11. “Ghulam Nabi, a farmer sells his crops at the local market rather than to a
distribution center”. This action of Ghulam Nabi comes under which of the
following?
► Backward integration
► Product development
► Forward integration
► Horizontal integration
12. Where usage rate of present customers of the company can be increased
significantly and the current markets are not saturated, which strategy would
be effective for the company to follow?
► Market Penetration p; 89
► Product Development
► Market Development
► Retrenchment
13. Product development involves going in the direction of which one of the
following?
► Present products to present markets
► Present products to new markets
► New products to present markets
► New products to new markets
New products to present markets: product development
Present products and new markets: market development
New products and new markets: diversification
Current products and current market: market penetration
14
? . All of the following would be considered an Opportunity to a business
EXCEPT which one of the following
► Removal of international trade barriers
► Emergence of unfulfilled customer need
► Emergence of substitute products
► loosening of regulations
15. A & Ammar is the sole manufacturer of leather goods in Pakistan
year, government has lowered tax rates for this industry. There is a possibility
that new companies will enter the market to avail this opportunity. Lowering
the tax rates will present which of the following to A & Ammar?
► Strength
► Weakness
► Opportunity
► Threat
16. Which of the following are the two internal dimensions represented on the
axes of the SPACE Matrix?
► Environmental stability and industry strength
► Industry strength and competitive advantage
► Competitive advantage and financial strength p; 100
► Financial strength and environmental stability
17. ABC Corporation can have competitive advantage over its competitor by
taking all of the following actions EXCEPT:
► By increasing product quality
► By having debt to equity ratio=1
► By altering product life cycle
► By increasing customer base
18. All of the following are the limitations of BCG Matrix EXCEPT:
► It is one-dimensional to view every business as a star, cash cow, dog or
question mark
► BCG can not be developed if a firm has at least less than three years data
► The businesses that fall in the centre of BCG matrix can not be classified
► Other variables such as size of market and competitive advantages are not
considered
Ref: Limitations
1. Viewing every business as a star, cash cow, dog, or question mark is overly
simplistic.
2. Many businesses fall right in the middle of the BCG matrix and thus are not
easily classified.
3. The BCG matrix does not reflect whether or not various divisions or their
industries are growing over time.
4. Other variables besides relative market share position and industry growth
rate in sales are important in making strategic decisions about various divisions.
19. According to the Grand Strategy Matrix, which strategy is recommended
for a firm with rapid market growth and a strong competitive position?
► Market penetration p; 107
► Conglomerate diversification
► Joint venture
► Retrenchment
20. “The business has a strong competitive position but is in a slow-growth
industry. Further, the business typically has high cash flow levels and limited
internal growth needs.” The statement refers which of the following?
► The firm falling in Quadrant I of Grand Strategy Matrix
► The firm falling in Quadrant II of Grand Strategy Matrix
► The firm falling in Quadrant III of Grand Strategy Matrix
► The firm falling in Quadrant IV of Grand Strategy Matrix p; 108
21. Which of the following is a Functional level objective?
► Achieving return on investment of at least 15%
► Aiming to achieve a market share of 10% p; 113
► Attaining operating profit of over Rs.10 million
► Increase earnings per share by at least 10% every
22. Which one of the followings is NOT a major factor that commonly forbids
effective resource allocation?
► Organizational politics
► Vague strategy targets
► Long run financial criteria p; 116
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