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CIMA E3 - Strategic Management Question Tutorial Sample Questions:

1. A direct external change trigger is:

A) An economic recession in an organization's home country.
B) A general increase in the use of the Internet by society.
C) A powerful competitor forcing an organization to cut its prices.
D) The introduction of new environmental protection policies by the government.

2. Which of the following would be likely to encourage an organization to use Scenario Planning? (Choose all that apply.)

A) The organization often experiences 'group-think', leading to a narrow view of the future.
B) The organization has not previously experienced any major surprises or expensive strategic mistakes.
C) Uncertainty in the industry is high, relative to management's ability to predict or adjust to change.
D) Competitor's are increasingly using Scenario Planning as part of their strategy formulation process.
E) The organization has achieved all of its objectives and operates within a stable external environment.

3. HH is an outdoor theatre which is based in the capital city of country N.
Tickets for shows can be booked at the ticket office or online. HH has identified the following critical success factors (CSFs):
An excellent, online ticket booking system
Customer satisfaction
Which of the following would be suitable key performance indicators (KPIs) for HH? (Choose all that apply.)

A) Number of customer complaints.
B) Percentage of ticket bookings aborted before completion.
C) Profit from sales of snacks and drinks.
D) Number of returning customers each year.
E) Employee turnover.
F) Customer show ratings, scored out of ten.

4. Company TTT produces a range of products, including products T1 and T5.
Product T1: Profitability has declined in recent years, although small profits continue to be made as the market contracts due to changing customer preferences. Overall market share is low and continues to reduce.
However, in addition to external sales T1 is also used as a component of product T5.
Product T5: A market leader within a low growth market, sources components both externally and from TTT's other subsidiaries. T5 benefits from significant economies of scale and TTT has recently considered modernizing its T5 production line but following a cost benefit analysis, decided not to proceed.
Which of the following is an appropriate strategy for TTT to adopt?

A) Harvest product T1 and Divest product T5.
B) Divest both product T1 and product T5.
C) Harvest both product T1 and product T5.
D) Divest product T1 and Harvest product T5.

5. Z is a medium-sized UK based accounting practice. Z operates a graduate training scheme. The trainees are given an induction and then placed on a three-year training programme designed to help develop professional skills and experience.
The training programme has been in existence for many years. However, there is no clear consensus amongst the partners of Z about what the trainees should be able to do on completion of the programme and therefore what the training programme should emphasize. This lack of clarity is affecting the morale and commitment of the trainees and significant numbers are failing the programme or leaving to join a rival firm.
Z's HR Department recognizes the need for committed and well motivated accountants to meet the increased expectations of clients and the competition from rival firms. The HR Department has identified changes to the training programme that can be implemented gradually through a series of initiatives.
Which TWO of the following statements regarding the change required in Z are correct? (Choose two.)

A) The change would be classified as a 'revolutionary change' according to Balogum and Hope Hailey.
B) The need to manage the competitive position is an example of an 'external direct trigger' for change.
C) The plans to combat competition would be considered as a 'structure' factor according to the McKinsey 7 S model.
D) Understanding which day-to-day behaviors to reinforce within the training programme, is about 'routines and rituals' according to the Cultural Web.
E) The skills, abilities and competences of the organization's employee's are a 'hard' factor according to the McKinsey 7 S model.

Solutions: