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CIMA E3 - Strategic Management Question Tutorial Sample Questions:

1. Which THREE of the following statements apply to Lynch's performance pyramid? (Choose three.)

A) The business unit level includes measures which relate to internal systems needed to meet customers' needs.
B) The right-hand side of the pyramid contains measures which are predominantly non-financial.
C) The left-hand side of the pyramid contains measures which have an external focus.
D) The performance pyramid is designed to ensure that all activities support the organization's vision.
E) The lowest level of the pyramid contains the day-to-day operational measures.
F) The business operating systems level includes the market-related Critical Success Factors.

2. DRAG DROP
In order to organize the value-adding activities to support a chosen strategy, Porter's Generic Strategies are often applied within an organization's value chain.
Against each of the activities listed below, select the Generic Strategy which best defines the strategic approach being taken.
Select and Place:

Correct

3. GV is a manufacturer and retailer of high quality suede gloves. GV makes all of its sales in country F, and is extremely profitable. After many successful years trading, GV has accumulated significant cash reserves and would like to grow the business organically.
After some investigation work, GV has discovered an opportunity to sell leather shoes in country P.
Which of the following strategic directions is GV taking if it pursues this opportunity, according to Ansoff's product / market matrix?

A) Market development
B) Product development
C) Market penetration
D) Related diversification

4. Which of the following would be a suitable performance measure of Internal Business Processes within Kaplan and Norton's 'Balanced Scorecard' model?

A) Higher P/E ratio.
B) Increase in market share.
C) Reduction in manufacturing cycle times.
D) New products developed.

5. Company TTT produces a range of products, including products T1 and T5.
Product T1: Profitability has declined in recent years, although small profits continue to be made as the market contracts due to changing customer preferences. Overall market share is low and continues to reduce.
However, in addition to external sales T1 is also used as a component of product T5.
Product T5: A market leader within a low growth market, sources components both externally and from TTT's other subsidiaries. T5 benefits from significant economies of scale and TTT has recently considered modernizing its T5 production line but following a cost benefit analysis, decided not to proceed.
Which of the following is an appropriate strategy for TTT to adopt?

A) Divest both product T1 and product T5.
B) Harvest product T1 and Divest product T5.
C) Divest product T1 and Harvest product T5.
D) Harvest both product T1 and product T5.

Solutions: