SPP Strategy Formulation & Development 5

Question 1

Which of the following best illustrates a 'harvest strategy' in the context of portfolio management?

Accepted Answer

Reducing investment in a declining business unit to maximize short-term cash flow before exiting

Answer

A harvest strategy deliberately reduces investment in a business unit (often a Dog or declining Cash Cow) to extract maximum short-term cash flow before divesting or exiting.

Question 2

The 'resource-based view' (RBV) of strategy suggests that competitive advantage stems primarily from:

Accepted Answer

Unique, valuable, rare, inimitable, and non-substitutable internal resources and capabilities

Answer

The RBV, associated with Barney and others, argues that durable competitive advantage comes from internal resources that are Valuable, Rare, Inimitable, and Non-substitutable (VRIN).

Question 3

A strategic planning team is using the 'TOWS Matrix.' How does this tool differ from a standard SWOT analysis?

Accepted Answer

TOWS uses the SWOT factors to generate actionable strategic options by cross-referencing internal and external factors

Answer

The TOWS Matrix takes SWOT findings and generates four strategy types — SO, ST, WO, WT — by systematically cross-referencing strengths/weaknesses with opportunities/threats to produce actionable strategies.

Question 4

When setting strategic priorities, the concept of 'strategic trade-offs' as described by Porter means:

Accepted Answer

Deliberately choosing NOT to do certain activities in order to maintain a consistent and unique strategic position

Answer

Porter argues that strategy requires making explicit trade-offs — choosing what not to do — because trying to do everything leads to a 'stuck in the middle' position with no real competitive advantage.

Question 5

An organization's 'strategic vision' is most accurately described as:

Accepted Answer

An aspirational description of what the organization intends to become in the future

Answer

A strategic vision is a forward-looking, inspirational statement describing the desired future state the organization aspires to achieve, guiding long-term strategic decisions.

(SPP) Strategic Planning Professional Practice Test

(SPP) Strategic Planning Professional Practice Test

SPP Strategy Formulation & Development 5