Question 1

How should the relation between objectives and strategy in planning be understood?

Accepted Answer

Strategy is the chosen path to achieve objectives The governing concept is the distinction between an objective and a strategy. An objective states the desired result, such as increasing market share by a specified amount, whereas a strategy is the broad chosen course for reaching that result, such as entering a new market, improving value, or using a different distribution network. A strategy must be consistent with the objective and available resources; it is not an isolated activity or a barrier to goal achievement. Option C is correct because it expresses this means-to-end relationship. A incorrectly separates strategy from purpose, B reverses the relationship, and D ignores the central role of both in planning.

Question 2

Why is looking only at low cost not enough while choosing a strategy in planning?

Accepted Answer

Because objectives, risk, time and resources are also considered The governing concept is strategic choice as a multi-criteria planning decision. A manager should not select an alternative merely because it has the lowest apparent cost. The strategy must support organisational objectives, fit the time available, use resources realistically and expose the organisation to an acceptable level of risk. A low-cost alternative may reduce quality, take too long, lack necessary resources or create serious uncertainty. Cost therefore remains important, but it must be balanced against other criteria. Option B wrongly says cost is irrelevant, option C treats every low-cost choice as bad, and option D denies the link between strategy and objectives. Hence, option A is correct.

Question 3

A company decides that entering rural markets will be the main direction this year. This is most related to which plan?

Accepted Answer

Strategy The governing concept is that a strategy is a broad and significant plan for achieving organisational objectives while responding to the business environment. Choosing rural-market entry as the main direction for the year indicates where the company will focus its competitive and growth efforts. Therefore, option A, Strategy, is correct. A rule would prescribe a compulsory action or prohibition in a specific situation. A method would explain the technique for carrying out one activity, such as conducting a rural survey. A budget would state the funds expected to be spent on the expansion. The question gives an overall direction, not a detailed procedure or financial estimate, so strategy is the most suitable plan.

Question 4

In planning strategy is mainly related to what?

Accepted Answer

Long term direction and competitive position Strategy decides the broad direction and competitive position of an organisation. In exams connect long term direction with strategy.

Question 5

A company plans lower price and better service after a new competitor enters. Which type of plan is this?

Accepted Answer

Strategy A broad plan made in response to a competitor is strategy. In exams treat rival response as strategy.

Question 6

Which element is most considered while making strategy?

Accepted Answer

External environment and resources Strategy is made by considering external opportunities threats and resources. In exams connect the word environment with strategy.

Question 7

A mobile company decides to focus on gaming phones for young customers. What does this show?

Accepted Answer

Strategy The direct answer is D: strategy. A strategy is a broad, long-term direction that connects an organisation's goals with its environment, customers and competition. Here the company chooses a target group, young customers, and a product focus, gaming phones. Step by step: identify the market segment; understand its needs; choose a product direction; direct resources and promotion toward that choice. This is a major business direction, not a routine instruction. Option D is correct. Option A, procedure, is a fixed sequence of steps for doing a task, such as processing an order. Option B, rule, is a specific instruction about what must or must not be done. Option C, method, is a particular way of performing an activity. The example selects a market and overall product position, so strategy is the best term. Memory cue: target market plus broad competitive direction = strategy.

Question 8

Which option is the correct example of strategy?

Accepted Answer

Adopting low prices and local distributors to enter rural markets A strategy is a broad plan designed to achieve an organisation’s long-term objective. Choosing low prices and local distributors to enter rural markets is an overall competitive approach, so option A is correct. A ban on mobile phones is a rule, while the steps for bill payment and machine cleaning are procedures. Exam tip: a strategy shows how a broad objective will be achieved; a procedure gives step-by-step instructions.

Question 9

What is the main difference between strategy and objective?

Accepted Answer

Objective states target and strategy gives broad direction to achieve it Objective states what to achieve and strategy states how to move broadly. In exams keep target and broad route separate.

Question 10

A food company plans to launch low sugar products after health awareness increases. Which plan does this show?

Accepted Answer

Strategy Changing product direction after observing customer trend is strategy. In exams connect changing trend with strategy.

Question 11

In which plan is analysis of competitors' moves important?

Accepted Answer

Strategy Strategy considers competitors and market position. In exams identify competitor analysis as strategy.

Question 12

A company decides to focus on app website and digital payment to increase online sales. What is this?

Accepted Answer

Strategy The broad decision to increase online sales by focusing on apps, websites and digital payments is a strategy. A strategy gives the overall direction for achieving an organisational objective. A rule only states what must or must not be done in a situation, while a procedure gives step-by-step instructions for performing a task. Exam tip: identify strategy when the question describes a broad course of action chosen to achieve a goal.

Question 13

Strategy is considered which level of plan?

Accepted Answer

Broad and long term plan Strategy is linked with broad and long term direction. In exams treat broad long term plan as strategy.

Question 14

A clothing brand adopts expensive designs and limited editions for premium customers. This is an example of what?

Accepted Answer

Strategy The direct answer is C: this is a strategy. A strategy is a broad plan for achieving an important organisational purpose, especially by deciding how the business will compete and which customers it will serve. The brand chooses expensive designs and limited editions to create a premium image and attract customers willing to pay more. This is a market-positioning and competitive choice, so it concerns the direction of the business rather than a small routine. Option A, procedure, is wrong because a procedure gives a sequence of steps for performing a recurring task. Option B, budget, is wrong because a budget is a numerical statement of expected income, spending or resources. Option C is correct because the product design, limited supply and premium target together form a competitive approach. Option D, rule, is wrong because a rule states what must or must not be done and normally allows no choice; it does not describe the broad market approach. A weak student can ask: ‘Is this deciding how the organisation will compete?’ If yes, it is likely strategy. Memory cue: strategy is the broad game plan; positioning tells customers why this brand is different.

Question 15

While making strategy opportunities and threats relate to what?

Accepted Answer

External environment Opportunities and threats are parts of external environment. In exams connect opportunities threats with strategy analysis.

Question 16

A company decides to produce in high volume at low cost and keep prices low in the market. Which strategic direction is this?

Accepted Answer

Cost leadership Competing through low cost is cost leadership strategy. In exams understand low cost plus low price as strategy.

Question 17

When is a strategy considered more effective?

Accepted Answer

When it matches resources and market situation A good strategy fits resources and market situation. In exams remember fit with resources and market.

Question 18

Which statement is not a strategy?

Accepted Answer

Imposing a fine for arriving late at the office Imposing a fine for late arrival is a rule because it gives a specific direction to regulate employees’ behaviour. A strategy is a broad action plan for achieving organisational objectives, such as using franchises to enter new cities or reaching customers directly through online channels. Exam tip: A statement that prescribes conduct or a restriction in a specific situation is usually a rule, not a strategy.

Question 19

An electronics company decides to strengthen after sales service to compete with a new foreign brand. What is this?

Accepted Answer

Strategy Changing service direction in response to competition is strategy. In exams identify competition response as strategy.

Question 20

In which strategy does a company focus on a specific small customer group?

Accepted Answer

Focus strategy Focusing on a specific customer group is focus strategy. In exams understand niche market as focus strategy.

Question 21

What is the correct difference between strategy and policy?

Accepted Answer

Strategy is broad competitive direction and policy is general decision guidance Strategy states market direction and policy guides decisions. In exams keep competitive direction and guidance separate.

Question 22

An education company decides to sell low fee courses in small towns instead of big cities. Which plan does this show?

Accepted Answer

Strategy Deciding target market and pricing direction is strategy. In exams treat market segment and price approach as strategy.

Question 23

Why are an organisation's strengths and weaknesses considered while making strategy?

Accepted Answer

So that plan fits internal capability The direct answer is D: strategy should fit the organisation’s internal capability. Before choosing a plan, managers study strengths and weaknesses because these show what the organisation can do well and where it faces limitations. For example, a company with skilled designers may pursue a design-led strategy, while a company lacking finance should not immediately choose a very expensive expansion. This is internal analysis and helps make the plan realistic. Option A is wrong because examining strengths and weaknesses does not aim to remove rules. Option B is wrong because the purpose is not to hide a budget; financial information should support sound decisions. Option C is wrong because internal analysis does not end procedures; procedures may still be needed to implement the plan. Option D is correct because a workable strategy must match people, money, technology, skills and other internal resources. The reasoning is: identify strengths, identify weaknesses, compare them with the desired goal, and select a feasible course of action. Memory cue: strengths and weaknesses are inside the organisation; opportunities and threats are outside it.

Question 24

A company adopts unique packaging and special quality to make its product look different from competitors. Which strategy is this?

Accepted Answer

Differentiation strategy Giving a product a distinct identity is differentiation strategy. In exams connect unique features with differentiation.

Question 25

If government rules change and a company changes its product design then what type of plan can this be?

Accepted Answer

Strategy Changing product direction according to external rules can be strategy. In exams connect regulatory change with strategy.

Strategy

Practice questions

01 How should the relation between objectives and strategy in planning be understood?

02 Why is looking only at low cost not enough while choosing a strategy in planning?

03 A company decides that entering rural markets will be the main direction this year. This is most related to which plan?

04 In planning strategy is mainly related to what?

05 A company plans lower price and better service after a new competitor enters. Which type of plan is this?

06 Which element is most considered while making strategy?

07 A mobile company decides to focus on gaming phones for young customers. What does this show?

08 Which option is the correct example of strategy?

09 What is the main difference between strategy and objective?

10 A food company plans to launch low sugar products after health awareness increases. Which plan does this show?

11 In which plan is analysis of competitors' moves important?

12 A company decides to focus on app website and digital payment to increase online sales. What is this?

13 Strategy is considered which level of plan?

14 A clothing brand adopts expensive designs and limited editions for premium customers. This is an example of what?

15 While making strategy opportunities and threats relate to what?

16 A company decides to produce in high volume at low cost and keep prices low in the market. Which strategic direction is this?

17 When is a strategy considered more effective?

18 Which statement is not a strategy?

19 An electronics company decides to strengthen after sales service to compete with a new foreign brand. What is this?

20 In which strategy does a company focus on a specific small customer group?

21 What is the correct difference between strategy and policy?

22 An education company decides to sell low fee courses in small towns instead of big cities. Which plan does this show?

23 Why are an organisation's strengths and weaknesses considered while making strategy?

24 A company adopts unique packaging and special quality to make its product look different from competitors. Which strategy is this?

25 If government rules change and a company changes its product design then what type of plan can this be?

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