CIMA E3 - Strategic Management Question Tutorial Sample Questions:

1. ZYX is a global hotel chain, employing over 10,000 staff worldwide. ZYX operates a Code of Conduct for all of its staff, which states "Our staff are the most important assets of our business operations. We expect the highest standards of ethical and professional conduct from all staff, who must display the principles of trust, respect, equality, integrity and fairness at all times." Which THREE of the following actions could ZYX take to positively influence its staff to work to the ethical and professional principles in its Code of Conduct? (Choose three.)

A) Induction and on-going staff training on ZYX's Code of Conduct and ethical and professional principles.
B) Operate a system of reward incentives for staff who display high ethical and professional standards.
C) Disciplinary actions, such as fines, for staff who do not display high ethical and professional standards.
D) Publication on its website of ZYX's Code of Conduct and regular examples of staff displaying the highest standards of professional conduct.
E) Set performance targets in diversity and equality for its hotel senior managers.
F) Interview process for staff prior to employment, to assess their understanding of ethical and professional behavior.

2. A direct external change trigger is:

A) The introduction of new environmental protection policies by the government.
B) A powerful competitor forcing an organization to cut its prices.
C) A general increase in the use of the Internet by society.
D) An economic recession in an organization's home country.

3. Plush is a medium-sized hotel which recently opened on the outskirts of a city which is popular with tourists. It has a sophisticated website which allows customers to pre-book rooms and additional items, such as meals in its restaurant and tickets for popular tourist attractions in the city.
Plush has listed its website on a popular hotel price comparison website, which allows customers to compare prices and facilities of hotels in the same area and this has resulted in over 60% of Plush's customer bookings so far.
Since listing on the price comparison website, the Sales Manager of Plush has noticed that the prices offered by its nearest competitors have reduced dramatically and their range of special offers have also increased.
Which TWO of Porter's Five Forces have been most affected by the use of the price comparison website by the hotels in the same area as Plush? (Choose two.)

A) Threat of substitutes.
B) Bargaining power of suppliers.
C) Bargaining power of customers.
D) Competitive rivalry.
E) Threat of new entrants.

4. Which of the following would be correct considerations when evaluating the Feasibility of a strategy? (Choose all that apply.)

A) Will customers object to the strategy?
B) Will the business be able to deal with the responses of its competitors to the strategy?
C) Will the strategy maintain competitive advantage?
D) Will the strategy exploit the core competencies of the business?
E) Will there be sufficient time to implement the strategy?

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

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