TMA Introduction to Strategy 4

Question 1

Which of the following is an example of a 'revenue enhancement' strategy in a turnaround plan?

Accepted Answer

Re-pricing products upward for high-value customer segments

Answer

Revenue enhancement strategies increase the top line; re-pricing for high-value segments boosts revenue without necessarily cutting costs.

Question 2

The concept of 'core competency' as defined by Prahalad and Hamel refers to:

Accepted Answer

A collective skill or technology that provides competitive advantage and is difficult to imitate

Answer

Core competencies are deep, integrated capabilities that differentiate the firm and are hard for competitors to replicate.

Question 3

Which term describes the process of identifying the root causes of a company's distress before selecting a turnaround strategy?

Accepted Answer

Diagnostic analysis

Answer

Diagnostic analysis is the systematic investigation into why a company failed — financial, operational, or strategic causes — before prescribing a remedy.

Question 4

When a turnaround plan focuses on 'asset right-sizing,' management is primarily:

Accepted Answer

Divesting or writing down excess or underutilized assets to improve efficiency

Answer

Asset right-sizing means eliminating or reducing assets that exceed the firm's realistic operational needs to cut costs and free up capital.

Question 5

In Porter's Five Forces framework, 'buyer power' is HIGH when:

Accepted Answer

Buyers are concentrated and purchase in large volumes with low switching costs

Answer

Concentrated buyers who purchase large volumes and can easily switch suppliers have strong negotiating leverage over pricing and terms.

TMA - Turnaround Management Association Practice Test

TMA - Turnaround Management Association Practice Test

TMA Introduction to Strategy 4