CHAPTER 6
  • 1. What is the main goal of the strategy analysis and choice process?
A) To prepare financial reports
B) To evaluate employees’ performance
C) To generate, evaluate, and select feasible alternative strategie
  • 2. Which factor is essential for ensuring understanding and commitment in strategy choice?
A) Involvement of as many managers and employees as possible
B) Cost reduction
C) Technology adoption
  • 3. What is encouraged in generating alternative strategies?
A) Cost minimization
B) Competition
C) Creativity
  • 4. What information should participants have available when formulating strategies?
A) Vision, mission, EFE, CPM, and IFE information
B) Marketing reports only
C) Supplier contracts
  • 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) EFE, IFE, CPM
C) SPACE, Grand Strategy
  • 8. Which stage uses input information to generate feasible alternative strategies?
A) Matching Stage
B) Decision 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) Evaluate political risks
B) Match key internal and external factors to generate strategies
C) Plot a company’s financial position
  • 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) 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) Use strengths to reduce the impact of external threats
C) Increase internal weaknesses
  • 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 avoid documentation
B) To allow estimation of costs and accountability
C) To create flexible plans
  • 16. One limitation of SWOT analysis is that it:
A) Focuses only on external factors
B) Is only for financial planning
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) Internal weaknesses only
C) Appropriate strategy types based on four dimensions
  • 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) Relative market share position and industry growth rate
B) External threats and internal weaknesses
C) Strategy implementation costs
  • 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) 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) BCG quadrants
B) IFE and EFE total weighted scores
C) SPACE dimensions
  • 26. Cells I, II, III in the IE Matrix suggest:
A) Liquidation
B) Hold and maintain strategies
C) Grow and build strategies
  • 27. Cells IV, V, VI in the IE Matrix recommend:
A) Hold and maintain strategies
B) Aggressive strategies
C) Harvest and divest strategies
  • 28. Cells VII, VIII, IX in the IE Matrix imply:
A) Market penetration
B) Harvest and divest strategies
C) Product development
  • 29. The Grand Strategy Matrix is based on:
A) Financial ratios
B) Political factors
C) Competitive position and market growth
  • 30. Quadrant I of the Grand Strategy Matrix suggests:
A) Diversification only
B) Excellent position; focus on integration or development strategies
C) Retrenchment
  • 31. Quadrant II of the Grand Strategy Matrix focuses on:
A) Backward integration
B) Improving weak competitive position using intensive strategies
C) Maintaining current strategies
  • 32. Quadrant III implies:
A) Weak competitive position and slow market growth; drastic changes needed
B) Strong competitive position
C) Market penetration
  • 33. Quadrant IV suggests:
A) Diversification or joint ventures in promising areas
B) Maintaining current operations
C) Weak competitive strategies
  • 34. The QSPM is used to:
A) Evaluate marketing campaigns
B) Assign employee bonuses
C) Objectively determine the relative attractiveness of feasible strategies
  • 35. The strategy with the highest STAS in QSPM is:
A) The least costly strategy
B) The most popular strategy
C) The most feasible strategy
  • 36. Estimating costs in recommendations should rely on:
A) Competitor opinions only
B) Company data, industry data, and expert opinion
C) Wild guesses
  • 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) Subjective factors like personal prejudice, emotions, and halo error
B) Financial ratios
C) Market trends
  • 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) Competitor strategies
B) Historical data only
C) Proposed actions and estimated costs
  • 42. A key aspect of strategy analysis and choice is:
A) Following trends blindly
B) Reducing financial risks only
C) Objective evaluation of alternatives based on input data
  • 43. Which matrix shows divisions’ positions in nine cells based on internal and external factors?
A) SPACE Matrix
B) IE Matrix
C) SWOT 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) Financial Position
C) Stability Position
  • 46. The analogy of strategy analysis and choice is compared to:
A) Writing a report
B) Building a house
C) Playing chess at a grandmaster level
  • 47. Why is specificity important in strategy formulation?
A) To reduce planning time
B) To improve creativity
C) To estimate costs and assign responsibilities clearly
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