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CIMA E3 - Strategic Management Question Tutorial Sample Questions:

1. BCA is a long established international airline. Which of the following represent Threats to BCA's business?
(Choose all that apply.)

A) Greater popularity of long-haul holidays.
B) A higher level of private car ownership.
C) A shortage of trained pilots in BCA.
D) A sudden increase in international terrorism.
E) A substantial rise in the price of oil.

2. Which TWO of the following are advantages to an organization of using non-financial performance measures, rather than financial performance measures? (Choose two.)

A) They are not distorted by inflation.
B) They present a wider view of organizational performance than financial performance measures.
C) They are easier to measure than financial performance measures.
D) They are less expensive to measure than financial performance measures.
E) They are less subjective than financial performance measures.

3. Ansoff has provided a product/market growth matrix which denotes possible strategic directions that an organization can follow.
Which of the following statements correctly describe the strategic options generated by the matrix? (Choose all that apply.)

A) Market penetration using existing products within existing markets.
B) Market penetration using existing products in new markets.
C) Diversification using new products in new markets.
D) Market development using existing products in new markets.
E) Market penetration using new products within existing markets.
F) Product development using new products in new markets.

4. DRAG DROP
YZ is a family-run business which manufactures and sells confectionery, employing almost 100 staff. It operates 10 shops in small towns in the north of country P.
Sales of YZ's products have decreased over the last 4 years due to competition from large supermarkets, internet shopping and a general economic downturn, which has hit the north of country P especially hard.
YZ's managing director has recently retired and the board decided to fill the vacancy with an external appointment. The new managing director plans to invest in new manufacturing technology, which would cut staffing levels by 15% and reduce wastage, allowing YZ to lower its prices. YZ's staff are very unhappy about these proposals, feeling that they will destroy YZ's family tradition and reputation that has developed over many years.
Select the correct descriptor for each of the forces for change below:
Select and Place:

Correct

5. YZ operates a national mobile phone (cell phone) network in one country. It is considering upgrading its network to 4th Generation (4G) by providing an improved bandwidth that will enable its customers faster access to the Internet.
This investment will cost S29 million which YZ's institutional investors have agreed to provide by subscribing to a rights issue. This is due to management having informed institutional investors that a rival is already offering
4G and that this is taking customers away from YZ because its network is now regarded as too slow. YZ's remaining customers have shown a willingness to pay extra for 4G and overall the investment will have a positive net present value.
Which of the following statements are correct? (Choose all that apply.)

A) There are sufficient investment funds available
B) YZ will gain a first mover advantage.
C) It is essential given the strategic threats to YZ.
D) There is stakeholder approval for the investment.
E) It provides a market development opportunity for YZ.

Solutions:

Question # 1 Answer: C,E

Question # 2 Answer: B,E

Question # 3 Answer: A,E,F

Question # 4 Answer: Only visible for members

Question # 5 Answer: A,C,D