IMANET IMANET Certifications IMANET-CMA Questions & Answers

• Question 1011:

  A large firm may be ,iewed as a portfolio of investments in the form of

  A. MGRs.

  B. SBUs.

  C. RMSs.

  D. BOGs.

  Correct Answer: B

  A strategic business unit (SBU) is a business (or a group) for which separate planning is possible An SBU also has its own competitors and a manager who engages in strategic planning and is responsible for the major determinants of proflt According, a large firm may be viewed as a portfolio of investments in the form of SBUs.

• Question 1012:

  A weak competitor in a high-growth market is sometimes called a A. Dog.

  B. Question mark.

  C. Cash cow.

  D. Star.

  Correct Answer: B

  A weak competitor En a high-growth market is called a question mark. They need large amounts cash to finance growth. However, if market share increases substantially. the question mark can become a star.

• Question 1013:

  General Electric has popularized a model for competitive analysis. In this portfolio matrix,

  A. Each of the firm's businesses is represented by a circle proportional to its size.

  B. Business strength and market attractiveness are measured using a multifactor index.

  C. The number of cells vanes with the number of factors used by the firm in its analysis.

  D. The four quadrants represent combinations of high or low market growth rates and business profitability.

  Correct Answer: B

  The GE model is a multifactor portfolio matrix with two variables. Business strength or `competitive position (BUS) is on one axis, and market attractiveness (MAT) is on the other. To measure BUS and MAT, the firm must isolate the multiple factors affecting each, quantity them, and create an index. Factors will vary with business. The measurements will provide the values on the axes of the matrix.

• Question 1014:

  A strategic business unit (SBU) has a relative market share (RMS) of 2.0 and a market growth rate (MGR) of 9.5%. According to the partook model for competitive analysis created by the Boston Consulting Group, such an SBU is considered a

  A. Star.

  B. Question mark.

  C. Cash cow.

  D. Dog.

  Correct Answer: C

  The annual MGR reflects the maturity and attractiveness of the market and the relative need for cash to finance expansion. An MOP of 10% or more is generally regarded as high. The RMS reflects an Sub's competitive position in the market segment. An RMS of 1.0 or more signifies that the SBU has a strong competitive position. Cash cows have high RMS and low MOR... They are strong competitors and cash generators in low- growth markets.

• Question 1015:

  A milk producer company acquires its own dairy farms to suppi milk. The growth strategy adopted by the company can be identified as

  A. Horizontal integration.

  B. Vertical integration.

  C. Concentric diversification.

  D. Conglomerate diversification

  Correct Answer: B

  Vertical integration occurs when a company becomes its own supplier or distributor. It combines within a firm production, distribution, selling, or other separate economic processes needed to deliver a product or service to a customer.

• Question 1016:

  A niche strategy adopted by a firm in a declining industry

  A. May entail aggressive pricing or marketing.

  B. Seeks a market segment with a stable or slowly decreasing demand with a potential for above-average returns.

  C. Is a controlled, gradual liquidation.

  D. Requires early sale of the business.

  Correct Answer: B

  A niche strategy seeks a market segment with stable or slowly decreasing demand with the potential for above-average returns. Some of the moves undertaken when following a leadership strategy may be prop

  ate. The firm may eventually change to a harvest or divest strategy.

• Question 1017:

  Which of the following is a factor in the choice of strategy in a declining industry?

  A. Likelihood of an industry produce profits.

  B. The nature of entrants to an industry.

  C. Externalities in industry development.

  D. Mobility burners,

  Correct Answer: A

  One factor in the choice of strategy in a declining industry is whether the declining industry is like to .idle profits to the firm, that is, whether industry structure is favorable.

• Question 1018:

  In an emerging industry,

  A. Price wars are likely.

  B. Defending market share and maximization of profits are the key strategies.

  C. Specific strategies are more beneficial than general strategies.

  D. Competitors are few, and customers must be corniced to try the product.

  Correct Answer: D

  An emerging industry is characterized by technological uncertainty regarding products and production methods. Also, strategic uncertainty arises because effective strategies have not yet been identified. Hence, firms are experimenting th product features, production methods, marketing approaches. etc. Moreover, competitive intelligence is necessarily poor because competitors have not been identified, and industry sales and other data are not available. By definition, customers are first-time birers. The marketing problem is to convince these customers that the benefits of substituting the product or service for something else exceeds the asks.

• Question 1019:

  Which of the following is most like an evolutionary process that causes structural change in an industry?

  A. Protection of proprietary knowledge.

  B. Barriers to entry.

  C. Innovation,

  D. Lack of buyer sophistication.

  Correct Answer: C

  According to Porter, the focus of the anatsis of industry evolution should be on evolutionary processes that create structural change in an industry. They operate to move an industry from its initial structure to its potential structure. The nature of that structure and the speed at which it will be achieved are junkie to be known. They depend on numerous factors that are hard to predict, such as innovations in technology, products, processes, and arketing_resources and skills of firms; favor LeorunfavoraLe random events, and judgments about investments.

• Question 1020:

  A market follower is a firm that does not choose to challenge the market leader. This firm must have its own strategy for maintaining its share of the market. When the firm improves products that are already on the market and operates in different markets, it is a (n).

  A. Counterfeiter.

  B. Cloner.

  C. Imitator.

  D. Adapter.

  Correct Answer: D

  An adapter improves products and may operate in different markets or evolve into a market challenger