CHAPTER 6
  • 1. What is the main goal of the strategy analysis and choice process?
A) To evaluate employees’ performance
B) To prepare financial reports
C) To generate, evaluate, and select feasible alternative strategie
  • 2. Which factor is essential for ensuring understanding and commitment in strategy choice?
A) Technology adoption
B) Involvement of as many managers and employees as possible
C) Cost reduction
  • 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) Vision, mission, EFE, CPM, and IFE information
B) Supplier contracts
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) Input Stage
B) Implementation Stage
C) Matching 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) Matching Stage
B) Decision Stage
C) Evaluation Stage
  • 9. Which stage involves a single analytical technique to determine strategy attractiveness?
A) Implementation Stage
B) Matching Stage
C) Decision 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) Increase internal weaknesses
C) Use strengths to reduce the impact of external threats
  • 14. WT strategies focus on:
A) Defensive tactics to reduce weaknesses and avoid threat
B) Maximizing revenue
C) Exploiting opportunities
  • 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) Provides a snapshot in time and doesn’t show how to gain competitive advantage
B) Is only for financial planning
C) Focuses only on external factors
  • 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) 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) 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) Stars
B) Cash Cows
C) Dogs
  • 23. Cash Cows are divisions that:
A) Require significant investments
B) Have low market share and low growth
C) Generate more cash than needed
  • 24. Dogs in the BCG Matrix are:
A) Always profitable
B) Low market share and low growth divisions
C) Stars in the making
  • 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) Harvest and divest strategies
B) Aggressive strategies
C) Hold and maintain strategies
  • 28. Cells VII, VIII, IX in the IE Matrix imply:
A) Product development
B) Harvest and divest strategies
C) Market penetration
  • 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) Excellent position; focus on integration or development strategies
B) Retrenchment
C) Diversification only
  • 31. Quadrant II of the Grand Strategy Matrix focuses on:
A) Improving weak competitive position using intensive strategies
B) Backward integration
C) Maintaining current strategies
  • 32. Quadrant III implies:
A) Market penetration
B) Strong competitive position
C) Weak competitive position and slow market growth; drastic changes needed
  • 33. Quadrant IV suggests:
A) Maintaining current operations
B) Weak competitive strategies
C) Diversification or joint ventures in promising areas
  • 34. The QSPM is used to:
A) Objectively determine the relative attractiveness of feasible strategies
B) Evaluate marketing campaigns
C) Assign employee bonuses
  • 35. The strategy with the highest STAS in QSPM is:
A) The most popular strategy
B) The least costly strategy
C) The most feasible 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) Financial performance
B) External market trends
C) Shared values, beliefs, and practices that support strategy implementation
  • 38. Political considerations in strategy choice involve:
A) Avoiding decision-making
B) Reducing costs only
C) Navigating power dynamics and negotiations to gain commitment
  • 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) 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) Reducing financial risks only
B) Objective evaluation of alternatives based on input data
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) Stability Position
B) Employee turnover
C) Financial Position
  • 46. The analogy of strategy analysis and choice is compared to:
A) Building a house
B) Writing a report
C) Playing chess at a grandmaster level
  • 47. Why is specificity important in strategy formulation?
A) To improve creativity
B) To reduce planning time
C) To estimate costs and assign responsibilities clearly
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