BMO Strategic Planning 3 — Questions and Answers
Question 1: Which stage of the strategic management process involves comparing actual organizational performance against established goals?
- Strategy formulation
- Environmental scanning
- Strategy evaluation and control (Correct answer)
- Strategy implementation
Correct answer: Strategy evaluation and control
Strategy evaluation and control is the phase where performance is measured against benchmarks and corrective actions are initiated when deviations occur.
Question 2: The Ansoff Matrix quadrant that carries the HIGHEST risk for an organization is:
- Market penetration
- Market development
- Product development
- Diversification (Correct answer)
Correct answer: Diversification
Diversification is the riskiest quadrant in the Ansoff Matrix because the organization is simultaneously entering a new market with a new product.
Question 3: A 'PESTEL' analysis is used in strategic planning primarily to:
- Evaluate a company's financial ratios against competitors
- Identify macro-environmental factors that may impact the organization (Correct answer)
- Map internal process inefficiencies across departments
- Determine the optimal pricing strategy for new products
Correct answer: Identify macro-environmental factors that may impact the organization
PESTEL analyzes Political, Economic, Social, Technological, Environmental, and Legal factors in the macro-environment to inform strategic decisions.
Question 4: In the Balanced Scorecard framework, the 'Learning and Growth' perspective primarily measures:
- Customer retention and satisfaction rates
- Employee skills, culture, and organizational capacity for innovation (Correct answer)
- Financial return on investment and profitability
- Internal process cycle times and quality metrics
Correct answer: Employee skills, culture, and organizational capacity for innovation
The Learning and Growth perspective focuses on the intangible assets—human capital, information capital, and organizational capital—that enable the other three scorecard perspectives.
Question 5: A company decides to license its brand to a foreign manufacturer instead of establishing its own foreign subsidiary. This market entry strategy is classified as:
- Greenfield investment
- Joint venture
- Licensing (Correct answer)
- Acquisition
Correct answer: Licensing
Licensing grants a foreign entity the right to use the company's intellectual property in exchange for royalties, requiring minimal capital investment and risk.
Question 6: The difference between a 'strategic goal' and a 'strategic objective' is best described as:
- Goals are short-term; objectives are long-term
- Goals are broad desired outcomes; objectives are specific, measurable milestones toward those goals (Correct answer)
- Goals are set by frontline managers; objectives by executives
- Goals are financial; objectives are operational
Correct answer: Goals are broad desired outcomes; objectives are specific, measurable milestones toward those goals
Strategic goals define the general direction and desired end state, while objectives are the specific, time-bound, and measurable steps used to achieve those goals.
Question 7: Which term describes the gap between an organization's current strategic position and its desired future position?
- Strategic drift
- Strategic gap (Correct answer)
- Competitive disadvantage
- Resource misalignment
Correct answer: Strategic gap
A strategic gap represents the difference between where the organization is today and where it wants to be, driving the need for strategic action.
BMO Strategic Planning 3
Which stage of the strategic management process involves comparing actual organizational performance against established goals?