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CHAPTER 6
Contributed by: Laong
  • 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) Involvement of as many managers and employees as possible
B) Technology adoption
C) Cost reduction
  • 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) 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) Implementation Stage
B) Matching Stage
C) Input 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) Evaluation Stage
B) Decision Stage
C) Matching 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) 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) Use strengths to exploit opportunities
B) Maintain current strategy
C) Overcome weaknesses by taking advantage of 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 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) 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) Internal weaknesses only
B) Historical financial trends
C) Appropriate strategy types based on four dimensions
  • 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) Stars, Cash Cows, Dogs
B) Aggressive, Conservative, Defensive, Competitive
C) SO, WO, ST, WT
  • 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) 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) Generate more cash than needed
B) Have low market share and low growth
C) Require significant investments
  • 24. Dogs in the BCG Matrix are:
A) Low market share and low growth divisions
B) Stars in the making
C) Always profitable
  • 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) 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) Harvest and divest strategies
B) Market penetration
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) Excellent position; focus on integration or development strategies
B) Retrenchment
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) 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) Assign employee bonuses
B) Objectively determine the relative attractiveness of feasible strategies
C) Evaluate marketing campaigns
  • 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) Wild guesses
C) Competitor opinions only
  • 37. Organizational culture in strategy formulation refers to:
A) External market trends
B) Financial performance
C) Shared values, beliefs, and practices that support strategy implementation
  • 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) Financial ratios
C) Subjective factors like personal prejudice, emotions, and halo error
  • 40. A limitation of QSPM is that it:
A) Ignores costs
B) Always requires subjective judgments
C) Focuses only on external factors
  • 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) Objective evaluation of alternatives based on input data
C) Reducing financial risks only
  • 43. Which matrix shows divisions’ positions in nine cells based on internal and external factors?
A) SWOT Matrix
B) IE 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) Stability Position
B) Financial Position
C) Employee turnover
  • 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 estimate costs and assign responsibilities clearly
C) To reduce planning time
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