Question 1

Which option gives the correct difference between strategy and budget?

Accepted Answer

Strategy is broad direction and budget is numerical resource plan Strategy gives direction and budget states amount. In exams keep broad plan and numerical plan separate.

Question 2

A company decides to focus on essential products and reduce luxury products after expecting recession. What is this?

Accepted Answer

Strategy Changing product direction according to economic environment is strategy. In exams understand economic change as strategy.

Question 3

In which situation is market development strategy visible?

Accepted Answer

Selling existing product in a new geographical market Taking an existing product to a new market is market development. In exams identify new market with existing product.

Question 4

In which plan does a company try to match its resources with opportunities?

Accepted Answer

Strategy Strategy matches resources with opportunities. In exams treat resources with opportunities as strategy.

Question 5

A dairy company decides to launch nutritious flavoured milk for children. This is linked with which strategic direction?

Accepted Answer

Product development Launching a new product for selected customers is product development strategy. In exams identify new product direction as strategy.

Question 6

Why should strategy be flexible?

Accepted Answer

Because external environment can change Strategy should adjust according to changing environment. In exams treat flexibility as a need of strategy.

Question 7

A company adopts eco friendly packaging to look different from its competitor. What is this?

Accepted Answer

Strategy A direction to create a distinct identity is strategy. In exams understand differentiation through packaging as strategy.

Question 8

Which statement best states the nature of strategy?

Accepted Answer

It is a broad plan based on external and internal analysis Strategy is a broad plan based on internal and external analysis. In exams treat analysis based broad plan as strategy.

Question 9

A company plans to add new features to an existing product to increase sales in the same market. This is linked with which strategy?

Accepted Answer

Product improvement strategy Improving an existing product is product improvement strategy. In exams understand new features in existing product as strategy.

Question 10

In which situation is diversification strategy visible?

Accepted Answer

Company entering a completely new product area Entering a new product area can be diversification. In exams connect new product plus new area with diversification.

Question 11

Which option shows that the purpose of strategy is to gain competitive advantage?

Accepted Answer

Attracting customers with faster delivery and better warranty Offering distinct benefits to attract customers is competitive strategy. In exams connect competitive advantage with strategy.

Question 12

Why is strategy not only an internal plan?

Accepted Answer

Because it also considers external market and competition Strategy analyses external market and competition. In exams understand strategy as an outward looking plan.

Question 13

An app company decides to provide simple interface and phone support for elderly customers. Which strategic thinking does this show?

Accepted Answer

Focus on customer segment Focusing on a specific customer group is strategic focus. In exams treat customer segment focus as strategy.

Question 14

If a company plans to find new uses when market demand declines then what is it?

Accepted Answer

Strategy Changing market direction when demand declines is strategy. In exams identify demand change response as strategy.

Question 15

A company considers strong research capability as its strength and chooses innovation based competition. Which plan does this show?

Accepted Answer

Strategy Choosing competitive direction based on internal strength is strategy. In exams treat strength based direction as strategy.

Question 16

What is the correct difference between strategy and procedure?

Accepted Answer

Strategy is broad direction and procedure is order of steps Strategy gives broad direction while procedure states sequence. In exams keep direction and sequence separate.

Question 17

A company identifies weak distribution network as its weakness and decides to partner with local distributors. This relates to what?

Accepted Answer

Strategic improvement Making broad direction to correct a weakness is strategy. In exams understand weakness response as strategy.

Question 18

Which statement shows a method rather than strategy?

Accepted Answer

Explaining standard technique of cutting metal A method is a prescribed procedure or technique for performing a task, whereas a strategy is a broad plan for achieving organisational objectives. Explaining a standard technique for cutting metal describes how a task is done, so it is a method. In contrast, entering a new market or creating a distinct brand reflects a competitive strategy. Exam tip: A statement explaining ‘how to do a task’ usually indicates a method; a statement showing the broader direction of action indicates a strategy.

Question 19

A company decides to reduce dependence on wholesalers and sell directly to customers. This is linked with which strategy?

Accepted Answer

Direct distribution strategy Reaching customers directly is distribution strategy. In exams understand channel restructuring as strategy.

Question 20

In which situation may strategy need to be changed?

Accepted Answer

When market technology and customer preferences change rapidly Changing market and technology affect strategy. In exams connect dynamic environment with strategy flexibility.

Question 21

A restaurant starts fast lunch service and monthly meal plan only for office employees. Which strategy does this show?

Accepted Answer

Focus strategy Creating service for a specific customer group is focus strategy. In exams identify segments like office employees.

Question 22

If a company brings a new product for a new customer category then this is most related to which strategy?

Accepted Answer

Diversification strategy New product and new customer area point towards diversification. In exams remember new product plus new market.

Question 23

A company focuses on better design and experience instead of low price competition. Which strategy is this?

Accepted Answer

Differentiation strategy Better design and experience create distinct identity. In exams connect differentiation with unique value.

Question 24

Why should strategy be linked with objectives?

Accepted Answer

So that strategy can give direction for achieving targets Strategy gives the broad route to achieve objectives. In exams treat strategy without objective as incomplete.

Question 25

Which option shows a strategy using an opportunity?

Accepted Answer

Launching a new range of organic products when demand rises Rising demand is an opportunity and new range is strategy. In exams treat opportunity based action as strategy.

Strategy

Practice questions

01 Which option gives the correct difference between strategy and budget?

02 A company decides to focus on essential products and reduce luxury products after expecting recession. What is this?

03 In which situation is market development strategy visible?

04 In which plan does a company try to match its resources with opportunities?

05 A dairy company decides to launch nutritious flavoured milk for children. This is linked with which strategic direction?

06 Why should strategy be flexible?

07 A company adopts eco friendly packaging to look different from its competitor. What is this?

08 Which statement best states the nature of strategy?

09 A company plans to add new features to an existing product to increase sales in the same market. This is linked with which strategy?

10 In which situation is diversification strategy visible?

11 Which option shows that the purpose of strategy is to gain competitive advantage?

12 Why is strategy not only an internal plan?

13 An app company decides to provide simple interface and phone support for elderly customers. Which strategic thinking does this show?

14 If a company plans to find new uses when market demand declines then what is it?

15 A company considers strong research capability as its strength and chooses innovation based competition. Which plan does this show?

16 What is the correct difference between strategy and procedure?

17 A company identifies weak distribution network as its weakness and decides to partner with local distributors. This relates to what?

18 Which statement shows a method rather than strategy?

19 A company decides to reduce dependence on wholesalers and sell directly to customers. This is linked with which strategy?

20 In which situation may strategy need to be changed?

21 A restaurant starts fast lunch service and monthly meal plan only for office employees. Which strategy does this show?

22 If a company brings a new product for a new customer category then this is most related to which strategy?

23 A company focuses on better design and experience instead of low price competition. Which strategy is this?

24 Why should strategy be linked with objectives?

25 Which option shows a strategy using an opportunity?

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