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CIMA E3 - Strategic Management Question Tutorial Sample Questions:

1. A is a private healthcare organization aiming to provide affordable and accessible high quality patient services.
A is introducing Big Data, which has not yet been adopted by the competition. A's database will store a huge amount of information about its patients. Clear access to wide sources of accurate information will enable patients to make more informed choices. Patients will be able to compare not only the prices of drugs, treatments and physicians but also their relative effectiveness.
Which of the following concerns should A have about its use of Big Data?

A) Lack of competitive advantage
B) Privacy issues
C) Veracity of information
D) Variety of information

2. Directors have a duty to shareholders and other stakeholders and are required to promote the success of the company.
Which THREE of the following are valid roles and responsibilities of directors? (Choose three.)

A) To consider the likely consequences of any decision in the long term.
B) To focus only on maximizing company profits.
C) To avoid conflicts of interest and of duties.
D) To be responsible for keeping all external stakeholders satisfied.
E) To have regard for the interests of the company's employees.

3. DRAG DROP
QR is a conglomerate with two divisions, A and B.
Given the information below, select the most appropriate strategy for each division to implement.
Select and Place:

Correct

4. YZ operates a national mobile phone (cell phone) network in one country. It is considering upgrading its network to 4th Generation (4G) by providing an improved bandwidth that will enable its customers faster access to the Internet.
This investment will cost S29 million which YZ's institutional investors have agreed to provide by subscribing to a rights issue. This is due to management having informed institutional investors that a rival is already offering
4G and that this is taking customers away from YZ because its network is now regarded as too slow. YZ's remaining customers have shown a willingness to pay extra for 4G and overall the investment will have a positive net present value.
Which of the following statements are correct? (Choose all that apply.)

A) It provides a market development opportunity for YZ.
B) YZ will gain a first mover advantage.
C) There is stakeholder approval for the investment.
D) There are sufficient investment funds available
E) It is essential given the strategic threats to YZ.

5. Company TTT produces a range of products, including products T1 and T5.
Product T1: Profitability has declined in recent years, although small profits continue to be made as the market contracts due to changing customer preferences. Overall market share is low and continues to reduce.
However, in addition to external sales T1 is also used as a component of product T5.
Product T5: A market leader within a low growth market, sources components both externally and from TTT's other subsidiaries. T5 benefits from significant economies of scale and TTT has recently considered modernizing its T5 production line but following a cost benefit analysis, decided not to proceed.
Which of the following is an appropriate strategy for TTT to adopt?

A) Harvest product T1 and Divest product T5.
B) Divest both product T1 and product T5.
C) Harvest both product T1 and product T5.
D) Divest product T1 and Harvest product T5.

Solutions: