CSM Strategic Planning & Analysis 3 — Questions and Answers
Question 1: In Porter's Five Forces, which force directly addresses the threat posed by companies from outside the current industry entering the market?
- Bargaining power of buyers
- Threat of new entrants (Correct answer)
- Rivalry among existing competitors
- Threat of substitute products
Correct answer: Threat of new entrants
The threat of new entrants assesses how easily companies from other industries or markets could enter and compete.
Question 2: A software organization decides to focus on serving a narrow customer segment with highly specialized features. This is an example of which generic strategy?
- Cost leadership
- Differentiation
- Focus strategy (Correct answer)
- Integration strategy
Correct answer: Focus strategy
Porter's focus strategy involves targeting a narrow market segment with either cost or differentiation emphasis.
Question 3: Which of the following best describes a 'lagging indicator' in a strategic performance measurement system?
- A metric that predicts future performance
- A metric that reflects outcomes after they have occurred (Correct answer)
- A real-time operational dashboard metric
- A metric used exclusively for financial forecasting
Correct answer: A metric that reflects outcomes after they have occurred
Lagging indicators measure results that have already happened, such as revenue or customer churn, rather than predicting future outcomes.
Question 4: An organization mapping its value chain for software delivery is most likely trying to:
- Identify all software defects before release
- Identify activities that create value and those that are sources of competitive advantage (Correct answer)
- Create a project schedule for the next sprint
- Benchmark salaries against industry standards
Correct answer: Identify activities that create value and those that are sources of competitive advantage
Value chain analysis identifies primary and support activities to determine where competitive advantage and value creation occur.
Question 5: Which strategic planning horizon is typically associated with an organization's mission and vision?
- Operational (daily to weekly)
- Tactical (monthly to quarterly)
- Long-term (3–10 years) (Correct answer)
- Project-level (sprint to release)
Correct answer: Long-term (3–10 years)
Mission and vision statements guide long-term direction, typically spanning 3–10 years or beyond.
Question 6: What does a 'make-or-buy' analysis help a software manager determine?
- Whether to release software under open or closed license
- Whether to develop a capability internally or outsource/purchase it (Correct answer)
- The optimal pricing model for a software product
- How to allocate testing resources across projects
Correct answer: Whether to develop a capability internally or outsource/purchase it
A make-or-buy analysis evaluates the cost, risk, and strategic value of building a capability in-house versus acquiring it externally.
Question 7: In strategic planning, 'strategic fit' refers to:
- The alignment between a strategy and the organization's resources, capabilities, and environment (Correct answer)
- The number of employees required to execute a plan
- Matching software architecture to coding standards
- Scheduling strategic reviews on a fixed calendar
Correct answer: The alignment between a strategy and the organization's resources, capabilities, and environment
Strategic fit means that the chosen strategy matches the organization's internal capabilities and the external environment it operates in.
CSM Strategic Planning & Analysis 3
In Porter's Five Forces, which force directly addresses the threat posed by companies from outside the current industry entering the market?