E3 Strategic Management Question and Answers

T is a management consultant. He was recently contracted by company XYZ to act as an external Change Agent in a program of change being undertaken. T's first task was to assist XYZ in clearly defining the outcomes of the change program and ensure that these were achievable. T also set up a number of change teams and led several workshops and team building exercises. Many of XYZ's staff were resistant to the change program. Therefore, T had to ensure that he created an appropriate vision for the change and was able to resolve any conflict which occurred during the change program.

 

Which THREE of the following are the key skills of a Change Agent demonstrated by T?

YYY is a profit-seeking provider of television channels. It broadcasts to some 55 countries using satellite and cable technologies. It also commissions and produces about 30% of the programs it broadcasts, to give it a unique competitive advantage against other broadcasters.

 

Web 2.0 provides new opportunities for YYY and it has developed a strong social media component to its programming schedules to increase audience engagement.

 

Keeping YYY's divisions working together is crucial to its success as a business.

 

Which of the following methods of divisional Performance Measurement would you recommend to YYY? 

H is a small 18-hole golf club owned by sisters F and R It offers a bar. a small shop that sells basic equipment and a professional golfer providing golf lessons to members for an additional fee.

Membership numbers have fallen, putting significant pressure on cash flow Last year the sisters had to each invest $20,000 to prevent the golf club from going out of business. The key priority for them in the short term is to increase H's membership numbers.

Which TWO of the following strategies would be feasible for H?

LLL is considering entering Country B to sell its zero emissions car.

LLL has invested heavily in fuel cell technology for its car. It does not rely on any polluting fuels for its energy. This means that LLL's car is the only true zero emissions car. 

Research conducted in Country B for LLL has revealed the following:

   • Country B's Government is concerned that all forms of pollution have risen to dangerous levels. 

   • Despite being worried about pollution the Government of Country B has not yet adopted taxation policies to encourage the use of low pollution cars.

   • Drivers choosing a car continue to rank the speed and appearance of a car very much higher  than its impact on environmental pollution. 

   • About 2% of motorists own an electric or hybrid powered car. 

   • A high rate of sales tax levied on the price of new cars in Country B encourages motorists to continue to drive older, more polluting, cars.

 

LLL recognises that it needs to plan its strategy for Country B over the long-term.

Which THREE of the following strategies would you advise LLL to use to build its long-term sales in Country B?

A has a portfolio of business units. One of A's units has a total market share of 25% and its largest competitor has a market share of 20%. In the last year the overall market of this business unit has declined by 2%, although its revenues have increased by 12%. following a successful marketing campaign.

According to the BCG matrix. A's business unit would be classified as which of the following?

QQQ has identified a new strategy which is both Suitable and Feasible However, it will not be Acceptable to some groups of QQQ's stakeholders who have publicly objected to it.

Which THREE of the following statements are correct ways of resolving competing stakeholder objectives, as suggested by Cyert and March?

Which of the following distinguishes a learning curve effect from a learning Organization?

Which of the following statements would encourage an Organization to use Scenario Planning?

 

Select ALL that apply.

MNO has decided to widen the scope of its performance measurement by constructing and using a Balanced Scorecard. MNO has established a range of Key Performance Indicators (KPI's) for use within its Balanced Scorecard.

Place each of the Balanced Scorecard perspectives against the most relevant KPI.

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?

You have been asked to advise a junior member of your team what qualities they should look for when identifying a coach or mentor to work with.

Place the qualities associated with effective coaching and mentoring next to the relevant statements below.

BBB is a manufacturer that has been criticized in the financial press because it does not have a policy for sustainability.

Which THREE of the following elements would be crucial to BBB successfully embedding sustainability into its activities? (Choose three.)

Johnson, Scholes and Whittington developed the SAF framework to explain the factors that should be considered before pursuing a strategic option.

 

JJJ is a listed company that is considering launching a new product into its market.

 

Which of the following considerations affects the Acceptability of this new product launch?

A fresh-food packaging manufacturer has recently changed the design of its packaging in order to reduce the amount of non-recyclable material. Its immediate customer, a large fresh-food wholesaler, does not see the need for this re-design as it believes that it will adversely affect the storage of the fresh food. However, the final customer, a large supermaket chain, has expressed strong interest in the new packaging design, as the supermarket chain has strict Corporate Social Responsibility targets to achieve.

 

Which of the following statements most appropriately describes the situation outlined above, from the perspective of the fresh-food packaging manufacturer?

DDD has just issued a profit forecast in connection with a proposed take-over of a business.  The take-over is strongly opposed by the target company. DDD's Management Accountant played a large part in helping DDD's Finance Director prepare the profit forecast.  However, the Management Accountant believes that the profit forecast is overly optimistic and is based on some false assumptions.  As a result the Management Accountant thinks the profit forecast is misleading. Select THREE of the actions below which are consistent with CIMA's Code of Ethics.

The Board of a supermarket chain has decided that to compete more effectively against its competitors, it needs to change its strategy and pursue a differentiation-focus strategy. The Board's aim is to pursue differentiation to attract customers who have a higher disposable income and want to buy luxury food and other goods.

 

Which statements are valid for this differentiation-focus strategy? 

 

Select ALL that apply.

STU is a government funded university in Country V. The senior management team of STU uses the 3 E's approach (Economy. Efficiency and Effectiveness) to evaluate the performance of the university and to set performance measures.

Which of the following measures would be categorised as a measure of the 'Effectiveness' of STU, based upon the 3 E's approach?

GGG is currently undertaking a process of intuitive forecasting. A team of ten people has been selected from all levels of management and from a range of functional departments, to take part in the process. An initial single question of 'How do we improve future customer satisfaction levels for GGG?' has been posed and all members of the team have been asked to present a suggestion. No one is allowed to criticise another person's ideas. This process should give GGG a forum for the expression and discussion of a wide range of ideas.

 

Which of the following intuitive forecasting techniques is GGG undertaking?

HHH intends to introduce a Balanced Scorecard to assist with its strategic policy formation and achievement of strategic plans. Which TWO of the following stakeholders are addressed by a Balanced Scorecard perspective?

A company runs a distribution warehouse. Its information systems constantly monitors inventory levels, with automatic re-order processing occuring with suppliers when inventory items reach a specified level. It operates a robotics system which automatically picks inventory from its location in the warehouse and delivers it to the pick-up area. The company also has a large database of customer information which it uses to analyse buying behavior and sales trends so that it can provide customers with relevant and targeted marketing information.

Which THREE of the following activities of the Value Chain have been affected by the use of IT/ IS?

CCC is a small business which manufactures and sells bicycles. Its most popular product is the standard road bike, brand named the 'Easy Rider'. CCC offers customers a limited degree of choice in terms of product specification for the Easy Rider bicycle. CCC manufactures and sells 1,000 Easy Rider bicycles each year. The average retail price of an Easy Rider bicycle is $500.

 

As a result of the recent rise in popularity of cycling in its home country, last year CCC launched a new bicycle, brand named the 'Pro Rider'. This bicycle is aimed at the more serious cyclists who take part in competitions and road races. CCC offers Pro Rider customers a wide choice of specifications and accessories and uses the highest quality of materials in its manufacturing process. A Pro Rider bicycle retails for an average price of $6,000. In its first year, CCC sold 150 Pro Rider bicycles.

 

CCC's business is generated mainly from word of mouth recommendations, repeat business and from customer visits to its small chain of shops. It aims to increase its market share for both brands within the next 5 years. Competition is high, with a number of large national bicycle manufacturers in the market. 

 

Which TWO of the following are critical success factors (CSF's) for CCC?

Which TWO of the following statements are NOT characteristics of a robust 'coaching climate'?

ZZZ is a retailing Organization that is suffering falling market share and falling profits.

 

ZZZ has a new Chief Executive Officer (CEO) who is urgently setting up a strategic performance evaluation system. This will involve identifying Critical Success Factors (CSFs) and then monitoring Key Performance Indicators (KPIs).

 

Advise the CEO which of the following statements is suitable for the role that a Chartered Global Management Accountant should undertake.

BBB has often encountered difficulties when it has introduced strategies which involve Organizational change. BBB is about to enter a period of much change and has decided to appoint one or more change agents to help to manage this. Select ALL of the statements that apply in respect of a change agent. 

TTT is a partnership that designs a specialist type of construction project for clients. It does not build the construction projects itself. TTT has eight partners who are skilled architects. Each partner works independently on their own projects. The partners rarely meet except to agree how to share out TTT's very significant profits.

 The partners are disappointed that TTT is not growing as fast as it has in the past. Each partner is fully employed on their own projects and none has the time to recruit new architects to TTT. They are frustrated at the lack of leadership in TTT, although none of the partners are willing to take on a more senior role.

 

Which THREE of the following does TTT need to address?

McKinsey's '7-S' model distinguishes between 'hard' and 'soft' factors.

 

Which TWO of the following statements are correct?

DF Company is undertaking a strategic review of its activities and has asked you to explain how a Force Field analysis would assist in the review process.

Which of the following statements would be most appropriate?

Which TWO of the following are advantages to an organization of using non-financial performance measures, rather than financial performance measures? (Choose two.)

PQ is an international airline.

In accordance with Porter's Value Chain, select “Primary” or “Support” for each of the activities listed below:

Which of the following structures would you recommend for the Board of Directors of a UK public company in order to fulfill its legal responsibilities?

JJJ is a frozen food delivery business in Country Q. Competition is high and JJJ prices its delivery services very competitively. JJJ has doubled its market share to 35% in the last five years.

 

In order to continue to improve its competitive position in Country Q, JJJ has invested in 100 new delivery vans. These vans have been designed to increase the speed and efficiency in loading and unloading the frozen food products. JJJ has to meet tight delivery deadlines to its customers or penalties for late delivery are charged to JJJ by its customers. Drivers of the vans undertake regular training. 

 

Which of the following would be the most appropriate critical success factor within the 'Customer' perspective of a Balanced Scorecard for JJJ?

Which of the following is NOT a key attribute of a successful stretch target?

BBB is a global online recruitment agency It has over 20 million clients registered worldwide and estimates that it holds up to 80 terabytes of data about its clients. BBB gathers data about its clients from a wide variety of sources, such as client registration data input directly to the website, client browser and search histories and social media activity, all of which are used to build up a view of its clients.

Client data changes on a frequent basis and must be updated continually. New clients join the site regularly and the employment needs of clients often change. BBB utilises Big Data Analytics to evaluate its client data.

Which of the following features of Big Data are evident in BBB?

Select ALL that apply

Company V has obtained planning permission to build 20 wind turbines in town W. This will be a highly profitable project and help the Government in Country H meet targets for renewable energy. However, local residents and wildlife groups are extremely unhappy and have objected to the plans and threatened to cause disruption at the site of the proposed wind turbines once building work commences

Which THREE of the following activities should Company V use, according to Cyert and March, to resolve these conflicting stakeholder objectives?

ZYX is a global hotel chain, employing over 10,000 staff worldwide. ZYX operates a Code of Conduct for all of its staff, which states “Our staff are the most important assets of our business operations. We expect the highest standards of ethical and professional conduct from all staff, who must display the principles of trust, respect, equality, integrity and fairness at all times.”

Which THREE of the following actions could ZYX take to positively influence its staff to work to the ethical and professional principles in its Code of Conduct? (Choose three.)

Which of the following categorizations would be correct, according to McFarlan's Strategic Grid, for a system which is critical to sustaining existing business but its future strategic importance is considered to be low?

JJJ presently makes motorcycles for use by the armed forces in its home country. Defence spending cuts have forced JJJ to seek a new business direction. JJJ has decided to make trucks for sale to private businesses in its home country.

 

Use the Ansoff product/market matrix to identify the new strategic direction of JJJ.

LMN is a fast food manufacturer that makes 'Ready-meals'.

Place the appropriate stage of the Value Chain against each of the activities below:

E is a company run by a well balanced Board of Directors. E is performing well, but is looking to reduce costs in the current year Which of the following activities would lack integrity'' Select ALL that apply.