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