Sample Paper CA Inter – Paper 7B : Strategic Management (Old Course)

Sample Paper CA Inter – Paper 7B : Strategic Management (Old Course) May 2019 Examination provided by ICAI. The pattern of CA Inter question paper would be 30% objective and 70% descriptive under the Old and New Schemes.

1. Which of these basic questions should a vision statement answer?

(a) What is our business?
(b) Who are our competitors?
(c) Where we are to go?
(d) Why do we exist?

2. According to Porter, what is usually the most powerful of the five competitive forces?

(a) Rivalry among existing firms
(b) Potential development of substitute products
(c) Bargaining power of buyers and suppliers
(d) Potential entry of new competitors

3. An organization that has a low relative market share position and competes in a slow- growth industry is referred to as a _____.

(a) Dog
(b) Question Mark
(c) Star
(d) Cash Cows

4. What type of organizational structure do most small businesses follow?

(a) Divisional structure
(b) Functional structure
(c) Hour Glass structure
(d) Matrix structure

5. Which section of the SWOT Matrix involves matching internal strengths with external opportunities?

(a) The WT cell
(b) The SW cell
(c) The SO cell
(d) The ST cell

6. What can be defined as the art and science of formulating, implementing and evaluating cross-functional decisions that enable an organization to achieve its objectives?

(a) Strategy formulation
(b) Strategy evaluation
(c) Strategy implementation
(d) Strategic management

7. An important activity in __________ is taking corrective action.

(a) Strategy evaluation
(b) Strategy implementation
(c) Strategy formulation
(d) Strategy leadership

8. Which of the following is not a limitation of SWOT (Strengths, Weaknesses, Opportunity, Threats) analysis?

(a) Organizational strengths may not lead to competitive advantage
(b) SWOT gives a one-shot view of a moving target
(c) SWOT’s focus on the external environment is too broad and integrative
(d) SWOT overemphasizes a single dimension of strategy

9. The emphasis on product design is very high, the intensity of competition is low, and the market growth rate is low in the ______ stage of the industry life cycle.

(a) Maturity
(b) Introduction
(c) Growth
(d) Decline

10. A narrow market focus is to a differentiation-based strategy as a

(a) Broadly-defined target market is to a cost leadership strategy
(b) Growth market is to a cost-based strategy
(c) Technological innovation is to a cost-based strategy
(d) Growth market is to a differentiation-based strategy

11. The most probable time to pursue a harvest strategy is in a situation of

(a) High growth
(b) Decline in the market life cycle
(c) Strong competitive advantage
(d) Mergers and acquisitions

12. Vertical integration may be beneficial when

(a) Lower transaction costs and improved coordination are vital and achievable through vertical integration.
(b) Flexibility is reduced, providing a more stationary position in the competitive environment.
(c) Various segregated specializations will be combined.
(d) The minimum efficient scales of two corporations are different.

13. One of the primary advantages of diversification is sharing core competencies. In order for diversification to be most successful, it is important that

(a) The target market is the same, even if the products are very different.
(b) The products use similar distribution channels.
(c) The methods of production are the same.
(d) The similarity required for sharing core competencies must be in the value chain, not in the product.

14. Individual investors are reliant on upon the organisation’s managers to

(a) Maximize short-term returns in the form of dividends.
(b) Add value to their investments in a way that the stockholders could not accomplish on their own.
(c) Achieve risk reduction at a lower cost than stockholders could obtain on their own.
(d) Diversify the stockholder’s investments in order to reduce risk.

15. Horizontal integration is concerned with

(a) Production
(b) Quality
(c) Product planning
(d) All of the above

16. Change in company’s —————– gives rise to problems necessitating a new —————- to be made.

(a) Structure, Strategy
(b) Strategy, Structure
(c) Structure, Structure
(d) Strategy, Strategy

17. The reasons for acquisition are

(a) Increased market power
(b) Increased diversification
(c) Increased speed to market
(d) All of the these

18. Competitive rivalry has the most effect on the firm’s ____ strategies than the firm’s other strategies.

(a) Business level
(b) Corporate level
(c) Functional level
(d) All of these

19. A firm successfully implementing a differentiation strategy would expect:

(a) Customers to be sensitive to price increases.
(b) To charge premium prices.
(c) Customers to perceive the product as standard.
(d) To automatically have high levels of power over suppliers.

20. Conglomerate diversification is another name for which of the following?

(a) Related diversification
(b) Unrelated diversification
(c) Portfolio diversification
(d) Acquisition diversification

21. When to organisations combine to increase their strength and financial gains along with breaking the trade barriers is called———–

(a) Hostile takeover
(b) Liquidation
(c) Merger
(d) Acquisition

22. Internal __________ are activities in an organization that are performed especially well.

(a) Opportunities
(b) Competencies
(c) Strengths
(d) Management

23. Financial objectives involve all of the following except:

(a) Growth in revenues
(b) Larger market share
(c) Higher dividends
(d) Greater return on investment

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