Question 1

The entry barriers are high and the threat of entry is low in each of the following instances except when

Options :

A : capital requirements are high.

B : companies have large cost advantages over potential entrants due to high economies of scale.

C : patents or other forms of intellectual properties are in place.

D : customers do not have strong brand preferences or loyalty.

Answer: D

Question 2

A large retail company is working on its annual plan. The company has had several year of declining sales and net income. The business development team, along with the store managers, developed a forecast for sales in the upcoming year. The CEO challenged them to do better, and said he expected a further 10% increase in sales volume. The finance team made the adjustment, but the bottom line is still negative. Executive level managers are under pressure to turn the company around. At a meeting with senior management, the business development team says that it is unreasonable to expect higher volume without a bigger investment in marketing, which the company is not willing to do.A planning analyst is later instructed by the CFO to increase the sales volume in the annual plan. The analyst is aware of the concerns of the business development team and is worried that increasing the volumes is not in the best interest of the company and might even be unethical. The company does not have established policies regarding how to handle such a situation. According to IMA's Statement of Ethical Professional Practice, the analyst should

Options :

A : take the issue to the media.

B : discuss the issue with a friend outside the office.

C : take the issue above the CFO level to the next higher level of management.

D : discuss the issue with the CFO.

Answer: C

Question 3

Risk from volatility in foreign currencies, interest rates, and commodities is an example of what risk?

Options :

A : Strategic.

B : Financial.

C : Hazard.

D : Operational.

Answer: B

Question 4

Which of the following correctly orders the steps in the Strategic Planning Process?

Options :

A : Environmental Scanning, Vision and Mission, Strategy Design, Strategy Implementation, Evaluation and Control

B : Vision and Mission, Environmental Scanning, Strategy Design, Strategy Implementation, Evaluation and Control

C : Vision and Mission, Environmental Scanning, Strategy Design, Evaluation and Control, Strategy Implementation

D : Vision and Mission, Environmental Scanning, Strategy Implementation, Strategy Design, Evaluation and Control

Answer: B

Question 5

Which one of the following is the best description of the product life cycle?

Options :

A : The sequence of activities associated with the creation of a product, beginning with research and development, then followed by design, and ending with manufacturing.

B : The sequence of phases associated with the product’s life in the market, beginning with introduction, followed by growth, maturity, and ending with decline.

C : The sequence of phases associated with the product’s life in the market, beginning with development, then followed by introduction, growth, maturity, and ending with decline.

D : The sequence of activities associated with the creation of a product, beginning with research and development, then followed by design, manufacturing, marketing and distribution, and ending with customer service.

Answer: B

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