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CIMA E3 - Strategic Management Question Tutorial Sample Questions:

1. DRAG DROP
AB uses Johnson, Scholes and Whittington's criteria of 'Feasibility and Acceptability' to evaluate potential strategies. AB has begun a project to re-engineer its best selling product.
Apply the appropriate criterion to each of the questions below:
Select and Place:

Correct

2. According to Porter's Five Forces model, which of the following would be evidence of high buyer power?

A) There is a concentration of buyers.
B) Buyers are fragmented and act independently of each other.
C) There is a low probability of backward integration.
D) Products are not standardized and buyers cannot easily switch to another product.

3. Information Systems (IS) strategy is correctly defined as:

A) The planning, organizing, investment and control of information applications in the organization.
B) Decisions on the hardware, software and communications solutions used in the organization.
C) Identifying the information needs of the organization and aligning development to them.
D) The roles and structure of information specialists in the organization and their relationship with users.

4. QWE is a private company belonging to a famous former sports professional. It operates gyms and fitness clubs across its home country. Each gym or fitness club is treated as a profit center and the manager of each center is paid bonuses based on its financial performance.
QWE introduced multidimensional performance measures into its management control systems 3 years ago.
These measure competitiveness, financial performance, capacity utilization, innovation and the flexibility of its centers to cope with changing demands.
The managers of QWE's centers have been leaving at a very high rate over the last 2 years. They have claimed that the measures are too open to interpretation and when they think they are improving their center's performance they are told they are doing the wrong things. They also complain that the managers in the centers near big cities find it much easier to reach their targets than the managers of other centers.
According to Fitzgerald and Moon's Building Block model, where does the problem lie?

A) Dimensions and Rewards
B) Dimensions and Standards
C) Standards and Rewards
D) Standards, Dimensions and Rewards

5. YZ operates a national mobile phone (cell phone) network in one country. It is considering upgrading its network to 4th Generation (4G) by providing an improved bandwidth that will enable its customers faster access to the Internet.
This investment will cost S29 million which YZ's institutional investors have agreed to provide by subscribing to a rights issue. This is due to management having informed institutional investors that a rival is already offering
4G and that this is taking customers away from YZ because its network is now regarded as too slow. YZ's remaining customers have shown a willingness to pay extra for 4G and overall the investment will have a positive net present value.
Which of the following statements are correct? (Choose all that apply.)

A) There are sufficient investment funds available
B) It provides a market development opportunity for YZ.
C) It is essential given the strategic threats to YZ.
D) There is stakeholder approval for the investment.
E) YZ will gain a first mover advantage.

Solutions: