CIMA Business Strategy and Competitive Environment 2 — Questions and Answers
Question 1: Which growth strategy involves an organization acquiring or merging with a competitor at the same stage of the supply chain?
- Vertical integration
- Horizontal integration (Correct answer)
- Conglomerate diversification
- Market penetration
Correct answer: Horizontal integration
Horizontal integration involves acquiring or merging with a competitor at the same supply chain stage to gain market share or reduce competition.
Question 2: Porter's Value Chain divides organizational activities into primary and support activities. Which of the following is a PRIMARY activity?
- Human resource management
- Technology development
- Inbound logistics (Correct answer)
- Procurement
Correct answer: Inbound logistics
Inbound logistics is a primary activity in Porter's Value Chain, directly involved in creating and delivering a product or service.
Question 3: What is the Boston Consulting Group (BCG) Matrix primarily used for?
- Analyzing a company's competitive position in its industry
- Managing a portfolio of business units based on market growth and relative market share (Correct answer)
- Evaluating employee performance and development
- Planning capital expenditure for new projects
Correct answer: Managing a portfolio of business units based on market growth and relative market share
The BCG Matrix helps organizations manage their portfolio of business units by categorizing them based on market growth rate and relative market share.
Question 4: In the context of strategic alliances, a 'joint venture' involves which of the following?
- Two companies sharing marketing resources only
- Two or more companies creating a new, separate legal entity together (Correct answer)
- One company acquiring a minority stake in another
- Companies agreeing informally to cooperate on a project
Correct answer: Two or more companies creating a new, separate legal entity together
A joint venture involves two or more companies creating a new, separate legal entity in which they share ownership, control, and profits.
Question 5: Which concept describes the competitive advantage gained when a company enters a new market before its rivals?
- Late mover advantage
- First mover advantage (Correct answer)
- Cost advantage
- Differentiation advantage
Correct answer: First mover advantage
First mover advantage refers to the competitive benefits gained by being the first company to enter a new market or adopt a new technology.
Question 6: According to the McKinsey 7S Framework, which of the following is classified as a 'hard' element?
- Shared values
- Style
- Skills
- Strategy (Correct answer)
Correct answer: Strategy
Strategy is one of the three 'hard' elements in the McKinsey 7S Framework (along with Structure and Systems), which are easier to define and measure.
CIMA Business Strategy and Competitive Environment 2
Which growth strategy involves an organization acquiring or merging with a competitor at the same stage of the supply chain?