Strategic Choices
30 original test MCQs, 2 marks each. Practice and separate-test stems differ. T001-T010 use one shared case below; T011-T030 stand alone.
Original practice, not official ICAI questions or suggested answers. Scores are temporary and not synced to Study Hub. Contract/current-rule/accounting/tax boundaries are included in the review pack.
Not scored yet.
Acorn Group: shared case for T001-T010
Acorn Group: one shared case for T 001-T 010
Acorn keeps a mature existing line efficient in its current product-market scope. It plans to sell an unchanged existing product in a genuinely new region and considers acquiring a supplier earlier in that product's value chain. A weak unrelated unit drains operating cash; core viability, funding and causes require diagnosis before turnaround/divestment choices. These moves must be coordinated rather than assuming every unit has the same direction.
For BCG only, define high market growth as at least 10% and high relative share as at least 1. Relative share is the unit's percentage divided by the largest OTHER competitor's percentage in the same defined market/period. Units: A market growth 15%,unit share 30%,rival 20%; B 3%,40%,20%; C 12%,10%,25%; D 2%,5%,20%. These are supplied model assumptions, not observed companies or approved investments. Actual costs, cash generation, resource needs and risk are not supplied.
Separately, Acorn proposes an alliance for research with a partner. Both remain independent/separate entities while sharing contributions, benefits and control in the proposed scope. Secret leakage, future competition, contribution/control and exit terms need review. No acquisition, alliance signing, disposal, closure, financing, staff action or information disclosure is authorised by this fictional scenario. The first ten questions use this same case and score independently; source holds and model limits remain visible.
SM-C04-T001 · 2 marksRead shared case
Acorn retains a mature line efficiently, expands a new region and reviews a weak unit. Corporate direction?
Explanation
Correct answer A: Combination of stability/growth/retrenchment possibilities.
Different units can have different directions.
SM-C04-T002 · 2 marksRead shared case
Existing product sold in Acorn's genuinely new region: Ansoff cell?
Explanation
Correct answer D: Market development.
Explicit product/market definitions control label.
SM-C04-T003 · 2 marksRead shared case
Acorn's proposed purchase of its input supplier is what?
Explanation
Correct answer C: Backward integration/external acquisition route.
Direction in linked chain and execution route differ.
SM-C04-T004 · 2 marksRead shared case
A growth 15%,shares 30/20 under high growth>=10% and high relative>=1 is what?
Explanation
Correct answer D: Star with relative 1.5.
Both supplied model axes are high.
SM-C04-T005 · 2 marksRead shared case
B growth 3%,shares 40/20 under the same cutoffs is what?
Explanation
Correct answer C: Cash cow with relative 2.
Low growth/high relative.
SM-C04-T006 · 2 marksRead shared case
C growth 12%,shares 10/25 under the same cutoffs is what?
Explanation
Correct answer C: Question mark with relative .4.
High growth/low relative.
SM-C04-T007 · 2 marksRead shared case
D growth 2%,shares 5/20 under the same cutoffs is what?
Explanation
Correct answer C: Dog with relative .25.
Both axes low; no automatic exit follows.
SM-C04-T008 · 2 marksRead shared case
Acorn's cash-draining weak unit needs what before turnaround/divestment choice?
Explanation
Correct answer B: Cause/core-fit/finance/viability assessment.
Recovery and disposal alternatives require evidence.
SM-C04-T009 · 2 marksRead shared case
Acorn's research partners remain separate and share benefits/control. Form?
Explanation
Correct answer A: Strategic alliance.
Independence plus cooperation distinguishes the case.
SM-C04-T010 · 2 marksRead shared case
Which portfolio conclusion is defensible for Acorn?
Explanation
Correct answer A: Assess cash/capability/risks and roles rather than automatically fund stars or liquidate dogs.
Matrix classification supports, not replaces, judgment.
SM-C04-T011 · 2 marksStability is called safe status quo with no need to adapt. What correction fits?
Explanation
Correct answer D: Preserve scope while improving efficiency and responding to relevant changes; risk remains.
Source positive adjectives are not guarantees.
SM-C04-T012 · 2 marksAnsoff classification is ambiguous because the baseline market is unstated. What is needed?
Explanation
Correct answer A: Define existing/new product and customer-market boundaries.
Novelty depends on baseline/context.
SM-C04-T013 · 2 marksA new product is sold to existing customers. How does SM4 resolve SM3 focus wording?
Explanation
Correct answer C: Product development, not penetration, under explicit axes.
SM 4 p 9/24-25 clarifies the grid.
SM-C04-T014 · 2 marksSharing a brand is assumed to guarantee related-diversification synergy. Qualification?
Explanation
Correct answer A: Assess actual transferable assets/skills and net benefit against coordination costs.
Potential links need fit/economic support.
SM-C04-T015 · 2 marksA firm combines unrelated operations mainly to subsidise persistent losses. What should be tested?
Explanation
Correct answer D: Strategic fit, returns, risk and opportunity cost rather than automatic financial sense.
Source optimistic claims must be qualified.
SM-C04-T016 · 2 marksA purchase is friendly and target strong. Can it still be acquisition?
Explanation
Correct answer A: Yes if control/structure establish acquisition; tone/relative strength are not conclusive.
Source page 15 tone stereotypes not definitions.
SM-C04-T017 · 2 marksA merger is proposed to eliminate competitive pressure. Which scope boundary matters?
Explanation
Correct answer D: Assess actual terms/current competition rules; no anticompetitive conduct authorised by a textbook rationale.
Classification is research, not action permission.
SM-C04-T018 · 2 marksForeign local partner may aid entry. What cannot be inferred?
Explanation
Correct answer C: Automatic exemption from local law or improper political influence permission.
Political/context advantages need lawful verified terms.
SM-C04-T019 · 2 marksEmergency turnaround actions aim primarily at what?
Explanation
Correct answer B: Stop cash leakage/stabilise operations and feasible funding.
Actions need actual terms/authority and viable priorities.
SM-C04-T020 · 2 marksCore business irreparably damaged but managers assume any restructuring guarantees survival. Correction?
Explanation
Correct answer B: Evaluate core viability, assets/debts/cash and alternatives; recovery may be impossible.
Turnaround stages do not eliminate feasibility risk.
SM-C04-T021 · 2 marksDivestment is considered shameful regardless mismatch/alternative value. View?
Explanation
Correct answer A: It can be an integral corporate strategy evaluated on evidence, not stigma.
Source frames disposal as strategic option.
SM-C04-T022 · 2 marksTotal abandonment of activities in strategic overview is called what?
Explanation
Correct answer B: Liquidation, with detailed legal mechanics outside this source coverage.
Brief strategic definition is not insolvency/legal advice.
SM-C04-T023 · 2 marksADL position adequate but vulnerable to stronger rivals is what?
Explanation
Correct answer D: Tenable.
Satisfactory but vulnerable differs from weak unsatisfactory.
SM-C04-T024 · 2 marksADL ageing/tenable table suggests divest/retrench. Must it automatically exit?
Explanation
Correct answer B: No; compare evidence, resources and alternatives before choice.
Model gives conditional options, not compulsion.
SM-C04-T025 · 2 marksNew product has 60% absolute share/profit, no market growth/rival share. Star classification?
Explanation
Correct answer C: Unresolved: need market growth and relative-share denominator/cutoffs.
Coufix source example lacks complete explicit axes;do not overclaim.
SM-C04-T026 · 2 marksWhich BCG post-identification role prioritises short-term cash despite long-term effects?
Explanation
Correct answer B: Harvest.
Harvest differs from building/preserving share.
SM-C04-T027 · 2 marksAn SBU increases share while sacrificing near-term earnings. Role?
Explanation
Correct answer D: Build.
Objective is stronger future share.
SM-C04-T028 · 2 marksGE attractiveness weights .4/.35/.25 with ratings 4/3/2 give score?
Explanation
Correct answer B: 3.15.
1.6+1.05+.5=3.15; rating directions defined.
SM-C04-T029 · 2 marksGE strength weights .3/.3/.4 with ratings 4/3/5 give score?
Explanation
Correct answer A: 4.1.
1.2+.9+2=4.1.
SM-C04-T030 · 2 marksGE medium attractiveness/strong strength suggests invest/expand. What caveat applies?
Explanation
Correct answer B: Conditional guidance with rating/weight/cash/risk/fit review, not guaranteed return or authority.
Multifactor ratings are assumptions and choices need judgment.