CS Strategic Planning & Development 2 — Questions and Answers
Question 1: A company conducts a PESTLE analysis before entering a new market. Which factor category addresses regulatory compliance and trade policies?
- Economic
- Social
- Political (Correct answer)
- Technological
Correct answer: Political
Political factors in PESTLE include government policies, trade regulations, and regulatory compliance requirements.
Question 2: During strategy formulation, a firm identifies a capability that is valuable, rare, inimitable, and organized. According to the VRIO framework, this capability provides:
- Temporary competitive advantage
- Sustained competitive advantage (Correct answer)
- Competitive parity
- Competitive disadvantage
Correct answer: Sustained competitive advantage
A resource meeting all four VRIO criteria—valuable, rare, inimitable, and organized—yields sustained competitive advantage.
Question 3: Which planning horizon is most commonly associated with operational plans in strategic management?
- 10+ years
- 3–5 years
- Less than 1 year (Correct answer)
- 1–3 years
Correct answer: Less than 1 year
Operational plans address day-to-day activities and typically cover a horizon of less than one year.
Question 4: A strategic planner uses the Ansoff Matrix to evaluate growth options. Selling existing products to new customer segments is best described as:
- Market penetration
- Product development
- Market development (Correct answer)
- Diversification
Correct answer: Market development
Market development involves taking existing products into new markets or customer segments.
Question 5: In the context of strategic planning, a 'stretch goal' is best defined as:
- A goal that is easily achievable within current resources
- An aspirational target that requires significant capability building (Correct answer)
- A minimum performance threshold set by regulators
- A short-term tactical objective
Correct answer: An aspirational target that requires significant capability building
Stretch goals are ambitious targets that push an organization beyond its current capabilities to drive innovation and growth.
Question 6: Which element of a well-constructed strategic plan defines the enduring purpose and reason for the organization's existence?
- Vision statement
- Mission statement (Correct answer)
- Strategic objective
- Core competency
Correct answer: Mission statement
The mission statement articulates the organization's fundamental purpose and the value it delivers to stakeholders.
Question 7: A firm using scenario planning develops multiple plausible futures to stress-test its strategy. The primary benefit of this technique is:
- Predicting the single most likely future with precision
- Reducing planning cycle time significantly
- Building strategic flexibility to respond to uncertainty (Correct answer)
- Eliminating the need for competitive analysis
Correct answer: Building strategic flexibility to respond to uncertainty
Scenario planning helps organizations develop adaptable strategies that can perform across a range of potential futures.
CS Strategic Planning & Development 2
A company conducts a PESTLE analysis before entering a new market.
Which factor category addresses regulatory compliance and trade policies?