Strategic Management Questions and Answers





Strategic Management solved MCQ Questions :

Strategic management is a process that involves setting goals and procedures to make a company more competitive. It often includes analyzing the internal organization, evaluating strategies, and executing strategies throughout the company. This section focus on all topics of the Strategic Management subject. Here you can get important mcq questions on Strategic Management with answers. These questions will help you to prepare for interviews, entrance exams, online tests, and semester exams. These Strategic Management multiple choice questions are for both freshers and experienced candidates.

Strategic Management MCQ Chapter Wise :

Here you will find a list of important questions and answers with detailed solution on strategic management in MCQ quiz style for competitive exams and interviews. Here, You can practice these MCQs chapter-wise for FREE.

Below section consists of important multiple choice questions on strategic management with answers -:

1. the sketch of the BCG matrix, what is the label of the vertical axis?
a) Market growth rate
b) Business strength
c) Market share
d) Industry growth rate

Answer: d

2. What is the purpose of an activity map?
a) A system to facilitate better time-planning
b) It is used in business process reengineering to show how the different activities of an organisation are linked together
c) It is used to identify and understand strategic capability by mapping how the different activities of an organisation are linked together
d) A list of activities undertaken by an organisation

Answer: c

3. Industry/sector benchmarking compares:
a) Organisational performance between firms/public sector organisations in different industries or sectors
b) Organisational performance between firms/public sector organisations in the same industry or sector
c) Organisational performance between firms/public sector organisations in different countries
d) Organisational performance between different divisions of the firm

Answer: b

4. Which of the following statements is not true reg corporate strategies?
a) They are concerned with the broad and more long-term issues of the organization
b) They are concerned with how the organization is going to compete in a specific business or industry
c) are concerned with the direction the organization is headed
d) They are concerned with the business(es) that the organization is in and the businesses they want to be in

Answer: b

5. Abdullah group of industries is involved in the sale of its marginal business. It is most likely to say that Abdullah group is implementing which one of the following strategies?
a) Retrenchment
b) Liquidation
c) Acquisition
d) Join venture

Answer: a

6. What is the starting point of strategic intent?
a) Objectives
b) Goals
c) Mission
d) Vision

Answer: d

7. Corporate level strategy deals with:
a) objectives of specific functions
b) objective of Single strategic Business Unit
c) objectives of the corporate
d) objectives of specific operations

Answer: c

8. From the following activity which does not comes under the primary activities of value Chain analysis:
a) Operations
b) Technology development
c) Marketing and sales
d) Services

Answer: b

9. Which of the following can be identified as a best statement that represents a firms big picture statements, describing a desired end state, general in scope and not restrictive?
a) Corporate philosophy statement
b) Company creed
c) Vision statement
d) Mission statement

Answer: c

10. One of the top level manager of a large manufacturing plant uses to spend her day trying to ensure that the material waste is not more than 10% , she spends her day performing the management process of:
a) Planning
b) Organizing
c) Leading
d) Controlling

Answer: d

11. The word tactics is most likely to be associated with
a) Business strategy
b) Corporate strategy
c) Operational strategy
d) All of the abvoe

Answer: c

12. Buyers market exist when:
a) few suppliers in the market
b) buyers purchases in small volume
c) buyers purchases in large volume
d) product of suppliers are unique and differentiated

Answer: c

13. How many cells are in a SWOT matrix?
a) 9
b) 6
c) 3
d) 2

Answer: a

14. The Reasons for diversification is:
a) to reduce competition
b) to increase organizational capabilities
c) to get tax advantage
d) to get quick entry into a business

Answer: b

15. Strategic Management handles:
a) external issues
b) management issues
c) internal issues
d) administrational issues

Answer: a

16. A possible and desirable future state of an organization is called:
a) Mission
b) Vision
c) Strategy implementation
d) Strategy formulation

Answer: b

17. What does Question mark symbolize in BCG matrix?
a) Remain Diversified
b) Invest
c) Stable
d) Liquidate

Answer: a

18. Selling all of a companys assets in parts for their tangible worth is called:
a) Divestiture
b) Concentric Diversification
c) Liquidation
d) Unrelated integration

Answer: c

19. What do Cash Cows symbolize in BCG matrix?
a) Remain Diversified
b) Invest
c) Stable
d) Liquidate

Answer: c

20. The BCG matrix is based on
a) Industry attractiveness and Business strength
b) Industry Growth rate and Business strength
c) Industry Attractiveness and Relative Market share
d) Industry growth rate and relative market share

Answer: d

21. When does horizontal integration occur?
a) When a firm acquires or merges with a major competitor
b) When a firm acquires or merges with a an unrelated business
c) When a firm acquires or merges with a distributor
d) When a firm acquires or merges with a supplier firm

Answer: a

22. Divestment is what kind of strategy?
a) An asset-reduction strategy
b) A weakness-reduction strategy
c) A product-reduction strategy
d) A cost-reduction strategy

Answer: a

23. Sustained survival implies
a) that a turnaround is achieved but there is little further growth
b) that a turnaround is achieved and there is potential for further growth
c) that a turnaround is achieved and there is a clear opportunity to employ a new growth strategy
d) that a turnaround is achieved and it is appropriate to diversify soon

Answer: a

24. In which of the following scenarios is a joint venture likely to be more attractive than acquisition?
a) Horizontal integration
b) Vertical integration
c) New market entry
d) Larger resource pool

Answer: a

25. McDonalds is deciding whether to expand into manufacturing kitchen equipment in China. At what level is this decision likely to be made?
a) Business
b) Corporate
c) Functional
d) International

Answer: b

26. Which type of trend can be exemplified by the increasing numbers of two income households in a society?
a) Solid
b) Economic
c) Cultural
d) Technological

Answer: b

27. The primary benefit brought from restructuring is:
a) employee involvement
b) cost reduction
c) increased morale
d) increased number and organizational hierarchy

Answer: b

28. Technological advancements can create which of the following advantage besides many other existing powerful advantages for the businesses?
a) Economic
b) Social
c) Environmental
d) Competitive

Answer: d

29. Which strategies aim at improving internal weakness by taking advantage of external opportunities?
a) SO
b) WO
c) SW
d) ST

Answer: b

30. the sketch of the BCG matrix, what is the label of the horizontal axis?
a) Industry growth rate
b) Market share
c) Market growth rate
d) Business strength

Answer: b

31. Strategy is developed by the visionary chief executive in ___________ mode of strategic management
a) planning mode
b) adaptive mode
c) strategic mode
d) entrepreneurial mode

Answer: d

32. Stability strategy is a ____________ strategy
a) corporate level
b) business level
c) functional level
d) strategic level

Answer: a

33. What are the means by which long term objectives will be achieved?
a) Strategies
b) Policies
c) Strength
d) Opportunities

Answer: a

34. Marketing strategy is a ___________ type of strategy
a) business level
b) Growth strategy
c) corporate strategy
d) functional strategy

Answer: d

35. When an industry relies heavily on government contracts, which forecasts can be the most important part of an external audit
a) Economic
b) Competitive
c) Political
d) Multinational

Answer: c

36. Which of the following is not a recognized element of corporate strategy?
a) Competitive advantage
b) Closure
c) Acquisition
d) Divestment

Answer: a

37. __________ refers to the purposes an organization strives to achieve
a) Strategic Intent
b) Strategic Formulation
c) Strategic Implementation
d) Strategic Control

Answer: a

38. __________ strategy may require a firm to redefine its business and may involve divestment of a major product line or an SBU, abandon some markets or reduce its functions
a) Expansion Strategy
b) Retrenchment Strategy
c) Combination Strategy
d) Stability Strategy

Answer: b

39. Which of the following statements is false? Formal strategic planning
a) implies determined actions for achieving objectives
b) is a time consuming process
c) should develop clear and rigid plans for the organization to implement
d) is most applicable in stable environments

Answer: c

40. __________ strategy is often considered as entrepreneurial strategy where firm develops and introduce new products and markets or penetrate markets to build share
a) Retrenchment Strategy
b) Combination Strategy
c) Stability Strategy
d) Expansion Strategy

Answer: d

41. All of the following are key opportunities and threats in external environment because of political, government and legal forces except:
a) Tax rate
b) Social security program
c) Cross boarder relationship
d) Patent law

Answer: b

42. Internal audit is done:
a) Before external audit
b) After external audit
c) Parallel to external audit
d) Vertical to external audit

Answer: c

43. Bargaining power of customers is high if:
a) Differentiation of competitors product is low
b) Switching costs are low for substitute products
c) The buyer has little information about the market
d) The buyer requires a high quality product for own production

Answer: a

44. The magnitude and changes that may affect an organization is survival owing to all of the following except:
a) Merger-mania
b) Demographics
c) E-commerce
d) Dubious firms

Answer: d

45. Which of the following requires a firm to establish annual objectives, devise, policies, motivates employees and allocate resources for the execution of strategies?
a) Strategy formulation
b) Strategy evaluation
c) Strategy implementation
d) Strategy estimation

Answer: c

46. Analysing the ext environment and the organisations resources are part of the:
a) Functional level planning process
b) Determining the mission of the business
c) Financial planning process
d) Strategic planning process

Answer: d

47. Which of the following is not one of Porters five competitive forces?
a) Bargaining power of suppliers
b) Threats of new entrants and barriers to entry
c) Threats of technological advances
d) Threats of substitutes

Answer: c

48. Strategic business units
a) Are found in one-business organisations
b) Carry out strategies assigned by the CEO
c) Develop their own unique way of competing
d) Implement the marketing function's strategic planning and management decisions

Answer: c

49. Marketing current products with possible modifications and range increases is also known as what?
a) Retrenchment
b) Market penetration
c) Product development
d) Market development

Answer: d

50. Retrenchment is:
a) When a company experiences declining profits and makes cutbacks to improve efficiency
b) When a company adopts a new strategic position for a product or service
c) The sale of the complete business, either as a single going concern or piecemeal to different buyers or sometimes by auctioning the assets
d) ely to take place when an organization lacks a key success factor for a particular market

Answer: a

51. In Ansoff's matrix, product development involves going in the direction of
a) present products to present markets
b) present products to new markets
c) new products to present markets
d) new products to new markets

Answer: c

52. Which of these questions is not addressed by an effective business model?
a) What do customers value today?
b) Who are our customers?
c) What does the organization produce?
d) None of the above All are essential questions for effective business models

Answer: d

53. Which of the following would you not expect to see in a vision statement?
a) Descriptions of desirable future situations
b) Motivational terminology
c) Focus on the values to which the organization is committed
d) What the organization seeks to do to reach desirable future states

Answer: d

54. What are the decisions and actions that determine long-run performance of an organization?
a) strategies
b) missions
c) goals
d) opportunities

Answer: a

55. Which of the following does Campbell (1989) suggest to be a dimension of valuable mission statements?
a) Differentiates the business from competitors
b) States the objectives of the organization
c) Meaningful and relevant to stakeholders
d) States the values of the organization

Answer: d

56. Which of the following is one of the four key elements which must be adhered to if synergy is to be achieved?
a) Efficiency
b) Competitive strategies
c) Customer satisfaction
d) Effective leadership

Answer: d

57. An organization that is diversifying its product line is exhibiting what type of growth strategy?
a) stability
b) retrenchment
c) growth
d) maintenance

Answer: c

58. A stability strategy is particularly appropriate when
a) the firm is facing rapid growth opportunities
b) the industry is in a state of rapid upheaval
c) an organization is not meeting its goals
d) an organizations performance is declining

Answer: b

59. What is synergy?
a) When the organization is providing a product to the customer that perfectly suits their requirements
b) When the parts of an organization are combined and managed in such a way that the drawbacks exceed those which would result if the parts were operating separately
c) When the parts of an organization are combined and managed in such a way that the benefits exceed those which would result if the parts were operating separately
d) When the parts of an organization are combined and managed in such a way to reduce costs

Answer: c

60. What is Kelloggs main challenge for the future:
a) To create new products for a market that is both growing and declining according to geography whilst generating enough cash to advertise and launch new products
b) To create new products for a market that is both growing and declining according to geography
c) To create new products for a market that has the same tastes, whilst generating enough cash to advertise and launch new products
d) To not become adversely affected by increased competition again and adapt to changing customer tastes

Answer: a

61. The acronym SWOT stands for
a) Special Weapons for Operations Timeliness
b) Services, Worldwide Optimization and Transport
c) Strengths, Weakness, Opportunities and Threats
d) None of the above

Answer: c

62. Which of the following statements best describes strategic management?
a) A process consisting of determining objectives and strategic actions to achieve those objectives
b) A process consisting of determining objectives, strategic actions to achieve those objectives, the implementation of desired strategy, and the monitoring of that strategy
c) A process consisting of the determination of direction, strategic actions to achieve objectives, the implementation of desired strategy, and monitoring of that strategy
d) A process for determining direction, strategic actions to achieve objectives, and the implementation of desired strategy

Answer: c

63. Which of the following is a key external factors that should be taken into account by a corporate strategy?
a) economic conditions
b) political conditions
c) legal environments
d) competition

Answer: d

64. Which one of the following would not be considered a functional strategy?
a) Financial
b) Marketing
c) Product-market
d) Operations

Answer: c

65. The two internal elements of SWOT analysis are
a) weaknesses and threats
b) opportunities and threats
c) strength and weaknesses
d) strengths and threats

Answer: c

66. International business has recently grown at such a rapid pace because of
a) stricter government policies on cross-border movements
b) development of institutions to support and facilitate trade
c) decreasing global competition
d) companies increased concerns with terrorism

Answer: b

67. Which of the following factors does not increase the bargaining power of a supplier?
a) Substitutability
b) Concentration of suppliers
c) A buyer is important to the supplier
d) High switching costs

Answer: c

68. Which of the following best describes the mode of international business used by most companies?
a) mixed ventures
b) foreign direct investment
c) joint ventures
d) exporting and importing

Answer: d

69. What is the danger of excessive monopoly power?
a) The organization will charge high prices
b) The organization will not attempt to cut costs
c) The organization will change strategy to seek to fully exploit its power
d) The organization will stifle innovation

Answer: c

70. Exports and imports apply mostly to which of the following?
a) services
b) merchandise
c) intellectual property
d) licensing

Answer: b

71. Which one of the following does not influence organizational learning?
a) Awareness of wider environmental developments
b) Knowledge of competitor activity
c) Reflecting on past actions
d) Applying activity maps

Answer: d

72. _______ are the organizations major value creating skills, capabilities and resources that determine the organizations competitive weapons
a) Strengths
b) Opportunities
c) Core competencies
d) Weaknesses

Answer: c

73. Which one of the following is not a future pattern identified by Courtney et al. (1997)
a) A limited and definable number of discrete alternatives which can be evaluated and judged by strategic managers
b) A limited and definable number of alternatives which cannot be evaluated nor judged with any great certainty
c) A limited but undefinable number of discrete alternatives which can be evaluated and judged
d) A limited but undefinable number of discrete alternatives that cannot be evaluated nor judged at all

Answer: a

74. An example of a core competency of a firm is
a) the corporate reputation
b) communicating with customers in their own languages worldwide
c) developing least squared exemptions within its accounting system
d) evaluating tangible and intangible assets

Answer: b

75. The merging of analysis of internal and external factors influencing the organizations strategy is known as
a) complete studies
b) organizational behavior and theory
c) definitional analysis
d) SWOT analysis

Answer: d

76. Why should governments seek to regulate?
a) To control competition and stop monopoly power
b) To minimize resource wastage and monopoly power
c) To control competition and minimize resource wastage
d) To control competition, minimize resource wastage, and inhibit the exploitation of weak buyers and suppliers

Answer: d

77. An investment that gives the investor a controlling interest in a foreign company is known as which of the following?
a) foreign portfolio investment
b) foreign direct investment
c) mixed venture
d) pure venture

Answer: b

78. Which of the following is not suggested by Markides (1999) as a factor for competitive and strategic success?
a) Synergy
b) Careful evaluation of strategic options
c) Ensure consistency between desired strategic position and the chosen strategy
d) Active opportunity searching

Answer: c

79. In order to have controlling interest in a foreign company
a) an investor must have at least 100 % interest in the foreign company
b) an investor must have at least 50% interest in the foreign company
c) an investor may hold a minority stake if the remaining ownership is widely dispersed
d) an investor must make all decisions at headquarters about the foreign company

Answer: c

80. To succeed, Ansoff (1987) demands that organizations become
a) more aggressive in terms of competitive strategies and entrepreneurialism or change orientation
b) more aggressive in terms of competitive strategies
c) more aggressive in terms of competitive strategies and in their pursuit of opportunities
d) more aggressive in terms of competitive strategies and innovation

Answer: a

81. Managers should study international business because
a) international business comprises a large and growing portion of the worlds total business
b) global events and competition affect almost all companies
c) a company operating internationally will engage in modes of business that differ from those it is accustomed to domestically
d) all of the above

Answer: d

82. How is an organization most likely to secure and sustain a position of strength in its associated environment?
a) By seeking to influence and manage their external environment
b) By seeking to influence their competitors' environment
c) By seeking to influence and manage their internal environment
d) By seeking to restrict changes within their environment

Answer: a

83. What would NOT be a reason for a company to engage in international businessa
a) To maximize competitive risk
b) To acquire resources
c) To expand sales
d) To diversify sources of sales and supplies

Answer: a

84. Which of the following would not be considered a barrier to entry?
a) High innovation
b) Concentration of distribution channels
c) Steep experience curves
d) Concentration of suppliers

Answer: a

85. International business has grown rapidly in recent decades for all the following reasons EXCEPT
a) rapid expansion of technology
b) liberalization of governmental policies on cross-border movement of trade and resources
c) development of institutions to support and facilitate international trade
d) increased cost of labor in both the lesser-developed and developing countries

Answer: d

86. ______ is the collection of managerial decisions and actions that determine the long-run performance of an organization
a) planning
b) goal-oriented management
c) strategic management
d) leadership

Answer: c

87. Which one of the following is not a form of non-price competition?
a) Branding
b) Innovation
c) Advertising
d) None All of the above increase non-price competition

Answer: d

88. Why is strategic management important?
a) It has little impact on organizational performance
b) It is involved in many of the decisions that managers make
c) Most organizations do not change
d) Organizations are composed of similar divisions and functions

Answer: b

89. Which one of the following is not an aspect of the MOST analysis
a) Mission
b) Strategies
c) Tactics
d) Organization

Answer: d

90. ______ and ______ are outcomes from a study of the external environment
a) Threats and Weaknesses
b) Strengths and Weaknesses
c) Weights and Measures
d) Opportunities and Threats

Answer: d

91. The pie slices within the circles of a ________ reveal the percent of corporate profits contributed by each division
a) QSPM
b) BCG matrix
c) SPACE matrix
d) Grand strategy matrix

Answer: b

92. Which one of the following is of concern for not-for-profit organizations
a) The markets to service
b) Identifying suppliers to deal with
c) Developing capabilities
d) Building monopolies

Answer: a

93. Select the statement that best applies to emergent strategies. Emergent strategy...
a) implies an ability to react to events
b) implies strategizing
c) implies no deviation from plans
d) implies constant evaluation of the bigger picture

Answer: a

94. The impact of strategies on the general direction and basic character of a company is
a) short range
b) medium range
c) long range
d) minimal

Answer: c

95. Select the most accurate statement. Value
a) means value for money
b) is best described as the benefits the business chooses to give to customers through its product/service
c) is the benefits of a product/service as perceived by the customer
d) does not offer competitive advantage

Answer: c

96. A _______ strategy addresses organizational weaknesses, helps stabilize operations and revitalizes organizational resources and capabilities
a) unrelated diversification
b) horizontal integration
c) vertical integration
d) retrenchment

Answer: d

97. Which one of the following are considered to be synergistic benefits for LVMH?
a) Joint ventures
b) Similarity of portfolio
c) Commercial exploitation
d) Name association

Answer: d

98. An organization is said to have _______ when it has several different businesses that are independent and that formulate their own strategies
a) operational units
b) strategic business units
c) competitive advantages
d) legal subunits

Answer: b

99. Which of the following is a force in the Porter's five forces model of industry attractiveness?
a) opportunity for new entrants
b) opportunity for substitutes
c) bargaining power of suppliers
d) sustainable competitive advantage for customers

Answer: c

100. Which one of the following is not one of the elements of strategic thinking described by Campbell and Alexander (1997)?
a) Organizational culture
b) Outlining of competencies
c) Future-gazing
d) Organizational behavior

Answer: b