cs507 spring 2009 mid term paper

MIDTERM EXAMINATION

Spring 2009

MGT603- Strategic Management (Session - 1)




Question No: 1 ( Marks: 1 ) - Please choose one



Various job titles of a strategist may include all of the following EXCEPT:



Owner



Foreman P6



Chancellor



Chief executive officer





Question No: 2 ( Marks: 1 ) - Please choose one



According to ‘Peter Drucker’, what is the prime task of strategic management?





To develop the vision of the business



Effectively evaluate the strategies



To think through the overall mission of a business P4



Develop alternative set of strategies





Question No: 3 ( Marks: 1 ) - Please choose one



Strategist is an individual who is involved in the strategic management process, thus



may be known as:



Member board of director



President P6



Division manager



All of the given options





Question No: 4 ( Marks: 1 ) - Please choose one



External opportunities and threats that can significantly benefit or harm an

organization may include all of the following EXCEPT:





Demographics



Competitive trends



Technological changes



Research and development P7





Question No: 5 ( Marks: 1 ) - Please choose one



The S & T Organization has an established "game plan" for its business operations.

This game plan reflects the company's awareness of how and where it should

compete and against whom the competition should take place. It can be stated that



this organization has an established



Goal not sure



Formality



Policy



Strategy





Question No: 6 ( Marks: 1 ) - Please choose one



Identify the term that is known as a “mean of providing guidance to actions and

procedures, including how resources are to be allocated and how tasks assigned to

the organization might be accomplished”.





Policies



Objectives



Aspirations



Goals

Broadly defined, policy refers to specific guidelines, methods, procedures, rules, forms, and administrative practices established to support and encourage work toward stated goals. Policies are instruments for strategy implementation.



Question No: 7 ( Marks: 1 ) - Please choose one



All of the following statements are true about a firm’s mission statement EXCEPT:



A mission statement directly contributes positively to financial performance P25



A mission statement does not directly contribute positively to financial performance



A mission statement should not provide useful criteria for selecting among

alternative strategies



Primary reason to develop a mission statement is not to attract the customers





Question No: 8 ( Marks: 1 ) - Please choose one



All of the following external forces directly affect an organization EXCEPT:





Market segmentation strategies



Types of products/services offered



Management structure of an organization P28



Choice of businesses to acquire or sell





Question No: 9 ( Marks: 1 ) - Please choose one



“If a strategist has identified that the market growth rate is 8 %, the number of

sellers in industry are 52 and the industry's products are differentiated.” Which of

the following industry's success factor he is exploring?





Social forces



Competitive forces



Social forces



Economic forces





Question No: 10 ( 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?



(ANS required)

Significant and equal



Marginal and equal



Significant and unequal



Insignificant and unequal



Question No: 11 ( Marks: 1 ) - Please choose one



Which one variable falls under the category of the Social, Cultural, Demographic,

and Environmental Variable?



Propensity of people to spend



Buying habits P34



Level of disposable income



Income differences by region





Question No: 12 ( 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 P37



Social, cultural and, demographic forces



Competitive forces





Question No: 13 ( 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 P43



Business ethics





Question No: 14 ( Marks: 1 ) - Please choose one



Which of the following can be considered as barriers to entering a market or

industry?



The lack of economies of scale and experience and low levels of brand loyalty



The presence of large number of rivals already in the industry (not sure)



Relatively large capital requirements and industry have economies of scale



The absence of tariffs, trade restrictions, and/or government-mandated regulations





Question No: 15 ( Marks: 1 ) - Please choose one



Supplier bargaining power is not likely to pose strong competitive pressure when

which of the following situation is prevailing?



Buying firms are looking for suppliers with superior just-in-time supply

capabilities and low prices



The suppliers furnish a critical part or component that is in relatively short supply



Buying firms collaborate closely with their key suppliers to achieve mutual

benefits



The products of alternative suppliers are highly differentiated, making the cost of

switching relatively high (not sure)



Question No: 16 ( Marks: 1 ) - Please choose one



Which of the following is a collection of firms that offers similar products or services?

such as IBM, Apple, and Dell?



Concentration



Industry



Corporation



Alliances



Question No: 17 ( 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 P45



Firm is taking advantage of opportunities and is avoiding the threats





Question No: 18 ( Marks: 1 ) - Please choose one



Assigning rating '2' to an internal factor in IFE matrix indicates what?



Major weakness



Minor weakness P47



Minor strength



Major strength





Question No: 19 ( Marks: 1 ) - Please choose one



Which of the following are signs of weakness in a company's competitive position?



(ANS Required)

A return-on-equity is below 25% and earnings per share is less than Rs. 2.00



A price set by the firm higher than the market leader



A declining market share, poor product quality and few sales in market



Lower revenues and profit margin and narrow product line than the market leader





Question No: 20 ( Marks: 1 ) - Please choose one



What is the essential bridge between the present and the future that increases the

likelihood of achieving desired results?



Motivating



Planning P54



Controlling



Organizing



Explanation:

Planning is the: Start of the process

Bridge between present and future, Increases likelihood of achieving desired results



Question No: 21 ( 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: 22 ( Marks: 1 ) - Please choose one



How Synergy can numerically be expressed?



2+2=3 (NAGATIVE)



2+2=0



2+2=4



2+2=5 POSITIVE SYNERGY

Ref: [You must be registered and logged in to see this link.]



Question No: 23 ( Marks: 1 ) - Please choose one



Which of the following can reveal the demographic characteristics of an organization’s?

Customers?



Test marketing



Customer profiling



Market development



Vision statement



Ref:

The information generated by customer analysis can be essential in developing an effective mission statement. Customer Profiles can reveal the demographic characteristics of an organization's customers. P61



Question No: 24 ( Marks: 1 ) - Please choose one



Test marketing is commonly applied by which of the following companies?



Industrial goods companies



Consumer goods companies P62



Public sector companies



Private sector companies



Question No: 25 ( Marks: 1 ) - Please choose one



All of the following are the consideration for a company when conducting test

marketing EXCEPT:



What advertising channel should be used for test? P61



How many cities to include for test?



What information to collect during the test?



What action to take after the test has been completed?



Question No: 26 ( 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

Ref:

Three financial ratios that are helpful in evaluating a firm's dividend decisions are the earnings-per share Ratio, the dividends-per-share ratio, and the price-earnings ratio.



Question No: 27 ( Marks: 1 ) - Please choose one

Debt-to-equity ratio is one of the types of which ratios?



Profitability



Leverage P65



Liquidity



Activity



Question No: 28 ( Marks: 1 ) - Please choose one



In strategy formulation phase, what can be the problem when only financial ratios

are used to measure organizational performance?

(Ans required)



They need to be compared with competitors’



They are only understandable by accountants



There are many different measures available



The measures are usually inconsistent





Question No: 29 ( Marks: 1 ) - Please choose one



All of the following are functional support roles of Management Information System

EXCEPT:



Recording and storing accounting records



Recording and storing inventory data



Recording and storing business intelligence data



The enhanced ability to explore "what if"



(See p82 Topic functional support roles)



Question No: 30 ( Marks: 1 ) - Please choose one



------------------ become/s information only when it/they is/are evaluated, filtered,

condensed, analyzed and organized for a specific purpose, problem, individual, or

time.



Material



Data



Competitive advantages



Competitor analysis



Ref:

Data becomes information only when it is evaluated, filtered, condensed, analyzed, and organized for a specific purpose, problem, individual, or time



Question No: 31 ( 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



Disadvantage of Horizontal integration:

Synergies maybe more imaginary than real

Substitutes market is often very different. Challenge occurs to management during acquisition.

Reduction in competition may lead to anti-trust issues. [You must be registered and logged in to see this link.]





Question No: 32 ( 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 (see topic p85)





Question No: 33 ( Marks: 1 ) - Please choose one



Where usage rate of present customers of the company can be increased

significantly and the current markets are not saturated, which strategy would be

effective for the company to follow?



Market Penetration

Product Development

Market Development

Retrenchment



Ref:

Four guidelines when market penetration may be an especially effective strategy are:

Current markets not saturated

Usage rate of present customers can be increased significantly

Market shares of competitors declining while total industry sales increasing

Increased economies of scale provide major competitive advantages





Question No: 34 ( Marks: 1 ) - Please choose one



Which of the followings involves the substantial modification of existing products or

the creation of new but related products that can be marketed to current customers

through established channels?



Innovation



Differentiation



Product development



Market development



Ref:

Product development is a strategy that seeks increased sales by improving or modifying present products or services.



Question No: 35 ( Marks: 1 ) - Please choose one



Rose Company markets new products or services that have no technological or

commercial synergies with current products, but which may appeal to new groups

of customers. Which strategy is being adopted by Rose Company?



Horizontal diversification



Horizontal integration



Conglomerate diversification



Backward integration



Explanation:

Conglomerate diversification means Adding new, unrelated products or services for new customer.




Question No: 36 ( Marks: 1 ) - Please choose one



XYZ Corporation has decided to cut back on its product lines and to reduce the size

of its operations because it can support no longer commitments needed to sustain it.

XYZ is going to pursue which of the following strategy?



Divestiture



Conglomerate diversification



Retrenchment



Liquidation



Retrenchment: Explanation

Regrouping through cost and asset reduction to reverse declining sales and Profit



Question No: 37 ( Marks: 1 ) - Please choose one



Ahmad Textiles and Superior Textiles have come with each other in cross-manufacturing agreement, the firms are going for which of the following?



Liquidation



Acquisition



Joint venture (Not sure)



Takeover





Question No: 38 ( 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



Ref: Some of the potential advantages of mergers and acquisitions include achieving economies of scale, combining complementary resources, garnering tax advantages, and eliminating inefficiencies.





Question No: 39 ( Marks: 1 ) - Please choose one



Which of the following enables the firm to create superior value for its customers

and superior profits for itself in comparison to its rival firms?





Competitive advantage



Comparative advantage



Differential advantage P87



Suitable advantage





Question No: 40 ( Marks: 1 ) - Please choose one



Non-financial benefits of strategic management include all of the following

EXCEPT:



Enhanced awareness of threats



Reduced resistance to change



Increase in sales P11



Better awareness of external threats





Question No: 41 ( Marks: 5 )



A good mission statement should include “Customer orientation”, what does it

mean? Explain it with the help of simple examples.





Question No: 42 ( Marks: 5 )



What are strengths and weaknesses of an organization? Explain with the help of

examples.