CSM Strategic Planning & Implementation 3 — Questions and Answers
Question 1: Which of Porter's generic strategies involves targeting a narrow market segment with either low cost or differentiation?
- Cost Leadership
- Differentiation
- Focus (Correct answer)
- Blue Ocean
Correct answer: Focus
Porter's Focus strategy concentrates on a specific market niche, applying either cost or differentiation advantages within that segment.
Question 2: A company conducts a PESTEL analysis primarily to:
- Assess internal operational efficiency
- Identify macro-environmental factors affecting strategy (Correct answer)
- Rank competitors by market share
- Define target customer personas
Correct answer: Identify macro-environmental factors affecting strategy
PESTEL examines Political, Economic, Social, Technological, Environmental, and Legal factors in the external macro-environment.
Question 3: In the context of strategic management, 'core competencies' are best defined as:
- The basic skills required for all employees in the organization
- Unique capabilities that provide sustainable competitive advantage and are hard to replicate (Correct answer)
- Financial strengths that give a company a cost advantage
- The primary products or services offered by the company
Correct answer: Unique capabilities that provide sustainable competitive advantage and are hard to replicate
Core competencies, as defined by Prahalad and Hamel, are deeply embedded capabilities that differentiate a firm and are difficult for competitors to imitate.
Question 4: Which tool plots business units on axes of market growth rate and relative market share to guide portfolio strategy?
- McKinsey 7-S Framework
- BCG Growth-Share Matrix (Correct answer)
- Ansoff Matrix
- Value Chain Analysis
Correct answer: BCG Growth-Share Matrix
The BCG matrix categorizes business units as Stars, Cash Cows, Question Marks, or Dogs to inform resource allocation decisions.
Question 5: When implementing strategy, 'cascading goals' means:
- Reducing goals progressively as they move down the hierarchy
- Breaking high-level strategic objectives into aligned goals at every organizational level (Correct answer)
- Prioritizing goals based on their financial impact
- Transferring strategy ownership from executives to middle managers
Correct answer: Breaking high-level strategic objectives into aligned goals at every organizational level
Cascading ensures that enterprise-level strategy is translated into department and individual goals, creating alignment throughout the organization.
Question 6: A firm pursues a 'market development' strategy according to the Ansoff Matrix when it:
- Launches new products in existing markets
- Sells existing products in new markets (Correct answer)
- Develops new products for new markets
- Deepens penetration in existing markets with existing products
Correct answer: Sells existing products in new markets
Market development involves taking current products or services into new geographic regions, customer segments, or distribution channels.
Question 7: Which of the following is a key reason strategies fail during implementation?
- Strategies are too innovative and disruptive
- Lack of clear communication, accountability, and resource commitment (Correct answer)
- Too much employee involvement in the planning phase
- Strategies are too aligned with the organization's mission
Correct answer: Lack of clear communication, accountability, and resource commitment
Research consistently shows that poor communication, unclear ownership, and insufficient resources are the primary reasons well-formulated strategies fail in execution.
CSM Strategic Planning & Implementation 3
Which of Porter's generic strategies involves targeting a narrow market segment with either low cost or differentiation?