MSM 6650 Strategic Management Exam Prep 2026 | 200 Practice
Questions & Detailed Answers | AFI Framework + Complete Revision
Notes | Combined Exam Guide PDF
1. What does the AFI framework stand for in strategic management?
A) Assessment, Forecasting, Integration
B) Analysis, Formulation, Implementation
C) Action, Finance, Innovation
D) Allocation, Function, Improvement
Answer: B
Explanation: The AFI framework consists of three integrated stages: Analysis (diagnosing the firm's
internal and external environment), Formulation (developing strategy based on analysis), and
Implementation (executing the formulated strategy).
2. Which question does the Analysis phase of the AFI framework primarily address?
A) "How do we implement our strategy?"
B) "Where are we?"
C) "Where are we going?"
D) "How will we get there?"
Answer: B
Explanation: The analysis phase of strategic management answers the question "Where are we?" and
includes analyzing a firm's organizational performance, external environment, and internal environment.
,3. Which question does the Formulation phase of the AFI framework primarily address?
A) "Where are we?"
B) "How do we execute our plan?"
C) "Where are we going?"
D) "What are our internal weaknesses?"
Answer: C
Explanation: Strategy formulation begins to answer the question "Where are we going?" by developing
strategic options for the firm.
4. The AFI framework is best described as which type of model?
A) A strictly linear, stepbystep process
B) An iterative, interdependent model
C) A reactive, unstructured approach
D) A purely financial planning tool
Answer: B
Explanation: The AFI framework is a model that links three interdependent strategic management tasks
that help managers plan and implement a strategy. The process is iterative rather than strictly linear
because effective managers do not formulate strategy without thinking about how to implement it.
,5. Which of the following is NOT one of the three pillars of strategic management according to the AFI
framework?
A) Strategic Analysis
B) Strategy Formulation
C) Strategy Implementation
D) Strategic Evaluation
Answer: D
Explanation: The three pillars of strategic management are strategic analysis, strategy formulation, and
strategy implementation. Strategic evaluation, while important, is not one of the three primary pillars.
6. A firm's vision statement answers which fundamental question?
A) "What is our business?"
B) "What do we want to become?"
C) "How do we make money?"
D) "Who are our competitors?"
Answer: B
Explanation: The vision statement answers the question "What do we want to become?" whereas the
mission statement answers "What is our business?"
, 7. Which of the following questions would be most appropriate to ask during the Analysis phase of the
AFI framework?
A) "How do we implement our strategy through organizational structure?"
B) "What effects do forces in the external environment have on the firm's potential to gain and sustain a
competitive advantage?"
C) "How should we allocate resources to execute our strategy?"
D) "What should be our diversification strategy?"
Answer: B
Explanation: Questions asked during the strategy analysis stage should include "What effects do forces
in the external environment have on the firm's potential to gain and sustain a competitive advantage?"
8. Strategic management is the integrative management field that combines which three elements in
the quest for competitive advantage?
A) Planning, Organizing, Leading
B) Analysis, Formulation, Implementation
C) Strategy, Structure, Culture
D) Vision, Mission, Values
Answer: B
Explanation: Strategic management is the integrative management field that combines analysis,
formulation, and implementation in the quest for competitive advantage.
Questions & Detailed Answers | AFI Framework + Complete Revision
Notes | Combined Exam Guide PDF
1. What does the AFI framework stand for in strategic management?
A) Assessment, Forecasting, Integration
B) Analysis, Formulation, Implementation
C) Action, Finance, Innovation
D) Allocation, Function, Improvement
Answer: B
Explanation: The AFI framework consists of three integrated stages: Analysis (diagnosing the firm's
internal and external environment), Formulation (developing strategy based on analysis), and
Implementation (executing the formulated strategy).
2. Which question does the Analysis phase of the AFI framework primarily address?
A) "How do we implement our strategy?"
B) "Where are we?"
C) "Where are we going?"
D) "How will we get there?"
Answer: B
Explanation: The analysis phase of strategic management answers the question "Where are we?" and
includes analyzing a firm's organizational performance, external environment, and internal environment.
,3. Which question does the Formulation phase of the AFI framework primarily address?
A) "Where are we?"
B) "How do we execute our plan?"
C) "Where are we going?"
D) "What are our internal weaknesses?"
Answer: C
Explanation: Strategy formulation begins to answer the question "Where are we going?" by developing
strategic options for the firm.
4. The AFI framework is best described as which type of model?
A) A strictly linear, stepbystep process
B) An iterative, interdependent model
C) A reactive, unstructured approach
D) A purely financial planning tool
Answer: B
Explanation: The AFI framework is a model that links three interdependent strategic management tasks
that help managers plan and implement a strategy. The process is iterative rather than strictly linear
because effective managers do not formulate strategy without thinking about how to implement it.
,5. Which of the following is NOT one of the three pillars of strategic management according to the AFI
framework?
A) Strategic Analysis
B) Strategy Formulation
C) Strategy Implementation
D) Strategic Evaluation
Answer: D
Explanation: The three pillars of strategic management are strategic analysis, strategy formulation, and
strategy implementation. Strategic evaluation, while important, is not one of the three primary pillars.
6. A firm's vision statement answers which fundamental question?
A) "What is our business?"
B) "What do we want to become?"
C) "How do we make money?"
D) "Who are our competitors?"
Answer: B
Explanation: The vision statement answers the question "What do we want to become?" whereas the
mission statement answers "What is our business?"
, 7. Which of the following questions would be most appropriate to ask during the Analysis phase of the
AFI framework?
A) "How do we implement our strategy through organizational structure?"
B) "What effects do forces in the external environment have on the firm's potential to gain and sustain a
competitive advantage?"
C) "How should we allocate resources to execute our strategy?"
D) "What should be our diversification strategy?"
Answer: B
Explanation: Questions asked during the strategy analysis stage should include "What effects do forces
in the external environment have on the firm's potential to gain and sustain a competitive advantage?"
8. Strategic management is the integrative management field that combines which three elements in
the quest for competitive advantage?
A) Planning, Organizing, Leading
B) Analysis, Formulation, Implementation
C) Strategy, Structure, Culture
D) Vision, Mission, Values
Answer: B
Explanation: Strategic management is the integrative management field that combines analysis,
formulation, and implementation in the quest for competitive advantage.
