AIBMC MBA Exam
**Question 1.** Which element of the strategic management process involves setting
long‑term objectives and defining the overall direction of the firm?
A) Implementation
B) Formulation
C) Evaluation
D) Control
Answer: B
Explanation: Formulation is the stage where vision, mission, and strategic objectives are
defined.
**Question 2.** In Porter’s Five Forces model, the threat of new entrants is highest when:
A) There are high switching costs for customers
B) There are strong brand loyalties
C) Entry barriers are low
D) Suppliers are concentrated
Answer: C
Explanation: Low entry barriers make it easier for new competitors to join the market.
**Question 3.** A matrix organisational structure primarily aims to:
A) Reduce hierarchy levels
B) Combine functional and product lines for flexibility
C) Centralise decision‑making
D) Eliminate middle management
Answer: B
Explanation: Matrix structures blend functional and divisional lines to improve responsiveness.
**Question 4.** Which KPI is non‑financial and reflects employee engagement?
, AIBMC MBA Exam
A) Return on Assets (ROA)
B) Net Profit Margin
C) Employee Turnover Rate
D) Earnings Per Share (EPS)
Answer: C
Explanation: Turnover rate measures how well the organization retains staff, indicating
engagement.
**Question 5.** Lewin’s change model includes all the following stages except:
A) Unfreeze
B) Refreeze
C) Transform
D) Change
Answer: C
Explanation: The three stages are Unfreeze, Change, and Refreeze; “Transform” is not part of
the model.
**Question 6.** The Sarbanes‑Oxley Act primarily addresses:
A) Marketing ethics
B) Corporate governance and financial reporting
C) International trade tariffs
D) Environmental sustainability
Answer: B
Explanation: SOX strengthens internal controls and disclosures for public companies.
**Question 7.** In the 4 Ps of marketing, “Place” refers to:
A) Product design
, AIBMC MBA Exam
B) Distribution channels
C) Pricing strategy
D) Promotional tactics
Answer: B
Explanation: “Place” concerns how the product reaches the end consumer.
**Question 8.** A firm that uses a “price skimming” strategy is:
A) Setting a low introductory price to gain market share quickly
B) Charging a high initial price to recover R&D costs
C) Matching competitor prices exactly
D) Offering discounts to price‑sensitive segments
Answer: B
Explanation: Price skimming captures maximum revenue from early adopters before lowering
price.
**Question 9.** Which segmentation variable is demographic?
A) Lifestyle
B) Age
C) Usage rate
D) Personality
Answer: B
Explanation: Age is a classic demographic characteristic used to segment markets.
**Question 10.** The “AIDA” model in advertising stands for:
A) Awareness, Interest, Decision, Action
B) Attention, Interest, Desire, Action
, AIBMC MBA Exam
C) Attraction, Influence, Decision, Adoption
D) Analysis, Implementation, Development, Assessment
Answer: B
Explanation: AIDA outlines the sequential steps a consumer goes through after exposure to an
ad.
**Question 11.** In retail management, “shrinkage” most commonly refers to:
A) Decrease in product variety
B) Loss of inventory due to theft, error, or damage
C) Reduction in store floor space
D) Decline in customer footfall
Answer: B
Explanation: Shrinkage is the gap between recorded inventory and actual stock.
**Question 12.** The product life‑cycle stage characterized by high marketing costs and low
profits is:
A) Introduction
B) Growth
C) Maturity
D) Decline
Answer: A
Explanation: During introduction, firms invest heavily in promotion while sales are still building.
**Question 13.** Competitive advantage through “cost leadership” is achieved by:
A) Offering unique product features
B) Providing superior customer service
C) Producing at the lowest possible cost
**Question 1.** Which element of the strategic management process involves setting
long‑term objectives and defining the overall direction of the firm?
A) Implementation
B) Formulation
C) Evaluation
D) Control
Answer: B
Explanation: Formulation is the stage where vision, mission, and strategic objectives are
defined.
**Question 2.** In Porter’s Five Forces model, the threat of new entrants is highest when:
A) There are high switching costs for customers
B) There are strong brand loyalties
C) Entry barriers are low
D) Suppliers are concentrated
Answer: C
Explanation: Low entry barriers make it easier for new competitors to join the market.
**Question 3.** A matrix organisational structure primarily aims to:
A) Reduce hierarchy levels
B) Combine functional and product lines for flexibility
C) Centralise decision‑making
D) Eliminate middle management
Answer: B
Explanation: Matrix structures blend functional and divisional lines to improve responsiveness.
**Question 4.** Which KPI is non‑financial and reflects employee engagement?
, AIBMC MBA Exam
A) Return on Assets (ROA)
B) Net Profit Margin
C) Employee Turnover Rate
D) Earnings Per Share (EPS)
Answer: C
Explanation: Turnover rate measures how well the organization retains staff, indicating
engagement.
**Question 5.** Lewin’s change model includes all the following stages except:
A) Unfreeze
B) Refreeze
C) Transform
D) Change
Answer: C
Explanation: The three stages are Unfreeze, Change, and Refreeze; “Transform” is not part of
the model.
**Question 6.** The Sarbanes‑Oxley Act primarily addresses:
A) Marketing ethics
B) Corporate governance and financial reporting
C) International trade tariffs
D) Environmental sustainability
Answer: B
Explanation: SOX strengthens internal controls and disclosures for public companies.
**Question 7.** In the 4 Ps of marketing, “Place” refers to:
A) Product design
, AIBMC MBA Exam
B) Distribution channels
C) Pricing strategy
D) Promotional tactics
Answer: B
Explanation: “Place” concerns how the product reaches the end consumer.
**Question 8.** A firm that uses a “price skimming” strategy is:
A) Setting a low introductory price to gain market share quickly
B) Charging a high initial price to recover R&D costs
C) Matching competitor prices exactly
D) Offering discounts to price‑sensitive segments
Answer: B
Explanation: Price skimming captures maximum revenue from early adopters before lowering
price.
**Question 9.** Which segmentation variable is demographic?
A) Lifestyle
B) Age
C) Usage rate
D) Personality
Answer: B
Explanation: Age is a classic demographic characteristic used to segment markets.
**Question 10.** The “AIDA” model in advertising stands for:
A) Awareness, Interest, Decision, Action
B) Attention, Interest, Desire, Action
, AIBMC MBA Exam
C) Attraction, Influence, Decision, Adoption
D) Analysis, Implementation, Development, Assessment
Answer: B
Explanation: AIDA outlines the sequential steps a consumer goes through after exposure to an
ad.
**Question 11.** In retail management, “shrinkage” most commonly refers to:
A) Decrease in product variety
B) Loss of inventory due to theft, error, or damage
C) Reduction in store floor space
D) Decline in customer footfall
Answer: B
Explanation: Shrinkage is the gap between recorded inventory and actual stock.
**Question 12.** The product life‑cycle stage characterized by high marketing costs and low
profits is:
A) Introduction
B) Growth
C) Maturity
D) Decline
Answer: A
Explanation: During introduction, firms invest heavily in promotion while sales are still building.
**Question 13.** Competitive advantage through “cost leadership” is achieved by:
A) Offering unique product features
B) Providing superior customer service
C) Producing at the lowest possible cost
