TMA Introduction to Strategy 2

Question 1

In turnaround management, which of the following best describes a 'stabilization strategy'?

Accepted Answer

Stopping the financial bleeding and halting the decline before repositioning

Answer

Stabilization focuses on stopping losses and halting decline as the first phase before longer-term strategic repositioning.

Question 2

Which analytical framework categorizes a firm's activities into primary and support activities to identify sources of competitive advantage?

Accepted Answer

Value Chain Analysis

Answer

Porter's Value Chain Analysis decomposes a firm's operations into primary activities (inbound logistics, operations, etc.) and support activities to locate cost or differentiation advantages.

Question 3

A distressed company serving a niche market with specialized products is most likely pursuing which generic strategy?

Accepted Answer

Differentiation focus

Answer

Differentiation focus targets a narrow market segment with unique, premium offerings rather than competing on price or breadth.

Question 4

Which of the following is a PRIMARY indicator used to detect the early warning signs of financial distress in strategic planning?

Accepted Answer

Declining current ratio and rising debt-to-equity ratio

Answer

A falling current ratio signals liquidity problems, while a rising debt-to-equity ratio signals excessive leverage — both early financial distress warnings.

Question 5

The concept of 'strategic fit' in turnaround management refers to:

Accepted Answer

Alignment between a company's resources, capabilities, and its chosen strategy

Answer

Strategic fit means that a firm's internal capabilities and resources are aligned with the demands of its chosen external strategy.

TMA - Turnaround Management Association Practice Test

TMA - Turnaround Management Association Practice Test

TMA Introduction to Strategy 2