TMA Introduction to Strategy 3 — Questions and Answers
Question 1: Which of the following best describes 'strategic intent' in the context of corporate turnaround?
- A short-term operational target set by department heads
- A clear, long-term aspirational goal that motivates the organization through adversity (Correct answer)
- A legal document filed during Chapter 11 proceedings
- A cost-reduction benchmark set by creditors
Correct answer: A clear, long-term aspirational goal that motivates the organization through adversity
Strategic intent provides a unifying long-term vision that guides the organization through the turnaround, motivating stakeholders beyond short-term metrics.
Question 2: The Balanced Scorecard in strategy execution measures performance across how many perspectives?
- Two
- Three
- Four (Correct answer)
- Six
Correct answer: Four
The Balanced Scorecard uses four perspectives: Financial, Customer, Internal Processes, and Learning & Growth.
Question 3: A turnaround manager who decides to exit unprofitable product lines is executing which type of strategic action?
- Market penetration
- Portfolio pruning / retrenchment (Correct answer)
- Horizontal diversification
- Forward integration
Correct answer: Portfolio pruning / retrenchment
Exiting unprofitable lines is a retrenchment or portfolio pruning strategy, focusing the firm on its most viable activities.
Question 4: Which of the following scenarios best illustrates a 'turnaround trap' — a strategic mistake common in distressed companies?
- Focusing management attention on cash flow preservation first
- Attempting too many strategic initiatives simultaneously, diluting resources (Correct answer)
- Communicating the turnaround plan transparently to all stakeholders
- Conducting a rigorous root-cause analysis before committing to a strategy
Correct answer: Attempting too many strategic initiatives simultaneously, diluting resources
Pursuing too many initiatives at once is a classic turnaround trap — it spreads scarce resources too thin and prevents any single effort from succeeding.
Question 5: In the context of competitive strategy, 'competitive parity' means:
- Having the lowest cost structure in the industry
- Meeting the minimum competitive standards required to remain in an industry (Correct answer)
- Outperforming all rivals on every strategic dimension
- Achieving equal market share with the industry leader
Correct answer: Meeting the minimum competitive standards required to remain in an industry
Competitive parity means matching rivals on necessary strategic dimensions so as not to be at a disadvantage, without necessarily exceeding them.
Question 6: Which growth-strategy framework maps products and markets on two axes — existing vs. new — to identify expansion options?
- GE-McKinsey Matrix
- BCG Growth-Share Matrix
- Ansoff Matrix (Correct answer)
- Porter's Five Forces
Correct answer: Ansoff Matrix
The Ansoff Matrix plots existing/new products against existing/new markets, yielding four strategies: penetration, development, development, and diversification.
Question 7: In a distressed-company context, which stakeholder group typically has the MOST immediate leverage over strategic decisions?
- Common shareholders
- Secured creditors (Correct answer)
- Junior bondholders
- Trade unions
Correct answer: Secured creditors
Secured creditors hold collateral claims and can force liquidation or bankruptcy proceedings, giving them the most direct leverage over a distressed company's strategy.
TMA Introduction to Strategy 3
Which of the following best describes 'strategic intent' in the context of corporate turnaround?