Sample Questions and Answers
Question 1
Which of the following is the primary goal of strategic management in a business organization?
A. Maximizing employee satisfaction
B. Achieving and sustaining competitive advantage
C. Increasing organizational hierarchy
D. Implementing short-term plans effectively
Answer: B
Question 2
Which tool is most commonly used to analyze an organization’s internal strengths and weaknesses?
A. PESTLE Analysis
B. SWOT Analysis
C. Porter’s Five Forces
D. Value Chain Analysis
Answer: B
Question 3
What does the “T” in SWOT analysis stand for?
A. Tactics
B. Trends
C. Threats
D. Targets
Answer: C
Question 4
The concept of “core competency” was introduced by:
A. Michael Porter
B. Gary Hamel and C.K. Prahalad
C. Peter Drucker
D. Henry Mintzberg
Answer: B
Question 5
Which of the following is an example of a functional-level strategy?
A. Expanding into new markets internationally
B. Developing an employee training program
C. Establishing strategic partnerships
D. Setting overall corporate objectives
Answer: B
Question 6
Porter’s Five Forces framework includes all of the following EXCEPT:
A. Bargaining power of buyers
B. Threat of substitutes
C. Government regulations
D. Rivalry among competitors
Answer: C
Question 7
Which of the following strategies involves offering products at a lower price point to gain market share?
A. Cost leadership
B. Differentiation
C. Focus
D. Market penetration
Answer: A
Question 8
The BCG Matrix categorizes products or business units into which of the following groups?
A. Growth, Stability, Decline, and Plateau
B. Stars, Cash Cows, Question Marks, and Dogs
C. High Risk, Low Risk, Moderate Risk, and No Risk
D. Strengths, Weaknesses, Opportunities, and Threats
Answer: B
Question 9
A company pursuing a differentiation strategy focuses on:
A. Reducing costs
B. Offering unique products or services
C. Targeting a broad market
D. Implementing generic strategies
Answer: B
Question 10
What is the primary focus of a corporate-level strategy?
A. Allocating resources among business units
B. Designing marketing campaigns
C. Managing day-to-day operations
D. Monitoring employee performance
Answer: A
Question 11
Which strategic tool analyzes political, economic, social, technological, legal, and environmental factors?
A. SWOT Analysis
B. PESTLE Analysis
C. BCG Matrix
D. Balanced Scorecard
Answer: B
Question 12
What is the primary goal of a vertical integration strategy?
A. Increase customer loyalty
B. Gain control over supply chains or distribution channels
C. Minimize production costs
D. Diversify product offerings
Answer: B
Question 13
Which phase of the strategic management process involves defining an organization’s mission and vision?
A. Implementation
B. Evaluation
C. Formulation
D. Benchmarking
Answer: C
Question 14
The Ansoff Matrix is most commonly used to:
A. Analyze competitor strengths
B. Evaluate risk in market expansion strategies
C. Identify supply chain inefficiencies
D. Create financial forecasts
Answer: B
Question 15
A company using a focus strategy:
A. Competes in a wide market
B. Targets a narrow market segment
C. Avoids competitive pressures
D. Pursues aggressive cost-cutting
Answer: B
Question 16
Which of the following is NOT a component of the Value Chain model?
A. Inbound logistics
B. Operations
C. Marketing and sales
D. Competitor benchmarking
Answer: D
Question 17
Scenario planning in strategic management is primarily used to:
A. Predict future market share
B. Prepare for multiple potential futures
C. Evaluate employee performance
D. Create standardized operating procedures
Answer: B
Question 18
Which of the following is a key characteristic of strategic decisions?
A. They are routine and operational.
B. They require long-term commitment.
C. They have minimal organizational impact.
D. They are reversible and low risk.
Answer: B
Question 19
A company’s vision statement should primarily focus on:
A. Current market performance
B. Employee training programs
C. The future aspirations of the company
D. Cost-cutting measures
Answer: C
Question 20
The process of benchmarking involves:
A. Identifying best practices from other organizations
B. Cutting costs across all departments
C. Developing new financial models
D. Implementing a quality assurance program
Answer: A
Question 21
Which strategic management tool measures performance across financial, customer, internal, and learning dimensions?
A. Balanced Scorecard
B. SWOT Analysis
C. Value Chain Analysis
D. BCG Matrix
Answer: A
Question 22
Which of the following is NOT part of Michael Porter’s Generic Strategies?
A. Differentiation
B. Cost leadership
C. Innovation leadership
D. Focus
Answer: C
Question 23
The primary objective of environmental scanning is to:
A. Implement effective HR policies
B. Monitor changes in external and internal environments
C. Create a detailed marketing plan
D. Develop a new mission statement
Answer: B
Question 24
What is the main focus of diversification strategy?
A. Reducing costs in existing markets
B. Expanding into unrelated business areas
C. Increasing customer satisfaction
D. Improving supply chain efficiency
Answer: B
Question 25
Which of the following is a key feature of blue ocean strategy?
A. Creating uncontested market space
B. Competing on price alone
C. Targeting a niche market
D. Improving operational efficiency
Answer: A
Question 26
The Triple Bottom Line approach in strategic management considers:
A. Profit, productivity, and performance
B. People, planet, and profit
C. Price, product, and promotion
D. Positioning, planning, and policy
Answer: B
Question 27
What is the primary goal of a retrenchment strategy?
A. Rapid growth
B. Stabilization and cost control
C. Expanding into new markets
D. Innovation in products
Answer: B
Question 28
Which strategy involves acquiring competitors in the same industry?
A. Horizontal integration
B. Vertical integration
C. Market penetration
D. Differentiation
Answer: A
Question 29
What is the first step in the strategic management process?
A. Strategy formulation
B. Strategy implementation
C. Mission and vision development
D. Environmental analysis
Answer: C
Question 30
The primary purpose of a mission statement is to:
A. Define the company’s values and purpose
B. Outline future aspirations
C. Highlight financial targets
D. Detail operational goals
Answer: A
Question 31
Which of the following best describes strategic fit?
A. Aligning operational processes with HR policies
B. Achieving alignment between an organization’s resources and its external environment
C. Balancing short-term and long-term goals
D. Matching customer preferences with product offerings
Answer: B
Question 32
Which of the following is an example of an external factor in a PESTLE analysis?
A. Corporate governance policies
B. Economic growth rates
C. Employee turnover
D. Inventory management systems
Answer: B
Question 33
In the GE-McKinsey Matrix, what does the “industry attractiveness” dimension measure?
A. The level of product differentiation
B. The potential profitability of the industry
C. The size of the company’s market share
D. The effectiveness of marketing campaigns
Answer: B
Question 34
Which approach to strategy emphasizes adapting to changes in the external environment over time?
A. Prescriptive strategy
B. Emergent strategy
C. Static strategy
D. Reactive strategy
Answer: B
Question 35
Which of the following is NOT typically a characteristic of corporate-level strategies?
A. Addressing long-term growth
B. Defining the overall scope of the organization
C. Allocating resources across business units
D. Establishing detailed operational plans
Answer: D
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