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E3 Workbook Q
CIMA E3 - Enterprise Strategy
Workbook
E3 Workbook Q
Lecture 1 - Strategy Formation
1. Which of the following could be best described as a ‘Strategic’ decision?
A. A decision to replace the current computer terminals with like for like replacements.B. A decision to offer employees a 5% pension scheme as required by new legislation.C. A decision to withdraw from the European market due to poor sales and stakeholder pressure.D. A decision to offer the office cleaning contract out to tender, rather than use the same company
used in the 10 years previously.
2. Johnston, Scholes & WittinBlue Mountain identified 3 main stages in the strategic planning process, Strategic Analysis, Strategic Choice & Strategic Implementation.
Which of the following would not be part of the strategic analysis stage?
A. Undertaking a SWOT analysis.B. Identification and analysis of stakeholdersC. Undertaking a GAP analysis.D. Setting the strategic direction.
3. James Anderson McDuff Jnr. is the son of a Texan Oil billionaire who has made a name as an entrepreneur in his own right by investing a small amount of seed capital provided by his father in several hugely successful ventures including a low cost airline and a chain of luxury hotels. He believes that a planned approach to strategy is not possible in todays fast moving environment but implements a flexible strategy responding to market changes as they arise which he feels keeps the business one step ahead of the competition.
Which one of the following strategic planning models best describes James approach?
A. The Rational Model.B. EmergentC. Freewheeling OpportunismD. Incrementalism
4. Which of the following is NOT a component of undertaking a resource based approach to strategic planning.
A. Resource audit.B. Threshold competencies.C. Core competencies.D. Incremental budgeting.
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5. Javians Ltd. is a large multi-national conglomerate who has just undertaken the acquisition of a small competitor Kanvs Ltd. In order to improve the operations of Kanvs Ltd. the first decision that was taken was to implement in Kanvs Ltd. the just in time ordering system currently used in Javians Ltd.
The decision to acquire Kanvs Ltd is an example of a ........1.......... strategic decision whilst the implementation of the JIT system in Kanvs Ltd. is an example of a ......2........ strategic decision.
Which of the following terms fit the gaps in 1 and 2?
A. Business, FunctionalB. Corporate, BusinessC. Functional, Corporate D. Corporate, Functional
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Lecture 2 - Strategic Considerations
1. Ideas Regional Hospital Trust is a publicly owned health provider being run as part of the National Health Service of Einsteinland. Recently an audit by the national regulators has highlighted 3 key problems:
1. The Key Performance Indicator of keeping spend per bed below $4 was not met2. An overspend of $500,000 compared to budget on surgical gloves was discovered.3. The primary target of the trust to treat all emergency patients within 1 hour was not met.
These failures are failures of:
A. 1. Economy 2. Effectiveness 3. Efficiency B. 1. Effectiveness 2. Economy 3. EfficiencyC. 1. Efficiency 2. Economy 3. EffectivenessD. 1. Efficiency 2. Effectiveness 3. Economy
2. Which of the following statements around Strategic Management Accounting (SMA) is NOT correct?
A. SMA uses both internal and external information.B. SMA’s function is to contribute to the strategic direction of the organisation.C. SMA primarily uses historic data to produce financial reports for management.D. SMA includes analysis of customer profitability and contributes to pricing decisions.
3. Which of the following is NOT a duty of the directors of a company under the Companies Act 2006?
A. To promote the success of the company.B. To undertake an ethical and moral stance in all decisions.C. To avoid conflicts of interest.D. To act with reasonable care, skill and diligence.
4. Which of the following is NOT a benefit of implementing corporate governance rules within an organisation.
A. Strategic decisions should be made more quickly.B. The organisations should be run on a more ethical basis.C. The risk to shareholders of losing their investment should be lower.D. The directors of the organisations should be more accountable.
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Lecture 3 - Mission, Vision & Objectives
1. Which of the following is NOT correct regarding an organisation’s mission statement?
A. It is an document primarily for use within the organisation.B. It is a succinct document stating the purpose and aims of the organisation.C. It sets out the goals and objectives of the organisation.D. It does not usually focus on the commercial aspects of the organisation.
2. Aspro Co. has recently published the following statement:
‘Aspro Co. aims to be Europe’s best-value retailer and to always exceed customer needs’
Which one of the following is this statement most likely to be:
A. A vision statementB. A corporate strategyC. A mission statementD. A strategic plan
3. Laxtic Co. is a new computer chip manufacturer which has recently succeeded in increasing it’s UK market share to 5%. It has set itself the following objective:
‘To become the largest computer chip manufacturer in the world within 3 years with at least a 75% share of the global market’
Which of the SMART framework for objectives does this NOT meet?
A. MeasurableB. Time constrainedC. SpecificD. Attainable
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Lecture 4 - Stakeholders
1. ABC has several stakeholders that have been identified by the board and categorised. Which of the following statements concerning the stakeholder view is correct?
A. The only legitimate stakeholders are shareholders.B. Any one person or group with a legitimate interest in the activities of the organisation is a
stakeholder.C. Stakeholders should be formally registered and fill in a form to be recognised as such.D. The managers of the organisation are the most important stakeholders.
2. Which of the following would be ALL be classified as connected stakeholders?
A. Suppliers, Banks, Employees.B. Government, Customers, Shareholders.C. Suppliers, Customers, Shareholders.D. Managers, Banks, Suppliers.
3. Island Health Trust runs a hospital in the capital city of Hope Island. Recently the senior consultant doctors have expressed concern at the lack of spare time for golf and have threatened to stop conducting surgery on a Friday. Nurses and Junior doctors do not agree with the action so will remain available on the Friday regardless of consultant action.
What is the source of power for the consultants in Island Health Trust?
A. PositionalB. SystemC. PersonalD. Expert
4. ABC Ltd. is a listed company. It’s largest shareholder is a pension fund who owns almost 17% of it’s shares. It has recently expressed concern at the strategic direction of ABC and has a history of voting against the board with other large shareholders at the AGM to force directors to change decisions.
Using Mendalow’s matrix what strategy should ABC undertake to deal with the pension fund?
A. Keep satisfiedB. Keep informedC. Key playersD. minimal effort
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5. Novo Co. is a large chemical company which has recently established a new plant in a medium size city in a developing country. There has been safety concern expressed by several parties. In response Novo Co. firstly appeased the local community through the provision of new school building sponsored by the company. Secondly the company gave an undertaking that a special water filtration system would be added to the plant to gain the support of the local council.
Which of the following stakeholder conflict resolution strategy is Novo Co. undertaking?
A. SatisfycingB. Side paymentsC. Exercise of powerD. Sequential attention
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Lecture 5 - Non-Market Strategy
1. Intervention by the government to set a minimum price for alcohol is an example of regulation to address market failure caused by:
A. Lack of competitionB. Market imperfectionC. ExternalitiesD. Inequity
2. Corporate Political Activity may be undertaken by an organisation in order to:
A. Improve the world for the socially deprived.B. Improve environmental legislation for the good of everyone.C. Secure policy preferences.D. Understand the impact of government on the organisation.
3. Lobbying by an organisation is an example of which ONE of the following?
A. Primary data research.B. Environmental analysis.C. Corporate Governance.D. Political Activity.
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Lecture 6 - Corporate Social Responsibility
1. CFR Ltd. is considers Corporate Social Responsibility to be an added cost and a waste of time. They comply with such issues only to the extent that it it required by law.
Which of the following best describes CFRs approach to Corporate Social Responsibility?
A. PhilanthropicB. LegalC. EthicalD. Economic
2. Which of the following could be seen as a drawback to implementing a Corporate Social Responsibility policy?
A. Increased cost of compliance to the business.B. Differentiation of the product or service.C. Loss of key business skills.D. Failure to attract and retain quality staff.
3. Which of the following statements regarding sustainability and Corporate Social Responsibility (CSR) are NOT correct?
A. CSR and sustainability may lead to cost savings in the short term.B. Sustainability relates to the organisation’s use of resources.C. CSR refers to the obligation to maximise the positive impact on stakeholders whilst minimising
negative impact.D. One of the four areas of CSR defined in Carrolls model is ‘Stakeholder’.
4. CIMA’s report ‘Evolution of corporate sustainability practices’ outlined ten elements of organisational sustainability under three headings of Strategy & Oversight, Execution and Performance & Reporting.
Which of the following does not appear under the heading ‘Strategy & Oversight’.
A. Board and senior management commitment.B. Understand key sustainability drivers.C. Extensive and effective sustainability training.D. Integrate sustainability drivers into the firms strategic direction.
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5. Which of the following best describes the concept of ‘Corporate Citizenship’?
A. The implementation of rules set down by the stock market.B. Lobbying government to ensure that new rules affecting the organisation are not implemented.C. Doing the minimal amount required to comply with laws and regulations.D. Going beyond consideration of stakeholders and considering the impact of the organisation on
society.
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Lecture 7 - Ethics
1. Archie is an accountant who works in a small local manufacturing business. During the recent recession the company has had cash flow problems and the CEO has asked Archie to overstate profit by bringing in sales from next year. He assures Archie that it is a ‘one-off to ensure our survival and the jobs of him and his colleagues’.
For Archie to do this would be a breach of which of the following principles?
A. ObjectivityB. ConfidentialityC. IntegrityD. Due Care
2. Ziggie is the CEO of a multi-national company which is currently experiencing some difficulties. Due to a recent revelation of accounting errors and manipulation of the financial statements by other members of staff, the share price has fallen dramatically which has drastically reduced the value of share options to which Ziggie is entitled this year. Ziggie has just been made aware of further accounting errors not yet disclosed to the financial markets and has her weekly meeting with financial journalists this afternoon.
Which of the following best describes Ziggie’s situation:
A. Ziggie has breached the ethical principle of integrity.B. Ziggie’s situation exposes her to a self-interest threat.C. Ziggie has breached the ethical principle of objectivity.D. Ziggie’s situation exposes her to a familiarity threat.
3. Lavinda has been a trainee accountant with a company for two years. She has recently realised that a lot of the journal postings she has made and reviewed herself over that period of time have been incorrect and may have led to an significant overstatement of profit last year. Lavinda feels that she has been inadequately supervised as she has already reported her concerns regarding inadequate review processes to her line manager when the postings were made.
Lavinda is facing a ......1....... threat and she should now ...........2...........
The missing information should read as which of the following:
A. 1. Self Interest 2. Tender her resignationB. 1. Self Review 2. Continue as normal having already informed her line managerC. 1. Self Review 2. Inform a more senior member of staff of the situationD. 1. Integrity 2. Inform the regulatory authority of the accounting error
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4. Which of the following is NOT a valid reason to disclose confidential information to a third party?
A. The client authorises the information to be disclosed.B. The information relates to money laundering being undertaken by the organisation.C. The information relates to a situation in which members of the public are at risk of harm.D. The third party could suffer significant loss if they do not receive the information.
5. Flounder Co. is a large multi-national bank, it has over 10,000 staff working in over 3000 branches across the world. Flounder prides itself on providing maximum shareholder wealth year on year through share price increases and high dividends
It has recently come to light that Flounder have been charging very high fees to some of their poorest customers and forcing struggling small business clients to take high interest rate securitised loans when they default on overdraft payments. None of these actions have been deemed illegal by regulator investigations and recent financial results have been excellent due to these factors as well as reducing front line staff and closing some small local branches.
Which of Johnston, Sholes and Wittington’s ethical stances is Flounder Co. adopting?
A. Short term stakeholder interestsB. Long term stakeholder interestsC. Multiple stakeholder obligationsD. Shaper of society
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Lecture 8 - External Environment I
1. Slippy Co. is a growing manufacturer of water park slides with a unique patented super-smooth plastic coating for their products. They are considering undertaking an environmental analysis.
Which of the following is NOT an benefit that is likely to be derived from Slippy’s environmental analysis?
A. An understanding of the the threats to their competitive position.B. An understanding of how to meet the needs of stakeholders.C. An understanding of the resources available within the company.D. An understanding of opportunities Slippy Co. may not have yet considered.
2. Starchie Co. is a luxury shirt manufacturer that has recently undertaken a PESTEL analysis and identified the following:
i. The government in Foreignland has recently passed legislation to implement a minimum wage for all workers. Starchie Co. manufactures all or their products in Foreignland.
ii. The interest rate in Starchie’s main export market of Japan has recently been decreased in response to recessionary pressures.
iii. An article in an influential industry magazine entitled ‘The Shirt is Dead, Long live Jumpers’ has highlighted the reduced popularity of shirts globally.
These factors should be categorised as:
A. i. Political ii. Social iii. EconomicB. i. Environmental ii. Political iii. SocialC. i. Legal ii. Economic iii. SocialD. i. Political ii. Economic iii. Social
3. Geratic Co. is undertaking a Porter’s 5 Forces analysis in order to understand the competitive rivalries within it’s industry. It is a computer chip manufacturer who recently made a ground breaking discovery to produce an entirely new type of chip, however this discovery was not patentable and they are concerned that others will soon replicate this technology.
Which of the following will be of most concern to Geratic Co?
A. Bargaining power of buyers.B. Threat of new entrants.C. Threat of substitutes.D. Bargaining power of suppliers.
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4. Which of the following is NOT a limitation of Porter’s 5 Forces Analysis?
A. It is not useful for analysing fast-moving industries.B. It focuses too heavily on government influences.C. It ignores collaboration between the parties in the industry.D. It does not focus on industry profitability.
5. Roasters Co. grows and sells their own speciality roasting potatoes which they claim have the best taste of any roast potato when cooked that way.
Which of the following forces is most likely to be classified as ‘high’ for Roasters Co.
A. Bargaining power of buyers.B. Competition in the industry.C. Threat of substitutesD. Bargaining power of suppliers
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Lecture 9 - External Environment II
1. Salty Nuts Co. produces many different types of salted snacks including the Salted & Spiced Cashew nut. This product has been produced for several years and has sold in large quantities in the past. In order to keep sales at their previous levels a costly advertising campaign was launched but despite this, sales have decreased and profitability has declined as a result of the campaign and price reductions.
What stage of the product life cycle is the Salted & Spiced Cashew Nut?
A. GrowthB. DeclineC. MaturityD. Defeat
2. At this stage the product has relatively stable demand but many competitors in the market. It is likely that firms will be price takers rather that undertaking price skimming or penetration pricing.
The above statement best describes which stage in the product life cycle?
A. IntroductionB. GrowthC. MaturityD. Decline
3. Voldor Co. produces moderately luxurious cars which are aimed at middle to high earners with reasonable disposable income. They are aware that should the consumer decide to buy another luxury product such as a boat made by Dolldy Co. they may not purchase one of Voldor Co.’s cars.
Voldor Co. and Dolldy Co. are what types of competitor?
A. BrandB. GenericC. FormD. Industry
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Lecture 10 - External Environment III
1. Strap Co. is a leather bag manufacturer that is considering expanding it’s operations into foreign marketplaces. Which of the following is NOT a potential benefit of such expansion?
A. They may be able to cut the cost of production by producing abroad.B. They may discover a market they had not considered previously.C. They will be less exposed to political risk.D. They may find it easier to recruit and retain senior managers.
2. Which of the following is NOT a factor in the competitive advantage of nations outlined in Porter’s Diamond?
A. Factor conditionsB. Barriers to entryC. Strategy, structure & rivalryD. Demand conditions
3. Jingles Co. operates in the highly technological industry of quantum computing research and is considering re-locating their headquarters to LaLaLand. LaLaLand is widely regarded as the world leader in facilities for quantum computing and has a deep pool of expertise greater than any other country.
The facilities and expertise in LaLaLand is an example of which factor from Michael Porter’s Diamond Model?
A. Demand ConditionsB. Strategy, structure & rivalryC. Related & supporting industryD. Factor Conditions
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Lecture 11 - Internal Environmental Analysis
1. Alpha-Bet has a database which its managers use to identify individual customer needs as well as market trends. Since its inception, the database has boosted Alpha-Bet’s sales by 15%. Which one of the following resource classifications would Alpha-Bet’s database be included within?
A. MarketsB. ManagementC. Management informationD. Make-up
2. The following statements relate to organisational resources and competences. Select ALL of the statements that are correct.
A. ‘Core competences’ and ‘critical success factors’ mean the same thingB. Threshold competences tend to turn into core competencies over timeC. Core competences are difficult for an organisation’s rivals to imitateD. Threshold competencies give competitive advantage to the organisationE. Core competencies are regularly intangible in nature
3. Which FOUR of the following options are SECONDARY (or support) activities within Porter’s Value Chain?
A. Technology developmentB. ServiceC. InfrastructureD. ProcurementE. Marketing and salesF. Human resource management
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4. Fisher-Pride is a manufacturer of children’s toys.
Fisher-Pride is part way through its first formal strategic planning process, and has tried to identify those activities it performs that its customers really appreciated. The next step Fisher-Pride must perform is to classify these activities using Porter’s ‘Value Chain’ model.
Consider the following lists of activities and Value Chain classifications.
Identify which activity relates to each dimension by pairing the appropriate letter and number (e.g. A1, B2, etc).
5. Fisher-Pride has recently developed an automated inventory control system for its finished toys, which significantly reduces waste age.
Which ONE of the following Value Chain activities will Fisher-Pride’s automated inventory system directly improve?
A. ProcurementB. Inbound logisticsC. OperationsD. Outbound logistics
Activity Value Chain Classification
A Handling customer complaints 1 Human resource management
B Budgeting for the manufacturing process 2 Inbound logistics
C Staff training 3 Infrastructure
D Automated inventory control for raw material 4 Service
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6. The Grand Opera House is a theatre company struggling to make a profit. The management team are part way through its first formal strategic planning process, and has developed a mission statement:
The Grand Opera House aims to be the first choice for theatre goers, by providing quality entertainment at an affordable price, and excellent customer service.
The Grand Opera House has developed eight performance measures, based on this mission, but is uncertain how to categorise those measures into critical success factors (CSF’s) and key performance indicators (KPI’s).
Measures:
1. High levels of customer satisfaction2. Answer telephone calls within five rings3. Performance cancellations must happen less than 1 in 100 shows4. Prices must be within 5% of competitors5. Affordable ticket prices6. No more than 3% of customers submit complaints7. High quality theatre companies8. Excellent customer service
For each of the above measures, identify which are CSF’s and which KPI it is related to by placing the relevant measure number in the appropriate box below.
7. Which of the following is NOT true about the value chain?
Select the correct answer from the choices below
A. A logistics company could be a valid choice for both inbound and outbound logistics.B. They do not apply to service industriesC. The value chain seeks to explain what enables a business to make profitsD. Understanding linkages between activities is important
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Lecture 12 - Position Analysis
1. Mapit is an online accountancy tuition business. Mapit’s most recent corporate analysis has identified that there are two new businesses have recently entered its market and started aggressively targeting Mapit’s customers.
Which ONE of the following categories would these new business entrants to the market be classified within, as part of Mapit’s corporate appraisal?
A. StrengthB. ThreatC. WeaknessD. OpportunityE.
2. Lottie is a management accountant at Denvil Ltd. She has been asked to prepare a presentation to senior management regarding the benefits and drawbacks of corporate appraisal (SWOT analysis). She has asked you to look over her notes, which included the following section of bullet points:
• Corporate appraisal is designed to focus on the industry that the company operates within and assess the major industry-wide factors that may affect our strategy.
• Corporate appraisal typically summaries the key issues identified by other analysis models, such as PEST and Porter’s Five Forces.
• The corporate appraisal is a useful way of analysing the organisation’s strategic capabilities, as well as the key issues it faces.
Which ONE of the following statements best describes Lottie’s level of understanding of corporate appraisal (SWOT)?
A. Excellent - all three bullet points in her notes are correctB. Good - only one of the bullet points in her notes is incorrectC. Poor - two of the bullet points in her notes are incorrectD. Very poor - all of the bullet points in her notes are incorrect
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3. ProKnit is undertaking a position audit. The company makes and sells knitting machines and has a strong reputation with the market for quality at reasonable prices. ProKnit has identified that there is a growing market for knitting machines with a digital picture download option to which allows any digital image to be knitted from the machine. While ProKnit does not currently make this type of machine, their manufacture should use similar skills and raw material to their current product line.
ProKnit’s management has suggested a possible strategy of expansion into the digital knitting machine market. Which one of the following types of position audit strategy would this relate to?
A. Opportunity focusing on weaknessB. Opportunity focusing on strengthC. Threat focusing on weaknessD. Threat focusing on strength
4. ProKnit is also currently undertaking gap analysis. It wishes to start an effectiveness drive in order to close an expansion gap that has been identified.
Which TWO of the following strategise would be part of a typical effectiveness drive?
A. Development of new products for ProKnit’s existing marketsB. Increased automation to lower production costsC. Sourcing cheaper raw materials for the production processD. Price cuts to the product to boost sales volume
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Lecture 13 - Forecasting and Planning
1. The Delphi Technique relies on estimating the probabilities of different outcomes and the consequences of decisions, drawing a tree-type diagram, then ‘rolling back’ expected values to the earliest decision that needs to be made.
Choose whether the statement is true or false
2. Scenario planning examines and evaluates all the possible permutations of outcomes.
Choose whether the statement is true or false.
3. Scenario planning involves a number of distinct stages. These include:
A Monitor reality to see which scenario is unfoldingB Cluster together different factors to identify various consistent futuresC Identify high-impact, high-uncertainty factors in the environmentD Write the scenarioE For each factor, identify different possible futuresF For each scenario, identify and assess possible courses of actionG Revise scenarios and strategic options as appropriate
Place these stages into the correct order, beginning with the earliest, by writing the letters A-G in the correct order.
4. Which THREE of the following are disadvantages of an organisation undertaking scenario planning?
A Discourages creative thinkingB Creation of self-fulfilling propheciesC Encourages risk-taking by managementD May create scenarios that never actually occurE May be costly and inaccurate
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5. What technique does this describe?
The technique uses well-defined scenarios involving a number of people each of who can make their own choices. The choices made by one player affect the rewards received by the other players; the other players know this and this must be taken into account.
6. You have recently read an article about game theory in a student magazine. The article had the following first paragraph.
‘Game theory is concerned with the interrelationships between the competitive moves of a set of competitors. The common application of this is the so-called ‘prisoner’s dilemma’ which indicates that competing companies often adopt strategies that leave them all worse off unless some level of collusion occurs between them.’
Are there any problems with the above paragraph?
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Lecture 14 - Real Options
1. LAGAN is a large house building company. It is considering purchasing a section of land within a major town. The land is currently owned by the local government, who wishes LAGAN to build 200 new town houses. LAGAN has calculated that the net present value (NPV) of the project is negative. However, undertaking the building work would lead to LAGAN being able to get preferential status for more profitable work with the local government in future.
Which ONE of the following real options is included within the house building project?
A Option to abandonB Option to delayC Option to follow onD Option to return
2. Which of the following statements regarding real options is correct? Select ALL that apply.
A Options to abandon are especially useful for projects with a large capital investment and an uncertain outcome.B An option to abandon a project will increase in value as the project becomes increasingly uncertain.C Options to delay refer to projects will that provide the business with access to other, more profitable projects in the future (i.e. after a given delay).D Generally, options fall in value as their duration falls.
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Lecture 15 - Strategic Choice (Porter)
1. A possible generic strategy is focus-differentiation. Is this statement true or false?
2. Which of the following is incompatible with a company staying with its existing markets and with its existing product?
A Backward integrationB ConsolidationC Market growthD Efficiency gains
3. ‘Stuck in the middle’ means that a company is neither developing its products nor developing its markets. Is this statement true or false?
4. Tesca is a supermarket in country A. The supermarket industry in county A is saturated, with large numbers of chains of supermarkets in all segments of the market.
Tesca has at least five major rivals in the market, each with a similar market size to Tesca.
Tesca has already undertaken significant efficiency strategies to bring its cost base down to match those of its rivals. It does not feel that it is possible to reduce these core costs down further for Tesca or its rivals.
Tesca and its rivals each offer branded and unbranded food items. Tesca and its rivals charge similar prices for these items. None of the supermarkets offer non-food items.
According to Porter’s generic strategies model, Tesca would be an example of an organisation that is (select ONE of the following options):
A. A differentiatorB. A cost leaderC. Stuck in the middleD. A niche-player (a focus approach has been adopted)
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Lecture 16 - Strategic Choice (Ansoff)
1. Casiol sells calculators, including one known as MS-120. MS-120 was once one of the most popular calculators that Casiol sold, but it has recently entered a period of decline. Casiol has therefore updated the packaging of the calculator, as well as slightly reducing its selling price.
According to Ansoff’s product/market matrix, which of the following strategies has Casiol adopted?
A. Market developmentB. Product developmentC. DiversificationD. Market penetration
2. Zarb sells clothing, homewares and food through a large number of city centre high street stores across County A. It does not currently have an online presence.
It has recently initiated a number of different strategies and it wishes to categorise them using Ansoff’s product/market matrix.
Consider the following lists of strategies within Zarb as well as Ansoff’s matrix classifications.
Identify which activity relates to each dimension by pairing the appropriate letter and number (e.g. A1, B2, etc).
Zarb strategy Ansoff classification
A Zarb has started selling selected food products in motorway service stations across country A
1 Market penetration
B Zarb has launched a major new advertising campaign for its current clothes ranges, under the slogan ‘Zarb for all’
2 Diversification
C Zarb is piloting selling domestic electrical through its existing retail stores
3 Product development
D Zarb has considered selling selected banking services on the internet
4 Market development
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Lecture 17 - Strategic Choice (BCG)
1. Quinta has decided to adopt a ‘holding’ strategy for several of its products.
Which TWO of the following classifications of product (according to the Boston Consulting Group matrix) would this strategy be most suitable for?
A. DogB. StarC. Cash cowD. Question mark
2. JPL sells vacuum cleaners and other cleaning products. The company has decided to analyse its current portfolio of products using the Boston Consulting (BCG) Matrix.
One of JPL’s products is Whirl5000 - an upright vacuum cleaner. Whirl5000 was the market leader 10 years ago, but has failed to keep pace with more modern products (such as cordless and bagless) entering the cleaning market, which is now very mature. Whirl5000 is now the sixth highest selling detergent in the market and JPL thinks its market share is likely to decline further in the future.
JPL is still slightly profitable and, while relatively few customers purchase it, many remembered the brand name and JPL believes this supports the sale of other JPL products.
Which ONE of the following BCG strategies is most appropriate for JPL to adopt with regards Whirl5000?
A. HoldB. BuildC. HarvestD. Divest
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Lecture 18 - Decisions and Growth
1. Blue Mountain Ltd. is a provider of training courses for Google Analytics. It is one of only three main organisations that provide this service in country NI.
Blue Mountain us uncertain whether to grow by opening new training facilities across country NI, or by acquiring one of its rivals.
Which TWO of the following are factors that would encourage Blue Mountain to choose organic growth rather than acquisition?
A. Blue Mountain is under pressure from major shareholders for rapid growth in salesB. Blue Mountain has relatively low cash reserves and little access to additional
financeC. One of Blue Mountain’s rivals may soon be acquired by a multinational training
conglomerate with significant resourcesD. Blue Mountain’s rivals have significantly different corporate cultures to Blue
Mountain itself
2. Charity X Ltd., a charity which aims to improve the lives of older people, wishes to enter the market of telecommunications for the older generation, such as simplified mobile phones. However, the cost of creating design and production facilities is significant, with no guarantee of eventual success. Charity X has therefore approached SamgSamg Ltd - a company based in the telecommunications industry - and suggested that the two companies collaborate on the creation of appropriate mobile phone production facilities, sharing expertise, as well as the risks and rewards, equally.
Which ONE of the following methods of joint development would be most appropriate for the collaboration between Charity X and SamgSamg?
A. LicensingB. Joint ventureC. OutsourcingD. Informal strategic alliance
.
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3. TaxHelp Ltd is a new chain of tax and accountancy services, which has two premises in the capital city of country A that have been open for two months. TaxHelp is owned and solely managed by Paul, who has little experience running a business.
TaxHelp has been successful in the capital city, so Paul wishes to grow the number of premises in the chain rapidly but currently has little additional cash to invest, so he has decided to start selling TaxHelp franchises in towns and cities across its home country. TaxHelp has a very distinct style for its marketing and customer relations and Paul wants to ensure that this was replicated across all franchised premises.
How suitable would franchising be for TaxHelp (Choose ONE of the following options)
A. VERY - it will help them achieve all of their strategic goalsB. QUITE - while it would enable rapid growth it may be difficult to attract franchiseesC. NOT VERY - it may be difficult to attract franchisees and ensure adequate controlsD. NOT AT ALL - franchising would have no benefits and many risks for TaxHelp
4. Boding Ltd manufactures airplanes. It has factories in country A which produce the engines, as well as other factories in country B which produce the plane interior and other components. Boding then sends these goods to its facilities in its home country - country C, where they are assembled into the final product, which is sold to various countries around the world.
Which international growth strategy has Boding adopted?
A. MultinationalB. Overseas manufactureC. TransnationalD. Exporting
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Lecture 19 - Balanced Scorecard
1. Which THREE of the following are drawbacks of using the Balanced Scorecard (BS) model?
A. The BS does not provide a single view of performance which can lead to confusionB. There is no clear link between the balanced scorecard and shareholder analysisC. The BS mainly focuses on short-term measures, leading to long-term problemsD. The BS forces each division within an organisation to use identical indicatorsE. Measures within the BS can conflict with each other, leading to confusion
2. Choose one correct answer in each drop-down list to describe the balanced scorecard approach to performance management
A. A good financial perspectiveB. A good innovation and learning perspectiveC. A good internal business perspectiveD. A good customer perspective
The aim of profit-seeking organisations is__________. In the first instance this depends on __________ which depends on __________. These all rest on __________.
3. List THREE benefits of the Balanced Scorecard model.
Answer: Any of the following (or other reasonable answer)
• Improved organisation alignment • Improved communications, both internally and externally• Linked strategy and operations• More emphasis on strategy and organisational results • Integrated strategic planning and management
4. List THREE challenges that an organisation might encounter trying to develop and deploy a balanced scorecard system?
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Lecture 20 - More Performance Measures
1. Spittle Ltd is a drinks manufacturer which has been trading for almost 1 year. Due to the success of the company, a Human Resources department has been established. The new HR Manager has set targets in the following areas as performance measures for its employees:
1. number of defective products returned by customers2. number of new product lines offered to customers3. increased revenue and margins4. number of staff overtime hours5. value of wastage
Link the above performance measures with Fitzgerald and Moon’s building block model:
A. Resource utilisationB. InnovationC. FlexibilityD. ProfitE. Quality issues
2. Which of the following would be classified as an external effectiveness measure within the performance pyramid?
A. QualityB. DeliveryC. Cycle timeD. Productivity
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Lecture 21 - Measuring Performance II
1. Lynch and Cross are associated with the building block model. Choose whether the statement is true or false.
2. Which one of the following is NOT part of the building block model?
A. Internal effectivenessB. Standards for KPIsC. Dimensions of performanceD. Standards for employee rewards
. Internal effectiveness relates to the performance pyramid.
3. The bottom level of the performance pyramid consists of quality, delivery, cycle time and __________.
4. Financial performance measures are not relevant to not-for-profit organisations. Decide whether the statement is true or false.
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Lecture 22 - Measuring Performance III
1. EVA is an estimate of true economic profit after making corrective adjustments to GAAP accounting. It is argued that the profit and capital employed figures quoted in financial statements do not give the true picture and that the accounting figures need to be adjusted to show the true underlying performance. The basic concept of EVA is that performance should be measured in terms of the value added during the period. It is a measure of performance that is directly linked to shareholder wealth.
List 3 examples of the adjustments to GAAP accounting that could typically be made.
2. Which of the following benefits is consistent with the use of triple bottom line (BL) reporting?
A. Cost savings through reduced wastageB. Measures are all based on objective cash-flows, rather than subjective accounting
profitsC. Decisions made ensure shareholder wealth is maximisedD. Cheap and easy measurement of targets
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Lecture 23 - IT and strategy
1. Which of the following terms relates specifically to the selection of software and hardware within an organisation?
A. Information systems (IS) strategyB. Information management (IM) strategyC. Information technology (IT) strategyD. Business strategy
2. Pet-Hospital Ltd. is a call centre linked to a major chain of veterinary practices. When a customer calls Pet-Hospital about their pet, a medically qualified operator gathers information about their pet’s condition, which is entered onto a central database. This is used to make a decision about the cause of the pet’s problem. The operator will then inform the customer about what to do next - i.e. whether they need to attend the vet’s practice. For non-emergencies, the operator will email this information to the patient for their future reference.
Pet-Hospital is considering the launch of a new expert IT system. This will allow operators to input detailed patient symptoms into the system, which will then make suggestions as to possible diagnoses in order to support the operator’s decision making process.
Which ONE of the following activities within Pet-Hospital’s value chain is the new IT system supporting?
A. ServiceB. OperationsC. Outbound logisticsD. Procurement
3. Blue Parrot Ltd. is a manufacturer of quirky toys for the 18-29 age bracket. Blue Parrot uses a computer aided design (CAD) system to help it design new toys as efficiently as possible. However, Blue Parrot is considering further developments to its system that will allow it to share designs easily between its design team, key customers and major suppliers. Blue Parrot thinks that this additional functionality will significantly decrease the time taken to launch new products and give it a competitive advantage over its rivals.
According to McFarlan’s model of the criticality of information technology, once updated which ONE of the following would Blue Parrot’s CAD system be classified as?
A. SupportB. StrategicC. TurnaroundD. Factory
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Lecture 24 - E-Business
1. Cakes Direct Ltd Ltd has recently launched a website that enables customers to buy its major products online. Cakes Direct’s current website does not allow customers to set up personalised accounts and it does not store user information, such as email addresses or purchase history.
Which ONE of the following stages of e-business has Cakes Direct currently reached?
A. E-businessB. E-commerceC. Integrated e-commerceD. Web presence
2. Hey Lila Ltd has developed a stylish and innovative type of jewellery which they wish to sell online, but they have been unable to raise enough money to launch their own website. Hey Lila has therefore decided to sell jewellery through Etsi, a major online retailer, which sells a wide range of gift products. Etsi will allow Hey Lila to sell via their popular website, taking 15% of any revenue they make through the site.
Which ONE of the following aspects of Web 2.0 is being described above?
A. Software as a service (SaaS)B. MashupsC. Competence syndicationD. Global network effects
3. Teletec Ltd has recently decided to install a new IT entrance systems which will use retina recognition to record the arrival and departure times of all staff. This should eliminate the need for keeping manual time sheets and reduce the cost of running the payroll by 10%.
Which ONE of the following levels of strategy is the above IT system most closely linked to?
A. FunctionalB. CorporateC. BusinessD. Strategic
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Lecture 25 - Knowledge Management
1. Pizza-House Ltd has a large chain of restaurants through which is sells pizzas and other Italian style foods. Pizza-House has recently used data mining to uncover information which may be useful to the business.
Consider the following lists of data mining associations and data relationships that Pizza-House has uncovered.
Identify which data mining association correlates to each Pizza-House data relationship by pairing the appropriate letter and number (e.g. A1, B2, etc).
Data mining association Pizza-House data relationship
A Sequence 1 The number of pizzas sold by Pizza-House is rising by 3% each year and should continue to do so in the future
B Forecasting 2 68% of Pizza-House’s customers are under the age of 49
C Classification 3 Customers tend to visit Pizza-House on average, once every 4.5 weeks
D Association 4 95% of customer who buy pizza at Pizza-House also buy a soda style of drink
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Lecture 26 - Big Data
1. Consider the following two statements:
(i). Data warehousing is a term for a collection of data so large that it becomes difficult to store and process.
(ii). Data warehouses include a database, a data extraction tool and a decision support system.
Which of the above statements is / are correct? (Select ONE of the following).
A. BothB. (i) onlyC. (ii) onlyD. Neither
2. TRX Ltd recently started gathering extremely large volumes of information about its customers. The main concern is that customers’ details are changing rapidly and the company is uncertain how to prevent the data becoming out of date.
Which ONE aspect of the 3 V model is TRX having difficulty with?
A. Veracity (i.e. conformity to facts; accuracy)B. VelocityC. VolumeD. Variety
3. Which THREE of the following are typical problems that organisations may face when dealing with Big Data?
A. Inability to monitor information from social media sitesB. Legal and privacy issues if data is held about individualsC. The increasing use of electronic devices within society at largeD. Measurement of metrics that have no use to the organisationE. A lack of skills in the labour pool relating to the handling of Big Data
5. Big data is often unstructured. Is this statement true or false?
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6. Which of the following is NOT a way of analysing or using big data?
Select the correct answer from the choices below
A. Predictive analyticsB. Data warehousingC. Test analyticsD. Data mining
7. Which of the following is likely to benefit last from big data?
Select the correct answer from the choices below
A. Customer relationship marketingB. MarketingC. More accurate ordering of inventoryD. Financial accounting
8. Which of the following is unlikely to be a danger arising from big data technology?
Select the correct answer from the choices below
A. Disclosure of personal informationB. Computer virusesC. Decisions based on incorrect dataD. Regulatory costs
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Lecture 27 - Managing supply chain
1. The upstream part of the supply chain relates to the supply of goods and resources into the organisation. Is this statement true or false.
2. The push model of the supply chain is driven by demand and is essentially a just-in-time system. Is this statement true or false.
3. Which of the following are primary activities of Porter’s value chain?
Select one or more optionsA. OperationsB. ServiceC. Outbound logisticsD. Human resource managementE. Firm InfrastructureF. Technology DevelopmentG. ProcurementH. Marketing and salesI. Inbound logistics
4. ___________ recognise that few companies stand alone and that what is ultimately supplied to and paid for by customers depends on activities carried on by many suppliers, distributors and, indeed, logistical companies.
Complete the above statement.
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Lecture 28 - Managing customers
1. Which THREE of the following are included within Payne’s six market model?
A. Customer marketsB. Transaction marketsC. Internal marketsD. Public marketsE. Influence markets
2. UTV is a television broadcaster in country NI. Much of its revenue comes from advertising sponsors who will pay higher fees for their adverts if the number of people watching UTV’s television programmes rises.
UTV has recently been informed of a new mobile application that large numbers of people in country NI are using. Individuals download the application to their mobile phone and it gives them tailored suggestions as to the best programmes to watch on television each day.
According to Payne’s six market model, which ONE of UTV’s six markets would this new application be classified within?
A. CustomerB. InfluenceC. InternalD. Recruitment
3. Organise the following words to complete the statement below:
A. Information systemsB. Customer Relationship ManagementC. CustomersD. SharingE. RelationshipF. Organise
_____________ is a method used by the organisation to track and __________ its contracts with current and prospective__________.
It will involve building a strong __________ with customers as well as gathering, storing and __________ information, typically using _________
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4. _________ is an analysis of all the revenue streams and service costs associated with specific customers or customer groups.
__________ is the present value of future cash flows attributed to the customer relationship.
Complete the blanks above using either:
A - ’Customer account profitability (CAP)’ andB - ‘Customer lifetime value (CLV).
5. Which of the following are inputs to the customer lifetime value (CLV) calculation? Select all those that apply.
A. Retention costB. Market definitionC. Customer segmentD. Periodic revenueE. Discount rate
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Lecture 29 - Change
1. Which of the following are NOT elements of the cultural web?
Select one or more correct answers from the choices below.
A. Symbols and titlesB. StaffC. Structure of the organisationD. StrategyE. Skills
2. Match the items on the left with the items on the right relating to the scope of change and the nature of change.
Scope and nature
A Scope: transformation; nature: incremental 1 Adaption
B Scope: transformation; nature: big bang 2 Evolution
C Scope: realignment; nature: incremental 3 Reconstruction
D Scope: realignment; nature: big bang 4 Revolution
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Lecture 30 - Managing Change I
1. Which of the following is NOT one of the stages in Kurt Lewin’s famous three-stage prescriptive model of change?
A. Unfreezing current attitudesB. Moving to a new levelC. Melting resistanceD. Refreezing attitudes at the new level
2. Which of the following will not affect the choice of strategic change programme?
A. Government policyB. Nature of organisationC. CultureD. Leadership style
3. Which of the following are elements of Gemini’s 4R’s model that was developed toassist transformational change?
A. Re-structure, reform, renewB. Re-structure, revitalise, renewC. Revitalise, re-frame, revisitD. Re-frame, revisit, retain
4. Lewin’s force field analysis that is used to describe the forces that come into conflictover planned change incorporates which types of forces?
A. Valence and expectancyB. Co-ordinating and controllingC. Concern for people vs. concern for the taskD. Restraining and driving
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4 Leading involves:
A. controlling othersB. directing and influencing others towards the achievement of organisational
objectivesC. ensuring that activities conform to planned eventsD. setting timetables and work schedules
5 Which of the following does NOT describe leadership?
A. It is the art, skill or process of influencing people to work towards the achievement of group or larger organisational goals
B. It is a dynamic process in a group or team where one individual influences the others to contribute voluntarily to the achievement of group tasks in a given situation
C. It is the ordering and co-ordination of functions to achieve a given purposeD. It is the process of influencing others to work willingly towards goals, to the best
of their capabilities, perhaps in a manner different to that which they would otherwise have chosen
6. The force field theory of change management suggest that changes should be forced through. Is this statement true or false?
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Lecture 31 - Managing Change II
1. Change agents are key figures who support the change process and play a major role in dealing with resistance.
The change agent has several key advantages but how many from the list below are not an advantage.
A. Define the problem and its cause – identify restraining forces and help management understand the root causes
B. Diagnose solutions and select appropriate courses of action – help management select the most appropriate course of action
C. Implement change – take a lead in implementing change
D. Constantly remind staff of the problems arising as a result of the change
2. Kanter identified the skills that leaders must have if their organisations are to be adept at managing change. Name at least THREE of these skills.
