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 evaluate employees’ performance
C) To prepare financial reports
  • 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) Cost minimization
B) Creativity
C) Competition
  • 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) Matching Stage
B) Implementation Stage
C) Input Stage
  • 7. Which matrices are included in the Input Stage?
A) EFE, IFE, CPM
B) QSPM
C) SPACE, Grand Strategy
  • 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) Match key internal and external factors to generate strategies
B) Plot a company’s financial position
C) Evaluate political risks
  • 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) Overcome weaknesses by taking advantage of opportunities
B) Use strengths to exploit opportunities
C) Maintain current strategy
  • 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) Maximizing revenue
B) Exploiting opportunities
C) Defensive tactics to reduce weaknesses and avoid threat
  • 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) Is only for financial planning
B) Focuses only on external factors
C) Provides a snapshot in time and doesn’t show how to gain competitive advantage
  • 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) Aggressive, Conservative, Defensive, Competitive
B) SO, WO, ST, WT
C) Stars, Cash Cows, Dogs
  • 20. The BCG Matrix evaluates divisions based on:
A) Strategy implementation costs
B) External threats and internal weaknesses
C) Relative market share position and industry growth rate
  • 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) 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) 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) Aggressive strategies
B) Harvest and divest 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) 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) Improving weak competitive position using intensive strategies
B) Maintaining current 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) Maintaining current operations
B) Diversification or joint ventures in promising areas
C) Weak competitive strategies
  • 34. The QSPM is used to:
A) Assign employee bonuses
B) Evaluate marketing campaigns
C) Objectively determine the relative attractiveness of feasible strategies
  • 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) 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) Financial performance
C) External market trends
  • 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) Market trends
B) Financial ratios
C) Subjective factors like personal prejudice, emotions, and halo error
  • 40. A limitation of QSPM is that it:
A) Always requires subjective judgments
B) Focuses only on external factors
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) 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) SPACE Matrix
B) QSPM
C) Grand Strategy Matrix
  • 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) 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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