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) Technology adoption
C) Cost reduction
  • 3. What is encouraged in generating alternative strategies?
A) Creativity
B) Cost minimization
C) Competition
  • 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) Three
C) Two
  • 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) SPACE, Grand Strategy
B) QSPM
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) 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) Nine
C) Four
  • 12. What is the purpose of a WO strategy?
A) Maintain current strategy
B) Overcome weaknesses by taking advantage of opportunities
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 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) 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) Internal weaknesses only
B) Appropriate strategy types based on four dimensions
C) Historical financial trends
  • 18. Which of the following is NOT a dimension of the SPACE Matrix?
A) Industry Position
B) Financial Position
C) Market Share 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) External threats and internal weaknesses
B) Strategy implementation costs
C) Relative market share position and industry growth rate
  • 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) 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) Stars in the making
B) Always profitable
C) Low market share and low growth divisions
  • 25. The IE Matrix positions divisions based on:
A) SPACE dimensions
B) IFE and EFE total weighted scores
C) BCG quadrants
  • 26. Cells I, II, III in the IE Matrix suggest:
A) Grow and build strategies
B) Liquidation
C) Hold and maintain strategies
  • 27. Cells IV, V, VI in the IE Matrix recommend:
A) Harvest and divest strategies
B) Hold and maintain strategies
C) Aggressive strategies
  • 28. Cells VII, VIII, IX in the IE Matrix imply:
A) Market penetration
B) Product development
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) Diversification only
B) Excellent position; focus on integration or development strategies
C) Retrenchment
  • 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) Strong competitive position
C) Weak competitive position and slow market growth; drastic changes needed
  • 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) Evaluate marketing campaigns
C) Assign employee bonuses
  • 35. The strategy with the highest STAS in QSPM is:
A) The most popular strategy
B) The most feasible strategy
C) The least costly strategy
  • 36. Estimating costs in recommendations should rely on:
A) Wild guesses
B) Competitor opinions only
C) Company data, industry data, and expert opinion
  • 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) Always requires subjective judgments
C) Ignores costs
  • 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) Reducing financial risks only
B) Following trends blindly
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) IE Matrix
B) SWOT Matrix
C) SPACE Matrix
  • 44. Which matrix is the only analytical technique designed to objectively rank strategies?
A) Grand Strategy Matrix
B) QSPM
C) SPACE 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) Playing chess at a grandmaster level
B) Writing a report
C) Building a house
  • 47. Why is specificity important in strategy formulation?
A) To estimate costs and assign responsibilities clearly
B) To improve creativity
C) To reduce planning time
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