IMANET IMANET Certifications IMANET-CMA Questions & Answers

• Question 1001:

  An example of a governmental impediment to global competition is k High storage costs.

  A. Labor regulations.

  B. High information and search costs.

  C. Greater responsiveness by local firms.

  Correct Answer: A

  Governmental impediments to global competition are general imposed for the announced purpose of protecting local firms and jobs and developing new industries. They also may have the effect of raising revenue. Examples of impediments are tariffs: duties: quotas: domestic content rules: preferences for local firms regarding procurement, taxes, RandD, labor regulations, and other operating rules: and laws (e.g.. anti-bribery or tax) enacted by a national government that impede national firms from competing globally. These impediments are most ,likely when industries are viewed as crucial

• Question 1002:

  Which of the following is an impediment to global competition?

  A. Lack of world demand.

  B. Global experience.

  C. Product redefinition.

  D. Broad line global competition.

  Correct Answer: A

  Global introduction of a product may be hindered by lack of world demand. The reason may be that the product lacks appeal except in a few markets or that it is in an early stage of the product life cycle of world trade. Thus, initial introduction should be in a few markets where the product has the greatest appeal. Over time, with Product imitation and technology diffusion, the product may spread to new markets,

• Question 1003:

  Which strategy in a global industry is most Ikea to be facilitated by a transnational coalition?

  A. A protected niche strategy.

  B. A nab onal focus strategy.

  C. A national segment strategy.

  D. Broad line global competition.

  Correct Answer:

  Broad line global competition is competition over the full product line of the firm based on differentiation or low cost. The firm needs large resources for this long-term strategy. Governmental relations should emphasize impediment reduction. Transnational coalitions may be created to help the firms overcome impediments to executing the broader strategies, for example, market access or technology barriers.

• Question 1004:

  Governments restrict trade to

  I. Help foster new industries.

  II.

  Protect declining industries. Ill. Increase tax revenues.

  A.

  lon'.

  B.

  land II only.

  C.

  II and Ill only.

  D.

  I, II, and Ill.

  Correct Answer: D

  Governmental impediments to global competition are generally imposed for the announced purpose of protecting local firms and jobs and developing new industries. They also may have the effect of raising revenue. Examples of impediments are tariffs; duties; quotas; domestic content rules; preferences for local firms regarding procurement, taxes, RandD, labor regulations, and other operating rules; and laws (e.g., anti-bribery or tax) enacted by a national government that impede national firms from competing globally. These impediments are most belly when industries are `iewed as crucial

• Question 1005:

  A global industry is one that?

  A. Contains competitors that are multinationals.

  B. Has secured a competitive advantage based on economies of scale in centralized production.

  C. Has a strategic advantage by establishing coordinated competition in many national markets.

  D. Has made large direct investments abroad.

  Correct Answer: C

  The anises of a competition in an industry requires consideration of the economics of the industry and the characteristics of competitors. However, in a global industry, the anises is not limited to one market. but extends to all markets (geographic or national) taken together. Michael E. Porter defines a global industry as one in which the strategic positions of competitors in major geographic or national markets are fundamental affected by their overall global positions." Thus, an industry becomes global because it perceives a net strategic advantage to competing, as Porter says, in coordinated way in many national markets

• Question 1006:

  Which of the following is a source of global competitive actvantage?

  A. Low fixed costs.

  B. Production economies of scale

  C. Weak copyright protection.

  D. Intensive local service requirements.

  Correct Answer: B

  Production economies of scale exist when a firm can produce and sell the output at which the average total cost of production is minimized. (The archetpal example is oil refining.) In other words, economies of scale in centralized production may jield a cost advantage achievable on when output exceeds the demand in one `country and exports are feasible.

• Question 1007:

  Samsec, Inc. has four major disions. each doing business in a different market Market growth rates and relative competitive positions for each of these four divisions are shown below. A relative competitive position is defined as the dMsion's market share relative to the market share of the next largest competitor in the industry. Business Relative Growth Competitive Rate Position Division A 13% 4% Division B 12% 110% Division C 5% 12% DivisionD 4% 170%

  Which division most likely does not have the strategic potential to generate a significant level of cash?

  A. DMsIonA.

  B. Division B

  C. Division C.

  D. DMsionD

  Correct Answer: C

  Techniques of portfolio analysis have been developed to aid management in making decisions about resource allocation, new business startups and acquisitions, downsizing, and divestitures, One of the two portfolio models most frequently used for competitive analysis was created by the Boson Consulting Group (BOG). This model, the growth- share matrix, has two variables. The market growth rate (MGR) is on the vertical aas, and each SBU's relative market share (RMS) is on the horizontal axis. The graph is dMded into four quadrants. designated "stars "question marks," "cash cows," and "dogs Division C isa"dog" - -

• Question 1008:

  According to a business portloho analysis model developed by General Electric. if a strategic business unit is classified in Zone 1, what are the possible BUS and MAT combinations?

  A. Strong BUS and High MAT, medium BUS and high MAT, strong BUS and medium MAT.

  B. Medium BUS and low MAT, weak BUS and medium MAT, weak BUS and low MAT.

  C. Strong BUS and low MAT, medium BUS and MAT, weak BUS and high MAT.

  D. Strong BUS and high MAT, medium BUS and MAT, weak BUS and low MAT.

  Correct Answer: A

  Zone 1 is located in the upper left-hand corner of the diagram. It consists of strong BUS and high MAT, medium BUS and high MAT, strong BUS and medium MAT.

• Question 1009:

  According to the growth-share matrix model for business portfolio analysis, a divest strategy

  A. Is necessary for a question mark with potential to be a star.

  B. Is used for strong cash cows.

  C. Is normally used for question marks and dogs that reduce the firm's profitability.

  D. Maximizes short-term net cash inflow.

  Correct Answer: C

  A dwest strategy is normally used for question marks and dogs that reduce the flrrrs profitability. The

  proceeds of sale or liquidation are then invested more favorably.

• Question 1010:

  According to the growth-share matrix model for business portfolio analysis, which of the following provide resources for investment in other SBUs?

  A. Stars.

  B. Duson marks.

  C. Cash cows.

  D. Dogs.

  Correct Answer: C

  Cash cows are strong competitors and cash generators. An SBU that is a cash cow ordinarily enjoys high profit margins and economies of scale. Financing for expansion is not needed, so the SBUs excess cash can be used for investments in other SBUs.