Marks: 1 ) - Please choose one
The extent to which a business concentrates on a narrowly defined market is best referred to as:
Niche strategy
Cost leadership strategy
Differentiation strategy
Segmentation
Explanation: Market segmentation is the process in marketing of grouping a market (i.e. customers) into smaller subgroups. It is also called market focus.
Question No: 12 ( Marks: 1 ) - Please choose one
Under which of the following conditions, Concentric Diversification would be
particularly an effective strategy to pursue?
When an organization has grown so large so quickly that major internal
reorganization is needed
When sales of current products would increase intensively by adding the new related products
When revenues from current products/services would increase significantly by
adding the new unrelated products
When current products are in maturity stage of the product life cycle
Question No: 13 ( Marks: 1 ) - Please choose one
Which of the following stages in the strategy-formulation framework focuses on summarizing the basic information needed to formulate strategies?
Output
Input
Decision
Matching
Question No: 14 ( Marks: 1 ) - Please choose one
Which of the following stages of Strategy Formulation Framework involves
development of Internal-Factor Evaluation Matrix?
Input stage
Output stage
Matching stage
Decision stage
Question No: 15 ( Marks: 1 ) - Please choose one
Which of the following stages of strategy formulation framework involves
development of Internal External Matrix?
Input stage
Output stage
Matching stage
Decision stage
Question No: 16 ( Marks: 1 ) - Please choose one
In order to avoid the emergence of substitute products, AF & Z Corporation has an access and control over the scarce natural resources necessary for the production of their products, Which of the following strategies AF & Z is using?
SO
WO
SW
ST
Explanation: This type of strategy helpful when weaknesses are removed to overcome external threats. It is difficult to target WT strategy.
Question No: 17 ( Marks: 1 ) - Please choose one
What type of strategies would you recommend when a firm’s SPACE Matrix
directional vector has the coordinates (-2, +3)?
Aggressive
Conservative
Competitive
Defensive
Note:We are not in a position to solve it either. If any member can solve it properly, Please post it on the group or at email address
Question No: 18 ( Marks: 1 ) - Please choose one
Which of the following is NOT a step for the preparation of a SPACE matrix?
Select a set of variables to relating to financial strength, competitive advantage,
environmental stability, and industry strength
Assign a numerical value ranging from +1 (worst) to +6 (best) to each of the
variables that make up the financial strength and industry strength dimensions
Assign weights to the variables according to their relative importance for the firm
Compute an average score and dividing by the number of variables
Question No: 19 ( Marks: 1 ) - Please choose one
The business has a strong competitive position but is in a slow-growth industry.
Further, the business typically has high cash flow levels and limited internal growth needs. The statement refers which of the following?
The firm falling in Quadrant I of Grand Strategy Matrix
The firm falling in Quadrant II of Grand Strategy Matrix
The firm falling in Quadrant III of Grand Strategy Matrix
The firm falling in Quadrant IV of Grand Strategy Matrix
Explanation: Quadrant IV businesses have a strong competitive position but are in a slow-growth industry. These firms have the strength to launch diversified programs into more promising growth areas.
Question No: 20 ( Marks: 1 ) - Please choose one
What is the product of weights and attractiveness scores for each strategy in QSPM?
Sum total attractiveness scores
Total attractiveness scores
Weighted scores
Total weighted scores
Question No: 21 ( Marks: 1 ) - Please choose one
Which of the following is a Functional level objective?
Achieving return on investment of at least 15%
Aiming to achieve a market share of 10%
Attaining operating profit of over Rs.10 million
Increase earnings per share by at least 10% every
Question No: 22 ( Marks: 1 ) - Please choose one
Which of the following is a Corporate level objective?
Getting 75% customer awareness of company s brand in target markets
Increasing earnings per share by at least 10%
Building customer database of at least 250,000 companies
Achieving a 10% share of International market
Question No: 23 ( Marks: 1 ) - Please choose one
The manager of MZ firm has defined the goal that the firm wants to increase its
production by at least 200 units in size. Thus, which part of the SMART criteria has been focused by the firm through this goal statement?
Specific
Measurable
Achievable
Relevant
Question No: 24 ( Marks: 1 ) - Please choose one
Mr. Ali, the operations manager of ABC Company did not agree with the proposal of marketing manager - Mr. Zeeshan at the meeting regarding launch of a new product. There was an exchange of hot word among them. The matter was referred to CEO, so that the conflict could be resolved, but the CEO did not take any action in the hope that the conflict will resolve itself. The statement describes which of the conflict resolution mood?
Avoidance
Compliance
Diffusion
Confrontation
Note:We are not in a position to solve it either. If any member can solve it properly, Please post it on the group or at email address
Question No: 25 ( Marks: 1 ) - Please choose one
Ahmad fisheries is going to arrange a meeting with AH& T distributors so that the
matters regarding wrong delivery by AH & T and conflict arising from it can be
settled. Which of the following conflict resolving approach is followed in the situation?
Avoidance
Confrontation
Resistance
Diffusion
Note:We are not in a position to solve it either. If any member can solve it properly, Please post it on the group or at email address
Question No: 26 ( Marks: 1 ) - Please choose one
Why do changes in company strategy often require changes in the way an organization is structured?
Because structure depicts how goals will be established
Because structure dictates how authorities will be delegated
Because structure dictates how resources will be obtained
Because structure dictates how financial resources are spent
Explanation: Changes in strategy often require changes in structure because new positions may be created, deleted, or merged. Organizational structure dictates how resources are allocated and how objectives are established in a firm
Question No: 27 ( Marks: 1 ) - Please choose one
Which one of the following is the organizational structure that most of the medium size organizations follow?
Divisional structure
Strategic business unit
Functional structure
Matrix structure
Question No: 28 ( Marks: 1 ) - Please choose one
Of the following, which one is least likely to be considered an advantage presented by a matrix organizational structure?
It facilitates the use of highly specialized staff and equipment
It minimizes the project cost because the key people can be shared
It can raise dual reporting and communication problems
It provides excellent training ground for strategic managers
Rationale: Its is the disadvantage of matrix structure.
Question No: 29 ( Marks: 1 ) - Please choose one
Zairian Corporation has streamlined its operations by cutting costs, such as decrease in payroll or reduction in its size through the sale of assets. In which of the following activity Zaria Corporation is involved?
E-Engineering
Re-engineering
Restructuring
Benchmarking
Explanation: Restructuring—also called downsizing, rightsizing, or delayering involves reducing the size of the firm in terms of number of employees, number of divisions or units, and number of hierarchical levels in the firm's organizational structure.
Question No: 30 ( Marks: 1 ) - Please choose one
Which of these is not one of the tests used to determine whether a performance-pay plan will benefit an organization?
Do employees understand the plan?
Is the plan improving communications?
Does the plan pay out when it should?
Does the plan reduce management layers?
Note:We are not in a position to solve it either. If any member can solve it properly, Please post it on the group or at email address
Question No: 31 ( Marks: 1 ) - Please choose one
All of the following are the managerial issues for managing natural environment
EXCEPT:
Global warming- depletion of rain forests
Employee understanding about environment
Developing biodegradable products and packages
Waste management to clean air and water
Explanation: Special natural environmental issues include ozone depletion, global warming, depletion of rain forests, destruction of animal habitats, protecting endangered species, developing biodegradable products and packages, waste management, clean air, clean water, erosion, destruction of natural resources, and pollution control.
Question No: 32 ( Marks: 1 ) - Please choose one
Production processes typically constitute of what percentage of firm’s total assets?
More than 70 %
More than 65 %
More than 60 %
More than 55 %
Question No: 33 ( Marks: 1 ) - Please choose one
Which one of the following is TRUE about two different market segments?
They can be served with the same marketing strategy
They usually require different marketing strategies
They are always in different geographic locations
There is heterogeneity within the segment in its needs
Question No: 34 ( Marks: 1 ) - Please choose one
XYZ Company has segmented its market by keeping in view occupation and
education level of customers. Which of the following bases of segmentation the
company has used?
Demographic
Psychographic
Behavioral
Geographic
Explanation: Some demographic segmentation variables include:
• Age
• Gender
• Family size
• Family lifecycle
• Generation: baby-boomers, Generation X, etc.
• Income
• Occupation
• Education
• Ethnicity
• Nationality
• Religion
• Social class
Question No: 35 ( Marks: 1 ) - Please choose one
Which variable would be considered as a part of pricing decisions?
Warranty
Bundling
Safety
Functionality
Explanation: Some examples of pricing decisions to be made include:
• Pricing strategy (skim, penetration, etc.)
• Suggested retail price
• Volume discounts and wholesale pricing
• Cash and early payment discounts
• Seasonal pricing
• Bundling
• Price flexibility
• Price discrimination
Question No: 36 ( Marks: 1 ) - Please choose one
Which of the following statement is TRUE about 'firm infrastructure' as a support
activity of Michael Porter's value chain model?
It includes procurement of raw materials, servicing, spare parts, buildings,
machines
It Includes technology development to support the value chain activities like
Process automation
It includes the activities associated with recruiting and development of employees
and managers
It includes general management, planning management, legal, finance, accounting, public affairs
Question No: 37 ( Marks: 1 ) - Please choose one
Which of the following statement is correct about human resource management?
It includes procurement of raw materials, servicing, spare parts, buildings,
machines
It Includes technology development to support the value chain activities like
Process automation
It includes the activities associated with recruiting and development of employees and managers
It includes general management, planning management, legal, finance, accounting, public affairs
Question No: 38 ( Marks: 1 ) - Please choose one
All of the following are the cost drivers of Porter s supply chain activities EXCEPT:
Capacity utilization
Timing of market entry
Economies of scale
Firm's infrastructure
Question No: 39 ( Marks: 1 ) - Please choose one
Which one of the following is NOT considered as a difficulty in evaluation of strategies?
Increase in environment’s complexity
Difficulty predicting future with accuracy
Decreasing number of variables
Rate of obsolescence of plans
Rationale: Increasing number of variables is difficulty instead of decreasing.
Question No: 40 ( Marks: 1 ) - Please choose one
Which of the following statement is TRUE about Controls which are used in
strategy evaluation stage?
They are strategy-oriented
They are action-oriented
They are control-oriented
They are information-oriented
Explanation: Control is the quality of effective evaluation strategy. Controls need to be action-oriented rather than information-oriented.
Question No: 41 ( Marks: 1 ) - Please choose one
A good evaluation system must posses various qualities. Which of the following is not a characteristic of a good strategy evaluation system?
Strategy-evaluation activities must be economical
Strategy-evaluation activities should be meaningful
Strategy-evaluation activities should dominate the decisions
Strategy-evaluation activities should provide timely information
Rationale: The strategy-evaluation process should not dominate decisions; it should foster mutual understanding, trust, and common sense! No department should fail to cooperate with another in evaluating strategies.
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 )
If you construct a SPACE Matrix and the directional vector points to the lower left
quadrant, what type of strategies would you recommend?
Question No: 44 ( Marks: 3 )
Define Functional level objectives. Provide at least two statements exemplifying such objectives.
Question No: 45 ( Marks: 3 )
Auditors who perform audit can be divided into three groups? Identify and define
each of them.
Question No: 46 ( Marks: 5 )
Identify the five steps that must be followed while developing an IE Matrix.
Question No: 47 ( Marks: 5 )
Positioning is actually the way that a product is introduced to its market audience.
What are the five steps required for effective product positioning?
Question No: 48 ( Marks: 10 )
You are the business executive of Omar textiles Mills. You are asked to evaluate the strengths, weaknesses, opportunities and threats of the firm and develop altogether different strategies by using different combinations of any two of these.
Question No: 49 ( Marks: 10 )
Quantitative Strategic Planning Matrix (QSPM) is a high-level strategic
management approach for evaluating possible strategies. You are required to
prepare a (QSPM) of XYZ Manufacturing Company for evaluating any two
strategies? 
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