CHAPTER 6
  • 1. What is the main goal of the strategy analysis and choice process?
A) To generate, evaluate, and select feasible alternative strategie
B) To prepare financial reports
C) To evaluate employees’ performance
  • 2. Which factor is essential for ensuring understanding and commitment in strategy choice?
A) Technology adoption
B) Cost reduction
C) Involvement of as many managers and employees as possible
  • 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) 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) Two
B) Four
C) Three
  • 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) SPACE, Grand Strategy
B) QSPM
C) EFE, IFE, CPM
  • 8. Which stage uses input information to generate feasible alternative strategies?
A) Evaluation Stage
B) Matching Stage
C) Decision Stage
  • 9. Which stage involves a single analytical technique to determine strategy attractiveness?
A) Decision Stage
B) Implementation Stage
C) Matching 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) Nine
B) Four
C) Six
  • 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) 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) Exploiting opportunities
B) Maximizing revenue
C) Defensive tactics to reduce weaknesses and avoid threat
  • 15. Why must strategies be stated in specific terms?
A) To create flexible plans
B) To allow estimation of costs and accountability
C) To avoid documentation
  • 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) Appropriate strategy types based on four dimensions
B) Historical financial trends
C) Internal weaknesses only
  • 18. Which of the following is NOT a dimension of the SPACE Matrix?
A) Market Share Position
B) Financial Position
C) Industry Position
  • 19. Quadrants of the SPACE Matrix include:
A) SO, WO, ST, WT
B) Stars, Cash Cows, Dogs
C) Aggressive, Conservative, Defensive, Competitive
  • 20. The BCG Matrix evaluates divisions based on:
A) Strategy implementation costs
B) Relative market share position and industry growth rate
C) External threats and internal weaknesses
  • 21. In the BCG Matrix, 'Stars' are characterized by:
A) Low market share and low growth
B) High market share and high growth
C) High market share and low growth
  • 22. Which BCG category may require substantial investment to maintain growth?
A) Cash Cows
B) Dogs
C) Stars
  • 23. Cash Cows are divisions that:
A) Have low market share and low growth
B) Generate more cash than needed
C) Require significant investments
  • 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) SPACE dimensions
C) IFE and EFE total weighted scores
  • 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) Harvest and divest strategies
C) Aggressive strategies
  • 28. Cells VII, VIII, IX in the IE Matrix imply:
A) Product development
B) Market penetration
C) Harvest and divest strategies
  • 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) 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) 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) Weak competitive strategies
B) Diversification or joint ventures in promising areas
C) Maintaining current operations
  • 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 least costly strategy
B) The most feasible strategy
C) The most popular strategy
  • 36. Estimating costs in recommendations should rely on:
A) Company data, industry data, and expert opinion
B) Competitor opinions only
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) Reducing costs only
C) Avoiding decision-making
  • 39. Bias in strategy analysis may be caused by:
A) Market trends
B) Subjective factors like personal prejudice, emotions, and halo error
C) Financial ratios
  • 40. A limitation of QSPM is that it:
A) Ignores costs
B) Focuses only on external factors
C) Always requires subjective judgments
  • 41. The Recommendations Page in a strategic plan lists:
A) Historical data only
B) Proposed actions and estimated costs
C) Competitor strategies
  • 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) 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) Financial Position
B) Employee turnover
C) Stability 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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