MGT603 SOLVED QUIZS

136. Identify a reason due to which market segmentation is considered to be an important variable in strategy implementation.

► All company strategies require increased sales through new markets and

products

► It allows a firm to operate with limited resources

► Market segmentation decisions directly affect marketing mix variables

► All of the given options

REF: First, strategies such as market development, product development, market

penetration, and diversification require increased sales through new markets

and products.

Market segmentation allows a firm to operate with limited resources because

mass production, mass distribution, and mass advertising are not required.

Finally, market segmentation decisions directly affect marketing mix

variables: product, place, promotion, and price

137. All of the following are key financial rations EXCEPT:

► Market share

► Production quality

► Earnings per share

► Return on equity

Ref: Some key financial ratios: Return on investment, Return on equity, Profit

margin, Market share, Debt to equity, Earnings per share, Sales growth, and

Asset growth.

FINALTERM EXAMINATION

Spring 2010 (PAPER 4)

MGT603- Strategic Management (Session - 3)

138. Concentric Diversification involves heading towards which of the

following?

► Adding new, but related, products or services

► Adding new, unrelated products or services

► Regrouping through cost and asset reduction

► Adding unrelated products or services for new customers

139. Which of the following is often considered the first step in strategic

planning?

► Devising a mission statement

► Developing a vision statement

► Setting annual objectives

► Formulating set of strategies

140. Which of the following can be considered as a factor of internal strengths

and weaknesses of an organization?

► Technological changes

► Production/operations

► Demographics

► Competitive trends

141. Long-term objectives includes all of the following EXCEPT:

► Measurable

► Reasonable

► Varying

► Consistent

Ref: The Nature of Long-Term Objectives

Objectives should be quantitative, measurable, realistic, understandable,

challenging, hierarchical, obtainable, and congruent among organizational

units..(Page No.09)

142. All of the following statements are true about a firm’s mission statement

EXCEPT:

► A mission statement directly contributes positively to financial performance

► A mission statement does not directly contribute positively to financial

performance

► A mission statement should not provide useful criteria for selecting among

alternative strategies

► Primary reason to develop a mission statement is not to attract the customers

143. According to ‘Peter Drucker’, what is the prime task of strategic

management?

► To develop the vision of the business

► Effectively evaluate the strategies

► To think through the overall mission of a business

► Develop alternative set of strategies

144. “A complex set of basic underlying assumptions and deeply held beliefs

shared by all members of the group and drive in important ways the behavior

of individuals in the organizational context” is known as:

► Internal audit

► Organizational culture

► Internal assessment

► Organizational strategy

145. Which of these is the allocation and reallocation of capital and resources

to projects, products, assets and divisions of an organization

► Investment decision

► Financing decisions

► Restructuring decisions

► Strategic decision

Ref: The investment decision, also called capital budgeting, is the allocation and

reallocation of capital and resources to projects, products, assets, and divisions of

an organization. (Page No.64)

146. Amir, a sole proprietor, uses the information system to ask the question;

“What if the prices will decrease by 16% in the next year?” Which of the

following functions the information system is performing for Amir?

► Functional support role

► Decisional support role

► Managerial support role

► Analytical supporting role

Ref: The business decision-making support function goes one step further. It

becomes an integral part -- even a vital part -- of decision -making. It allows users

to ask very powerful "What if…?" questions: What if we increase the price by

5%? What if we increase price by 10%?(Page No.73)

147. Which of the following is sometimes referred as “the mystery approach to

decision making, when subordinates are left to figure out what is happening and

why”?

► Managing by hope

► Managing by extrapolation

► Managing by crisis

► Managing by subjectives

Ref: Managing by Subjective—built on the idea that there is no general plan for

which way to go and what to do; just do the best you can to accomplish what

you think should be done. In short, "Do your own thing, the best way you know

how" (sometimes referred to as the mystery approach to decision making because

subordinates are left to figure out what is happening and why).(Page no.79)

148. The purpose of an external audit is to prepare a list of which of the

following?

► Opportunities and weaknesses

► Threats and strengths

► Opportunities and threats

► Strengths and weaknesses

149. Defensive strategies include all of the following EXCEPT:

► Retrenchment

► Acquisition

► Divestiture

► Liquidation

150. Smoothies Tire & Rubber Co. is selling its North American tire business

to Avinza International, is an example of which type of strategy?

► Related diversification

► Retrenchment

► Divestiture

► Liquidation

Ref: Selling a division or part of an organization is called divestiture. Divestiture

often is used to raise capital for further strategic acquisitions or investments.

Divestiture can be part of an overall retrenchment strategy to rid an organization

of businesses that are unprofitable, that require too much capital, or that do not

fit well with the firm's other activities.