ExpertHard1 markMultiple Choice
CPA · Question 21 · Area I: Business Analysis
A company identifies the following in its SWOT analysis:<br/>- Strength: Strong R&D capabilities<br/>- Threat: Aggressive new competitors entering the market<br/><br/>Which strategic option best represents an 'ST' (Strength-Threat) strategy?
A company identifies the following in its SWOT analysis:<br/>- Strength: Strong R&D capabilities<br/>- Threat: Aggressive new competitors entering the market<br/><br/>Which strategic option best represents an 'ST' (Strength-Threat) strategy?
Answer options:
A.
Form a joint venture with a competitor to share costs.
B.
Divest the R&D division to focus on core operations.
C.
Accelerate innovation to differentiate products and create barriers to entry.
D.
Lobby for increased import tariffs.
How to approach this question
Match the Internal Strength to the External Threat. How can the strength be used to neutralize the threat?
Full Answer
C.Accelerate innovation to differentiate products and create barriers to entry.✓ Correct
An ST strategy uses internal strengths to minimize external threats. Leveraging R&D to innovate creates a superior product, making it harder for new entrants to compete.
Common mistakes
Selecting a strategy that addresses the threat but doesn't use the strength.
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