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CHAPTER 6
Contributed by: Laong
  • 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) Cost reduction
B) Technology adoption
C) Involvement of as many managers and employees as possible
  • 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) Marketing reports only
B) Supplier contracts
C) Vision, mission, EFE, CPM, and IFE information
  • 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) Implementation Stage
B) Matching Stage
C) Input Stage
  • 7. Which matrices are included in the Input Stage?
A) SPACE, Grand Strategy
B) EFE, IFE, CPM
C) QSPM
  • 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) Decision Stage
B) Matching Stage
C) Implementation 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) Nine
B) Six
C) Four
  • 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 strengths to reduce the impact of external threats
B) Increase internal weaknesses
C) Use weaknesses to create opportunities
  • 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 create flexible plans
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) Stars, Cash Cows, Dogs
B) SO, WO, ST, WT
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 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) Generate more cash than needed
B) Require significant investments
C) Have low market share and low growth
  • 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) Hold and maintain strategies
B) Liquidation
C) Grow and build 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) Market penetration
B) Product development
C) Harvest and divest strategies
  • 29. The Grand Strategy Matrix is based on:
A) Competitive position and market growth
B) Financial ratios
C) Political factors
  • 30. Quadrant I of the Grand Strategy Matrix suggests:
A) Diversification only
B) Retrenchment
C) Excellent position; focus on integration or development strategies
  • 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) Weak competitive position and slow market growth; drastic changes needed
B) Market penetration
C) Strong competitive position
  • 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) Competitor opinions only
B) Wild guesses
C) Company data, industry data, and expert opinion
  • 37. Organizational culture in strategy formulation refers to:
A) Financial performance
B) Shared values, beliefs, and practices that support strategy implementation
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) Financial ratios
B) Subjective factors like personal prejudice, emotions, and halo error
C) Market trends
  • 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) Proposed actions and estimated costs
B) Historical data only
C) Competitor strategies
  • 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) SPACE Matrix
B) IE Matrix
C) SWOT Matrix
  • 44. Which matrix is the only analytical technique designed to objectively rank strategies?
A) SPACE Matrix
B) Grand Strategy Matrix
C) QSPM
  • 45. Which factor is NOT considered in the SPACE Matrix?
A) Financial Position
B) Stability Position
C) Employee turnover
  • 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 improve creativity
B) To reduce planning time
C) To estimate costs and assign responsibilities clearly
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