CIMA CIMAPRO15-E03-X1-ENG

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CIMA E3 - Strategic Management Question Tutorial Sample Questions:

1. RST is a company specializing in the production of wood-based products. RST has decided to introduce a fully integrated Information System across all divisions in order to improve knowledge sharing throughout the business and enhance customer relationship management.
RST is expecting resistance to the integrated Information System from it's staff who are key to the business and would be difficult to replace. Staff have a good understanding of why the new system and knowledge sharing is needed and how the system will work but many staff are not happy about the potential changes to their working conditions.
Which of the following change leadership styles, as outlined by Kotter and Schlesinger, would be most appropriate for RST to adopt?

A) Education
B) Negotiation
C) Coercion
D) Manipulation

2. LLL is an international oil and gas exploration company. It is considering investing S300 million in developing new oil fields in Country D.
For this it will need to obtain a license from the government of Country D.
These new oil fields will bring much wealth to Country D because a large proportion of the revenue from the production of oil will be paid to the government as part of the licensing agreement.
However, oil production in Country D will have some undesirable social effects, such as the threat of pollution, congestion to the roads and pressure on local amenities such as housing, electricity and clean water.
Which of the following approaches to stakeholder management should LLL NOT undertake in order to enter Country D?

A) Develop and circulate a promotional video showing the benefits enjoyed by other countries in which LLL operates.
B) Undertake stakeholder mapping to identify the interests of the most powerful players in the decision to grant a license to LLL.
C) Issue free shares in a Joint Venture to develop oil fields to government ministers from Country D.
D) Commit to improving the local amenities and roads as a part of the application for a license in Country D.

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

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

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

5. Company TTT produces a range of products, including products T1 and T5.
Product T1: Profitability has declined in recent years, although small profits continue to be made as the market contracts due to changing customer preferences. Overall market share is low and continues to reduce.
However, in addition to external sales T1 is also used as a component of product T5.
Product T5: A market leader within a low growth market, sources components both externally and from TTT's other subsidiaries. T5 benefits from significant economies of scale and TTT has recently considered modernizing its T5 production line but following a cost benefit analysis, decided not to proceed.
Which of the following is an appropriate strategy for TTT to adopt?

A) Divest product T1 and Harvest product T5.
B) Harvest both product T1 and product T5.
C) Divest both product T1 and product T5.
D) Harvest product T1 and Divest product T5.

Solutions: