CMC Business Strategy Development 2 ā Questions and Answers
Question 1: Which strategic framework uses four quadrantsāStars, Cash Cows, Question Marks, and Dogsāto allocate resources across business units?
- GE-McKinsey Matrix
- BCG Growth-Share Matrix (Correct answer)
- Ansoff Matrix
- Porter's Value Chain
Correct answer: BCG Growth-Share Matrix
The BCG Growth-Share Matrix classifies business units by market growth rate and relative market share into these four categories.
Question 2: A company pursuing a 'focus differentiation' strategy is targeting:
- The broadest possible customer segment with unique products
- A narrow market segment with highly tailored, premium offerings (Correct answer)
- Cost leadership within a niche market
- Multiple segments simultaneously to maximize revenue
Correct answer: A narrow market segment with highly tailored, premium offerings
Focus differentiation combines a narrow target market with product or service uniqueness to serve that segment exclusively.
Question 3: In scenario planning, what is the primary purpose of identifying 'driving forces'?
- To determine competitor weaknesses
- To understand key uncertainties that will shape future environments (Correct answer)
- To set short-term performance targets
- To allocate capital expenditures
Correct answer: To understand key uncertainties that will shape future environments
Driving forces are macro-level trends and uncertainties whose outcomes will most significantly influence which future scenarios materialize.
Question 4: A firm has high operational efficiency but struggles to differentiate its products. According to the strategy clock, it is most likely positioned as:
- Hybrid
- Low price/low value (Correct answer)
- Broad differentiation
- Focused differentiation
Correct answer: Low price/low value
The 'low price/low value' segment on Bowman's Strategy Clock represents firms offering reduced benefits at lower prices with minimal differentiation.
Question 5: Which analytical tool helps strategists assess the degree of rivalry, threat of entry, supplier power, buyer power, and substitutes in an industry?
- PESTLE Analysis
- Value Chain Analysis
- Porter's Five Forces (Correct answer)
- Balanced Scorecard
Correct answer: Porter's Five Forces
Porter's Five Forces framework analyzes the five competitive forces that determine industry attractiveness and long-run profitability.
Question 6: When a company uses a 'blue ocean strategy,' it is primarily seeking to:
- Outcompete rivals through lower pricing
- Create uncontested market space by making competition irrelevant (Correct answer)
- Acquire competitors to gain market share
- Defend existing market position aggressively
Correct answer: Create uncontested market space by making competition irrelevant
Blue ocean strategy, developed by Kim and Mauborgne, focuses on value innovation to create new demand rather than competing in existing markets.
Question 7: The 'strategic fit' concept in business strategy refers to:
- Matching employee skills to job requirements
- Alignment between a firm's strategy, resources, and external environment (Correct answer)
- The financial performance of strategic investments
- Compatibility between merging companies' cultures
Correct answer: Alignment between a firm's strategy, resources, and external environment
Strategic fit describes the degree to which a firm's internal capabilities and resources align with external opportunities and market demands.
CMC Business Strategy Development 2
Which strategic framework uses four quadrantsāStars, Cash Cows, Question Marks, and Dogsāto allocate resources across business units?