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MCQs on Strategic Management

  1. Selling all a company asset in parts for their tangible worth is called __________
    A. Unrelated integration
    B. Concentric Diversification
    C. Divestiture
    D. Liquidation
    Answer: Liquidation
  2. The BCG matrix is based on__________
    A. Industry Growth rate and Business strength
    B. Industry attractiveness and Business strength
    C. Industry growth rate and relative market share
    D. Industry Attractiveness and Relative Market share
    Answer: Industry growth rate and relative market share
  3. A possible and desirable future state of an organization is called_________
    A. Vision
    B. Mission
    C. Strategy formulation
    D. Strategy implementation
    Answer: Vision
  4. What do Cash Cows symbolize Stable in BCG matrix?
    A. Invest
    B. Remain Diversified
    C. Stable
    D. Liquidate
    Answer: Stable
  5. What are the guides to decision making?
    A. Procedures
    B. Rules
    C. Policies
    D. Goals
    Answer: Policies
  6. Buying another company by one company means __
    A. Joint venture
    B. Acquisition
    C. Merger
    D. Amalgamation
    Answer: Acquisition
  7. In strategic thinking, how long is the long term, approximately?
    A. 3 to 5 years
    B. 2 to 3 years
    C. 1 month to 1 year
    D. More than 5 years
    Answer: More than 5 years
  8. Strategy is developed by the visionary chief executive in __ of strategic management
    A. adaptive mode
    B. planning mode
    C. strategic mode
    D. entrepreneurial mode
    Answer: entrepreneurial mode
  9. Which environment can create new market and new business segments?
    A. Technological environment
    B. Economic environment
    C. Socio cultural environment
    D. Political environment
    Answer: Technological environment
  10. Low cost, Differentiation and Focus are examples of __
    A. Business strategies
    B. Corporate strategies
    C. Operational strategies
    D. Functional strategies
    Answer: Business strategies
  11. The word tactics is most likely to be associated with____________
    A. Business strategy
    B. Operational strategy
    C. Corporate strategy
    D. All of the above
    Answer: Operational strategy
  12. Stability strategy is a____________strategy.
    A. corporate level
    B. functional level
    C. strategic level
    D. business level
    Answer: corporate level
  13. What is the starting point of strategic intent?
    A. Goals
    B. Objectives
    C. Mission
    D. Vision
    Answer: Vision
  14. Marketing strategy is a __ type of strategy
    A. corporate strategy
    B. Growth strategy
    C. functional strategy
    D. business level
    Answer: functional strategy
  15. Corporate level strategy deals with__________
    A. objectives of specific operations
    B. objectives of the corporate
    C. objectives of specific functions
    D. objective of Single strategic Business Unit
    Answer: objectives of the corporate
  16. Strategic Management handles_________
    A. management issues
    B. external issues
    C. administrational issues
    D. internal issues
    Answer: external issues
  17. Strategies are the means by which long term objectives will be achieved
    A. Policies
    B. Strategies
    C. Opportunities
    D. Strength
    Answer: Strategies
  18. How many cells are in a SWOT matrix?
    A. 6
    B. 9
    C. 2
    D. 3
    Answer: 9
  19. The magnitude and changes that may affect an organization is survival owing to all of the following except _
    A. Demographics
    B. E-commerce
    C. Dubious firms
    D. Merger-mania
    Answer: Dubious firms
  20. Which strategies improve internal weaknesses by taking advantage of external opportunities?
    A. WO
    B. SO
    C. ST
    D. SW
    Answer: WO
  21. When an industry relies heavily on government contracts, which forecasts can be the most important part of an external audit.
    A. Competitive
    B. Economic
    C. Political
    D. Multinational
    Answer: Political
  22. According to the BCG matrix SBU comprising products in an attractive industry but representing little market share would be referred to as _
    A. a star
    B. a dog
    C. a question mark
    D. a cash cow
    Answer: A question mark
  23. Which would be classified as a stakeholder?
    A. Banks
    B. Communities
    C. Suppliers
    D. Communities Banks Suppliers
    Answer: Communities Banks Suppliers
  24. Strategic business units_________
    A. Carry out strategies assigned by the CEO.
    B. Are found in one-business organizations.
    C. Implement the marketing function’s strategic planning and management decisions.
    D. Develop their own unique way of competing.
    Answer: Develop their own unique way of competing
  25. Bargaining power of customers is high if __
    A. Differentiation of competitors product is low.
    B. The buyer has little information about the market.
    C. Switching costs are low for substitute products.
    D. The buyer requires a high-quality product for own production
    Answer: Differentiation of competitors product is low
  26. The sketch of the BCG matrix, what is the label of the horizontal axis?
    A. Market growth rate
    B. Market share
    C. Business strength
    D. Industry growth rate
    Answer: Market share
  27. Technological advancements can create Competitive advantage besides many other existing powerful advantages for the businesses?
    A. Competitive
    B. Social
    C. Environmental
    D. Economic
    Answer: Competitive
  28. All of the following are key opportunities and threats in external environment because of political, government and legal forces except__________
    A. Patent law
    B. Cross boarder relationship
    C. Social security program
    D. Tax rate
    Answer: Social security program
  29. The primary benefit brought from restructuring is___________
    A. increased morale
    B. cost reduction
    C. employee involvement
    D. increased number and organizational hierarchy
    Answer: cost reduction
  30. Internal audit is done______
    A. After external audit
    B. Before external audit
    C. Vertical to external audit
    D. Parallel to external audit
    Answer: Parallel to external audit
  31. The fundamental purpose for the existence of any organization is described by its
    a. policies
    b. mission
    c. procedures
    d. strategy
    Ans. b
  32. The fundamental purpose of an organization’s mission statement is to
    a. create a good human relations climate in the organization.
    b. define the organization’s purpose in society.
    c. define the operational structure of the organization.
    d. generate good public relations for the organization.
    Ans. b
  33. The acronym SWOT stands for
    a. Special Weapons for Operations Timeliness
    b. Services, Worldwide Optimization and Transport
    c. Strengths Worldwide Overcome Threats
    d. Strengths, Weaknesses, Opportunities, and Threats
    Ans. d
  34. Which of the following is not a characteristic of strategic management that makes it different from other types of management?
    a. It is interdisciplinary.
    b. It has an external focus.
    c. It has an internal focus.
    d. It concerns the present direction of the organization.
    Ans. d
  35. Which of the following is an issue considered in developing corporate strategies?
    a. What business(es) are we in?
    b. What direction are we going?
    c. What resources do we have to implement our strategies?
    d. What businesses are we in and what to do with those businesses?
    Ans. c
  36. Which of the following is NOT a major element of the strategic management process?
    a. Formulating strategy
    b. Implementing strategy
    c. Evaluating strategy
    d. Assigning administrative tasks
    Ans. d
  37. Competitive advantage can best be described as:
    a. increased efficiency.
    b. what sets an organization apart.
    c. a strength of the organization.
    d. intangible resources.
    Ans. a
  38. ……………..is the foundation of blue ocean strategy.
    a. Innovation
    b. Value creation
    c. Value innovation
    d. value cost trade-off
    Ans. c
  39. The various organizational routines and processes that determine how efficiently and effectively the organization transforms its inputs into outputs are called
    a. strengths.
    b. core competencies.
    c. capabilities.
    d. customer value.
    Ans. b
  40. When defining strategic management the most imp thing to remember is that it
    a. Not as easy as you think
    b. Mainly the province of senior managers
    c. A living evolving process
    d. More conceptual than practical. A way of determining responsibilities
    Ans. c
  41. An organisation’s strategy:
    a. remains set in place longer than the mission and objectives
    b. generally forms over a period of time as events unfold
    c. tends to be formed at the same time the mission is developed and objectives are formulated
    d. is usually conceived at a single time when managers sit down and work out a comprehensive strategic plan for the next 3-5 years
    Ans. b
  42. The primary focus of strategic management is
    a. strategic analysis
    b. the total organisation
    c. strategy formulation
    d. strategy implementation.
    Ans. b
  43. Which of the following is not an advantage of strategic management?
    a. It provides organisations with a clearer sense of direction and purpose
    b. It helps improve the political, economic, social and technological environment of the organisation
    c. It helps orientate management decisions to relevant environmental conditions
    d. It helps organisations be proactive rather than reactive
    Ans. b
  44. Which of the following defines how each individual business unit will attempt to achieve its mission?
    a. Business strategy
    b. Corporate strategy
    c. Functional strategy
    d. National strategy
    Ans. a
  45. Which of the following focuses on supporting the corporate and business strategies?
    a. Competitive strategy
    b. Corporate strategy
    c. Operational strategy
    d. National strategy
    Ans: c
  46. Which one of the following is not a primary task of strategic managers?
    a. Establishing strategic objectives
    b. Developing the steps to follow in implementing operational level plans
    c. Defining the business and developing a mission
    d. Developing a strategy
    e. Implementing and evaluating the chosen strategy
    Ans. b
  47. Which one of the following is at the core of strategic management?
    a. Choosing which organisational objectives to focus on
    b. Being alert for opportunities to change work responsibilities
    c. Adapting the organisation to a changing external environment
    d. Choosing whether to make decisions autocratically or on the basis of participation
    Ans. c
  48. The three organizational levels are:
    a. corporate level, business level, functional level
    b. corporate level, business unit level, functional level
    c. corporate strategy level, business unit level, functional level
    d. corporate strategy level, business level, specialist level
    Ans. a
  49. Which one of the following is NOT included in the Porter’s Five Forces model:
    a. Potential development of substitute products
    b. Bargaining power of suppliers
    c. Rivalry among stockholders
    d. Rivalry among competing firms
    Ans. c
  50. The goal of the organization’s ……………… is to capture the hearts and minds of employees, challenge them, and evoke their emotions and dreams.
    a. vision
    b. mission
    c. culture
    d. strategy
    Ans. a
  51. A firm’s mission
    a. is a statement of a firm’s business in which it intends to compete and the customers which it intends to serve.
    b. is an internally-focused affirmation of the organization’s financial, social, and ethical goals.
    c. is mainly intended to emotionally inspire employees and other stakeholders.
    d. is developed by a firm before the firm develops its vision.
    Ans. a
  52. An analysis of the economic segment of the external environment would include all of the following EXCEPT
    a. interest rates.
    b. international trade.
    c. the strength of the U.S. dollar.
    d. the move toward a contingent workforce.
    Ans. d
  53. Product differentiation refers to the:
    a. ability of the buyers of a product to negotiate a lower price.
    b. response of incumbent firms to new entrants.
    c. belief by customers that a product is unique.
    d. fact that as more of a product is produced the cheaper it becomes per unit.
    Ans. c
  54. Which of the following is NOT an entry barrier to an industry?
    a. expected competitor retaliation
    b. economies of scale
    c. customer product loyalty
    d. bargaining power of suppliers
    Ans. d
  55. Switching costs refer to the:
    a. cost to a producer to exchange equipment in a facility when new technologies emerge.
    b. cost of changing the firm’s strategic group.
    c. one-time costs suppliers incur when selling to a different customer.
    d. one-time costs customers incur when buying from a different supplier.
    Ans. d
  56. Suppliers are powerful when:
    a. satisfactory substitutes are available.
    b. they sell a commodity product.
    c. they offer a credible threat of forward integration.
    d. they are in a highly fragmented industry.
    Ans. c
  57. All of the following are forces that create high rivalry within an industry EXCEPT
    a. numerous or equally balanced competitors.
    b. high fixed costs.
    c. fast industry growth.
    d. high storage costs.
    Ans. c
  58. Internal analysis enables a firm to determine what the firm
    a. can do.
    b. should do.
    c. will do.
    d. might do.
    Ans. a
  59. An external analysis enables a firm to determine what the firm
    a. can do.
    b. should do.
    c. will do.
    d. might do.
    Ans. d
  60. In the airline industry, frequent-flyer programs, ticket kiosks, and e-ticketing are all examples of capabilities that are
    a. rare.
    b. causally ambiguous.
    c. socially complex.
    d. valuable.
    Ans. d
  61. Competitors are more likely to respond to competitive actions that are taken by
    a. differentiators.
    b. larger companies.
    c. first movers.
    d. market leaders.
    Ans. d
  62. Which of the following is not a cultural product?
    a. Rites
    b. Emotions
    c. Rituals
    d. Sagas
    e. Symbols
    Ans. b
  63. Which of the following is an element of a firm’s remote external environment?
    a. Competition
    b. Political agencies
    c. Suppliers
    d. Trade union
    Ans. b
  64. Long-term objectives should be all of the following except:
    a. measurable.
    b. continually changing.
    c. reasonable.
    d. challenging.
    e. consistent.
    Ans. b
  65. According to Greenley, strategic management offers all of these benefits except that
    a. it provides an objective view of management problems.
    b. it creates a framework for internal communication among personnel.
    c. it encourages a favourable attitude toward change.
    d. it maximizes the effects of adverse conditions and changes.
    e. it gives a degree of discipline and formality to the management of business.
    Ans. d
  66. Which group would be classified as a stakeholder?
    a. Communities
    b. Banks
    c. Suppliers
    d. Employees
    e. All of these
    Ans. e
  67. Which of the following is not a stage of strategy formulation techniques?
    a. Formulation Framework
    b. Matching stage
    c. External factor evaluation
    d. Decision stage
    Ans. b
  68. The immediate external environment includes:
    a. Divisions
    b. S. B. U. s
    c. Competitors
    d. Management
    Ans. c
  69. The ……………… comprises economic and social conditions, political priorities, and technological developments, all of which must be anticipated, monitored, assessed and incorporated into the executive’s decision making.
    a. Internal environment
    b. Task environment
    c. Operating environment
    d. Societal environment
    Ans. d
  70. Strategic management involves the……….. , directing, ………… and controlling of a company’s strategy-related decisions and actions.
    a. Financing; marketing
    b. Planning; financing
    c. Planning; organizing
    d. Marketing; planning
    Ans. c
  71. External assessment is performed in which of the strategic management phase?
    a. Strategy formulation stage
    b. Strategy implementation stage
    c. Strategy evaluation stage
    d. All of the given options
    Ans. a
  72. Political variables have a significant effect on
    a. Strategy formulation and implementation
    b. Strategy formulation and evaluation
    c. Strategy implementation and evaluation
    d. Strategy formulation, implementation and evaluation
    Ans. a
  73. Strategic decisions ostensibly commit the firm for
    a. 1 -2 years
    b. The short term
    c. one years
    d. A long time, typically five years
    Ans. d
  74. Social responsibility is a critical consideration for a company’s strategic decision makers since
    a. Stockholders demand it
    b. The mission statement must express how the company intends to contribute to the societies that sustain it
    c. It increases a company’s profits
    d. It helps make decisions
    Ans. b
  75. Which of the following are signs of weakness in a company’s competitive position?
    a. A return-on-equity is below 25% and earnings per share of less than Rs. 2.00
    b. A price set by the firm higher than its rivals
    c. A declining market share, poor product quality and few sales in market
    d. Lower revenues and profit margin and narrow product line than the market leader
    Ans. c
  76. The strategy was developed by the visionary chief executive in which mode of strategic management?
    a. Planning mode
    b. Strategic mode
    c. Adaptive mode
    d. Entrepreneurial mode
    Ans. d
  77. What type of strategy is stability strategy?
    a. Corporate level
    b. Functional level
    c. Strategic level
    d. Business level
    Ans. a
  78. How many cells are there in a SWOT matrix?
    a. 9
    b. 6
    c. 3
    d. 2
    Ans. a
  79. One company buying another company means
    a. Joint venture
    b. Acquisition
    c. Amalgamation
    d. Merger
    Ans. b
  80. Strategic management is an important part of any business which helps with ………… formulation and business decisions.
    a. Strategy
    b. Tactics
    c. Procedure
    d. Marketing
    Ans. a
  81. In strategic management, SWOT stands for ………
    a. Strength, Weakness, Opportunity, Thread
    b. Strength, Weakness, Opportunity, Threat
    c. Strong, Weak, Open, Transparent
    d. Strategic Weapons for Worldwide Tactics
    Ans. b
  82. Which of the following is NOT a characteristic of an effective mission statement?
    A) Specific
    B) Measurable
    C) Flexible
    D) Realistic
    E) Inspirational
    Answer: C) Flexible
  83. Which of the following represents a core element of Michael Porter’s Five Forces analysis?
    A) Value Chain Analysis
    B) SWOT Analysis
    C) PESTEL Analysis
    D) Competitive Rivalry
    E) Benchmarking
    Answer: D) Competitive Rivalry
  84. When a company expands its existing business operations into a new industry or market, it is an example of:
    A) Horizontal Integration
    B) Diversification
    C) Vertical Integration
    D) Market Penetration
    E) Market Development
    Answer: B) Diversification
  85. The VRIO framework is used to assess a company’s:
    A) Competitive Advantage
    B) Profit Margin
    C) Market Share
    D) Customer Loyalty
    E) Financial Viability
    Answer: A) Competitive Advantage
  86. Which of the following is an external factor that organizations consider during the strategic management process?
    A) Organizational Culture
    B) Core Competencies
    C) Key Performance Indicators
    D) Political Environment
    E) Employee Turnover
    Answer: D) Political Environment
  87. The BCG Matrix classifies products or businesses into four categories based on:
    A) Market Growth Rate and Market Size
    B) Market Share and Market Growth Rate
    C) Market Potential and Competitive Intensity
    D) Product Differentiation and Cost Structure
    E) Customer Segmentation and Product Portfolio
    Answer: B) Market Share and Market Growth Rate
  88. In the context of strategic decision-making, SWOT stands for:
    A) Strengths, Weaknesses, Opportunities, Threats
    B) Sales, Workforce, Organization, Technology
    C) Strategy, Workflow, Objectives, Tactics
    D) Structure, Workflow, Organization, Training
    E) Sales, Workflow, Objectives, Technology
    Answer: A) Strengths, Weaknesses, Opportunities, Threats
  89. Which of the following statements is true about a differentiation strategy?
    A) It aims to target a broad market with low-cost products.
    B) It focuses on cost reduction to offer products at the lowest prices.
    C) It emphasizes unique and premium features to attract a specific market segment.
    D) It seeks to maintain the status quo and avoid significant changes in the business.
    E) It involves targeting a niche market with specialized products or services.
    Answer: C) It emphasizes unique and premium features to attract a specific market segment.

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Strategic Management MCQs with Answers

In this set of Strategic Management multiple-choice questions (MCQs), we will test your knowledge of strategic management concepts and principles.

Strategic Management MCQs

  1. Which of the following is NOT a step in the strategic management process?
    A) Strategy Formulation
    B) Strategy Implementation
    C) Strategy Evaluation
    D) Strategy Delegation
  2. A company’s internal strengths and weaknesses are assessed in which analysis?
    A) SWOT Analysis
    B) PESTEL Analysis
    C) Porter’s Five Forces Analysis
    D) BCG Matrix Analysis
  3. What does the “R” stand for in the VRIO framework used to assess a firm’s resources and capabilities?
    A) Rare
    B) Resource
    C) Reliable
    D) Responsive
  4. Which competitive strategy focuses on achieving a broad market scope and differentiation from competitors?
    A) Cost Leadership
    B) Market Development
    C) Differentiation
    D) Concentration
  5. The process of acquiring or merging with competitors to achieve strategic objectives is known as:
    A) Joint Venture
    B) Diversification
    C) Acquisition
    D) Vertical Integration
  6. What is the primary goal of a retrenchment strategy?
    A) Increase market share in current markets.
    B) Expand into new markets.
    C) Reduce costs and improve efficiency.
    D) Maintain stability and avoid risks.
  7. Which of the following is NOT one of Porter’s generic competitive strategies?
    A) Focus
    B) Cost Leadership
    C) Differentiation
    D) Market Penetration
  8. Which framework is used to analyze the strategic business units (SBUs) of a diversified company?
    A) BCG Matrix
    B) Ansoff Matrix
    C) GE–McKinsey Nine-Box Matrix
    D) Porter’s Five Forces Model
  9. Which strategic management tool helps in identifying the firm’s primary line of businesses and their interconnections?
    A) SWOT Analysis
    B) Value Chain Analysis
    C) Core Competencies
    D) Business Portfolio Matrix
  10. What does the “E” stand for in the PESTEL analysis?
    A) External
    B) Economic
    C) Evaluation
    D) Environmental
  11. Which growth strategy involves offering existing products in new markets?
    A) Market Penetration
    B) Market Development
    C) Product Development
    D) Diversification
  12. In the context of strategy implementation, what does “MBO” stand for?
    A) Managing Business Operations
    B) Market-Based Optimization
    C) Management by Objectives
    D) Maximizing Business Outcomes
  13. Which of the following is a component of the external environment in the PESTEL analysis?
    A) Vision and Mission
    B) Core Competencies
    C) Technological Factors
    D) Organizational Structure
  14. The process of identifying and evaluating competitors to make strategic decisions is known as:
    A) Competitive Intelligence
    B) Market Segmentation
    C) Market Analysis
    D) Consumer Behavior Analysis
  15. Which of the following is an example of a cost leadership activity?
    A) Offering high-quality products at premium prices.
    B) Differentiating products to create a unique brand image.
    C) Reducing production costs to offer lower prices than competitors.
    D) Focusing on a niche market with specialized products.
  16. In the context of the BCG Matrix, which category represents products with low market share in a slow-growing market?
    A) Stars
    B) Cash Cows
    C) Question Marks (Problem Child)
    D) Dogs
  17. Which strategy involves a reduction in the scope of a business’s activities, including selling off or closing down parts of the organization?
    A) Market Penetration
    B) Retrenchment
    C) Concentration
    D) Diversification
  18. What does the “I” stand for in the VRIO framework?
    A) Inimitable B) Innovation C) Integrated D) Internal
  19. Which of the following is NOT a potential risk of pursuing a differentiation strategy?
    A) Customers may be willing to pay a premium for unique features.
    B) Higher production and R&D costs to create differentiated products.
    C) Competitors imitating the unique features and reducing differentiation.
    D) Failing to meet customer expectations of unique features.
  20. The process of entering a new market with existing products is known as:
    A) Market Penetration
    B) Market Development
    C) Product Development
    D) Diversification
  21. Which strategy involves seeking growth opportunities within the organization’s current market and products?
    A) Market Penetration
    B) Market Development
    C) Product Development
    D) Diversification
  22. Which of the following is NOT a primary activity in Porter’s Value Chain Analysis?
    A) Inbound Logistics
    B) Operations
    C) Procurement
    D) Marketing and Sales

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Answers Strategic Management MCQs

Check out answers of MCQs on Strategic Management which are listed above for practice.

  1. D) Strategy Delegation
  2. A) SWOT Analysis
  3. A) Rare
  4. C) Differentiation
  5. C) Acquisition
  6. C) Reduce costs and improve efficiency.
  7. D) Market Penetration
  8. A) BCG Matrix
  9. D) Business Portfolio Matrix
  10. D) Environmental
  11. B) Market Development
  12. C) Management by Objectives
  13. C) Technological Factors
  14. A) Competitive Intelligence
  15. C) Reducing production costs to offer lower prices than competitors.
  16. D) Dogs
  17. B) Retrenchment
  18. A) Inimitable
  19. A) Customers may be willing to pay a premium for unique features.
  20. B) Market Development
  21. A) Market Penetration
  22. C) Procurement

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