cima cimapra19 e03 1 practice test

E3 Strategic Management

Last exam update: Dec 12 ,2025
Page 1 out of 19. Viewing questions 1-15 out of 278

Question 1

XYZ operates a national chain of restaurants.
Which THREE of the following are external environmental drivers for XYZ?

  • A. Appointment of a new Marketing Director
  • B. Recession in XYZ's country
  • C. Reduced personal income of its customers due to increased personal taxation
  • D. A direct competitor to XYZ closes down
  • E. Launch of a new improved menu by XYZ
Mark Question:
Answer:

B, C

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Question 2

Which of the following of Porter's Five Forces would affect the power of suppliers?

  • A. Economies of scale
  • B. A lack of differentiation
  • C. Similar sized competitors
  • D. A lack of substitutes
Mark Question:
Answer:

D

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Question 3

Which TWO of the following are economic factors?

  • A. Change of government
  • B. Interest rates
  • C. Obsolescence
  • D. Exchange rates
  • E. Demographic change
Mark Question:
Answer:

B, D

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Question 4

LMN is a medium sized Organization which has faced a number of challenges due to the recent
economic recession. In the last 3 years, its profits have fallen each year and it has made 10% of its
staff redundant during the same period. LMN has a hierarchical structure with formal lines of
communication. All of the key business decisions are made by a small senior management team, as
the senior managers believe that they have the most experience to make these decisions.

LMN has recently hired an external change agent to review its activities and to make
recommendations on what it must do to ensure its survival. Having spent several weeks talking to
staff and observing the activities and management processes of LMN, the external change agent has
made the following recommendations:
1. Reduce the management levels within LMN, as this is limiting its ability to respond effectively to
customer demands.

2. Allow some of its staff to take part in the decision making process, as much experience and
expertise is being overlooked when making key business decisions.

Which TWO of the following elements of the Cultural Web will be most affected by the change
agent's recommendations?

  • A. Organizational structure
  • B. Symbols
  • C. Routines and rituals
  • D. Power structures
Mark Question:
Answer:

A, D

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Question 5

Which THREE of the following frameworks are used solely to evaluate the external environment of
an Organization?

  • A. PEST Analysis
  • B. Porter's Five Forces Model
  • C. Porter's Diamond
  • D. Porter's Value Chain
  • E. Kaplan and Norton's Balanced Scorecard
Mark Question:
Answer:

A, B, C

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Question 6

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

Select ALL that apply.

  • A. A sudden increase in international terrorism.
  • B. A shortage of trained pilots in UUU.
  • C. A substantial rise in the price of oil.
  • D. A higher level of private car ownership.
  • E. Greater popularity of long-haul holidays.
Mark Question:
Answer:

A, C

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Question 7

BBB is a manufacturer of convenience meals. Which of the following could be Weaknesses for BBB?
Select ALL that apply.

  • A. Government health warnings about food ingredients.
  • B. A shortage of production capacity.
  • C. Outdated materials requirement planning processes.
  • D. A reduction in BBB's Marketing budget.
  • E. A rise in consumer demand for fresh food.
Mark Question:
Answer:

B, C, D

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Question 8

In Johnson, Scholes and Whittington's model of rational strategy which of the following stages
appear?
Select ALL that apply.

  • A. Analysis
  • B. Choice
  • C. Feasibility
  • D. Implementation
  • E. Sustainability
Mark Question:
Answer:

A, B, D

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Question 9

Which of the following did Johnson, Scholes and Whittington identify as success criteria for the
evaluation of strategic options?

Select ALL that apply.

  • A. Suitability
  • B. Affordability
  • C. Feasibility
  • D. Acceptability
  • E. Durability
Mark Question:
Answer:

A, C, D

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Question 10

EF manufactures and sells cars in Country X. Which of the following would improve its profitability?

  • A. Withdrawal of one of EF's major competitors from selling cars to motorists in Country X.
  • B. Introduction of legislation in Country X requiring improvements to the pay and conditions of the workers in car factories.
  • C. Adoption of free trade principles by the government of Country X, resulting in the removal of tariffs on imported cars.
  • D. An increase in the sales tax levied by the government of Country X on the sale of new cars.
Mark Question:
Answer:

A

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Question 11

Organizations have a variety of stakeholders, each with differing interests and requirements. This can
lead to stakeholder conflict. This can be further complicated when individuals are members of more
than one stakeholder group and when members of one group do not share the same principal
interest.
Company FF has decided that it needs to undertake a stakeholder analysis in order to manage its
stakeholders more effectively.
Which of the following statements are valid when undertaking stakeholder analysis?
Select ALL that apply.

  • A. Establishes stakeholder interests and claims on the Organization.
  • B. The analysis enables priorities to be set to minimize power clashes.
  • C. Considers how to prevent stakeholder trouble before it starts.
  • D. Determines the degree of power that each group holds.
  • E. The analysis only focuses on quantitative matters.
Mark Question:
Answer:

A, B, D

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Question 12

Which THREE principles are explicitly named in the CIMA Ethical Code for Management Accountants
Part A?

  • A. Objectivity
  • B. Professional Competence and Due Care
  • C. Integrity
  • D. Privacy of Information
  • E. Correct Personal Behavior
Mark Question:
Answer:

A, B, C

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Question 13

D is a Project Manager. D has just left a meeting with the Executive Team of his Organization. D is
delighted that the Executive Team has given support to D's proposal to implement a knowledge
management system in the Organization.

What should be the next activity that D undertakes in this project?

  • A. Create a technological infrastructure of hardware and software.
  • B. Create database structures to store and reference knowledge.
  • C. Gain the commitment of senior management to the project.
  • D. Populate the knowledge management system with knowledge.
Mark Question:
Answer:

A

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Question 14

Company MM is wanting to build an out of town shopping complex. This will be located near a busy
road which is surrounded by housing estates. MM has yet to obtain planning permission. It
recognizes that unless it takes action, the local residents will object to MM's plans. As the Publicity
Manager you have been asked to take over responsibility for Stakeholder Management.
Which of the following Stakeholder Management statements is NOT correct?

  • A. Organizations will have a variety of stakeholders each with differing attitudes to risk which can cause conflict.
  • B. Pressure groups have an interest in matters of public policy, but do not want to control the workings of government.
  • C. Stakeholder management is made more complicated for an Organization when individuals belong to more than one stakeholder group.
  • D. In measuring the satisfaction of stakeholder interests, Organizations should only focus on quantitative matters.
Mark Question:
Answer:

D

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Question 15

According to Johnson, Scholes and Whittington, Suitability is an important consideration when
evaluating potential alternative investment strategies.

Which of the following is a Suitability consideration?

  • A. There are limited raw materials available.
  • B. Finances are available.
  • C. Current markets are not saturated.
  • D. Staff will be resistant to change.
Mark Question:
Answer:

C

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