Business Strategy Test

Business Strategy Test

Which of the following areas would a company not focus on during strategic planning?

a. Economic

b. Social

c. Political

d. Charitable

What is the main goal in setting customer related priorities?

a. To assign a value to customers

b. To determine which customers are the most profitable and focus only on them

c. To determine how to sell more to all customers

d. To determine how the firm adds value for the customers

Why is "skilled staff" not a competitive advantage?

a. Any competitor can easily hire skilled staff by tempting your own staff or that of others to join them

b. Skilled staff can easily ruin good plans

c. Skilled staff cost more than unskilled staff, offsetting the advantage

d. Skilled staff is a competitive advantage

What else must a company have besides an advantage in order to succeed in the long term?

a. Sustainability

b. Solid management

c. Open communication

d. Loyal shareholders

What does the action plan portion of a strategic plan accomplish?

a. It discusses what happened in the past.

b. It outlines the management's role in implementing the plan.

c. It tells the board of directors what the management expects.

d. It discusses what specific actions will be taken to achieve the strategic goals and deliverables outlined in the plan.

Which of the following would help maintain a competitive advantage?

a. Aggressive marketing

b. The management's commitment to excellence

c. Communicating the company values to the entire organization

d. Patent or trademark on what creates the advantage

Which of the following most closely impacts an organization?

a. Employees

b. Market

c. Industry

d. Environment

What is the purpose of a strategy map?

a. It is required to be filed with the Securities and Exchange Commission

b. It is necessary to visualize the big picture and how all aspects of the strategic plan integrate together

c. It allows the company to map past performance

d. it maps the company's financial initiatives

How should firms plan for unknown future economic events?

a. By spending as excessively as possible

b. By firing people whenever possible

c. By predicting future direction and making decisions accordingly, knowing that the economy runs in cycles

d. By hiring only contract labor rather than regular employees

How often should strategic plans be revised and assessed?

a. Daily

b. Every three months

c. Never

d. Only if required by the board

Which of the following needs to be addressed before implementing a plan?

a. Deciding how the board of directors may react

b. How to motivate people to implement the plan

c. How the next strategic plan will be drafted

d. Determining if it is worth the time of the management

Which of the following non financial factors from the past should be examined as they impact the company the most?

a. Net Income

b. Geographical Trends

c. Economic Trends

d. Population Growth

Why is it important to think about execution before planning?

a. Determining your execution plan will mitigate the need to focus on strategy

b. It helps you to determine how much the plan will cost to execute

c. Knowing what resources you have will determine the company's ability and level of execution which, in turn, will dictate what level of planning can be done

d. It helps you to plan for employee dislike of the plan

Which of the following is a method a company could use to evaluate its competitive advantage?

a. Determining where the company stands amongst the competition

b. Graph performance

c. Customer feedback

d. Determining if a new marketing campaign was successful

What would examining the supply and demand dynamics for a supplier's goods accomplish?

a. Allow your firm to determine how much quantity to order based on their availability

b. Allow your firm to determine what pricing schedule your competitors are receiving

c. Allow your firm to determine the relative price setting power of the supplier compared to other suppliers

d. It would not be of any use

What are the three main elements to a strategic plan?

a. Mission, Goals, Management

b. Managerial, Operational, Financial

c. Where are we now? Where are we going? How will we get there?

d. What went wrong? How to fix it? How much it will cost?

What is a mission statement?

a. A single sentence or two describing the company's purpose

b. A detailed plan of action

c. A roadmap for future growth

d. A list of near term objectives

Why would a company set strategic priorities for the next 5 years?

a. It takes several years in order to get approval

b. It takes several years for a good strategic plan to grow and show results

c. It guarantees management will stay with the company for several years

d. If set for 5 years, then no strategic plans need to be drafted until that time has passed

Why would a failed past performance item be worth examining?

a. For understanding why revenues were within 5% of the forecast

b. For understanding why employee retention is high

c. For understanding why a planned project wasn't completed

d. For understanding why growth exceeded the plan

Which of the following is the method often used to ensure that managers implement strategic plans?

a. Tie compensation rewards and growth to results which will be generated by implementing the plan

b. Threaten layoffs

c. Request them to implement the plans

d. Make the plans easy to implement

How should a strategic plan be evaluated for financial viability?

a. By seeing if the strategic initiatives are profitable as a whole

b. By ensuring that the strategy does not impact finances

c. By estimating revenues and expenses for each of the strategic initiatives, and determining if they will be profitable

d. The management should make a rough judgment call

Which of the following is an example of an internal priority?

a. Partnering with other firms

b. Training employees

c. Entering new markets

d. Developing new products

Why is it important to continually communicate a plan to all employees?

a. To reinforce the plan and increase commitment

b. To tie raises and job security to measurable criteria

c. To make employees feel important even though they have no impact

d. To forewarn employees of layoffs

Why is it important to have someone who was not involved in creating the plan review the final strategic plan?

a. To check for spelling mistakes

b. To verify the plan is compliant with regulatory bodies

c. To check the management's ability to manage the firm

d. To verify the plan makes sense to outside parties and integrates well with the company

What purpose does a balanced scorecard serve?

a. It allows the company to measure its financial performance

b. It tracks the progress and performance of key performance indicators

c. It maps out historical performance

d. It allows the management to effect process change

Why would a firm not mitigate small risks to business?

a. It is difficult to know every potential risk

b. It wants to incur some risks and learn from them

c. It does so to lure competitors into taking on the same risks

d. The cost-benefit ratio of mitigating even the smallest risks makes it not worth it

How can a firm maintain its competitive advantage?

a. By trying to deceive the competition

b. By continually improving on its advantage

c. By forcing customers to purchase their products

d. By sabotaging the plans of competitors with close substitutes

What is a department plan?

a. A plan for staffing each department

b. A profit and loss statement specific to each department

c. A shorter version of the full strategic plan which is created specifically for department managers, allowing them to focus on the aspects related to them and how they manage their departments

d. A plan of action for cutting costs by a department

Why is it important to reflect on past successes?

a. The past can be copied and repeated

b. The company can apply the same strategy to past failures to turn them around

c. The company can see what it achieved and how

d. Past trends always indicate future performance

Which of the following would be best to review to see trends and overall performance of the past?

a. Current Balance Sheet

b. Current Month Profit & Loss compared to Prior Year Profit & Loss

c. Current Cash Flow Statement

d. Trailing 12 Month Profit & Loss Statement

What is meant by scenario planning?

a. Looking at past successes and how they were achieved

b. Creating a list of possible negative situations and deciding how the company would react to each

c. Planning for success and how to achieve it

d. Looking at past failures and what went wrong

How does a firm prioritize which threats to their business would be most damaging?

a. It considers all threats equally damaging

b. It weighs the probability of the event occurring and how it will impact the business

c. It looks at the threats which have impacted other companies and assumes that they them also the extent of damages

d. It considers only those threats damaging which impact employee morale

Which of the following is a barrier to entry?

a. Substantial capital investment needed to enter a market

b. Low set up costs

c. Easy access to qualified employees

d. Government grants for the specific industry

Which of the following is a reason for the failure of a strategic plan?

a. The management was 100% above board

b. The plan looked at past successes and failures while planning for the future

c. The mission statement was only two sentences long

d. It was not communicated to everyone who needed to know

Which of the following is a common risk outside the control of the business?

a. Inventory shrinkage

b. Employee labor disputes

c. Economic downturn

d. Gross margin

What two factors are used in the GE Matrix for strategic

a. Market Attractiveness and Business Strength

b. Geographical Location and Consumer Spending

c. Business Strength and Geographical Location

d. Consumer Spending and Market Attractiveness

Which of the following would be used to evaluate productivity?

a. Net Income

b. Quick Ratio

c. Return on Assets

d. Cash Balance

How can a company prevent a disaster related to the crash of company servers while facilitating the employees' ability to perform in their jobs?

a. By utilizing hardcopy reports as much as possible

b. By backing up data on a routine basis through live or at least daily backups

c. By cross training employees

d. By storing call data locally on the employees' machines

How should a company communicate a new strategic plan company wide?

a. Company meeting for all employees

b. An email to all employees

c. A meeting only for department managers

d. Only top management should be aware of strategic plans, no communication is necessary

What significance does a "debt to equity ratio" have to a business owner in evaluating how the company has performed?

a. It allows them to determine the profitability of the company

b. It allows them to determine how leveraged the company is

c. It allows them to determine how effectively cash was managed

d. It allows them to compare profits against other industry leaders