Question 1

A company plans to sell its existing product in new mountain regions with local service centres. This is an example of which strategy?

Accepted Answer

Market development strategy Taking an existing product to a new geographical market is market development strategy. In exams identify existing product and new market together.

Question 2

Why is matching internal capability with external opportunity necessary while making strategy?

Accepted Answer

So that strategy is implementable and market fit Successful strategy depends on matching resources and opportunities. In exams treat capability and opportunity fit as the base of strategy.

Question 3

A company avoids low price competition and makes design quality and after sales service its main identity. Which strategy does this show?

Accepted Answer

Differentiation strategy Creating distinct identity through design quality and service is differentiation strategy. In exams connect unique value with differentiation.

Question 4

If an organisation's objective is to increase rural reach but strategy is based only on expensive experience centres in metros then what is visible?

Accepted Answer

Strategic mismatch Rural objective and metro strategy do not match. In exams strategy should support the objective.

Question 5

An education platform leaves general classroom courses and starts night live classes only for working students. This is an example of which strategy?

Accepted Answer

Focus strategy Focusing on a narrow customer group like working students is focus strategy. In exams identify the narrow segment.

Question 6

A company treats rising cyber fraud as an opportunity and starts a security subscription service for small businesses. Which strategic response does this show?

Accepted Answer

Threat to opportunity strategy Cyber fraud is a threat converted into a new service opportunity. In exams connect threat conversion with strategy.

Question 7

At expert level what is the main difference between strategy and procedure?

Accepted Answer

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

Question 8

A healthcare company makes home testing and remote doctor advice its main service model to reduce hospital visits. What is this?

Accepted Answer

Strategy The direct answer is C: this is a strategy. A strategy is a broad, long-term way of achieving an important objective and responding to the environment. Here, the healthcare company is not merely choosing one small operating step; it is changing its main service model from depending mainly on hospital visits to using home testing and remote doctor advice. The reasoning is: identify the objective, reducing hospital visits; identify the broad approach, home testing plus remote consultation; recognise that the approach affects the whole service model; therefore call it strategy. Option A, method, is narrower and usually refers to a particular way of performing a task. Option B, rule, is a compulsory instruction that tells what must or must not be done. Option D, budget, is a financial plan showing expected income and expenditure. None describes the broad business direction as accurately as strategy. Exam cue: a major change in how an organisation serves customers is usually strategic.

Question 9

If strategy is based on low cost but the company keeps adding expensive personalised packages then which problem is visible?

Accepted Answer

Mismatch between strategy and actions The direct answer is Option A: mismatch between strategy and actions. A low-cost strategy aims to offer acceptable value while keeping operating and service costs low. Every major action should support that aim. Expensive personalised packages may increase staff time, technology expense, service complexity, and delivery cost. If the company keeps adding such costly features without redesigning the model or charging enough to cover them, its actions move away from the low-cost strategy. The reasoning is: declared strategy is low cost; personalised packages are expensive; repeated expensive actions raise the cost base; therefore the company’s actions are inconsistent with its stated strategy. Option A is correct. Option B, rule compliance, would mean following a rule and does not identify the conflict between the strategic goal and the costly decisions. Option C, correct procedure sequence, concerns the order of steps in a process and is not the issue here. Option D, accuracy of method, concerns whether a technique is correct, not whether actions support the chosen competitive position. A firm may add some premium features if they are carefully controlled, but the example highlights continuous costly additions under a low-cost plan. Exam cue: compare the stated strategy with actual decisions, spending, and operations.

Question 10

A bank makes low document loans and mentoring service its market direction for women entrepreneurs. This is linked with which strategy?

Accepted Answer

Inclusion based focus strategy Focusing on a specific underserved group is inclusion based focus strategy. In exams connect underserved segment with strategy.

Question 11

Which statement shows only policy rather than strategy?

Accepted Answer

Giving priority to empathy and fairness in customer complaints The second statement gives general guidance for decisions so it is policy. In exams keep guidance separate from strategy.

Question 12

A company starts loyalty points and referral benefits to increase sales of existing product in existing market. This is an example of which strategy?

Accepted Answer

Market penetration strategy Increasing sales of existing product in existing market is market penetration. In exams remember same product same market.

Question 13

When does strategy re evaluation become more necessary?

Accepted Answer

When implemented strategy raises sales but customer churn also increases The direct answer is B: when sales rise but customer churn also rises. Strategy must be judged through several meaningful indicators, not through one attractive number. In this case, higher sales look positive, but a rising churn rate means more customers are leaving. This may show dissatisfaction, poor service, unsuitable pricing, or unsustainable acquisition. Management should therefore re-examine the strategy and discover whether short-term sales are damaging long-term customer relationships. Option B is correct because it contains a significant mixed result. Option A is wrong because new chairs do not normally show strategic performance. Option C is wrong because changing an attendance register is an administrative matter. Option D is wrong because changing a file cover has no meaningful connection with strategic results. Memory cue: rising sales with rising churn is a warning signal.

Question 14

A company makes low data collection and clear consent its competitive identity after seeing consumer privacy concerns. Which strategy is this?

Accepted Answer

Privacy based differentiation strategy Privacy is made a unique trust value. In exams identify trust based differentiation as strategy.

Question 15

Which option correctly identifies strategy and objective?

Accepted Answer

Targeting small towns is strategy and increasing sales there by 16 percent is objective Market direction is strategy and measurable sales target is objective. In exams keep direction and target separate.

Question 16

A company starts regional campaigns with local artists after observing weak brand recall. Which strategic response does this show?

Accepted Answer

Weakness based brand strategy Changing brand direction after identifying a weakness is strategy. In exams understand weakness response as strategy.

Question 17

What should management do when external threat and internal weakness appear together while making strategy?

Accepted Answer

Choose a direction that corrects weakness and responds to threat Strategy is formed from combined SWOT signals. In exams treat weakness threat response as integrated strategy.

Question 18

A car manufacturer focuses on hybrid models after seeing rising fuel prices and emission rules. What type of strategy is this?

Accepted Answer

External environment response strategy Fuel price and rules are elements of external environment. In exams treat external change response as strategy.

Question 19

A retail company chooses convenience based competition by opening neighbourhood quick stores instead of large malls. What does this show?

Accepted Answer

Location and convenience based strategy Store format and convenience positioning are strategy. In exams understand location format decision as strategy.

Question 20

If strategy is direct distribution but the company gives all discounts only on third party platforms then what is the problem?

Accepted Answer

Mismatch between strategy and channel actions Direct distribution strategy should be supported by own channel actions. In exams check channel fit.

Question 21

An agricultural equipment company makes low water irrigation kits its main product direction after seeing rising drought problems. This is linked with which strategy?

Accepted Answer

Customer problem and environment based strategy Drought problem shows both external environment and farmer need. In exams treat problem based product direction as strategy.

Question 22

Which option clearly shows product development strategy?

Accepted Answer

Adding sensor feature to old product for existing customers Product improvement for existing market is product development. In exams remember improved product for existing market.

Question 23

A platform increased sales but refund complaints rose sharply. Which conclusion is proper in strategy evaluation?

Accepted Answer

Customer experience indicators also need checking Strategy success is judged through multiple related results. In exams check both sales and complaints.

Question 24

A textile exporter chooses to spread buyers across four different countries to reduce tariff risk. Which strategic idea does this show?

Accepted Answer

Risk diversification strategy Spreading buyer base across different markets is risk diversification. In exams understand dependency reduction as strategy.

Question 25

What is the correct difference between strategy and programme?

Accepted Answer

Strategy is broad direction and programme can be coordinated set of many activities Strategy is course of action and programme can be an activity package. In exams keep direction and activity set separate.

Strategy

Practice questions

01 A company plans to sell its existing product in new mountain regions with local service centres. This is an example of which strategy?

02 Why is matching internal capability with external opportunity necessary while making strategy?

03 A company avoids low price competition and makes design quality and after sales service its main identity. Which strategy does this show?

04 If an organisation's objective is to increase rural reach but strategy is based only on expensive experience centres in metros then what is visible?

05 An education platform leaves general classroom courses and starts night live classes only for working students. This is an example of which strategy?

06 A company treats rising cyber fraud as an opportunity and starts a security subscription service for small businesses. Which strategic response does this show?

07 At expert level what is the main difference between strategy and procedure?

08 A healthcare company makes home testing and remote doctor advice its main service model to reduce hospital visits. What is this?

09 If strategy is based on low cost but the company keeps adding expensive personalised packages then which problem is visible?

10 A bank makes low document loans and mentoring service its market direction for women entrepreneurs. This is linked with which strategy?

11 Which statement shows only policy rather than strategy?

12 A company starts loyalty points and referral benefits to increase sales of existing product in existing market. This is an example of which strategy?

13 When does strategy re evaluation become more necessary?

14 A company makes low data collection and clear consent its competitive identity after seeing consumer privacy concerns. Which strategy is this?

15 Which option correctly identifies strategy and objective?

16 A company starts regional campaigns with local artists after observing weak brand recall. Which strategic response does this show?

17 What should management do when external threat and internal weakness appear together while making strategy?

18 A car manufacturer focuses on hybrid models after seeing rising fuel prices and emission rules. What type of strategy is this?

19 A retail company chooses convenience based competition by opening neighbourhood quick stores instead of large malls. What does this show?

20 If strategy is direct distribution but the company gives all discounts only on third party platforms then what is the problem?

21 An agricultural equipment company makes low water irrigation kits its main product direction after seeing rising drought problems. This is linked with which strategy?

22 Which option clearly shows product development strategy?

23 A platform increased sales but refund complaints rose sharply. Which conclusion is proper in strategy evaluation?

24 A textile exporter chooses to spread buyers across four different countries to reduce tariff risk. Which strategic idea does this show?

25 What is the correct difference between strategy and programme?

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