Question 1

A company promises the lowest prices, but its suppliers are costly and wastage is high. What is the biggest strategic issue?

Accepted Answer

The cost structure does not support the promise Costly supplies and high wastage raise costs, making a lowest-price promise difficult to sustain. The company’s cost structure is therefore not aligned with its strategic promise.

Question 2

A company plans to enter the low-price market, but its production costs are higher than the industry average. What is the main weakness in this strategy?

Accepted Answer

The cost structure does not fit the chosen low-price approach The correct answer is A. A low-price strategy depends on being able to offer lower prices while keeping costs under control. Higher-than-average production costs can put pressure on profit margins and make that approach harder to sustain, unless the company offsets the costs in some other way.

Question 3

A company targets premium customers but provides weak after-sales service. What strategic risk does this create?

Accepted Answer

The promised value will not match the service delivered The correct answer is B. A premium offer sets expectations about the overall customer experience, which can include support after purchase. If that service is weak, the experience may fall short of the value the company promises, risking dissatisfaction and damage to its positioning.

Question 4

A food company introduces baked products for health-conscious customers and reduces its fried-product range. Which strategic analysis is most directly reflected in this decision?

Accepted Answer

Changing product direction in response to an external social trend The company is responding to growing health-consciousness among customers, a social trend in its external environment. Changing its product range to match that trend is a strategic product decision.

Question 5

A company chooses online-only distribution, but its target customers live in rural areas with unreliable internet access. What is the main strategic problem?

Accepted Answer

The distribution channel does not match customers’ circumstances A distribution channel must be accessible to the intended customers. Unreliable internet may prevent these rural customers from using an online-only channel, so the channel does not fit the target market.

Question 6

What is the best meaning of strategic fit in this context?

Accepted Answer

Alignment among goals, opportunities, resources, and capabilities Strategic fit means that an organisation’s goals and plans are aligned with relevant opportunities and with the resources and capabilities it can use to pursue them. Option B captures these elements together.

Question 7

A competitor introduces free delivery. Instead of copying it, a company chooses faster, guaranteed delivery. What does this choice best demonstrate?

Accepted Answer

A competitive strategy based on distinct customer value The company is choosing a different benefit—speed and delivery certainty—instead of matching the competitor’s free-delivery offer. This is a way to compete by offering distinct value to customers.

Question 8

A company plans to enter foreign markets within five years but has not decided how it will provide language support or find local partners. What is the main weakness in its strategy?

Accepted Answer

The course of action and arrangement of required resources are unclear Entering foreign markets is a broad objective, but a workable strategy also needs a clear course of action and arrangements for what it requires. The missing plans for language support and local partners show that these details have not been worked out.

Question 9

A company focuses on innovative products because it has a strong research team. What does this best illustrate?

Accepted Answer

Turning an internal strength into a strategic advantage A strong research team is an internal strength. Using that capability to develop innovative products can help the company stand out, so the company is using an internal strength to support its strategy.

Question 10

A company selects a high-growth opportunity but has not decided how it will finance the plan. Which element of the strategy is weakest?

Accepted Answer

Resource allocation Pursuing a growth opportunity requires resources, including finance. Without deciding how to fund the plan, the company has not adequately addressed resource allocation.

Question 11

A company adopts expensive packaging to create a luxury image, but its target customers are price-sensitive. What is the main strategic problem?

Accepted Answer

A mismatch between the target segment and the value offering Expensive packaging may raise the price or signal a premium offering, while price-sensitive customers tend to focus on affordability. This creates a mismatch between the chosen customer segment and the value offering.

Question 12

Which activity is most appropriate for monitoring a company’s strategy?

Accepted Answer

Regularly reviewing market share, customer feedback, and competitors’ actions Market share, customer feedback, and competitors’ actions can show whether the strategy is working and whether conditions have changed. Regularly reviewing these indicators is therefore relevant to strategic monitoring.

Question 13

A company promises the lowest prices, but its suppliers are expensive and its wastage is high. What is the biggest strategic concern?

Accepted Answer

The cost structure does not support the company’s strategic promise A lowest-price promise is difficult to sustain when purchasing costs and wastage are high. The company’s cost structure is therefore inconsistent with the low-price position it wants to offer.

Question 14

Which option best shows the integrated nature of a business strategy?

Accepted Answer

Connecting goals, customers, competitors, resources, and course of action in decisions A strategy is a broad plan for achieving objectives. It connects the organisation’s goals with its situation, resources, and overall course of action, rather than dealing with just one routine task.

Question 15

A product is aimed at young customers, but its promotion relies only on printed newspapers. What is the main strategic weakness?

Accepted Answer

The promotional channel may not effectively reach the target segment A promotional channel should suit the intended audience. If the chosen channel does not effectively reach young customers, the communication plan is poorly matched to the target segment.

Question 16

A company offers a product with a distinctive design and a lifetime repair promise. Which strategic concept does this best illustrate?

Accepted Answer

Differentiation strategy—offering distinctive customer value through features and service A distinctive design and repair promise set the offer apart from competing products and give customers a particular reason to choose it. This is differentiation through a distinctive value proposition.

Question 17

A company announces that it will expand nationally within three years, but its supply chain is weak. What is the main execution concern?

Accepted Answer

Operational capacity and the supply chain may be inadequate for the scale of expansion A national expansion plan requires the company to supply customers across a much wider area. If its supply chain and operating capacity cannot support that scale, implementation may fail or be delayed.

Question 18

A company copies a competitor’s strategy without understanding its own customers. What is the main risk?

Accepted Answer

The strategy may not fit the company’s own customers and circumstances A strategy that works for one competitor may not suit another company’s customers, resources, or circumstances. Without understanding its own customers, the company risks choosing a poor strategic fit.

Question 19

Which option correctly distinguishes a strategy from a policy?

Accepted Answer

A strategy is a broad course of action for achieving objectives; a policy provides general guidance for decisions A strategy sets a broad course of action for achieving objectives. A policy, by contrast, provides general guidance that helps people make consistent decisions within that course.

Question 20

A company targets the urban premium segment, but its product presentation and promotional messages project a low-cost image. What is the main strategic mismatch?

Accepted Answer

The brand’s communication and image do not match its intended premium position in the target market A premium target position should be supported by product presentation and promotional messages that communicate premium value. A low-cost image sends a conflicting signal to the intended customers.

Question 21

Which example best explains opportunity cost in a strategic choice?

Accepted Answer

Choosing one market may mean giving up the benefit available from the next-best alternative market Opportunity cost is the value of the next-best alternative that is given up. When a company chooses one market, it may forgo the potential benefit of investing in another market instead.

Question 22

A company enters a high-risk foreign market without including any way to identify, assess, or mitigate the risks in its strategy. What is the main weakness?

Accepted Answer

A gap in risk management Entering a high-risk market requires the company to consider potential threats and plan how to manage them. Leaving risk identification and mitigation out of the strategy creates a risk-management gap.

Question 23

A company plans to enter the rural education-technology market using local-language content and village tutors. Why is this an example of strategy?

Accepted Answer

It sets a broad direction for the product and resources in line with the target market The plan connects a specific target market with an appropriate offering and the resources needed to serve it. This broad, coordinated course of action is what makes it a strategy.

Question 24

A company adopts a premium-service strategy but provides no training to the staff who must deliver that service. What does this indicate?

Accepted Answer

A gap between the strategy and its implementation The company has chosen a premium-service direction, but staff training is needed to deliver that service. The missing training therefore shows a gap between the strategy and its implementation.

Question 25

A company uses an invitation-only model for high-end customers. Which strategic question does this choice primarily answer?

Accepted Answer

Whom to serve and what value to offer An invitation-only model defines which customers the company intends to serve. In this case, the company is targeting high-end customers and shaping its offering for them, so the choice addresses whom to serve and what value to offer.

Strategy

Practice questions

01 A company promises the lowest prices, but its suppliers are costly and wastage is high. What is the biggest strategic issue?

02 A company plans to enter the low-price market, but its production costs are higher than the industry average. What is the main weakness in this strategy?

03 A company targets premium customers but provides weak after-sales service. What strategic risk does this create?

04 A food company introduces baked products for health-conscious customers and reduces its fried-product range. Which strategic analysis is most directly reflected in this decision?

05 A company chooses online-only distribution, but its target customers live in rural areas with unreliable internet access. What is the main strategic problem?

06 What is the best meaning of strategic fit in this context?

07 A competitor introduces free delivery. Instead of copying it, a company chooses faster, guaranteed delivery. What does this choice best demonstrate?

08 A company plans to enter foreign markets within five years but has not decided how it will provide language support or find local partners. What is the main weakness in its strategy?

09 A company focuses on innovative products because it has a strong research team. What does this best illustrate?

10 A company selects a high-growth opportunity but has not decided how it will finance the plan. Which element of the strategy is weakest?

11 A company adopts expensive packaging to create a luxury image, but its target customers are price-sensitive. What is the main strategic problem?

12 Which activity is most appropriate for monitoring a company’s strategy?

13 A company promises the lowest prices, but its suppliers are expensive and its wastage is high. What is the biggest strategic concern?

14 Which option best shows the integrated nature of a business strategy?

15 A product is aimed at young customers, but its promotion relies only on printed newspapers. What is the main strategic weakness?

16 A company offers a product with a distinctive design and a lifetime repair promise. Which strategic concept does this best illustrate?

17 A company announces that it will expand nationally within three years, but its supply chain is weak. What is the main execution concern?

18 A company copies a competitor’s strategy without understanding its own customers. What is the main risk?

19 Which option correctly distinguishes a strategy from a policy?

20 A company targets the urban premium segment, but its product presentation and promotional messages project a low-cost image. What is the main strategic mismatch?

21 Which example best explains opportunity cost in a strategic choice?

22 A company enters a high-risk foreign market without including any way to identify, assess, or mitigate the risks in its strategy. What is the main weakness?

23 A company plans to enter the rural education-technology market using local-language content and village tutors. Why is this an example of strategy?

24 A company adopts a premium-service strategy but provides no training to the staff who must deliver that service. What does this indicate?

25 A company uses an invitation-only model for high-end customers. Which strategic question does this choice primarily answer?

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