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CIMA E3 Exam Actual Questions
E3 Strategic Management (Page 5 )

Updated On: 2-Aug-2026
Page 5 of 36
PDF with 278 Questions

FFF is considering developing a new website that will allow it to advertise and sell its high quality jewellery products online. The Board of FFF has identified that the cost of developing and managing a website would be relatively low. It is predicted that FFF will sell only a small percentage of its products through the website, as most customers like the personal experience of shopping in store.
However, research undertaken by the Marketing Director indicates that the website could be used very successfully by FFF for online marketing and customer communication. Therefore, the Marketing Director has suggested that FFF should develop an IT/ IS strategy to ensure a strategic focus for its website development. However, most of FFF's Board members, who are the main shareholders of the business, believe that developing an IT/IS strategy is unnecessary in order to develop and manage its website.
Which of the following arguments could be made by the Marketing Director to the Board of FFF to persuade it that an IT/ IS strategy would be appropriate in relation to the current website development?

  1. IT/ IS is expected by FFF's key stakeholders and should therefore have a strategic focus.
  2. IT/ IS forms the basis of FFF's competitive advantage and therefore requires a strategic focus.
  3. IT/ IS is fast moving and FFF can take advantage of new technologies as they become available, if managed strategically.
  4. IT/ IS is very expensive and without a strategic focus there is a risk of costly mistakes.

Answer(s): C



Company PP is a large UK retail company.
In the past it has focused primarily on using financial performance measures. However, PP then realised that this was leading to short-term decision-making on investment in easily valued assets and under investment in assets such as employee skills and customer satisfaction, where short-term returns are more difficult to measure.
It has therefore adopted the Balanced Scorecard approach. PP is now considering enhancing it's approach by using Kaplan and Norton's Strategic Mapping model, as this will enable it to establish its priorities and manage stakeholder expectations.
Which of the following statements would be regarded as improvements by using Strategic Mapping.
Select ALL that apply. 

  1. It will help to identify and prioritise how external processes would support PP's strategies.
  2. It will help PP establish the overriding objective of the Organization.
  3. It will help PP to identify and clarify customer-orientated strategies that support the overall business strategy.
  4. It will help inform which strategies, in each of the Balanced Scorecard perspectives, support improved performance.
  5. It will help PP to evaluate the operational and financial performance of the business.

Answer(s): B,C,D



A resource audit identifies the resources that are available to an Organization and seeks to start the process of identifying competencies. By assessing the results from a resource audit, a company can evaluate how well its resources have been utilised and the efficiency and effectiveness of the Organization's systems.
The Ms model is used to help managers undertake a resource audit.
Which THREE categories will be included in a resource audit?

  1. Management
  2. Motor vehicles
  3. Make-up
  4. Money
  5. Market research

Answer(s): A,C,D



Using Earl's 'Three levels of IT strategy' framework, which one of the following activities would occur as part of an Information Systems (IS) strategy?

  1. Design of key performance measures for an information system.
  2. Employing an IT Director to control the Organization's information system.
  3. Selection of the hardware for a new Information system.
  4. Evaluation of an SBU's information system to ensure that it continues to meet customer needs.

Answer(s): D



Kotter and Schlesinger identified six change styles.
Which of the following situations would be better managed by a Negotiation and Agreement style?

  1. Where the proposed change will disadvantage a powerful group of employees.
  2. Where management prefers to force through the change quickly and against the interests of the staff.
  3. Where management requires the detailed technical knowledge of the staff affected to design the change.
  4. Where staff are positive about the benefits from the change but do not understand what management requires them to do.

Answer(s): A



MMM is a multi-national company that manufactures and sells consumer durables.  MMM has recently experienced severe trading losses and its Marketing Director has decided to revise the Marketing Strategy paying due regard to MMM's key external drivers.
Which THREE of the following are key external drivers for MMM?

  1. A change in consumer age profiles in a country where MMM sells 5% of its output.
  2. A modification to MMM's production processes designed to save fuel.
  3. A change in MMM's domestic advertising agency.
  4. A growth in Protectionist trade policies in Africa and Asia.
  5. An upward trend in commodity prices.
  6. A decline in the value of the Euro and the U.S. dollar.

Answer(s): D,E,F



Johnson, Scholes and Whittington suggest that Acceptability is an important consideration when evaluating potential alternative investment strategies.
Which of the following statements relate to Acceptability?
Select ALL that apply.

  1. It considers the current position of the Organization.
  2. It considers expected performance outcomes.
  3. It considers cultural changes required. 
  4. It considers the extent to which risk versus return meets expectations of shareholders. 
  5. Acceptability should be assessed first before feasibility or suitability.

Answer(s): B,D



Which of the following uses apply to Porter's Value Chain?
Select ALL that apply.

  1. Gives managers a deeper understanding of precisely what their Organization does.
  2. Helps assess the markets that the company currently operates in.
  3. Identifies key processes that add value to the end customer.
  4. Assesses improvements to management information.  
  5. Prioritises operations that transform the various outputs into the final product.

Answer(s): A,C,D,E



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