AICPA Strategic Management & Performance 2 — Questions and Answers
Question 1: A company uses a Balanced Scorecard. Which perspective focuses on employee training and organizational culture?
- Financial
- Customer
- Internal Business Process
- Learning and Growth (Correct answer)
Correct answer: Learning and Growth
The Learning and Growth perspective addresses human capital, information capital, and organizational capital needed to support strategy.
Question 2: In Porter's Five Forces model, which force is most directly affected when a company's switching costs are very low?
- Threat of new entrants
- Bargaining power of buyers (Correct answer)
- Threat of substitutes
- Rivalry among existing competitors
Correct answer: Bargaining power of buyers
Low switching costs increase buyer bargaining power because customers can easily move to competing products or suppliers.
Question 3: Which performance measurement concept involves comparing a company's processes and metrics to best practices in the industry?
- Gap analysis
- Benchmarking (Correct answer)
- SWOT analysis
- Variance analysis
Correct answer: Benchmarking
Benchmarking compares a company's performance metrics and practices against industry leaders or best-in-class competitors.
Question 4: A firm pursues a cost leadership strategy. Which activity is most critical to sustaining this strategy?
- Heavy investment in R&D for product differentiation
- Continuous process improvement to reduce unit costs (Correct answer)
- Premium pricing to maximize per-unit margin
- Targeting niche markets with unique needs
Correct answer: Continuous process improvement to reduce unit costs
Cost leadership requires ongoing efficiency improvements and process optimization to maintain the lowest-cost position in the industry.
Question 5: Under the Balanced Scorecard framework, a lag indicator in the financial perspective would most likely be:
- Employee satisfaction scores
- Number of new product launches
- Return on equity (Correct answer)
- Customer complaint resolution time
Correct answer: Return on equity
Return on equity is a financial outcome (lag indicator) that reflects past performance rather than predicting future results.
Question 6: Which strategic planning tool uses a 2x2 matrix to classify business units by market growth rate and relative market share?
- GE-McKinsey Matrix
- BCG Growth-Share Matrix (Correct answer)
- Ansoff Matrix
- PESTLE Analysis
Correct answer: BCG Growth-Share Matrix
The BCG (Boston Consulting Group) Growth-Share Matrix plots business units as Stars, Cash Cows, Question Marks, or Dogs based on growth and share.
Question 7: When a company identifies a core competency, which characteristic is NOT typically associated with it?
- Provides access to a wide variety of markets
- Difficult for competitors to imitate
- Easily outsourced to reduce costs (Correct answer)
- Makes a significant contribution to customer value
Correct answer: Easily outsourced to reduce costs
Core competencies are strategically important internal capabilities that should not be outsourced because doing so would erode competitive advantage.
AICPA Strategic Management & Performance 2
A company uses a Balanced Scorecard.
Which perspective focuses on employee training and organizational culture?