MGT603 TODAYS PAPER 2010

Question No: 1 ( Marks: 1 ) - Please choose one
Long-term objectives includes all of the following EXCEPT:
► Measurable
► Reasonable
► Varying
► Consistent

Question No: 2 ( Marks: 1 ) - Please choose one
Which of the following is NOT included in the strategic management model?
► Measure and evaluate performance
► Establish long-term objectives
► Develop mission and vision statements
► Perform internal research to identify customers

Question No: 3 ( Marks: 1 ) - Please choose one
Which component of a mission statement addresses the basic beliefs, values, aspirations, and ethical priorities of the firm?
► Technology
► Philosophy
► Customers
► Self-concept

Question No: 4 ( Marks: 1 ) - Please choose one
“Identifying and evaluating social, political, economic, technological and competitive trends and events”; which of the followings best describes this statement?
► Developing an effective mission statement
► Conducting an internal audit
► Performing an external audit
► Formulating strategy

Question No: 5 ( Marks: 1 ) - Please choose one
The purpose of an external audit is to prepare a list of which of the following?
► Opportunities and weaknesses
► Threats and strengths
► Opportunities and threats
► Strengths and weaknesses

Question No: 6 ( Marks: 1 ) - Please choose one
Rehman industries, a leading firm of the industry is analyzing the technological forces for the firm which may provide it opportunities and threats for which stage/s of strategic management process?
► Strategy formulation
► Strategy implementation
► Strategy evaluation
► All of the given options

Question No: 7 ( Marks: 1 ) - Please choose one
Use of the Internet and Internet technologies can be integrated into the sales of on-line as well as off-line business and marketing portion of the value chain through which of the following?
► Through software that permits customers to specify build-to-order options
► Through online product catalogs containing rich product information and specifications
► Via online price quotes and online announcements of special sales and promotions
► All of the given options

Question No: 8 ( Marks: 1 ) - Please choose one
Which of the following best describes this statement; “A systematic and ethical process for gathering and analyzing information about the competition’s activities and general business trends to further a business’ own goals”?
► External assessment
► Industry analysis
► Competitive intelligence program
► Business ethics

Question No: 9 ( Marks: 1 ) - Please choose one
Which one of the following is NOT is a basic mission of a competitive intelligence program?
► To provide a general understanding of an industry
► To provide a general understanding of a company’s competitors
► To identify industry executives who could be hired by the firm
► To identify potential moves a competitor might make that would endanger a firm

Question No: 10 ( Marks: 1 ) - Please choose one
Which of the following statements is correct in relation to the Five Forces framework?
► The framework is a means of identifying the forces which affect the level of competition in an industry
► The framework identifies the major stakeholders of an organization
► The framework assists in developing a broad perspective on the environment within which an organization operates
► It is not appropriate in public sector management and for small organizations

Question No: 11 ( Marks: 1 ) - Please choose one
While preparing an External Factor Evaluation Matrix, a total score of 0.8 indicates that:
► Firm is taking advantages of strengths and avoiding threats
► Firm is taking no advantage of opportunities and is avoiding threats
► Firm is not taking advantages of opportunities and is not avoiding threats
► Firm is taking advantage of opportunities and is avoiding the threats

Question No: 12 ( Marks: 1 ) - Please choose one
Internal analysis involves gathering and analyzing information about all areas of a firm EXPECT:
► Research and development
► Management information system
► Marketing
► Competitors

Question No: 13 ( Marks: 1 ) - Please choose one
All of the following are included in the five functions of the management process EXCEPT:
► Planning
► Organizing
► Leading
► Delegating

Question No: 14 ( Marks: 1 ) - Please choose one
One of the top level manager of a large manufacturing plant uses to spend her day trying to ensure that the material wastage is not more than 10%. She spends her day in performing which of the following management functions?
► Planning
► Organizing
► Leading
► Controlling

Question No: 15 ( Marks: 1 ) - Please choose one
Waseem & Sons primarily want to gain control over the prices charged to consumers. What strategy will most likely be followed by Waseem & Sons?
► Market penetration
► Product development
► Forward integration
► Concentric Diversification

Question No: 16 ( Marks: 1 ) - Please choose one
The IFE matrix summarizes and evaluates which factors in the functional areas of a business?
► Opportunities and threats
► Strengths and weaknesses
► Strengths and threats
► Opportunities and weaknesses

Question No: 17 ( Marks: 1 ) - Please choose one
What is meant by Focused Differentiation?
► Concentrating on a particular feature of a product or service to achieve differentiation
► Concentrating on differentiation as the primary means of achieving competitive advantage
► Providing a high perceived value product to a selected market segment which justifies a substantial price premium
► Simultaneously seeking to achieve differentiation and a price lower than that of competitors

Question No: 18 ( Marks: 1 ) - Please choose one
Khawar Garments, a domestic firm begins to export to India, it is an example of which of the following?
► Horizontal integration
► Market development
► Forward integration
► Concentric diversification

Question No: 19 ( Marks: 1 ) - Please choose one
Under which of the following conditions, Concentric Diversification would be particularly an effective strategy to pursue?
► When an organization has grown so large so quickly that major internal reorganization is needed
► When sales of current products would increase intensively by adding the new related products
► When revenues from current products/services would increase significantly by adding the new unrelated products
► When current products are in maturity stage of the product life cycle

Question No: 20 ( Marks: 1 ) - Please choose one
The company acquires or develops new products that could appeal to its current customer groups even though those new products may be technologically unrelated to the existing product lines. Which of the following best describes the statement?
► Retrenchment
► Horizontal diversification
► Market development
► Horizontal integration

Question No: 21 ( Marks: 1 ) - Please choose one
Abdullah Group of Industries is involved in the sale of its marginal business. It is most likely to say that Abdullah Group is implementing _____________________ strategy.
► Join venture
► Acquisition
► Liquidation
► Retrenchment

Question No: 22 ( Marks: 1 ) - Please choose one
Mergers and acquisitions are created for all of the following reasons EXCEPT:
► For gaining new technology
► For reduction of tax obligations
► For gaining economies of scale
► For increase in number of employees

Question No: 23 ( Marks: 1 ) - Please choose one
In which of the given phases of strategic management, strategies are put into action?
► Strategy formulation
► Strategy implementation
► Strategy evaluation
► All of the given options

Question No: 24 ( Marks: 1 ) - Please choose one
______________ is the principle of conduct that guides decision-making.
► Human rights
► Business ethics
► The constitution
► Social responsibility

Question No: 25 ( Marks: 1 ) - Please choose one
Which of the following should be created first and foremost by a strategist?
► Strategy
► Objectives
► Vision
► Mission

Question No: 26 ( Marks: 1 ) - Please choose one
Which of the following is FALSE about vision and mission statements?
► Vision statement gives the overall purpose of an organization while a mission statement describes a picture of the preferred future
► A vision statement describes how the future will look if the organization achieves its mission and a mission statement explains what the organization does
► Mission statement answers the questions what is our business and the vision statement answers the question what do we want to become
► Mission statement explains the current position and activities of a firm whereas vision statement explains the future objective

Question No: 27 ( Marks: 1 ) - Please choose one
Which of the following is NOT a key question that can reveal internal strengths and weaknesses of the marketing department?
► Does the firm have effective sales?
► Are markets segmented effectively?
► Are the firm’s products and services priced appropriately?
► Does the firm have good liquidity?

Question No: 28 ( Marks: 1 ) - Please choose one
“A desired future state that the organization attempts to realize”. Identify the term relevant to the given statement.
► Goal
► Strategy
► Policy
► Procedure

Question No: 29 ( Marks: 3 )
What activities are performed in strategy evaluation stage under controlling function of management?

Controlling function of management includes all those activities undertaken to ensure that actual operations conform to planned operations. Controlling function of management is particularly important for effective strategy evaluation. Controlling function of management has the following activities in strategy evaluation.

1. Establishing performance standards
2. Measuring individual and organizational performance
3. Taking corrective actions
4. Comparing actual performance to planned performance standards

Question No: 30 ( Marks: 3 )
In your opinion, what can be the circumstances when a Low Cost Producer in an industry brings effectiveness?

The circumstances will be for high cost producers because, when low cost producer come into market. Its costumers will be increased. Also low-cost producer would generally have a higher profit margin.

Question No: 31 ( Marks: 5 )
What are the major stakeholders that affect pricing decisions?

Following are the five major stakeholders which affect pricing decisions.

1. Governments
2. Suppliers
3. Distributors
4. Consumers
5. Competitors

Question No: 32 ( Marks: 5 )
Mergers or acquisitions are the methods by which two companies combine to form a larger company. What can be the reasons for acheiving mergers or acquisitions?


The 1st reason for acquisition and merger to combine is that they believe that synergy exist and by joining both of us can achieve something more than we can get individually.
Acquisition and merger join to spread its risks and exploit new markets.
Acquisition is essential for growth.
Companies seek an acquisition because they believe that a good investment is capable of generating a high return for the parent company's shareholders.

MIDTERM EXAMINATION
Spring 2010
MGT603- Strategic Management (Session - 3)
Time: 60 min
Marks: 44
Question No: 1 ( Marks: 1 ) - Please choose one
Various job titles of a strategist may include all of the following EXCEPT:
► Owner
► Foreman
► Chancellor
► Chief executive officer
Question No: 2 ( Marks: 1 ) - Please choose one
Long-term objectives includes all of the following EXCEPT:
► Measurable
► Reasonable
► Varying
► Consistent
Question No: 3 ( Marks: 1 ) - Please choose one
All of these are pitfalls of an organization in strategic planning EXCEPT:
► Failing to involve key employees in all phases of planning
► Using strategic planning to gain control over decisions and resources
► Using plans as a standard for measuring performance
► Being so formal in planning that flexibility and creativity are stifled
Question No: 4 ( Marks: 1 ) - Please choose one
The organizations that conduct business operations across national borders are known as:
► Multinational corporations
► Domestic firms
► Strategic alliances
► Franchises
Question No: 5 ( Marks: 1 ) - Please choose one
A mission statement should “reconcile interests among diverse stakeholders”. What does it mean?
► All shareholders must be satisfied
► Shareholders should be given preference over customers
► Firm will devote attention to meeting claims of various stakeholders pg 23
► Firm will devote its attention towards the maximization of shareholders value
Question No: 6 ( Marks: 1 ) - Please choose one
Which component of a mission statement addresses the basic beliefs, values, aspirations, and ethical priorities of the firm?
► Technology
► Philosophy
► Customers
► Self-concept
Question No: 7 ( Marks: 1 ) - Please choose one
“Identifying and evaluating social, political, economic, technological and competitive trends and events”; which of the followings best describes this statement?
► Developing an effective mission statement
► Conducting an internal audit
► Performing an external audit
► Formulating strategy
Question No: 8 ( Marks: 1 ) - Please choose one
Suppose, the value of the currency of a certain country falls, what can be the effect on companies in Different Industries and in Different Locations in that country respectively?
► Significant and equal
► Marginal and equal
► Significant and unequal
► Insignificant and unequal
Question No: 9 ( Marks: 1 ) - Please choose one
What will happen to the Pakistani exports in overseas markets when there is a strong value of rupee?
► Pakistani exports will be less expensive
► Pakistani exports will be more expensive
► Pakistani exports will be more attractive
► Pakistani exports will be desirable
Question No: 10 ( Marks: 1 ) - Please choose one
Use of the Internet and Internet technologies can be integrated into the sales of on-line as well as off-line business and marketing portion of the value chain through which of the following?
► Through software that permits customers to specify build-to-order options
► Through online product catalogs containing rich product information and specifications
► Via online price quotes and online announcements of special sales and promotions
► All of the given options
Question No: 11 ( Marks: 1 ) - Please choose one
Assigning rating '2' to an internal factor in IFE matrix indicates what?
► Major weakness
► Minor weakness
► Minor strength
► Major strength
Question No: 12 ( Marks: 1 ) - Please choose one
As managers move up the organization, they perform which of the management function more?
► Leading
► Controlling
► Organizing
► Planning
Question No: 13 ( Marks: 1 ) - Please choose one
Sana has spent a day in a session where the future of her company was discussed. The people involved were trying to determine what the role of their company was as the 21st century approaches. Goals were then developed based upon their vision of the company's mission. Sana spent her day on which of the following process?
► Planning
► Organizing
► Leading
► Controlling
Question No: 14 ( Marks: 1 ) - Please choose one
One of the top level manager of a large manufacturing plant uses to spend her day trying to ensure that the material wastage is not more than 10%. She spends her day in performing which of the following management functions?
► Planning
► Organizing
► Leading
► Controlling
Question No: 15 ( Marks: 1 ) - Please choose one
Which of the following allows an organization to test alternative marketing plans and to forecast future sales of new products?
► Marketing
► Advertisement
► Test marketing
► Customer analysis
Question No: 16 ( Marks: 1 ) - Please choose one
Which of the following has/have been successful in determining R&D budget allocations?
► Financing as many project proposals as possible
► Budgeting for R&D about what competitors spend
► Deciding how many successful new products are needed
► All of the given options
Question No: 17 ( Marks: 1 ) - Please choose one
Which of the following is a drawback or limitation of Horizontal Integration?
► Synergies may be more imaginary than real
► It can increase suppliers' and buyers' bargaining power
► Economies of scale are likely to be decreased
► Both the first & third options are correct
Question No: 18 ( Marks: 1 ) - Please choose one
In which situation would horizontal integration be an especially effective strategy?
► When an organization can gain monopolistic characteristics without being challenged by the federal government
► When decreased economies of scale provide major competitive advantages
► When an organization has neither the capital nor human talent needed to successfully manage an expanded organization
► When competitors are succeeding due to managerial expertise or having particular resources
Question No: 19 ( Marks: 1 ) - Please choose one
Defensive strategies include all of the following EXCEPT:
► Retrenchment
► Acquisition
► Divestiture
► Liquidation
Question No: 20 ( Marks: 1 ) - Please choose one
Which strategy should be implemented when a division is responsible for an organization’s overall poor performance?
► Divestiture
► Forward integration
► Cost leadership
► Related diversification
Question No: 21 ( Marks: 1 ) - Please choose one
Which of the following is NOT the reason to go for divestiture?
► When firm has pursued retrenchment but failed to attain needed improvements
► When the availability of quality distributors is too limited
► When a division needs more resources than the firm can provide
► When a division is responsible for the firm’s overall poor performance
Question No: 22 ( Marks: 1 ) - Please choose one
A joining of two companies through one company buying more than one half of the other company's stocks is known as:
► Monopolization
► A spin-off
► An acquisition
► A merger
Question No: 23 ( Marks: 1 ) - Please choose one
Which of the following statements is TRUE about company’s strategies?
► Company strategies concern how to grow the business, how to out-compete rivals, how to satisfy customers
► Company strategies concern when to change the company's strategic vision and business model
► Company strategies concern whether to focus on achieving short-run performance targets or on long-range
► Company strategies concern performance targets and how much organizational stretch to build in
Question No: 24 ( Marks: 1 ) - Please choose one
Which of the following is a key merit of strategic management?
► Strategic management enables an organization to be proactive
► Strategic management enables an organization to avoid the threats
► Strategic management enables an organization to defeat their competitors
► Strategic management enables an organization to foresee into the future
Question No: 25 ( Marks: 1 ) - Please choose one
Which of the following statements describes a company's strategic vision?
► Gives a broad, aspiration image of the future that an organization is aiming to achieve
► Sets forth the long-range financial and strategic performance targets that organization seeks to achieve
► Indicates the boundaries of the company's present business
► Reflects how strategic objectives are to be achieved
Question No: 26 ( Marks: 1 ) - Please choose one
Which of the following is NOT a key question that can reveal internal strengths and weaknesses of the marketing department?
► Does the firm have effective sales?
► Are markets segmented effectively?
► Are the firm’s products and services priced appropriately?
► Does the firm have good liquidity?
Question No: 27 ( Marks: 1 ) - Please choose one
The corporate social policy should be reaffirmed or changed during which phase of strategic management?
► Strategy control
► Strategy implementation
► Strategy formulation
► Strategy evaluation
Question No: 28 ( Marks: 1 ) - Please choose one
All of the following are the circumstances when forward integration strategies are beneficial to be practiced EXCEPT:
► Availability of quality distributors is limited
► Existing markets for present products are saturated
► Advantages of stable production are high
► Present distributors have high profit margins

MIDTERM EXAMINATION
Spring 2010
MGT603- Strategic Management (Session -)
Time: 60 min
Marks: 44


Question No: 1 ( Marks: 1 ) - Please choose one
Which of the following can be considered as a factor of internal strengths and weaknesses of an organization?
► Technological changes
► Production/operations
► Demographics
► Competitive trends

ANS: Production/operations

Question No: 2 ( Marks: 1 ) - Please choose one
The objectives set by a manager should have which of the following characteristics?
► Should spell out how fast the company's strategy is to be implemented
► Should be challenging and congruent among organizational units
► Should include long-range performance targets but not short-range targets
► Should include financial performance targets but not strategic performance targets

ANS: Should be challenging and congruent among organizational units

Question No: 3 ( Marks: 1 ) - Please choose one
All of the following are the examples of a broad mission EXCEPT:
► The firm deals in beverages
► We sell quality skimmed milk
► Stationery is our product
► Company manufactures food items

ANS: Company manufactures food items

Question No: 4 ( Marks: 1 ) - Please choose one
Which of the following business actions is NOT considered to be unethical?
► Poor product or service safety
► Using non-union labor in a union shop
► Misleading advertising
► Too expensive products

ANS: Too expensive products

Question No: 5 ( Marks: 1 ) - Please choose one
“A Good mission statement identifies the utility of a firm's products to its customers”; which of the following represents this statement?
► Organization’s philosophy
► Customer orientation
► Social policy
► Declaration of attitude
ANS: Social policy
Question No: 6 ( Marks: 1 ) - Please choose one
Where an organization takes into account the effect of its strategic decisions on the society, the firm is taking care of:
► Corporate governance
► Business policy
► Business ethics
► Social policy

ANS: Social policy

Question No: 7 ( Marks: 1 ) - Please choose one
External assessment is performed in which of the following strategic-management phase?
► Strategy formulation stage
► Strategy implementation stage
► Strategy evaluation stage
► All of the given options
ANS: All of the given options

Question No: 8 ( Marks: 1 ) - Please choose one
Suppose, the value of the currency of a certain country falls, what can be the effect on companies in Different Industries and in Different Locations in that country respectively?
► Significant and equal
► Marginal and equal
► Significant and unequal
► Insignificant and unequal

ANS: Insignificant and unequal

Question No: 9 ( Marks: 1 ) - Please choose one
What will happen to the Pakistani exports in overseas markets when there is a strong value of rupee?
► Pakistani exports will be less expensive
► Pakistani exports will be more expensive
► Pakistani exports will be more attractive
► Pakistani exports will be desirable

ANS: Pakistani exports will be more expensive

Question No: 10 ( Marks: 1 ) - Please choose one
Local, state, and national elections, world oil, currency, and labor markets, number of patents, special tariffs are the examples of which one of the following?
► Economic forces
► Political, governmental, and legal forces
► Social, cultural and, demographic forces
► Competitive forces

ANS: Political, governmental, and legal forces

Question No: 11 ( Marks: 1 ) - Please choose one
Which one of the following is NOT is a basic mission of a competitive intelligence program?
► To provide a general understanding of an industry
► To provide a general understanding of a company’s competitors
► To identify industry executives who could be hired by the firm
► To identify potential moves a competitor might make that would endanger a firm

ANS: To identify industry executives who could be hired by the firm

Question No: 12 ( Marks: 1 ) - Please choose one
Which of the following arise when a company can take advantage of conditions in its environment to formulate and implement strategies that enable it to become more profitable?
► Strengths
► Opportunities
► Weaknesses
► Threats
ANS: Opportunities

Question No: 13 ( Marks: 1 ) - Please choose one
Assigning 1 rating to a key external factor indicates that:
► Response is superior
► Response is above average
► Response is average
► Response is poor

ANS: Response is poor

Question No: 14 ( Marks: 1 ) - Please choose one
Assigning rating '2' to an internal factor in IFE matrix indicates what?
► Major weakness
► Minor weakness
► Minor strength
► Major strength

ANS: Minor weakness

Question No: 15 ( Marks: 1 ) - Please choose one
Life-directing attitudes that serve as behavioral guidelines are known as:
► Values
► Rites
► Beliefs
► Sagas

ANS: Values

Question No: 16 ( Marks: 1 ) - Please choose one
Which of the following is the first step in the controlling function of management?
► Take corrective actions
► Restrict breaks employees take
► Evaluate expense reports
► Establish performance standards

ANS: Establish performance standards

Question No: 17 ( Marks: 1 ) - Please choose one
The steps required to perform cost/benefit analysis include all BUT:
► Comparing the total costs with the total benefits
► Figure out the total costs associated with a decision
► Approximation of the total benefits from the decision
► Adding the total cost and total benefit

ANS: Approximation of the total benefits from the decision

Question No: 18 ( Marks: 1 ) - Please choose one
Which of the following ratios is least likely to be helpful in evaluating a firm’s decision regarding dividend?
► Earnings-per-share ratio
► Long-Term Debt-to-Equity Ratio
► Dividends-per-share ratio
► Price-earnings ratio

ANS: Long-Term Debt-to-Equity Ratio

Question No: 19 ( Marks: 1 ) - Please choose one
Which of the following is the first step in developing an IFE Matrix?
► Summing the weighted scores for each variable
► Identifying the organization’s strengths and weaknesses
► Identifying the organization’s functions of business
► Determining the lead strategist

ANS: Identifying the organization’s strengths and weaknesses

Question No: 20 ( Marks: 1 ) - Please choose one
The business strategy decided upon by ABC Corporation is one that engages it in production of goods that are low in cost as compared to its competitors. ABC Company is perusing which one of the following strategy?
► Differentiation strategy
► Focus strategy
► Niche strategy
► Cost leadership strategy

ANS: Cost leadership strategy

Question No: 21 ( Marks: 1 ) - Please choose one
The strategy embraced by Ahmad Bros. is to address the needs of a very selected and specialized market segment. Ahmad Bros. is most likely to engage in which one of the following types of strategy?
► Differentiation strategy
► Best value strategy
► Focus strategy
► Low cost strategy

ANS: Focus strategy

Question No: 22 ( Marks: 1 ) - Please choose one
Which of the following is NOT a situation when an organization should use an unrelated diversification strategy?
► When an organization’s present channels of distribution can be used to market the new products to current customers
► Revenues from current products/services would increase significantly by adding the new related products
► When an organization competes in a highly competitive and/or a no-growth industry
► When the new products have counter-cyclical sales patterns compared to an organization’s present products

ANS: Revenues from current products/services would increase significantly by adding the new related products

Question No: 23 ( Marks: 1 ) - Please choose one
Smoothies Tire & Rubber Co. is selling its North American tire business to Avinza International, is an example of which type of strategy?
► Related diversification
► Retrenchment
► Divestiture
► Liquidation

ANS: Divestiture

Question No: 24 ( Marks: 1 ) - Please choose one
A joining of two companies through one company buying more than one half of the other company's stocks is known as:
► Monopolization
► A spin-off
► An acquisition
► A merger

ANS: A spin-off

Question No: 25 ( Marks: 1 ) - Please choose one
Which of the following environment includes all those factors which affect the organization and is itself affected by the organization?
► Task environment
► Social environment
► External environment
► Internal environment

ANS: Task environment

Question No: 26 ( Marks: 1 ) - Please choose one
Which of the following is a key merit of strategic management?
► Strategic management enables an organization to be proactive
► Strategic management enables an organization to avoid the threats
► Strategic management enables an organization to defeat their competitors
► Strategic management enables an organization to foresee into the future

ANS: Strategic management enables an organization to be proactive

Question No: 27 ( Marks: 1 ) - Please choose one
Developing vision and mission statements is important because of the following reasons EXCEPT:
► They are the basis for allocating resources
► They are useful for large firms only
► They establish organizational culture
► They translate objectives into work structure

ANS: They are useful for large firms only

Question No: 28 ( Marks: 1 ) - Please choose one
All of the following are the circumstances when forward integration strategies are beneficial to be practiced EXCEPT:
► Availability of quality distributors is limited
► Existing markets for present products are saturated
► Advantages of stable production are high
► Present distributors have high profit margins

ANS: Existing markets for present products are saturated

Question No: 29 ( Marks: 3 )
What are the two basic types of R & D that can take place in an organization?



Question No: 30 ( Marks: 3 )
Vertical integration is the degree to which the firm owns its upstream and its downstream buyers. What can be the possible benefits if the firm goes for vertical integration?


Question No: 31 ( Marks: 5 )
Mr. Mansoor is a finance manager of a firm. He is asked to prepare a financial ratio analysis. What can be the possible limitations of his analysis?

Question No: 32 ( Marks: 5 )
Mergers or acquisitions are the methods by which two companies combine to form a larger company. What can be the reasons for acheiving mergers or acquisitions?