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CIMA E3 - Strategic Management Question Tutorial Sample Questions:

1. Company CCC is an automotive component manufacturer. It manufactures three main products within its portfolio:
Product 1: Relative market share of 0.1; Market growth rate of -2%
Product 2: Relative market share of 4.0; Market growth rate of +3%
Product 3: Relative market share of 0.3; Market growth rate of +15%
Which TWO of the following statements are CORRECT? (Choose two.)

A) Product 2 is likely to be at the mature stage of its life cycle, is likely to benefit from significant economies of scale.
B) Product 1 is likely to be at the mature stage of its life cycle, have strong profitability and further investment should be considered.
C) Product 3 is likely to be at the growth stage of its life cycle, at high risk of failure and further investment should be considered.
D) Product 2 is likely to be at the growth stage of its life cycle, have weak profitability, poor cash generation and high capital requirements.
E) Product 1 is likely to be at the mature stage of its life cycle, operating in a contracting market and is fairly cash neutral.

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) Products are not standardized and buyers cannot easily switch to another product.
D) There is a low probability of backward integration.

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

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

4. GV is a manufacturer and retailer of high quality suede gloves. GV makes all of its sales in country F, and is extremely profitable. After many successful years trading, GV has accumulated significant cash reserves and would like to grow the business organically.
After some investigation work, GV has discovered an opportunity to sell leather shoes in country P.
Which of the following strategic directions is GV taking if it pursues this opportunity, according to Ansoff's product / market matrix?

A) Market development
B) Product development
C) Market penetration
D) Related diversification

5. SDC is a medium sized IT systems development company. SDC employs highly qualified and experienced systems development experts. It invests heavily in staff training and development and as a result, staff are highly motivated and staff turnover is low. SDC has a strong culture of team work and innovation, which the senior managers believe is the basis of SDC's success. The senior managers, who are also the founders of SDC, are highly experienced and have a strong vision for the business.
Which THREE of the following factors would be the main focus of a resource audit for SDC? (Choose three.)

A) Manpower
B) Markets
C) Money
D) Management
E) Make-up
F) Machinery

Solutions: