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CIMA E3 - Strategic Management Question Tutorial Sample Questions:

1. According to Porter's Five Forces model, which of the following would be evidence of high buyer power?

A) There is a low probability of backward integration.
B) There is a concentration of buyers.
C) Buyers are fragmented and act independently of each other.
D) Products are not standardized and buyers cannot easily switch to another product.

2. A is a private healthcare organization aiming to provide affordable and accessible high quality patient services.
A is introducing Big Data, which has not yet been adopted by the competition. A's database will store a huge amount of information about its patients. Clear access to wide sources of accurate information will enable patients to make more informed choices. Patients will be able to compare not only the prices of drugs, treatments and physicians but also their relative effectiveness.
Which of the following concerns should A have about its use of Big Data?

A) Variety of information
B) Lack of competitive advantage
C) Privacy issues
D) Veracity of information

3. A leading retail chain is undertaking environmental scanning as it is concerned that it is becoming uncompetitive and profits have started to fall. The Board of Directors is concerned that it will need to have a viable strategy to present to its shareholders at the next annual general meeting, in order to prevent shareholders' protests.
The company has been reluctant in the past to offer an Internet shopping service. It now believes, however, that by offering this service and introducing customer relationship marketing (CRM), this will produce a strategy that will help it to improve its competitiveness.
Which of the following statements apply to CRM? (Choose all that apply.)

A) The CRM process needs to include increasing the range of products that will be offered to customers.
B) In mature markets, existing customers provide the most likely source of future earnings.
C) CRM is about marketing to customers to obtain their loyalty, so customer research is not needed.
D) The company must be prepared to take customers' needs into account and be able to meet these needs.
E) CRM utilizes marketing resources to retain, rather than simply attract new customers.

4. 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 2 is likely to be at the growth stage of its life cycle, have weak profitability, poor cash generation and high capital requirements.
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 1 is likely to be at the mature stage of its life cycle, operating in a contracting market and is fairly cash neutral.
E) Product 1 is likely to be at the mature stage of its life cycle, have strong profitability and further investment should be considered.

5. Ansoff has provided a product/market growth matrix which denotes possible strategic directions that an organization can follow.
Which of the following statements correctly describe the strategic options generated by the matrix? (Choose all that apply.)

A) Market development using existing products in new markets.
B) Product development using new products in new markets.
C) Market penetration using new products within existing markets.
D) Market penetration using existing products within existing markets.
E) Market penetration using existing products in new markets.
F) Diversification using new products in new markets.

Solutions: