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CA Intermediate · Financial Management and Strategic Management · Introduction to Strategic Management

Meera Retail, a regional supermarket chain, is considering a strategic decision. Management wants the decision to be evaluated using the three-part test of strategic management: whether it fits the environment, is feasible with resources, and is acceptable to stakeholders. Its analysts find the new store format matches customer trends and is financially acceptable to owners, but requires skilled staff and technology the firm does not have and cannot acquire in time. Which criterion does the proposal fail?

The proposal fails the feasibility criterion. It suits market trends and is acceptable to owners, but the firm lacks the skilled staff and technology and cannot obtain them in time, so it does not have the resources and capabilities required to implement the strategy.

  1. ASuitability
  2. BFeasibilityCorrect
  3. CAcceptability
  4. DVision

Explanation

Matching customer trends indicates suitability, and owner approval indicates acceptability. The lack of skills and technology the firm cannot obtain in time means the firm lacks the resources to carry it out, which is a failure of feasibility. Vision is not part of this three-part test.

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