BEC Strategic Planning and Risk Management 2

Question 1

A competitive advantage is considered 'sustainable' when it is:

Accepted Answer

Difficult for competitors to imitate, substitute, or replicate over time

Answer

A sustainable competitive advantage persists because it is rooted in capabilities or resources that are valuable, rare, costly to imitate, and not substitutable (the VRIN framework).

Question 2

Scenario planning in strategic management involves:

Accepted Answer

Developing multiple plausible future situations and strategies for each

Answer

Scenario planning creates several distinct but plausible future scenarios (e.g., optimistic, pessimistic, most likely) and develops strategic responses for each, improving organizational resilience.

Question 3

The COSO ERM framework identifies which of the following as a core component?

Accepted Answer

Risk appetite and strategy alignment

Answer

The COSO ERM framework centers on aligning risk appetite with strategy, ensuring that the level of risk an organization is willing to accept informs its strategic decisions.

Question 4

A company's mission statement typically describes:

Accepted Answer

The organization's fundamental purpose and reason for existence

Answer

A mission statement articulates an organization's core purpose — why it exists, what it does, and for whom — providing direction and a foundation for strategic planning.

Question 5

Benchmarking as a strategic tool involves:

Accepted Answer

Comparing performance metrics against best-in-class organizations to identify improvement opportunities

Answer

Benchmarking systematically compares an organization's processes and performance metrics to industry leaders or best practices to identify performance gaps and improvement opportunities.

BEC - Business Environment and Concepts Practice Test

BEC - Business Environment and Concepts Practice Test

BEC Strategic Planning and Risk Management 2