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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) 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) 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) Three
B) Two
C) Four
  • 6. Which stage summarizes basic input information for strategy formulation?
A) Matching Stage
B) Input Stage
C) Implementation 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) Decision Stage
B) Matching 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) Evaluate political risks
B) Match key internal and external factors to generate strategies
C) Plot a company’s financial position
  • 11. How many strategy cells are in a SWOT Matrix?
A) Six
B) Four
C) Nine
  • 12. What is the purpose of a WO strategy?
A) Maintain current strategy
B) Use strengths to exploit opportunities
C) Overcome weaknesses by taking advantage of opportunities
  • 13. SMaintain current strategy
A) Increase internal weaknesses
B) Use weaknesses to create opportunities
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) Exploiting opportunities
C) Maximizing revenue
  • 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) 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) Industry Position
B) Market Share Position
C) Financial 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) 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) High market share and high growth
C) Low 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) Have low market share and low growth
B) Require significant investments
C) Generate more cash than needed
  • 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) IFE and EFE total weighted scores
B) BCG quadrants
C) SPACE dimensions
  • 26. Cells I, II, III in the IE Matrix suggest:
A) Grow and build strategies
B) Hold and maintain strategies
C) Liquidation
  • 27. Cells IV, V, VI in the IE Matrix recommend:
A) Hold and maintain strategies
B) Harvest and divest strategies
C) Aggressive strategies
  • 28. Cells VII, VIII, IX in the IE Matrix imply:
A) Market penetration
B) Harvest and divest strategies
C) Product development
  • 29. The Grand Strategy Matrix is based on:
A) Political factors
B) Competitive position and market growth
C) Financial ratios
  • 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) Backward integration
B) Maintaining current strategies
C) Improving weak competitive position using intensive strategies
  • 32. Quadrant III implies:
A) Weak competitive position and slow market growth; drastic changes needed
B) Strong competitive position
C) Market penetration
  • 33. Quadrant IV suggests:
A) Diversification or joint ventures in promising areas
B) Maintaining current operations
C) Weak competitive strategies
  • 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 feasible strategy
B) The most popular strategy
C) The least costly strategy
  • 36. Estimating costs in recommendations should rely on:
A) Wild guesses
B) Company data, industry data, and expert opinion
C) Competitor opinions only
  • 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) Reducing costs only
C) Avoiding decision-making
  • 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) Always requires subjective judgments
B) Ignores costs
C) Focuses only on external factors
  • 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) QSPM
B) SPACE Matrix
C) Grand Strategy Matrix
  • 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) Writing a report
B) Building a house
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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