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CIMA E3 - Strategic Management Question Tutorial Sample Questions:

1. 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.)

A) It is essential given the strategic threats to YZ.
B) YZ will gain a first mover advantage.
C) There is stakeholder approval for the investment.
D) There are sufficient investment funds available
E) It provides a market development opportunity for YZ.

2. JJJ is a publically quoted advertising agency. JJJ's competitive advantage is based on the expertise of its staff and its reputation in digital media advertising. JJJ has robust systems to protect its intellectual property. These include patents and copyrights. JJJ has also restricted access for most of its staff to its most sensitive data, such as studies of its customers' profitability.
JJJ's new Managing Director, Z, is concerned that when staff leave JJJ, the company loses whatever tacit knowledge they possess. These losses also impact on JJJ's reported profits. In order to remedy the losses of knowledge and the reduced profits Z wants to introduce a knowledge management strategy.
Which of the following steps support the introduction of a knowledge management strategy? (Choose all that apply.)

A) Z should gain the support of the Board of Directors.
B) JJJ should unfreeze current habits and standard operating procedures.
C) JJJ should convince staff of the benefits of sharing their tacit knowledge.
D) JJJ should integrate knowledge management and management accounting.
E) JJJ needs to acquire and install appropriate hardware and software.
F) Z should set a target for reported profit.

3. An organization must acquire suitable hardware and software in order to implement a knowledge management strategy so that knowledge can be stored and communicated.
Which of the following would be appropriate systems to use in a knowledge management strategy? (Choose all that apply.)

A) Social media
B) Internet
C) Ledgers and journals
D) Intranet
E) Groupware
F) Local area network

4. Country W hosts a large music competition every 5 years, which is attended by many international musicians.
The success of the competition is dependent upon effective Customer Relationship Marketing being established with many different market groups around the world. These include music colleges who send their students, broadcasting companies who broadcast the event on radio and television, audience members, online ticket sellers and music journalists who write about the competition in specialist journals.
Using Payne's 'Six Markets Model', which of the following is the correct classification for the music journalists writing about the competition?

A) Referral market
B) Customer market
C) Influence market
D) Supplier market

5. 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 1 is likely to be at the mature stage of its life cycle, operating in a contracting market and is fairly cash neutral.
B) Product 1 is likely to be at the mature stage of its life cycle, have strong profitability and further investment should be considered.
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 2 is likely to be at the growth stage of its life cycle, have weak profitability, poor cash generation and high capital requirements.
E) Product 2 is likely to be at the mature stage of its life cycle, is likely to benefit from significant economies of scale.

Solutions: