Question 1

According to Porter, there are three generic strategies through which an organisation can gain competitive advantage. What are the three generic strategies?

Options :

A : Cost leadership, Differentiation, Focus

B : Market Penetration, Diversification, Product Development

C : Internal development, Strategic alliances, Takeovers and mergers

D : Corporate, Business, Operational

Answer: A

Question 2

Which one of the following statements is true with respect to the role of the finance team in the strategic planning process?

Options :

A : The role of the finance team is exclusively focused on preparing the annual plan.

B : The finance team is responsible for the strategic plan.

C : The role of the finance team is varied and includes analyzing decisions, assuring cash availability in support of initiatives, and measuring performance.

D : The finance team evaluates the strategy but is not involved in strategic planning.

Answer: C

Question 3

The entry barriers are high and the threat of entry is low in each of the following instances except when

Options :

A : capital requirements are high.

B : companies have large cost advantages over potential entrants due to high economies of scale.

C : patents or other forms of intellectual properties are in place.

D : customers do not have strong brand preferences or loyalty.

Answer: D

Question 4

SAD is considering diversifying into an unrelated market. Which of the following reasons are likely reasons that SAD would adopt this strategy?

Options :

A : To reduce the overall risk of its organization and To enable growth if its current market is saturated

B : To enable growth if its current market is saturated

C : To free up management time within the organisation

D : To increase the number of synergies enjoyed by the organization

Answer: A

Question 5

UY is a manufacturer of motor vehicles. It has recently decided to start manufacturing motorbikes and scooters in an attempt to provide what UY’s Managing Director referred to as ‘a full range of transport solutions to our customers’.

Which ONE of the following types of diversification is UY undertaking?

Options :

A : Conglomerate

B : Forward vertical

C : Horizontal

D : Backwards vertical

Answer: C

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