CMA USA, PART-1, SECTION-B, STUDY TOPIC-1: STRATEGIC PLANNING

Topic 1: Strategic Planning: Key Features

Strategic planning (sometimes referred to as long-range planning) involves a comprehensive
look at an organization in relation to its industry, competitors, and environment.

Strategy and Strategic Planning

Every well-managed organization formulates both strategies and strategic plans to some
degree. Executives and managers typically spend considerable time thinking about strategies to
achieve organizational goals; these strategies are then formally incorporated in a strategic plan.

Strategy
Strategy is a broad term consists of three levels:

Corporate (or multi business)

 Looks at opportunities the corporation has and includes geographical expansion,
mergers and acquisitions, and product expansion or contraction
 Defines the organization’s values Involves decisions about which industries the
organization will compete in and how the business units will be linked
 Determines how organizational resources will be allocated among the firm’s business
units
 Determines constraints on what the firm will and will not do

Competitive (or business unit)

 Defines how an organization competes in a given industry—how the firm creates value
in that industry
 Involves a vision of the customers the organization serves and how it delivers value to
them
 Aligns organizational activities so all efforts consistently reinforce the potential
advantage of the firm’s competitive positioning
 Reinforces the organization’s competitive strategy

Functional (within a business)

 Includes plans and objectives for marketing, finance, research, technology, operations,
and other business functions
 Focuses on coordination among the business functions
 Defines activities and processes to help the organization maximize its competitive
position
 Clarifies if and how the organization’s functions fit with its competitive strategy

Corporate strategy considers the big picture, determines the appropriate mix of businesses,
and identifies where and in what markets the firm competes.

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Strategic Planning
A conceptual representation of strategic planning is shown in Figure

Key Elements of Strategic Planning

Environmental Analysis Master Strategies Tactical Plans

Evaluation of major interests: Development of long-range Development of short-range

 External environment plans: plans:
—opportunities and  Vision  Operational plans
threats  Mission  Budgets
 Internal environment  Strategies
—strengths and  Goals
weaknesses  Objectives

The Relationship Between Strategy and Strategic Planning

In practice, strategy formulation and strategic planning overlap. But the two processes have
important conceptual differences.
On a fundamental level, strategy formulation results in new strategies and strategic planning
addresses how to implement the strategies. Additional distinctions can be made:
 Strategy formulation leads to organizational goals.
 Strategic planning is typically a systematic process with a timetable and some measure
of prescribed procedures.
 Strategies are continually reevaluated based on changes to both internal and external
factors.

Regardless of the overlap or distinctions in terms and processes, strategy formulation and
strategic planning both address the following core elements at some level:

1. External factors. Recognition of organizational opportunities, limitations, and threats

2. Internal factors. Recognition of organizational strengths, weaknesses, and competitive
advantages
3. SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis. Identification of
elements that will help or hinder the organization.
4. Long-term vision, mission, and goals. Development of the overall organizational vision
and mission and the formulation of long-term business goals
5. Tactics to achieve long-term goals. Development of short-term plans and tactics

Steps in a Stakeholder Analysis Framework

Step 1. Identify stakeholders; brainstorm a list of the main participants.

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Step 2. Determine stakeholder needs; collect input through interviews, focus groups, surveys,
and so on.
Step 3. Develop a matrix of the organization’s objectives and the stakeholders’ needs.
Step 4. Identify the effect of the organization’s objectives versus the stakeholders’ needs (using
a plus or minus sign or question mark).
Step 5. Make a decision based on the effects recorded.

Linkage of a Stakeholder Analysis to Strategic Planning

Stakeholder analysis helps an organization frame its corporate social responsibility and
identifies the role good citizenship plays in a business. Through stakeholder analysis, a firm
learns:
• How people feel about the organization and the industry it is in.
• What issues the organization should rethink/reevaluate its position on.
• What the organization should do differently to improve its position.

Linkage of Globalization to Strategic Planning

The stages of globalization are sometimes named or categorized slightly differently than those
just described. And, obviously, not every organization passes through each stage in exactly the
same way. Some can move at an accelerated pace due to mergers and acquisitions. Others
evolve slowly in a deliberate manner and may take years to move from export to MNC and
global. Regardless of the nomenclature, the number of stages, and the time frame it takes for
an organization to go global, it is helpful to recognize that globalization follows a progression.
An enterprise needs to acquire additional skills and competence as it moves towards
globalization. Various activities and functions evolve as an organization becomes a full-fledged
multinational or global organization. For example, international financial skills and tax
knowledge become increasingly important along the globalization spectrum. To compete
successfully in the global arena, organizations must make considerable investments in
resources, and these investments should be carefully crafted during strategic planning.

Linkage of Internal Capability Analysis to Strategic Planning

Internal Elements: Resources, Skills & Process

Strategic planning should involve an understanding of the internal requirements and

capabilities needed prior to the operational plans being made. In the end, due diligence in
assessing internal capabilities and addressing them appropriately helps the organization
position itself to take advantage of future opportunities.

Linkage of a SWOT Analysis to Strategic Planning

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A SWOT analysis will generate a series of lists that an organization will then need to sort
through. Organizations will be faced with a number of questions, such as:

• What interrelationships exist among the strengths, weaknesses, opportunities, and threats?
• Does the organization have the necessary resources and capabilities to seize the opportunities
and neutralize the threats?
• How many competitors already have the same resources and competencies?
• Are there barriers to market entry?
• Could the organization gain a source of competitive advantage?
• Will acquiring a particular resource or capability create a cost disadvantage for the firm?
• Are substitutes available?
• Does the organizational structure allow the firm to take full advantage of its resources and
capabilities and support potential growth/change?
 The challenge in evaluating all the strengths, weaknesses, opportunities, and threats is
to prioritize them and then identify appropriate actions. The basic idea is to:
• Build on strengths.
• Eliminate or deal with weaknesses.
• Exploit opportunities.
• Minimize threats.

Vision
An organization’s vision statement is a guiding image of future success and achievement
articulated in terms of the organization’s contribution to society. It is a succinct statement of
what an organization will do for future generations and how it wants to be perceived.

A clear vision statement is compelling and unites everyone in the organization. It will reflect
organizational values and inspire and challenge management and employees to action.

Mission
A mission statement provides the guiding compass for an organization. A mission statement
answers this question: Why are we in business? In answering this question, a mission statement
must be accurate, easily understood, motivating, and transferable into action. It expresses how
the organization will continuously move toward its vision and provides a clear view of what the
firm is trying to accomplish
for its customers and other stakeholders.

Goals
Goals are the targets that an organization hopes to achieve in order to fulfill its mission and
achieve its vision. Goals serve as general guidelines and tend not to be specific or quantifiable.
A goal states the desired end result and the benefits of that result. It does not state the
implementation plan. Organizations typically develop both strategic and tactical goals.

Strategic Goals

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Strategic goals are established at the highest levels of an organization. Strategic goals are long
range in nature. Examples of strategic goals are business diversification, the addition or deletion
of product lines, and the penetration of new markets. The achievement of strategic goals
requires the establishment and achievement of tactical goals.

Tactical Goals
Tactical goals generally are established by strategic business units (SBUs) or by functional
departments at middle and lower levels of an organization. Tactical goals are short range,
usually spanning one year or less. An example of a tactical goal is “to increase product line
profits by 10% in the next year.”

Concepts Applying to Strategic and Tactical Goals

Just as organizational strategies must be dynamic, so too must strategic and tactical goals. New
things are always on the competitive horizon. Therefore, goals need to be modified or changed
to reflect the internal and external changes taking place. At a minimum, goals should be
evaluated on an annual basis.

Objectives
Objectives provide the details or actions required to support the goals. Well-conceived
objectives specify the quantitative measures that will be used to track progress and
performance—the desired action, the timing of the action, the level of performance desired,
and the function or individual responsible for the action. Multiple objectives may support one
goal. In this situation, all the objectives must be completed to realize the benefit of the goal.
One objective alone cannot ensure fulfillment of the goal.

Strategic Plan and Operational Plan: (See Page 143: Table of comparison)
A strategic plan tends to have a long-range planning horizon. This can be between one and ten
years, depending upon the nature of the business. In contrast, an operational plan focuses on
the fiscal year ahead and involves more tactical issues. A strategic plan precedes an operational
plan because the strategic plan provides the foundation upon which the more detailed
operational plan is developed.

Benefits of Strategic Planning:

 A systematic approach to analyzing threats and opportunities and examining why some
organizational strategies have better competitive and profit prospects than others
 A sound framework for developing an effective operating budget
 An organizational learning opportunity for managers to think about strategies and how
to best implement them
 An exercise to align management decision making and actions with corporate strategies
(to gain the buy-in of managers and show how their decisions and actions support
corporate programs)
 A basis for both financial and nonfinancial performance measures
 A channel of communication among all levels of management about strategies,
objectives, operational plans, and so on

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 Guidance for approaching new situations

Limitations of Strategic Planning

Strategic planning is not the end-all panacea to all organizational woes. Some of the key
shortcomings of strategic planning include:
• The effort, time, and expense involved in the process
• The fact that planning based on predictions is not an exact science; due to a variety of factors,
plans may prove to be incorrect and fail
• The potential for resistance to change resulting from entrenched ways of doing things
• The risk that planning can become a bureaucratic exercise devoid of fresh ideas and strategic
thinking.

Contingency Planning
Well-conceived strategic plans are based on events that are likely to occur but should also
include the uncertainties that are so prevalent in today’s business environment.

Subjects of Contingency Plans

Typical conditions for contingency planning include:
• Lower sales or profit levels
• New entrants that can capture market share
• Government regulations
• Loss of a key executive or manager/succession planning for key employee replacement
• Damage to a critical facility
• Computer system hacking/information security issues
 Disaster recovery
• Sudden changes in interest rates
• Shrinking capital availability
• Union activity
• Mergers, acquisitions, and takeovers

Steps in Contingency Planning (For details see page -146, book; Wiley)
In most companies, contingency plans are prepared after the strategic plan is completed. The
strategic planning process provides valuable data for developing the contingency plans.
Contingency plans typically deal with short-range tactical strategies rather than long-range
strategies.
Steps for contingency planning.

Step 1. Identify potential scenarios needing contingency plans (events, what-ifs).

Step 2. Estimate the potential impact of the events identified (in financial terms, competitive
position, etc.).
Step 3. Develop strategies and tactical plans to deal with each possible occurrence.
Step 4. Specify trigger points or warning signals.
Step 5. Store plans off-site.
Step 6. Routinely review plans and revise as warranted (at least as often as strategic planning).

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Situational Analysis
Situational analysis refers to a collection of methods that an organization uses to analyze its
internal and external environment in order to enhance understanding of the organization’s
capabilities, customers, and business environment. The situational analysis looks at both the
macro environmental factors that affect many organizations within the environment and the
micro environmental factors that specifically affect the organization.
The purpose of the analysis is to identify the organization’s position and to provide an
assessment of the organization’s ability to survive within the environment. Organizations must
be able to summarize opportunities and problems within the environment so they can
understand their capabilities within the market.

The methods used in conducting a situational analysis might include a SWOT analysis, Porter’s
Five Forces analysis, as well as a 5C analysis.

 The company analysis looks at evaluating the organization’s objectives, strategy, and
capabilities.
 The competitor analysis assesses competitor position within the industry and the
potential threat it may pose to other businesses.
 The customer analysis is extensive, focusing on customer demographics (wants and
needs, motivation to buy, quantity and frequency of purchase, target advertising, etc.).
 Collaborator analysis deals with identifying other key “middlemen” that might help
increase the organization’s likelihood of gaining more business opportunities.
 Finally, a climate analysis focuses on researching factors within the business climate and
environment that can have an effect on the organization.

This analysis is also referred to as a PEST analysis, which includes conducting analyses of the
following:
• Political and regulatory environment. How actively the government regulates the market
with its policies and how this might affect the production, distribution, and sale of goods and
services.
• Economic environment. Analyzing trends regarding macroeconomics, such as exchange rates
and inflation rate, which can prove to influence businesses.
• Social/cultural environment. Focuses on interpreting societal trends, which include the study
of demographics, education, and culture.
• Technological analysis. Assessing current technological state and technological advances in
order to be able to stay competitive and gain advantage over competitors.

BCG Growth-Share Matrix

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The BCG Growth-Share matrix is a chart/matrix created by the Boston Consulting Group (BCG)
in 1970 to help organizations analyze their business units and/or product lines to enable the
firm to allocate resources appropriately.

Through the matrix, an organization ranks its business units or products on the basis of their
relative market share (RMS) and market growth rate (MGR) and places them into one of the
following four quadrants:
1. Cash cows. These business units or product lines have high RMS, but low MGR. They have a
positive net cash flow and do not need cash for expansion.
2. Dogs. These business units or product lines have low RMS and low MGR. They have a modest
net cash flow and cash should not be put towards them for expansion.
3. Stars. These business units or product lines have high RMS and high MGR. Their net cash flow
is usually modest. However, cash should be put into them for expansion. These are the units or
brands the firm would want to build.
4. Question marks. These business units or product lines have low RMS but a high MGR. Their
net cash flow is usually poor. The firm would put cash towards expansion if they are believed to
have potential. If not, the firm should divest them.

AFTER READING THE TEXT ABOVE PLEASE PRACTICE THE FOLLOWING RELATED MCQS (34)
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1. Question ID: ICMA 19.P1.016 (Topic: Strategic Planning)

A company is in the process of developing its mission statement. Which one of the
following is least appropriate for a company’s mission statement?

 A. Defining the purpose of the company.

 B. Promoting a common shared goal on the part of employees.
 C. Identifying what product or service the company is providing.
 D. Explaining the tactics for increasing market share in a specific
region.
.
2. Question ID: ICMA 19.P1.017 (Topic: Strategic Planning)
A company sells a product that is aimed at the broad mass market but is perceived as
unique throughout its industry. The company is earning above average returns on the
product. Which one of the following is the most appropriate term for the competitive
strategy followed by the company?

 A. Market focus.
 B. Differentiation.
 C. Financial leadership.
 D. Cost focus.
.
3. Question ID: ICMA 19.P1.018 (Topic: Strategic Planning)
The concurrent action of basic competitive forces as defined by Porter’s 5 forces model
determines the

 A. long-term profitability and the competitive intensity of the industry.

 B. strategy that a firm should follow to achieve its objectives.
 C. entrance barriers that potential players must face to get into the industry.
 D. rivalry inside
the industry.

.
4. Question ID: ICMA 19.P1.019 (Topic: Strategic Planning)
After leading the market for the past decade, the growth of product ABC is slowing down.
In this stage of its life cycle, the product is still generating significant amounts of cash
flows that cover the company’s investment into new product innovations. According to the
BCG Growth-Share Matrix, product ABC is most likely an example of a

 A. dog.
 B. star.
 C. question mark.
 D. cash cow.
.

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5. Question ID: ICMA 19.P1.015 (Topic: Strategic Planning)

The management of a food-processing company is analyzing its internal strengths and
weaknesses as part of its strategic planning process. Which one of the following is most
likely considered a strategic internal variable for the company?

 A. Technological changes in food-processing methods.

 B. The economic forces that regulate the local labor supply.
 C. Changes in the legal code for food processors.
 D. The culture at the company’s food-processing
plant. Question was not answered
.
6. Question ID: HOCK CMA P3A H9 (Topic: Strategic Planning)
When the organization develops a plan or plans to prepare for future, often
unpredictable events, it is called:

 A. Contingency planning.
 B. Long-term business planning.
 C. Capital budgeting.
 D. Short-term
business planning.

.
7. Question ID: HOCK CMA P3A H2 (Topic: Strategic Planning)
Which of the following is not a significant reason for planning in an organization?

 A. Forcing managers to consider expected future trends and conditions.

 B. Promoting coordination among operation units.
 C. Enabling selection of personnel for open positions.
 D. Developing a basis for controlling
operations.

8. Question ID: ICMA 1603.P1.025 (Topic: Strategic Planning)

Analyzing a company's technological capabilities, employee skills, and sales team
performance will provide

 A. external factors that identify the company's strengths and threats.

 B. external factors that identify the company's strengths and weaknesses.
 C. internal factors that identify the company's strengths and opportunities.
 D. internal factors that identify the company's strengths and
weaknesses.
.

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9. Question ID: HOCK CMA P3A H28 (Topic: Strategic Planning)

According to the BCG Growth-Share Matrix, all of the following are included in product
life-cycle strategies except:

 A. "Milking" the product.

 B. Superior responsiveness to customers.
 C. Increase investment in the product to maximize market share.
 D. Aggressive pricing to increase market
share quickly.

.
10. Question ID: HOCK CMA P3A H15 (Topic: Strategic Planning)
The sources of a company's distinctive competencies are:
 A. High profitability and sustained profit growth.
 B. The company's resources and capabilities.
 C. The company's prior strategic commitments.
 D. The company's threats and
opportunities.

.
11. Question ID: ICMA 1603.P1.034 (Topic: Strategic Planning)
During the strategic planning process, which one of the following is an external factor to
be analyzed?

 A. Societal culture.
 B. Organizational culture.
 C. Organizational structure.
 D. Employee
morale.

.
12. Question ID: HOCK CMA P3A H8 (Topic: Strategic Planning)
It could be argued that the reason a company has succeeded in a very competitive
market while its rivals have failed is because:

 A. The successful company has adopted more steps to its formal strategic planning process.
 B. The strategies that the successful company pursues have a strong impact on its
performance relative to its rivals.
 C. The company has evolved into a multi-divisional organization.
 D. The company has adopted a strategy with a low propensity for
risk-taking.

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.
13. Question ID: CMA 692 H9 (Topic: Strategic Planning)
Strategy is a broad term that usually means the selection of overall objectives. Strategic
analysis ordinarily excludes the

 A. Target product mix and production schedule to be maintained during the year.
 B. Forms of organizational structure that would best serve the entity.
 C. Best ways to invest in research, design, production, distribution, marketing, and
administrative activities.
 D. Trends that will affect the
entity's markets.

.
14. Question ID: HOCK CMA P3A H47 (Topic: Strategic Planning)
Profitability is derived from three basic factors. Which of the following is not one of those?
 A. The amount of value placed on the company's products or services by the customer.
 B. The costs of creating the company's products or services.
 C. The price that the company charges for its products and services.
 D. Research and development that is highly
innovative.
.
15. Question ID: HOCK CMA P3A H1 (Topic: Strategic Planning)
An organization that has a competitive advantage over its industry rivals will

 A. be able to distribute its product more quickly than other industry competitors.
 B. spends more money on advertising than its competitors do.
 C. be more profitable than the average company in its industry.
 D. have distribution channels that are wider than others in
its industry.
.

16. Question ID: HOCK CMA P3A H10 (Topic: Strategic Planning)
Michael Porter's Five Forces Model helps managers to analyze forces that shape
competition within an industry in order to identify opportunities and threats in their
industry environments. Which of the following forces is not one of the Five Forces?

 A. The closeness of substitutes to a company's products.

 B. The bargaining power of competitors.
 C. Risk of entry by potential competitors.
 D. The bargaining power
of suppliers.

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17. Question ID: HOCK CMA P3A H17 (Topic: Strategic Planning)
To avoid failure, a company must maintain a constant focus on all of the following except:

 A. Identification and adoption of the best industrial practices.

 B. The nature of the organization's previous strategy and strategic commitments.
 C. Continuous improvement and learning.
 D. The foundation and practices of competitive
advantage.

.
18. Question ID: CMA 692 H4 (Topic: Strategic Planning)
The plan that describes the long-term position, goals, and objectives of an entity within its
environment is the

 A. Capital budget.
 B. Strategic plan.
 C. Cash management budget.
 D. Operating
budget.

.
19. Question ID: ICMA 1603.P1.012 (Topic: Strategic Planning)
A company has developed and implemented a wireless charging feature into one of its
flashlights. No other competitor in the marketplace currently offers this feature. In a
marketing research study,
the vast majority of consumers indicated that they would pay a premium for this feature.
Which one of the following is the best strategy to bring this product to the market?

 A. Porter's cost strategy.

 B. Porter's focus strategy.
 C. Porter's differentiation strategy.
 D. Porter's
segmentation strategy.

.
20. Question ID: CMA 1290 3.16 (Topic: Strategic Planning)
All of the following are characteristics of the strategic planning process except the

 A. Analysis and review of departmental budgets.

 B. Review of the attributes and behavior of the organization's competition.
 C. Analysis of external economic factors.
 D. Emphasis on
the long run.

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21. Question ID: HOCK CMA P3A H7 (Topic: Strategic Planning)

Which one of the following management considerations does the company usually
address first in strategic planning?

 A. Overall objectives of the company.

 B. Recent annual budgets.
 C. Outsourcing.
 D. Structure of the
organization.

.
22. Question ID: HOCK CMA P3A H35 (Topic: Strategic Planning)
Some of the benefits that horizontal integration may provide include the all of the following
except:
 A. Increased bargaining power over supplier, providers and buyers.
 B. Cost reduction.
 C. Diseconomies of scale.
 D. Increase in the value of a company's product offering through
differentiation

23. Question ID: ICMA 1603.P1.027 (Topic: Strategic Planning)

Which one of the following describes what an organization wants to accomplish and
leads to the formulation of long-term business objectives?

 A. Strategy.
 B. Mission Statement.
 C. Competency.
 D. Values.
24. Question ID: HOCK CMA P3A H5 (Topic: Strategic Planning)
The method(s) that managers employ to attain one or more of the organization's goals
can be defined as:

 A. Choosing the company's organizational structure.

 B. Strategy.
 C. Capital investments.
 D. Determining the company's
business model.

25. Question ID: HOCK CMA P3A H30 (Topic: Strategic Planning)
Which of the following is not a characteristic of a tactical plan:
 A. Top management is responsible for development and overall implementation.
 B. It relates to production, materials requirements, inventory, cash flows and income
statements.
 C. It is quantitative in focus.
 D. It covers a period of time one year to
five years.

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.
26. Question ID: HOCK CMA P3A H45 (Topic: Strategic Planning)
The four factors that derive from a company's distinctive competencies and which create
competitive advantage are
 A. superior efficiency, quality, innovation, and customer responsiveness.
 B. continuous improvement, continuous learning, prior strategic commitments and
absorptive capacity.
 C. employee productivity, capital productivity, product innovation and process innovation.
 D. the value (utility) customers place on the company's products, the price it charges for
its products, the costs of creating those products, and the profitability of the company.
.
27. Question ID: HOCK CMA P3A H49 (Topic: Strategic Planning)
Four generic competitive strategies can be used to achieve competitive advantage.
Which of the following is not one of those strategies?

 A. Differentiation.
 B. Innovation.
 C. Focused cost leadership.
 D. Cost
leadership.

.
28. Question ID: HOCK CMA P3A H24 (Topic: Strategic Planning)
Companies group customers in order to gain a competitive advantage. This is called:

 A. Positioning.
 B. Product differentiation.
 C. Market segmentation.
 D. Customer
differentiation.

.
29. Question ID: ICMA 1603.P1.043 (Topic: Strategic Planning)
Products that are identified in the BCG Growth-Share Matrix as Cash Cows possess
relatively

 A. high market share in a low growth market.

 B. low market share in a low growth market.
 C. high market share in a high growth market.
 D. low market share in a high
growth market.

30. Question ID: HOCK CMA P3A H3 (Topic: Strategic Planning)

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A company's mission statement is, above all, intended to define:

 A. The specific actions that the company should take.
 B. The company's profit objectives.
 C. The weaknesses of the firm.
 D. Why the company exists, or its "reason to
be."
31. Question ID: HOCK CMA P3A H25 (Topic: Strategic Planning)
Strategic managers use different business-level strategies to put the company's business
model into action. Business-level strategies include all of the following except
 A. How and where to invest the company's capital in ways that will result in competitive
advantage.
 B. How much to differentiate and how to price the company's product or service.
 C. What products should be offered and to which customer groups (market segments).
 D. How to improve the product attributes, the service attributes and personnel attributes
associated with the company's product.
32. Question ID: ICMA 1603.P1.016 (Topic: Strategic Planning)
A company is the leading company in the premium bottled water industry. Its growth is
mainly driven by the negative health publicity on carbonated soft drinks and other
sweetened beverages.
Extensive inventory and distribution infrastructure is needed to compete in this industry.
Its main packaging materials can be sourced either locally or easily imported from
overseas. With its 60% market share, the company is able to influence prices and
competitive activity. The second biggest competitor holds 20% market share, while the
remaining 20% is shared by many small companies. Supermarkets and other grocery
retailers are the largest customer segment, accounting for approximately 45% of sales.
The supermarkets and grocery retailers are driving volume growth and are undergoing
consolidation into larger supermarket conglomerates. Using Porter’s 5 Forces, which one
of the following statements best reflects the industry environment?
 A. Low profitability due to low threat of substitutes and new entrants.
 B. High profitability due to high power of buyers and sellers.
 C. Low profitability but can increase due to increasing power of buyers.
 D. High profitability but can decrease due to increasing power of
buyers.
33. Question ID: ICMA 10.P1.001 (Topic: Strategic Planning)
Cerawell Products Company is a ceramics manufacturer that is facing several challenges
in its operations. Which one of the following is subject to the least control by the
management of Cerawell in the current fiscal year?
 A. Vendors have asked that the contract price for the goods they supply to Cerawell be
renegotiated and adjusted for inflation.
 B. Experienced employees have decided to terminate their employment with
Cerawell and go to work for the competition.
 C. A competitor has achieved an unexpected technological breakthrough that has
given them a significant quality advantage, and has caused Cerawell to lose market
share.
 D. A new machine that was purchased this year has not helped reduce Cerawell's
unfavorable labor efficiency variances.

Compiled By Tazminul Hoque ,Phone: 01760316160

 CMA USA, PART-1, SECTION-B, STUDY TOPIC-1: STRATEGIC PLANNING

34. Question ID: HOCK CMA P3A H37 (Topic: Strategic Planning)
One of the steps in the the strategic planning process is analyzing external factors in order
to identify the organization's opportunities and threats. Which of the following is not a part
of external analysis?

 A. Examination of the industry in which the company operates.

 B. Analysis of the national environment in which the company operates.
 C. Identification of the company's strengths and weaknesses.
 D. Analysis of the macro
environment.

Compiled By Tazminul Hoque ,Phone: 01760316160