CIMA CIMAPRA19-E03-1 Exam Practice Test Instant Access

Question 1

FFF isconsidering developing a new website that will allow it toadvertise andsellitshigh quality jewellery productsonline. The Boardof FFF hasidentified that thecost of developing and managing a website would be relatively low. It is predictedthat FFF will sell only a small percentage of its products through the website, as most customers like the personal experience of shopping in store.

However, research undertaken by the Marketing Director indicates that the website could be usedverysuccessfullyby FFFfor online marketing and customer communication. Therefore, the Marketing Director has suggested that FFF should develop an IT/ IS strategy to ensure a strategic focus for its website development. However,most of FFF's Board members, who are the main shareholders of the business, believe thatdeveloping an IT/IS strategy is unnecessary in order to develop and manage its website.

Which ofthe followingarguments could be made by the Marketing Director to the Board of FFF to persuade it that an IT/ IS strategy would be appropriate in relation to the current website development?

AIT/ IS is expected by FFF's key stakeholders and should therefore have a strategic focus.

BIT/ IS forms the basis of FFF's competitive advantage and therefore requires a strategic focus.

CIT/ IS is fast moving and FFF can take advantage of new technologies as they become available, if managed strategically.

DIT/ IS is very expensive and without a strategic focus there is a risk of costly mistakes.

Answer : C

Question 2

Lynch developed the performance pyramid to define the links between objectives and performance measures.Which THREE of the following statementsapply to the performance pyramid?

AThe performance pyramid is designed to ensure that all activities support the Organization's vision.

BThe left-hand side of the pyramid contains measures which have an external focus.

CThe lowest level of the pyramid contains the day-to-day operational measures.

DThe business operating systems level includes the market-related Critical Success Factors.

EThe business unit level includes measures which relate to internal systems needed to meet customers' needs.

FThe right-hand side of the pyramid contains measures which are predominantly non-financial.

Answer : A, B, C

Question 3

A leading supermarket chain is undertaking environmental scanning as itis concerned that it is becoming uncompetitive and profits have started to fall. The Boardisconcerned that when the nextAnnualGeneralMeeting is held,itwill need to have a viable strategy to present toitsshareholders, in order to prevent shareholders' protests.

In the past the company has been reluctant to offer anInternet shopping service.However, it now believes that by offering this service and also introducing customer relationship marketing (CRM)thiswill produce a strategy that will help it to improve its competitiveness.

Whichof the following statementsapply to CRM?

Select ALL that apply.

ACRM utilises marketing resources to retain, rather than simply attract new customers.

BThe company must be prepared to take customers' needs into account and be able to meet these needs.

CIn mature markets, existing customers provide the most likely source of future earnings.

DCRM is about marketing to customers to obtain their loyalty, so customer research is not needed.

EThe CRM process needs to include increasing the range of products that will be offered to customers.

Answer : A, B, C

Question 4

M has been appointed as an external change agent to lead and implement a large scale re-structuring strategy which is being undertaken by a large bank. M has been appointed due to his extensive experience in a wide range of organizational re-structuring programmes. This re-structuring strategy will involve a large number of redundancies and the implementation of a new organization-wide management reporting system. M will need to work with staff from all departments and levels of the organization. The Board of Directors of the bank believes that an external change agent will bring more benefits to the change process than using an internal change agent.

Which of the following are the most likely benefits that could be achieved by the bank by appointing an external change agent to lead and implement the re-structuring strategy? (Choose all that apply.)

AThe change process should be less costly if an external change agent is appointed.

BThe bank can exploit the specialist expertise of the external change agent.

CAs a dedicated resource, the external change agent can give more time to the change process.

DThe external change agent will be more objective in decision-making than an internal change agent.

EThe external change agent will have better relationships with the bank employees than an internal change agent.

FThe speed of delivery of the change process will be quicker when using an external change agent.

Answer : D, F

Question 5

JJJ is a private company belonging to a famous former athlete. It operates gyms and fitness clubs across its home country. Each gym or fitness clubis treated as a profit centre and the manager of each centre is paid bonuses based on its financialperformance.

Three years ago it introduced multidimensional performance measures into its management control systems. These measurecapacity utilisation, financial performance, competitiveness, innovation, and the flexibility of its centres to cope with changing demands.

The managers of its centres have been leaving at a very high rate over the last two years. They have claimed that the measures are too open to interpretation and when they think they are improving the centre's performance they are told they are doing the wrong thing. They also complain that the managers in the centres near big cities find it much easier to reach their targets than the managers of other centres.

UsingFitzgerald and Moon's Building Block model, where does the problem lie?

AStandards and Rewards

BDimensions and Rewards

CDimensions and Standards

DStandards, Dimensions and Rewards

Answer : A

Question 6

According to Johnson, Scholes and Whittington,Suitability is an important consideration when evaluating potential alternative investment strategies.

Which of the following is a Suitability consideration?

AThere are limited raw materials available.

BFinances are available.

CCurrent markets are not saturated.

DStaff will be resistant to change.

Answer : C

Question 7

Which of the following structureswould you recommend for the Board of Directors of a UK public company in order to fulfillitslegal responsibilities?

AThe Board of Directors should have a minimum of six directors with the Board's tasks divided amongst them. The Board should also have a Chairman or Chairwoman who may serve as the Chief Executive if time permits.

BThe Board should have no more than six members with clearly defined executive and non-executive responsibilities.To make the role more efficient Chairman or Chairwoman of the Board should also be the Chief Executive.

CThere should be no restriction placed on the minimum or maximum number of Directors. The Directors'roles should be shared but the Chairman or Chairwoman should not act also as the Chief Executive.

DThe Chairman or Chairwoman should not have an executive role within the company. There should be at least two directors to carry out the Board's roles.

Answer : D

CIMAPRA19-E03-1 E3 Strategic Management Exam Practice Test