CIMA CIMAPRO15-E03-X1-ENG Exam Syllabus Topics:

CIMA E3 - Strategic Management Question Tutorial Sample Questions:

Question #1
A leading retail chain is undertaking environmental scanning as it is concerned that it is becoming uncompetitive and profits have started to fall. The Board of Directors is concerned that it will need to have a viable strategy to present to its shareholders at the next annual general meeting, in order to prevent shareholders' protests.
The company has been reluctant in the past to offer an Internet shopping service. It now believes, however, that by offering this service and introducing customer relationship marketing (CRM), this will produce a strategy that will help it to improve its competitiveness.
Which of the following statements apply to CRM? (Choose all that apply.)

A. The CRM process needs to include increasing the range of products that will be offered to customers.
B. The company must be prepared to take customers' needs into account and be able to meet these needs.
C. In mature markets, existing customers provide the most likely source of future earnings.
D. CRM utilizes marketing resources to retain, rather than simply attract new customers.
E. CRM is about marketing to customers to obtain their loyalty, so customer research is not needed.

Question #2
QWE is a private company belonging to a famous former sports professional. It operates gyms and fitness clubs across its home country. Each gym or fitness club is treated as a profit center and the manager of each center is paid bonuses based on its financial performance.
QWE introduced multidimensional performance measures into its management control systems 3 years ago.
These measure competitiveness, financial performance, capacity utilization, innovation and the flexibility of its centers to cope with changing demands.
The managers of QWE's centers have been leaving at a very high rate over the last 2 years. They have claimed that the measures are too open to interpretation and when they think they are improving their center's performance they are told they are doing the wrong things. They also complain that the managers in the centers near big cities find it much easier to reach their targets than the managers of other centers.
According to Fitzgerald and Moon's Building Block model, where does the problem lie?

A. Standards, Dimensions and Rewards
B. Dimensions and Standards
C. Standards and Rewards
D. Dimensions and Rewards

Question #3
When FarmCot Foods was founded five years ago, it was a small shop set up by a family of dairy farmers in a disused farm shed, selling their own produce to the local community. The family had decided, at that point in time, to diversify their dairy farming activities into also selling their own milk, cheese and ice cream products.
The aim was to increase their revenues, as dairy farming in their home country had been in decline for a number of years.
Since then, the shop has been very successful and has expanded rapidly over the last three years, due largely to a strong growth in tourism in its home country and a shift in consumer demand for locally sourced fresh farm products. FarmCot Foods is now located in a large purpose-built building on the site of the original farm shed and also operates a very popular cafa, a children's play area and sells a much wider range of products and gifts, which are all sourced from local suppliers.
Which of the following best describes FarmCot Foods approach to strategy development in the last five years?

A. Emergent
B. Freewheeling opportunism
C. Rational
D. Incremental

Question #4
Z is a medium-sized UK based accounting practice. Z operates a graduate training scheme. The trainees are given an induction and then placed on a three-year training programme designed to help develop professional skills and experience.
The training programme has been in existence for many years. However, there is no clear consensus amongst the partners of Z about what the trainees should be able to do on completion of the programme and therefore what the training programme should emphasize. This lack of clarity is affecting the morale and commitment of the trainees and significant numbers are failing the programme or leaving to join a rival firm.
Z's HR Department recognizes the need for committed and well motivated accountants to meet the increased expectations of clients and the competition from rival firms. The HR Department has identified changes to the training programme that can be implemented gradually through a series of initiatives.
Which TWO of the following statements regarding the change required in Z are correct? (Choose two.)

A. The skills, abilities and competences of the organization's employee's are a 'hard' factor according to the McKinsey 7 S model.
B. The change would be classified as a 'revolutionary change' according to Balogum and Hope Hailey.
C. The plans to combat competition would be considered as a 'structure' factor according to the McKinsey 7 S model.
D. Understanding which day-to-day behaviors to reinforce within the training programme, is about 'routines and rituals' according to the Cultural Web.
E. The need to manage the competitive position is an example of an 'external direct trigger' for change.

Question #5
Which of the following statements is NOT a role for Management Accountants involved in the strategy development process?

A. Consider and raise awareness of the ethical impact of proposed strategic decisions.
B. Assist the Board in determining risk appetite.
C. Integration of financial and non-financial information.
D. Writing the Annual Report.

Solutions: