Certified Management Accountant Strategic Management 2

Question 1

Which of the following best describes a 'blue ocean strategy'?

Accepted Answer

Creating uncontested market space by making competition irrelevant

Answer

Blue ocean strategy, developed by Kim and Mauborgne, involves creating new demand in uncontested market spaces rather than competing in existing 'red oceans.'

Question 2

In a BCG Growth-Share Matrix, a business unit with LOW market share in a HIGH growth market is classified as a:

Accepted Answer

Question Mark

Answer

Question Marks (also called Problem Children) have low market share in high-growth markets and require significant investment decisions.

Question 3

Which strategy involves a firm producing a wide range of products to reduce risk through diversification into related businesses?

Accepted Answer

Concentric diversification

Answer

Concentric diversification involves expanding into businesses related to the firm's core competencies or technology, sharing synergies across product lines.

Question 4

A company that acquires its supplier to control raw material costs is pursuing:

Accepted Answer

Backward vertical integration

Answer

Backward vertical integration occurs when a firm acquires or develops businesses that supply its inputs, moving upstream in the value chain.

Question 5

The concept of 'strategic fit' in corporate strategy refers to:

Accepted Answer

Aligning business unit strategies with corporate-level goals and synergies

Answer

Strategic fit describes how well a business unit's activities and resources align with and reinforce the parent company's overall strategy and other units.

Certified Management Accountant Practice Test

Certified Management Accountant Practice Test

Certified Management Accountant Strategic Management 2