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CIMA Strategic level E3 Exam Questions and Answers PDF

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Total 280 questions

Strategic Management Questions and Answers

Question 29

YZ operates a national mobile phone (cell phone) network in one country. It is considering upgrading its network to 4th Generation (4G) by providing an improved bandwidth that will enable its customers faster access to the Internet.

This investment will cost S29 million which YZ's institutional investors have agreed to provide by subscribing to a rights issue. This is due to management having informed institutional investors that a rival is already offering 4G and that this is taking customers away from YZ because its network is now regarded as too slow. YZ's remaining customers have shown a willingness to pay extra for 4G and overall the investment will have a positive net present value.

Which of the following statements are correct? (Choose all that apply.)

Options:

A.

It provides a market development opportunity for YZ.

B.

YZ will gain a first mover advantage.

C.

There is stakeholder approval for the investment.

D.

It is essential given the strategic threats to YZ.

E.

There are sufficient investment funds available

Question 30

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

Options:

A.

The organization often experiences 'group-think', leading to a narrow view of the future.

B.

Competitor's are increasingly using Scenario Planning as part of their strategy formulation process.

C.

The organization has achieved all of its objectives and operates within a stable external environment.

D.

The organization has not previously experienced any major surprises or expensive strategic mistakes.

E.

Uncertainty in the industry is high, relative to management's ability to predict or adjust to change.

Question 31

GQF is an exclusive fashion retailer. GQF has built its strong name and reputation upon its high price and exclusive image. It has recently attempted to increase sales by expanding into lower-pnced clothing sales in department stores. It has also allowed its name to appear on a number of licensed products such as perfume and watches. Many customers who would not normally purchase GQF products have shown a high level of interest in these lower-priced products and in the last twelve months, sales have increased dramatically GQF's shareholders have expressed their satisfaction with the results.

However, over the same period, sales of its high priced, exclusive branded goods have fallen as some of its traditional, loyal customers have become disillusioned by the lack of exclusivity of the GQF brand.

Which of the following criteria have been achieved by the strategy adopted by GQF?

Options:

A.

Suitable, Acceptable and Feasible

B.

Acceptable and Feasible

C.

Suitable and Acceptable

D.

Feasible and Suitable

Question 32

TTT, a manufacturer of computer monitors, is conducting a strategic analysis.  Which THREE of the following should be classified as Threats?

Options:

A.

An increase in the rate of inflation

B.

A serious fire in its main factory

C.

Its main competitor going out of business

D.

Consumers' increased preference for tablet computers

E.

A 20% increase in corporate taxation

F.

A design fault means TTT must compensate customers

Page: 8 / 11
Total 280 questions