E3 Strategic Management - E3 Exam Practice Test

Question 1

The Boston Consulting Group developed a matrix to assist managers in identifying the cash flow requirements of different businesses. The matrix suggests a number of appropriate strategies. Select ALL the strategies that apply to the Boston Consulting Group's matrix.

A. Hold

B. Diversify

C. Divest

D. Build

E. Re-appraise

F. Defer

Correct Answer: A,C,D

Question 2

Information Systems (IS) strategy is correctly defined as:

A. Identifying the information needs of the organization and aligning development to them.

B. Decisions on the hardware, software and communications solutions used in the organization.

C. The roles and structure of information specialists in the organization and their relationship with users.

D. The planning, organizing, investment and control of information applications in the organization.

Correct Answer: A

Question 3

Which of the following categorizations would be correct, according to McFarlan's Strategic Grid, for a system which is critical to sustaining existing business but its future strategic importance is considered to be low?

A. Factory

B. Turnaround

C. Support

D. Strategic

Correct Answer: C

Question 4

UUU is a long established international airline. Which of the following represent Threats to UUU's business?
Select ALL that apply.

A. A substantial rise in the price of oil.

B. A shortage of trained pilots in UUU.

C. Greater popularity of long-haul holidays.

D. A higher level of private car ownership.

E. A sudden increase in international terrorism.

Correct Answer: A,E

Question 5

You work as a Management Accountant for GHJ, a company that includes commitments to 'sustainability' in its mission statement.
Which THREE of the following are contributions that you, as Management Accountant, could make towards the achievement of this part of the company's mission statement? (Choose three.)

A. Integrated reporting of the triple bottom line of Profits, People and Planet.

B. Providing financial information with all non-recurring expenditures and incomes removed.

C. Project evaluations that include the externalities as well as the cash costs.

D. Ensuring the organization adopts the lowest cost technologies and suppliers.

E. Measures of organization's use of non-renewable resources and environmental emissions.

Correct Answer: A,C,E

Question 6

QQQ is Country M's largest supermarket with 40% of the market share. In addition it has opened several stores around the world in the last 10 years. One of the reasons for QQQ's success is its loyalty card. The loyalty card is used to gather information about the spending patterns of its customers. Around two billion pieces of information each week are captured and stored in an enormous data warehouse that can be accessed by QQQ and other selected large retail partners.
The information can be used to assess the success of new product launches as well as which demographics of customer are making the purchases. The system also allows QQQ to tailor its special offers to particular segments of the market and to predict the buying behaviour of its customers, which assists QQQ in procurement planning.
Which of the following best describes the activities outlined above for QQQ?

A. Data mining

B. E-business

C. Customer relationship management

D. Market segmentation

Correct Answer: A

Question 7

AAA is a car manufacturer which has undertaken a strategy to lobby a regional authority to include Its flagship hybrid model in a regional initiative to grant low-emission cars access to faster moving vehicle lanes.
These faster vehicle lanes were historically only available to cars carrying passengers. Given the benefits of AAA's low emission vehicles, AAA's cars were authorised to make use of the faster lanes, even when no passengers were on board providing AAA with a decisive competitive edge.
Which of the following strategies is AAA pursuing?

A. A market strategy

B. A sustainability strategy.

C. A non-market strategy.

D. An environmental strategy.

Correct Answer: C

Question 8

You are a Management Accountant working for a logistics firm that wants to build collaborative relationships with each of its key clients.
Which of the following changes to the management accounting function would you recommend to help the development of collaborative partnerships with a client?
Select ALL that apply.

A. Management accounting staff from your Organization should be made available to the key clients to facilitate joint problem-solving.

B. Close monitoring of service level agreements to ensure your Organization provides the minimum service specified.

C. Recruitment of management accounting staff from the key clients to improve shared understanding.

D. Relocation of some management accounting staff from your Organization into the offices of the key clients.

E. Open book management accounting in which the client can see the profits your firm makes from the relationship.

Correct Answer: A,D

Question 9

MMM is a multi-national company that manufactures and sells consumer durables. MMM has recently experienced severe trading losses and its Marketing Director has decided to revise the Marketing Strategy paying due regard to MMM's key external drivers. Which THREE of the following are key external drivers for MMM?

A. A modification to MMM's production processes designed to save fuel.

B. A change in MMM's domestic advertising agency.

C. An upward trend in commodity prices.

D. A change in consumer age profiles in a country where MMM sells 5% of its output.

E. A decline in the value of the Euro and the U.S. dollar.

F. A growth in Protectionist trade policies in Africa and Asia.

Correct Answer: C,E,F

CIMA E3 Strategic Management - E3 Exam Practice Test

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