Strategic Planning & Business Model Assessment Flashcards
6 cards from real CTA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Strategic Planning & Business Model Assessment flashcards as text
A 'customer profitability analysis' during a turnaround typically reveals:
Answer: That a minority of customers often generate a disproportionate share of profit while others destroy value
Pareto analysis of customer profitability often shows that 20% of customers generate 80% or more of profit, allowing the company to rationalize its customer base and redirect resources.
When a turnaround professional recommends 'rightsizing' a business, they mean:
Answer: Aligning the cost structure with a realistic sustainable revenue level, typically lower than peak operations
Rightsizing adjusts the organization's cost structure to be viable at a lower but sustainable revenue level, recognizing that returning to peak revenues may not be achievable.
Which strategic option is most appropriate when a distressed company has a strong brand but obsolete production infrastructure?
Answer: License the brand to manufacturers and outsource production to eliminate capital-intensive infrastructure costs
Licensing the brand allows the company to monetize its intangible value without the capital cost of manufacturing, significantly improving the cash economics of the business.
In assessing market position during a turnaround, 'share of wallet' analysis examines:
Answer: How much of each customer's total spending in the category the company captures versus competitors
Share of wallet analysis reveals whether the company's problems stem from losing existing customers or from customers reducing overall category spending, informing the recovery strategy.
The 'turnaround window' concept refers to:
Answer: The limited time period during which management has enough cash and stakeholder support to implement a recovery plan
The turnaround window is the critical period before cash runs out or stakeholders lose patience — effective turnaround professionals act decisively within this window.
Which analytical framework evaluates whether a business segment should be 'fixed, sold, or closed' during a turnaround?
Answer: A segment profitability and strategic fit matrix assessing both financial performance and long-term viability
A two-dimensional matrix evaluating both financial contribution and strategic fit helps prioritize which business segments deserve investment, which should be divested, and which should be wound down.