CHAPTER 6
  • 1. What is the main goal of the strategy analysis and choice process?
A) To evaluate employees’ performance
B) To generate, evaluate, and select feasible alternative strategie
C) To prepare financial reports
  • 2. Which factor is essential for ensuring understanding and commitment in strategy choice?
A) Cost reduction
B) Involvement of as many managers and employees as possible
C) Technology adoption
  • 3. What is encouraged in generating alternative strategies?
A) Competition
B) Creativity
C) Cost minimization
  • 4. What information should participants have available when formulating strategies?
A) Supplier contracts
B) Vision, mission, EFE, CPM, and IFE information
C) Marketing reports only
  • 5. The Strategy-Formulation Analytical Framework consists of how many stages?
A) Four
B) Two
C) Three
  • 6. Which stage summarizes basic input information for strategy formulation?
A) Implementation Stage
B) Matching Stage
C) Input Stage
  • 7. Which matrices are included in the Input Stage?
A) SPACE, Grand Strategy
B) EFE, IFE, CPM
C) QSPM
  • 8. Which stage uses input information to generate feasible alternative strategies?
A) Decision Stage
B) Evaluation Stage
C) Matching Stage
  • 9. Which stage involves a single analytical technique to determine strategy attractiveness?
A) Matching Stage
B) Decision Stage
C) Implementation Stage
  • 10. The SWOT Matrix is used to:
A) Plot a company’s financial position
B) Evaluate political risks
C) Match key internal and external factors to generate strategies
  • 11. How many strategy cells are in a SWOT Matrix?
A) Six
B) Four
C) Nine
  • 12. What is the purpose of a WO strategy?
A) Use strengths to exploit opportunities
B) Overcome weaknesses by taking advantage of opportunities
C) Maintain current strategy
  • 13. SMaintain current strategy
A) Increase internal weaknesses
B) Use weaknesses to create opportunities
C) Use strengths to reduce the impact of external threats
  • 14. WT strategies focus on:
A) Maximizing revenue
B) Defensive tactics to reduce weaknesses and avoid threat
C) Exploiting opportunities
  • 15. Why must strategies be stated in specific terms?
A) To allow estimation of costs and accountability
B) To create flexible plans
C) To avoid documentation
  • 16. One limitation of SWOT analysis is that it:
A) Is only for financial planning
B) Focuses only on external factors
C) Provides a snapshot in time and doesn’t show how to gain competitive advantage
  • 17. The SPACE Matrix is designed to indicate:
A) Historical financial trends
B) Appropriate strategy types based on four dimensions
C) Internal weaknesses only
  • 18. Which of the following is NOT a dimension of the SPACE Matrix?
A) Financial Position
B) Market Share Position
C) Industry Position
  • 19. Quadrants of the SPACE Matrix include:
A) SO, WO, ST, WT
B) Aggressive, Conservative, Defensive, Competitive
C) Stars, Cash Cows, Dogs
  • 20. The BCG Matrix evaluates divisions based on:
A) Strategy implementation costs
B) External threats and internal weaknesses
C) Relative market share position and industry growth rate
  • 21. In the BCG Matrix, 'Stars' are characterized by:
A) High market share and high growth
B) Low market share and low growth
C) High market share and low growth
  • 22. Which BCG category may require substantial investment to maintain growth?
A) Cash Cows
B) Stars
C) Dogs
  • 23. Cash Cows are divisions that:
A) Generate more cash than needed
B) Have low market share and low growth
C) Require significant investments
  • 24. Dogs in the BCG Matrix are:
A) Stars in the making
B) Always profitable
C) Low market share and low growth divisions
  • 25. The IE Matrix positions divisions based on:
A) IFE and EFE total weighted scores
B) SPACE dimensions
C) BCG quadrants
  • 26. Cells I, II, III in the IE Matrix suggest:
A) Hold and maintain strategies
B) Grow and build strategies
C) Liquidation
  • 27. Cells IV, V, VI in the IE Matrix recommend:
A) Aggressive strategies
B) Harvest and divest strategies
C) Hold and maintain strategies
  • 28. Cells VII, VIII, IX in the IE Matrix imply:
A) Harvest and divest strategies
B) Market penetration
C) Product development
  • 29. The Grand Strategy Matrix is based on:
A) Political factors
B) Financial ratios
C) Competitive position and market growth
  • 30. Quadrant I of the Grand Strategy Matrix suggests:
A) Retrenchment
B) Diversification only
C) Excellent position; focus on integration or development strategies
  • 31. Quadrant II of the Grand Strategy Matrix focuses on:
A) Maintaining current strategies
B) Backward integration
C) Improving weak competitive position using intensive strategies
  • 32. Quadrant III implies:
A) Strong competitive position
B) Weak competitive position and slow market growth; drastic changes needed
C) Market penetration
  • 33. Quadrant IV suggests:
A) Maintaining current operations
B) Diversification or joint ventures in promising areas
C) Weak competitive strategies
  • 34. The QSPM is used to:
A) Objectively determine the relative attractiveness of feasible strategies
B) Assign employee bonuses
C) Evaluate marketing campaigns
  • 35. The strategy with the highest STAS in QSPM is:
A) The most feasible strategy
B) The most popular strategy
C) The least costly strategy
  • 36. Estimating costs in recommendations should rely on:
A) Wild guesses
B) Company data, industry data, and expert opinion
C) Competitor opinions only
  • 37. Organizational culture in strategy formulation refers to:
A) Shared values, beliefs, and practices that support strategy implementation
B) External market trends
C) Financial performance
  • 38. Political considerations in strategy choice involve:
A) Navigating power dynamics and negotiations to gain commitment
B) Avoiding decision-making
C) Reducing costs only
  • 39. Bias in strategy analysis may be caused by:
A) Market trends
B) Financial ratios
C) Subjective factors like personal prejudice, emotions, and halo error
  • 40. A limitation of QSPM is that it:
A) Focuses only on external factors
B) Ignores costs
C) Always requires subjective judgments
  • 41. The Recommendations Page in a strategic plan lists:
A) Proposed actions and estimated costs
B) Historical data only
C) Competitor strategies
  • 42. A key aspect of strategy analysis and choice is:
A) Following trends blindly
B) Objective evaluation of alternatives based on input data
C) Reducing financial risks only
  • 43. Which matrix shows divisions’ positions in nine cells based on internal and external factors?
A) SPACE Matrix
B) SWOT Matrix
C) IE Matrix
  • 44. Which matrix is the only analytical technique designed to objectively rank strategies?
A) Grand Strategy Matrix
B) SPACE Matrix
C) QSPM
  • 45. Which factor is NOT considered in the SPACE Matrix?
A) Employee turnover
B) Stability Position
C) Financial Position
  • 46. The analogy of strategy analysis and choice is compared to:
A) Building a house
B) Playing chess at a grandmaster level
C) Writing a report
  • 47. Why is specificity important in strategy formulation?
A) To reduce planning time
B) To estimate costs and assign responsibilities clearly
C) To improve creativity
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