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QUESTION NO: 1
PPP is a company that designs and markets attractive handsets, tablets, and laptop PCs globally. Its brand is one of the top ten global brands. PPP uses external companies to manufacture its products.
The recently appointed CEO of PPP presented the company's strategy to a meeting of investors and journalists.
The CEO referred to public concerns about its past ways of doing business. He stated that PPP was actively seeking to address concerns about exploitation of workers in the factories of its suppliers. He said that PPP is also establishing a system to recycle or refurbish its products to avoid hazardous materials leaking into the environment and to give recycled products free of charge to people in poorer countries who cannot afford to buy them.
One investor asked the CEO to confirm whether this strategy would improve the profits of PPP in the present financial year. The CEO replied that it would not but that the strategy was essential to protect the future of the PPP brand. The investor was unhappy with this response from the CEO of
PPP.
Which of the following statements reflects BOTH the CEO's and investor's stances on Corporate Social
Responsibility (CSR) expressed at the meeting?
A. The CEO is taking a long-term shareholder interest stance. The investor is taking a short-term shareholder interest stance.
B. The CEO is taking a multiple stakeholder stance. The investor is taking a longer-term shareholder interest stance.
C. The CEO is taking multiple stakeholder obligation stance. The investor is taking a multiple stakeholder obligation stance.
D. The CEO is taking a shaper of society stance. The investor is taking a longer-term shareholder interest stance.
Answer: A
QUESTION NO: 2
Which of the following statements is NOT a role for Management Accountants involved in the strategy development process?
A. Assist the Board in determining risk appetite.
B. Integration of financial and non-financial information.
C. Consider and raise awareness of the ethical impact of proposed strategic decisions.
D. Writing the Annual Report.
Answer: A
QUESTION NO: 3
SSS is a large department store. It operates a chain of stores throughout Country Z. It offers a wide range of products, from cosmetics through to home furnishings.
SSS's Value Chain is presented below.
Which of the following generic strategies is being undertaken by SSS?
A. Differentiation Focus
B. Stuck in the middle
C. Differentiation
D. Cost Leadership
Answer: C
QUESTION NO: 4
STU is a hospital that is wholly funded by its national government. In the last five years it has seen its funding cut by over 30% due to budgetary pressure on the government, caused by a global recession. As a result, the senior management team of STU has had to make some very difficult decisions about prioritizing how it spends the funds it receives from the government. Its main strategies have been to reduce the number of administration staff and nursing staff by 20%, in order to reduce its costs. It has also stopped providing a number of services to patients, including its counselling services and its physiotherapy unit.
Which of the following strategies has STU adopted to manage its reduced funding? (Choose all that apply.)
A. Turnaround
B. Liquidation
C. Retrenchment
D. Facilitation
E. Divestment
Answer: E
QUESTION NO: 5
Porter suggests that competitive advantage arises from the implementation of a 'generic strategy'. Which THREE of the following are NOT generic strategies?
A. Focus
B. Market penetration
C. Market development
D. Cost leadership
E. Differentiation
F. Diversification
Answer: B,C,F
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Updated: May 28, 2022