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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 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) Creativity
B) Cost minimization
C) Competition
  • 4. What information should participants have available when formulating strategies?
A) Marketing reports only
B) Vision, mission, EFE, CPM, and IFE information
C) Supplier contracts
  • 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) Input Stage
B) Implementation Stage
C) Matching 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) Matching Stage
B) Decision Stage
C) Implementation Stage
  • 10. The SWOT Matrix is used to:
A) Plot a company’s financial position
B) Match key internal and external factors to generate strategies
C) Evaluate political risks
  • 11. How many strategy cells are in a SWOT Matrix?
A) Nine
B) Four
C) Six
  • 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 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 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) 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) 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) Financial Position
B) Market Share Position
C) Industry 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) Dogs
B) Cash Cows
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) 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) IFE and EFE total weighted scores
C) SPACE dimensions
  • 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) Product development
B) Harvest and divest strategies
C) Market penetration
  • 29. The Grand Strategy Matrix is based on:
A) Competitive position and market growth
B) Political factors
C) Financial ratios
  • 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) Backward integration
B) Maintaining current strategies
C) Improving weak competitive position using intensive strategies
  • 32. Quadrant III implies:
A) Market penetration
B) Weak competitive position and slow market growth; drastic changes needed
C) Strong competitive position
  • 33. Quadrant IV suggests:
A) Weak competitive strategies
B) Maintaining current operations
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) 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) 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) Market trends
B) Subjective factors like personal prejudice, emotions, and halo error
C) Financial ratios
  • 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) 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) SPACE Matrix
C) IE 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) Financial Position
B) Employee turnover
C) Stability 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 estimate costs and assign responsibilities clearly
C) To reduce planning time
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