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1 :

. : 10/11/13 :

2013/2014
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Question one: please indicate Yes or No. (30 marks)
1. ( ) Optimizing for tomorrow the trends of today is the purpose of strategic
management.
2. ( ) Even though useful, strategic planning has been cast aside by corporate
America since the early 1980s.
3. ( ) A mission statement is, in essence, a companys game plan.
4. ( ) Strategy formulation is often considered to be the most difficult stage in
the strategic-management process because it requires personal
discipline, commitment and sacrifice.
5. ( ) The final stage in strategic management is strategy control.
6. ( ) Environmental scanning, strategy formulation, implementation and
evaluation activities occur at three hierarchical levels in a small
organization: corporate, divisional and functional.
7. ( ) One of the fundamental strategy evaluation activities is reviewing
external and internal factors that are the bases for current strategies.
8. ( ) Analytical and intuitive thinking should complement each other.
9. ( ) Once a firm acquires a competitive advantage, they are usually able to
sustain the competitive advantage for an extended period of time.
10. ( ) A vision statement answers the question, What is our business?,
whereas a mission statement answers, What do we want to become?
11. ( ) The foundation for development of a comprehensive mission
statement is provided by a clear vision.
12. ( ) The vision statement should be shortpreferably one sentence.
13. ( ) A mission statement is a declaration of an organizations reason for
being.
14. ( ) In order to motivate a workforce effectively, both profit and vision are
needed.
15. ( ) When developing a mission statement, it is usually advisable to involve
as much managers as possible.
16. ( ) The first step in the process of developing a mission statement is to ask
all participants to prepare what they believe the organizations mission
should be.
17. ( ) A mission statement is usually a simple statement of specific beliefs.
18. ( ) A mission statement should be broad enough to reconcile differences
among an organizations various stakeholders.
19. ( ) Stakeholders both affect and are affected by an organizations strategic
decisions.
20. ( ) Good vision statements identify the utility of a firms products to its
customers.
21. ( ) An effective mission statement generates the impression a firm is
successful, has direction, and is worthy of time, support and
investment.
22. ( ) Environmental changes should not change a mission statement or a
vision statement..
23. ( ) An external audit focuses on identifying and evaluating trends and
events within the control of management.
24. ( ) To perform an external audit, a company first must gather competitive
intelligence and information about social, cultural, demographic,
environmental, economic, political, legal, governmental and
technological trends.
25. ( ) Research findings suggest that a greater percentage of a firms
profitability can be explained by the internal factors than can be
explained by the firms industry.
26. ( ) According to Michael Porter, five competitive forces create vital
opportunities and threats to organizations: (1) new entrants, (2)
substitute products or services, (3) bargaining power of suppliers, (4)
bargaining power of buyers, and (5) rivalry among existing firms.
27. ( ) Forward integration is used by firms to gain control or ownership of
suppliers.
28. ( ) Political, governmental, and legal factors are considered key threats for
most small and large organizations.
29. ( ) Freund argues that key external factors must be hierarchical.
30. ( ) Horizontal is used by firms to gain control or ownership of
competitors' companies.

Question two: choose the right answer. (10 marks)

1. What can be defined as the art and science of formulating, implementing and
evaluating cross-functional decisions that enable an organization to achieve
its objectives?
a. Strategy formulation
b. Strategy evaluation
c. Strategy implementation
d. Strategic management
e. Strategic leading
2. ____________ is used to refer to strategic formulation, implementation and
evaluation, with ______________ referring only to strategic formulation.
a. Strategic planning; strategic management
b. Strategic planning; strategic processing
c. Strategic management; strategic planning
d. Strategic management; strategic processing
e. Strategic implementation; strategic focus
3. An important activity in __________ is taking corrective action.
a. strategy evaluation
b. strategy implementation
c. strategy formulation
d. strategy leadership
e. all of the above
4. Which statement best describes intuition?
a. It represents the marginal factor in decision-making.
b. It represents a minor factor in decision-making integrated with analysis.
c. It should be coupled with analysis in decision-making.
d. It is better than analysis in decision-making.
e. It is management by ignorance.
5. The strategic-management process
a. occurs once a year.
b. is a sequential process.
c. is a continuous process.
d. applies mostly to companies with sales greater than $100 million.
e. applies mostly to small businesses
 6. As indicated in the strategic-management model, a clear _______ is needed
before alternate strategies can be formulated and implemented.
a. long-term objective
b. short-term objective
c. policy
d. mission statement
e. evaluation strategy
7. After a draft mission statement has been developed, it is important to:
a. ask managers to read several articles about mission statements as
background information.
b. vote on the mission statement.
c. ask managers to prepare a mission statement for the organization.
d. ask managers to seek support for the mission statement from their
subordinates.
e. provide a request for modifications, additions and deletions to the
mission statement
8. __________ is not part of an external audit.
a. Analyzing competitors
b. Analyzing financial ratios
c. Analyzing available technologies
d. Studying the political environment
e. Analyzing social, cultural, demographic and geographic forces
9. When an industry relies heavily on government contracts, which forecasts can
be the most important part of an external audit.
a. economic
b. political
c. technological
d. competitive
e. multinational
10. A systematic and ethical process for gathering and analyzing information about
the competitions activities and general trends to further a business own goals is
called
a. unethical business practice.
b. artificial intelligence.
c. competitive intelligence.
d. information sharing.
e. competitive advantage.

Question three: Answer the following questions. (10 marks)

1. List the main components of strategy formulation process? (2.5 marks)
2. Mention five benefits of using strategic management technique? (2.5 marks)

3. List five steps that comprise an effective framework for conducting an EFE
Matrix. Explain the details involved in performing any one of the steps. (5 marks)

Good Luck