Download GTU (Gujarat Technological University) MBA (Master of Business Administration) 2015 Winter 3rd Sem 2830001 Strategic Management Previous Question Paper
GUJARAT TECHNOLOGICAL UNIVERSITY
MBA ? SEMESTER - 3? ? EXAMINATION ? WINTER 2015
Subject Code: 2830001 Date: 30/11/2015
Subject Name: Strategic Management
Time: 10.30 AM to 01.30 PM Total Marks: 70
Instructions:
1. Attempt all questions.
2. Make suitable assumptions wherever necessary.
3. Figures to the right indicate full marks.
Q.1
(a)
06
1.
_________ are returns in excess of what an investors expects to earn from other
investments with a similar amount of risk.
A. Above-average returns B. Risk
C. Average returns D. Strategy
2. Which model checks an attractiveness of an industry?
A. I/O Model B. Five Force Model
C. Resource Based Model D. PESTEL Model
3. ___________ allow the firm to exploit opportunities or neutralize threats in its
external environment.
A. Non-substitutable capabilities B. Rare Capabilities
C Costly to imitate capabilities D. Valuable Capabilities
4. ___________ is a strategy through which two firms agree to integrate their
operations on a relatively coequal basis.
A. Acquisition B. Take over
C Merger D. Restructuring
5. The establishment of a new wholly owned subsidiary is referred to as a
__________
A. Joint Venture B. Greenfield Venture
C Franchising D. Hostile Takeover
6. ___________ is a strategy in which firms work together to achieve a shared
objectives.
A. Corporate Strategy B. Business Level Strategy
C Cooperative Strategy D. Internationalization Strategy
FirstRanker.com - FirstRanker's Choice
Seat No.: ________ Enrolment No.___________
GUJARAT TECHNOLOGICAL UNIVERSITY
MBA ? SEMESTER - 3? ? EXAMINATION ? WINTER 2015
Subject Code: 2830001 Date: 30/11/2015
Subject Name: Strategic Management
Time: 10.30 AM to 01.30 PM Total Marks: 70
Instructions:
1. Attempt all questions.
2. Make suitable assumptions wherever necessary.
3. Figures to the right indicate full marks.
Q.1
(a)
06
1.
_________ are returns in excess of what an investors expects to earn from other
investments with a similar amount of risk.
A. Above-average returns B. Risk
C. Average returns D. Strategy
2. Which model checks an attractiveness of an industry?
A. I/O Model B. Five Force Model
C. Resource Based Model D. PESTEL Model
3. ___________ allow the firm to exploit opportunities or neutralize threats in its
external environment.
A. Non-substitutable capabilities B. Rare Capabilities
C Costly to imitate capabilities D. Valuable Capabilities
4. ___________ is a strategy through which two firms agree to integrate their
operations on a relatively coequal basis.
A. Acquisition B. Take over
C Merger D. Restructuring
5. The establishment of a new wholly owned subsidiary is referred to as a
__________
A. Joint Venture B. Greenfield Venture
C Franchising D. Hostile Takeover
6. ___________ is a strategy in which firms work together to achieve a shared
objectives.
A. Corporate Strategy B. Business Level Strategy
C Cooperative Strategy D. Internationalization Strategy
Q.1
(b)
Explain the following terms:
1. Tangible Resources
2. Low Cost Strategy
3. Global Strategy
4. Corporate Governance
04
Q.1 (c) Explain : Strategic Group Mapping 04
Q.2(a) Explain in detail: Reasons for diversification 07
(b) Discuss: Why and How an Indian IT firms or any other firms of any Industry has
grown to be a world-class industry.
07
OR
(b) What reasons account for firm?s decisions to use acquisition strategies as a mean
to achieve strategic competitiveness?
07
Q.3(a) Explain SBU Structure and Network Structure 07
(b) Describe the major concerns of financial, marketing, operations, personnel and
information management plans and policies. Point out the significance of each
functional area?s plans and policies for strategy implementation.
07
OR
Q.3(a) Explain Balance Score Card with suitable example. 07
(b) Discuss the salient features of structures for the business strategies of cost
leadership, differentiation, and focus.
07
OR
Q.4(a) Explain the concept of Value Chain Analysis with suitable example. 07
(b) Suppose there is an NGO that works in the tribal areas for spreading health
awareness against indiscriminate use of tobacco and alcohol. Propose an effective
system of strategic evaluation and control that could be used by such an NGO.
07
OR
Q.4(a) Explain in brief: Strong Culture & Weak Culture 07
(b) How can corporate governance foster ethical strategic decisions and behaviors on
the part of managers?
07
Q.5 CASE: Vishala Printers ? Challenges of Differentiation in Cluttered
Markets:
THE FIRM:
Associated Business Corporation (ABC) is a diversified, multi-divisional company
having business presence in capital-industrial products, consumer durables, and
service industries. Through use of strategic planning tools, the company has
successfully evolved a strategy of high-specialization and high ?differentiation for
its products. Combined with the company?s philosophy of high ?ethic practices,
the firm has established for itself a reputation for high quality products in each of
its three businesses. Customers perceive the firm and its products as extremely
14
FirstRanker.com - FirstRanker's Choice
Seat No.: ________ Enrolment No.___________
GUJARAT TECHNOLOGICAL UNIVERSITY
MBA ? SEMESTER - 3? ? EXAMINATION ? WINTER 2015
Subject Code: 2830001 Date: 30/11/2015
Subject Name: Strategic Management
Time: 10.30 AM to 01.30 PM Total Marks: 70
Instructions:
1. Attempt all questions.
2. Make suitable assumptions wherever necessary.
3. Figures to the right indicate full marks.
Q.1
(a)
06
1.
_________ are returns in excess of what an investors expects to earn from other
investments with a similar amount of risk.
A. Above-average returns B. Risk
C. Average returns D. Strategy
2. Which model checks an attractiveness of an industry?
A. I/O Model B. Five Force Model
C. Resource Based Model D. PESTEL Model
3. ___________ allow the firm to exploit opportunities or neutralize threats in its
external environment.
A. Non-substitutable capabilities B. Rare Capabilities
C Costly to imitate capabilities D. Valuable Capabilities
4. ___________ is a strategy through which two firms agree to integrate their
operations on a relatively coequal basis.
A. Acquisition B. Take over
C Merger D. Restructuring
5. The establishment of a new wholly owned subsidiary is referred to as a
__________
A. Joint Venture B. Greenfield Venture
C Franchising D. Hostile Takeover
6. ___________ is a strategy in which firms work together to achieve a shared
objectives.
A. Corporate Strategy B. Business Level Strategy
C Cooperative Strategy D. Internationalization Strategy
Q.1
(b)
Explain the following terms:
1. Tangible Resources
2. Low Cost Strategy
3. Global Strategy
4. Corporate Governance
04
Q.1 (c) Explain : Strategic Group Mapping 04
Q.2(a) Explain in detail: Reasons for diversification 07
(b) Discuss: Why and How an Indian IT firms or any other firms of any Industry has
grown to be a world-class industry.
07
OR
(b) What reasons account for firm?s decisions to use acquisition strategies as a mean
to achieve strategic competitiveness?
07
Q.3(a) Explain SBU Structure and Network Structure 07
(b) Describe the major concerns of financial, marketing, operations, personnel and
information management plans and policies. Point out the significance of each
functional area?s plans and policies for strategy implementation.
07
OR
Q.3(a) Explain Balance Score Card with suitable example. 07
(b) Discuss the salient features of structures for the business strategies of cost
leadership, differentiation, and focus.
07
OR
Q.4(a) Explain the concept of Value Chain Analysis with suitable example. 07
(b) Suppose there is an NGO that works in the tribal areas for spreading health
awareness against indiscriminate use of tobacco and alcohol. Propose an effective
system of strategic evaluation and control that could be used by such an NGO.
07
OR
Q.4(a) Explain in brief: Strong Culture & Weak Culture 07
(b) How can corporate governance foster ethical strategic decisions and behaviors on
the part of managers?
07
Q.5 CASE: Vishala Printers ? Challenges of Differentiation in Cluttered
Markets:
THE FIRM:
Associated Business Corporation (ABC) is a diversified, multi-divisional company
having business presence in capital-industrial products, consumer durables, and
service industries. Through use of strategic planning tools, the company has
successfully evolved a strategy of high-specialization and high ?differentiation for
its products. Combined with the company?s philosophy of high ?ethic practices,
the firm has established for itself a reputation for high quality products in each of
its three businesses. Customers perceive the firm and its products as extremely
14
reliable and give full value for money. As such they readily pay higher prices
charged by the company for the superior products and services. All the three
businesses have an equal prominence in the firm?s business portfolio in terms of
contribution to sales and net profits and each business units has a healthy, though
intense, rivalry with the other two for superior results each year.
THE PRINTING DIVISION:
Vishala Printers is a division of Associated Business Corporation, which
specializes in publishing of scientific journals, annual reports, and business
catalogues. The firm has a most modern laser printing and computer typesetting
unit. It takes pride in the amount it invests (approximately 10 percent of its annual
sales) in maintaining the technological leadership through continuous development
of employees skills and purchase of latest computer hardware and software. The
chief executive of this division, Vipul Mehta,38 is a co-founder of ABC. He is
professionally qualified engineer and an MBA from one of the premier
management institutes of the country. He personally believes that each and every
product that comes out from the Printing Division must be impeccable in quality.
He started the venture in partnership with two others, after having worked for three
years in multination company in India. Over the past few years, the firm has shown
consistent pattern and rate of growth and profitability. The market-to-book ratio
has usually been above five for the previous three years.
CENTRAL INDIA MANUFACTURING CORPORATION (CIMC):
One of Vishala Printers? Major customers is Central India Manufacturing
Corporation. CIMC is a high ?profile public sector unit manufacturing strategic
goods for the country. It is one of the few PSUs making consistent profits. The
yearly volume of business that CIMC provides to Vishala Printers is roughly 20
percent of the latter?s annual turnover. CIMC?s top management regularly
publishes performance reports, catalogues, brochures, periodicals, field survey
reports etc. Some are sent at the highest levels of Government of India including
the Prime Minister and the concerned Cabinet Minister.
Of late, some competitors of Vishala Printers who are in day-to-day printing jobs
in which quality, requirements are not stringent, have been pressing the Finance
and Accounts (F/A) people in CIMC ?to do something? so that they can also get a
share in the seemingly high-margin quality jobs. These are the works which
presently Vishala Printers undertakes for CIMC. The printers had also developed
personal contacts with some influential persons in the organization. Some officers
and staff form (F/A) and Stores offices has earlier visited Mr. Mehta and tried to
negotiate with him an understanding so that the obligation could have become
mutual. They have also dropped suitable arm-twisting hints that ?although we could
have done so, but we have never delayed your payments or made any adverse
comments on the bills presented for payments.? Mr. Mehta has clearly instructed
his staff not to encourage such activities or dealings, and hence the F/A people
were politely refused.
FirstRanker.com - FirstRanker's Choice
Seat No.: ________ Enrolment No.___________
GUJARAT TECHNOLOGICAL UNIVERSITY
MBA ? SEMESTER - 3? ? EXAMINATION ? WINTER 2015
Subject Code: 2830001 Date: 30/11/2015
Subject Name: Strategic Management
Time: 10.30 AM to 01.30 PM Total Marks: 70
Instructions:
1. Attempt all questions.
2. Make suitable assumptions wherever necessary.
3. Figures to the right indicate full marks.
Q.1
(a)
06
1.
_________ are returns in excess of what an investors expects to earn from other
investments with a similar amount of risk.
A. Above-average returns B. Risk
C. Average returns D. Strategy
2. Which model checks an attractiveness of an industry?
A. I/O Model B. Five Force Model
C. Resource Based Model D. PESTEL Model
3. ___________ allow the firm to exploit opportunities or neutralize threats in its
external environment.
A. Non-substitutable capabilities B. Rare Capabilities
C Costly to imitate capabilities D. Valuable Capabilities
4. ___________ is a strategy through which two firms agree to integrate their
operations on a relatively coequal basis.
A. Acquisition B. Take over
C Merger D. Restructuring
5. The establishment of a new wholly owned subsidiary is referred to as a
__________
A. Joint Venture B. Greenfield Venture
C Franchising D. Hostile Takeover
6. ___________ is a strategy in which firms work together to achieve a shared
objectives.
A. Corporate Strategy B. Business Level Strategy
C Cooperative Strategy D. Internationalization Strategy
Q.1
(b)
Explain the following terms:
1. Tangible Resources
2. Low Cost Strategy
3. Global Strategy
4. Corporate Governance
04
Q.1 (c) Explain : Strategic Group Mapping 04
Q.2(a) Explain in detail: Reasons for diversification 07
(b) Discuss: Why and How an Indian IT firms or any other firms of any Industry has
grown to be a world-class industry.
07
OR
(b) What reasons account for firm?s decisions to use acquisition strategies as a mean
to achieve strategic competitiveness?
07
Q.3(a) Explain SBU Structure and Network Structure 07
(b) Describe the major concerns of financial, marketing, operations, personnel and
information management plans and policies. Point out the significance of each
functional area?s plans and policies for strategy implementation.
07
OR
Q.3(a) Explain Balance Score Card with suitable example. 07
(b) Discuss the salient features of structures for the business strategies of cost
leadership, differentiation, and focus.
07
OR
Q.4(a) Explain the concept of Value Chain Analysis with suitable example. 07
(b) Suppose there is an NGO that works in the tribal areas for spreading health
awareness against indiscriminate use of tobacco and alcohol. Propose an effective
system of strategic evaluation and control that could be used by such an NGO.
07
OR
Q.4(a) Explain in brief: Strong Culture & Weak Culture 07
(b) How can corporate governance foster ethical strategic decisions and behaviors on
the part of managers?
07
Q.5 CASE: Vishala Printers ? Challenges of Differentiation in Cluttered
Markets:
THE FIRM:
Associated Business Corporation (ABC) is a diversified, multi-divisional company
having business presence in capital-industrial products, consumer durables, and
service industries. Through use of strategic planning tools, the company has
successfully evolved a strategy of high-specialization and high ?differentiation for
its products. Combined with the company?s philosophy of high ?ethic practices,
the firm has established for itself a reputation for high quality products in each of
its three businesses. Customers perceive the firm and its products as extremely
14
reliable and give full value for money. As such they readily pay higher prices
charged by the company for the superior products and services. All the three
businesses have an equal prominence in the firm?s business portfolio in terms of
contribution to sales and net profits and each business units has a healthy, though
intense, rivalry with the other two for superior results each year.
THE PRINTING DIVISION:
Vishala Printers is a division of Associated Business Corporation, which
specializes in publishing of scientific journals, annual reports, and business
catalogues. The firm has a most modern laser printing and computer typesetting
unit. It takes pride in the amount it invests (approximately 10 percent of its annual
sales) in maintaining the technological leadership through continuous development
of employees skills and purchase of latest computer hardware and software. The
chief executive of this division, Vipul Mehta,38 is a co-founder of ABC. He is
professionally qualified engineer and an MBA from one of the premier
management institutes of the country. He personally believes that each and every
product that comes out from the Printing Division must be impeccable in quality.
He started the venture in partnership with two others, after having worked for three
years in multination company in India. Over the past few years, the firm has shown
consistent pattern and rate of growth and profitability. The market-to-book ratio
has usually been above five for the previous three years.
CENTRAL INDIA MANUFACTURING CORPORATION (CIMC):
One of Vishala Printers? Major customers is Central India Manufacturing
Corporation. CIMC is a high ?profile public sector unit manufacturing strategic
goods for the country. It is one of the few PSUs making consistent profits. The
yearly volume of business that CIMC provides to Vishala Printers is roughly 20
percent of the latter?s annual turnover. CIMC?s top management regularly
publishes performance reports, catalogues, brochures, periodicals, field survey
reports etc. Some are sent at the highest levels of Government of India including
the Prime Minister and the concerned Cabinet Minister.
Of late, some competitors of Vishala Printers who are in day-to-day printing jobs
in which quality, requirements are not stringent, have been pressing the Finance
and Accounts (F/A) people in CIMC ?to do something? so that they can also get a
share in the seemingly high-margin quality jobs. These are the works which
presently Vishala Printers undertakes for CIMC. The printers had also developed
personal contacts with some influential persons in the organization. Some officers
and staff form (F/A) and Stores offices has earlier visited Mr. Mehta and tried to
negotiate with him an understanding so that the obligation could have become
mutual. They have also dropped suitable arm-twisting hints that ?although we could
have done so, but we have never delayed your payments or made any adverse
comments on the bills presented for payments.? Mr. Mehta has clearly instructed
his staff not to encourage such activities or dealings, and hence the F/A people
were politely refused.
THE DECISION PROBLEM:
Recently the Stores Department of CIMC has taken a policy decision that all
printing jobs will be awarded to one firm on a yearly contract basis. The acceptance
of the tender and final award will be based purely on lowest rate offered. The rates,
once accepted, will be valid for a period one year and would remain frozen till the
end of the period. Mr. Mehta feels that this is a trick devised by some vested
interests in the F/A and Stores sections in connivance with other printers to
eliminate his organization from future contracts with the CIMC. It is universally
known that the rates charged by Vishala Printers are as much as 40-50 percent
higher than the other ?local? printers. Mr. Mehta justifies the difference by saying,
?despite the apparently high differential in rates, the net margins for us are only
about 15-18 percent on the quoted price. Our competitors in their ignorance do not
realize the additional fixed and variable costs that we incur and also the extent of
expertise involved?. Mr. Mehta feels that his rates are extremely reasonable and
fair and any downward price revision will not justify the amount of his personal
and organizational expertise and investments made in executing a high-quality
printing work.
With the consolidation of all printing work on an yearly basis, even the Director of
CIMC would not be able to use has discretionary powers to award others to Vishala
Printers as the value of one single contract will far exceed his authority. Till the
new policy, the Director was using his discretionary authority to overrule the F/A
office?s recommendations on lowest quotations for the prestigious and time-bound
works. Another usual practice has been to form job-committees for important jobs.
The purchase committee chairman could place orders directly on the firm on the
basis of recommendations of the individual job-committees. These committees
took decisions takings into consideration several other factors such as the nature of
job, its purpose, timeliness of delivery, quality of workmanship required which in
turn depended upon the skills and other resources that the printer had, and past
experience of the printer in undertaking similar jobs among others. The committee
members even visited the printer?s premises to make an on-the-spot assessment.
Now this would also not be possible as under the new rules all printing orders were
to be given only to the approved firms. According to Mr. Mehta, ?the work
involves lot of value-addition particularly in respect of intangibles, and these
additions cannot be neatly quantified for the purpose of calculating and evaluating
the rates offered by different competitors. The top management and scientists of
CIMC know that nobody else can provide the kind of service we require-yet they
cannot put this down on paper?.
One senior executive of CIMC made this comment on the quality provided by
Vishala Printers: ?Previously, we had to run around the printers and chase them for
getting the job done?. The proofs usually got delayed and once they were received,
carried many mistakes. The superscript and subscript notations and particularly
mathematical equations used in our scientific papers were never done properly
FirstRanker.com - FirstRanker's Choice
Seat No.: ________ Enrolment No.___________
GUJARAT TECHNOLOGICAL UNIVERSITY
MBA ? SEMESTER - 3? ? EXAMINATION ? WINTER 2015
Subject Code: 2830001 Date: 30/11/2015
Subject Name: Strategic Management
Time: 10.30 AM to 01.30 PM Total Marks: 70
Instructions:
1. Attempt all questions.
2. Make suitable assumptions wherever necessary.
3. Figures to the right indicate full marks.
Q.1
(a)
06
1.
_________ are returns in excess of what an investors expects to earn from other
investments with a similar amount of risk.
A. Above-average returns B. Risk
C. Average returns D. Strategy
2. Which model checks an attractiveness of an industry?
A. I/O Model B. Five Force Model
C. Resource Based Model D. PESTEL Model
3. ___________ allow the firm to exploit opportunities or neutralize threats in its
external environment.
A. Non-substitutable capabilities B. Rare Capabilities
C Costly to imitate capabilities D. Valuable Capabilities
4. ___________ is a strategy through which two firms agree to integrate their
operations on a relatively coequal basis.
A. Acquisition B. Take over
C Merger D. Restructuring
5. The establishment of a new wholly owned subsidiary is referred to as a
__________
A. Joint Venture B. Greenfield Venture
C Franchising D. Hostile Takeover
6. ___________ is a strategy in which firms work together to achieve a shared
objectives.
A. Corporate Strategy B. Business Level Strategy
C Cooperative Strategy D. Internationalization Strategy
Q.1
(b)
Explain the following terms:
1. Tangible Resources
2. Low Cost Strategy
3. Global Strategy
4. Corporate Governance
04
Q.1 (c) Explain : Strategic Group Mapping 04
Q.2(a) Explain in detail: Reasons for diversification 07
(b) Discuss: Why and How an Indian IT firms or any other firms of any Industry has
grown to be a world-class industry.
07
OR
(b) What reasons account for firm?s decisions to use acquisition strategies as a mean
to achieve strategic competitiveness?
07
Q.3(a) Explain SBU Structure and Network Structure 07
(b) Describe the major concerns of financial, marketing, operations, personnel and
information management plans and policies. Point out the significance of each
functional area?s plans and policies for strategy implementation.
07
OR
Q.3(a) Explain Balance Score Card with suitable example. 07
(b) Discuss the salient features of structures for the business strategies of cost
leadership, differentiation, and focus.
07
OR
Q.4(a) Explain the concept of Value Chain Analysis with suitable example. 07
(b) Suppose there is an NGO that works in the tribal areas for spreading health
awareness against indiscriminate use of tobacco and alcohol. Propose an effective
system of strategic evaluation and control that could be used by such an NGO.
07
OR
Q.4(a) Explain in brief: Strong Culture & Weak Culture 07
(b) How can corporate governance foster ethical strategic decisions and behaviors on
the part of managers?
07
Q.5 CASE: Vishala Printers ? Challenges of Differentiation in Cluttered
Markets:
THE FIRM:
Associated Business Corporation (ABC) is a diversified, multi-divisional company
having business presence in capital-industrial products, consumer durables, and
service industries. Through use of strategic planning tools, the company has
successfully evolved a strategy of high-specialization and high ?differentiation for
its products. Combined with the company?s philosophy of high ?ethic practices,
the firm has established for itself a reputation for high quality products in each of
its three businesses. Customers perceive the firm and its products as extremely
14
reliable and give full value for money. As such they readily pay higher prices
charged by the company for the superior products and services. All the three
businesses have an equal prominence in the firm?s business portfolio in terms of
contribution to sales and net profits and each business units has a healthy, though
intense, rivalry with the other two for superior results each year.
THE PRINTING DIVISION:
Vishala Printers is a division of Associated Business Corporation, which
specializes in publishing of scientific journals, annual reports, and business
catalogues. The firm has a most modern laser printing and computer typesetting
unit. It takes pride in the amount it invests (approximately 10 percent of its annual
sales) in maintaining the technological leadership through continuous development
of employees skills and purchase of latest computer hardware and software. The
chief executive of this division, Vipul Mehta,38 is a co-founder of ABC. He is
professionally qualified engineer and an MBA from one of the premier
management institutes of the country. He personally believes that each and every
product that comes out from the Printing Division must be impeccable in quality.
He started the venture in partnership with two others, after having worked for three
years in multination company in India. Over the past few years, the firm has shown
consistent pattern and rate of growth and profitability. The market-to-book ratio
has usually been above five for the previous three years.
CENTRAL INDIA MANUFACTURING CORPORATION (CIMC):
One of Vishala Printers? Major customers is Central India Manufacturing
Corporation. CIMC is a high ?profile public sector unit manufacturing strategic
goods for the country. It is one of the few PSUs making consistent profits. The
yearly volume of business that CIMC provides to Vishala Printers is roughly 20
percent of the latter?s annual turnover. CIMC?s top management regularly
publishes performance reports, catalogues, brochures, periodicals, field survey
reports etc. Some are sent at the highest levels of Government of India including
the Prime Minister and the concerned Cabinet Minister.
Of late, some competitors of Vishala Printers who are in day-to-day printing jobs
in which quality, requirements are not stringent, have been pressing the Finance
and Accounts (F/A) people in CIMC ?to do something? so that they can also get a
share in the seemingly high-margin quality jobs. These are the works which
presently Vishala Printers undertakes for CIMC. The printers had also developed
personal contacts with some influential persons in the organization. Some officers
and staff form (F/A) and Stores offices has earlier visited Mr. Mehta and tried to
negotiate with him an understanding so that the obligation could have become
mutual. They have also dropped suitable arm-twisting hints that ?although we could
have done so, but we have never delayed your payments or made any adverse
comments on the bills presented for payments.? Mr. Mehta has clearly instructed
his staff not to encourage such activities or dealings, and hence the F/A people
were politely refused.
THE DECISION PROBLEM:
Recently the Stores Department of CIMC has taken a policy decision that all
printing jobs will be awarded to one firm on a yearly contract basis. The acceptance
of the tender and final award will be based purely on lowest rate offered. The rates,
once accepted, will be valid for a period one year and would remain frozen till the
end of the period. Mr. Mehta feels that this is a trick devised by some vested
interests in the F/A and Stores sections in connivance with other printers to
eliminate his organization from future contracts with the CIMC. It is universally
known that the rates charged by Vishala Printers are as much as 40-50 percent
higher than the other ?local? printers. Mr. Mehta justifies the difference by saying,
?despite the apparently high differential in rates, the net margins for us are only
about 15-18 percent on the quoted price. Our competitors in their ignorance do not
realize the additional fixed and variable costs that we incur and also the extent of
expertise involved?. Mr. Mehta feels that his rates are extremely reasonable and
fair and any downward price revision will not justify the amount of his personal
and organizational expertise and investments made in executing a high-quality
printing work.
With the consolidation of all printing work on an yearly basis, even the Director of
CIMC would not be able to use has discretionary powers to award others to Vishala
Printers as the value of one single contract will far exceed his authority. Till the
new policy, the Director was using his discretionary authority to overrule the F/A
office?s recommendations on lowest quotations for the prestigious and time-bound
works. Another usual practice has been to form job-committees for important jobs.
The purchase committee chairman could place orders directly on the firm on the
basis of recommendations of the individual job-committees. These committees
took decisions takings into consideration several other factors such as the nature of
job, its purpose, timeliness of delivery, quality of workmanship required which in
turn depended upon the skills and other resources that the printer had, and past
experience of the printer in undertaking similar jobs among others. The committee
members even visited the printer?s premises to make an on-the-spot assessment.
Now this would also not be possible as under the new rules all printing orders were
to be given only to the approved firms. According to Mr. Mehta, ?the work
involves lot of value-addition particularly in respect of intangibles, and these
additions cannot be neatly quantified for the purpose of calculating and evaluating
the rates offered by different competitors. The top management and scientists of
CIMC know that nobody else can provide the kind of service we require-yet they
cannot put this down on paper?.
One senior executive of CIMC made this comment on the quality provided by
Vishala Printers: ?Previously, we had to run around the printers and chase them for
getting the job done?. The proofs usually got delayed and once they were received,
carried many mistakes. The superscript and subscript notations and particularly
mathematical equations used in our scientific papers were never done properly
even after we corrected the proofs. The aesthetic appeal of the catalogue or report
would always give impressions of shoddiness and corner cutting. I cannot say
exactly why the final product was never upto the mark, but the causes probably lay
in a combination of factors such as: the quality of inks used, the layout perspective
of the designers employed by the presses, the quality of skills of the machine-men
operating the offsets, or God knows what! now since Vishala Printers started doing
our prestigious jobs, all our seem to have been taken care of. It is they who chase
us for expediting the proof reading and return. Their usual practice is to sit with us
for about two hours and understand every detail of the job before commencing
work on it. As customers, we were first uncomfortable with this attitude from a
supplier but then understood that ultimately we were the beneficiaries in terms of
a superior product, timely delivery, and sustained commitment-this keeps
everybody on the toes. You know what, once they even refused to go ahead with
our job because our man failed to deliver the proofs for two days, and were ready
to bear as losses all the costs that they has incurred till then on the work. They often
improve upon the grammar of the sentences. I am not a technical man but the
scientist admits that errors of scientific and technical notations (otherwise hard to
detect) which inadvertently creep in the original typed manuscript get corrected at
Vishala. Probably, Mr. Mehta?s engineering and management background is the
reason behind this. We even got appreciation for improved quality and presentation
of our reports from our top boss ? the Secretary in the Ministry. With this new rule
about annual rate contract being introduced, I do not know how we will tackle a
new printer.?
The time is 8:55 in the morning. Mr. Mehta has called a meeting of his senior
managers at 10:00 a.m. to discuss the situation. By 2:00 p.m. the firm has to submit
its bid in a sealed envelope. All the quotations received till the deadline will be
opened in front of those present at 3:00 p.m.
As he sits in his car, Mr. Mehta is not panicky, but in a reflective mood.
Questions:
1. As a strategic manager for the firm, what will you do or suggest to the Chief
Executive to do in the given situation?
2. Given the nature of competition, VP?s overall business strategy, and the
fact that much business is lost because of the values it holds, should (n?t)
the firm change its norms of ethical practices? Will the current values be
sustainable in the long-run?
OR
CASE: Misplace Leadership Lessons
Mumbai residents were enjoying their early morning tea on August 2 when local
TV channels started flashing screen-blasting ?Breaking News?: 489 management
14
FirstRanker.com - FirstRanker's Choice
Seat No.: ________ Enrolment No.___________
GUJARAT TECHNOLOGICAL UNIVERSITY
MBA ? SEMESTER - 3? ? EXAMINATION ? WINTER 2015
Subject Code: 2830001 Date: 30/11/2015
Subject Name: Strategic Management
Time: 10.30 AM to 01.30 PM Total Marks: 70
Instructions:
1. Attempt all questions.
2. Make suitable assumptions wherever necessary.
3. Figures to the right indicate full marks.
Q.1
(a)
06
1.
_________ are returns in excess of what an investors expects to earn from other
investments with a similar amount of risk.
A. Above-average returns B. Risk
C. Average returns D. Strategy
2. Which model checks an attractiveness of an industry?
A. I/O Model B. Five Force Model
C. Resource Based Model D. PESTEL Model
3. ___________ allow the firm to exploit opportunities or neutralize threats in its
external environment.
A. Non-substitutable capabilities B. Rare Capabilities
C Costly to imitate capabilities D. Valuable Capabilities
4. ___________ is a strategy through which two firms agree to integrate their
operations on a relatively coequal basis.
A. Acquisition B. Take over
C Merger D. Restructuring
5. The establishment of a new wholly owned subsidiary is referred to as a
__________
A. Joint Venture B. Greenfield Venture
C Franchising D. Hostile Takeover
6. ___________ is a strategy in which firms work together to achieve a shared
objectives.
A. Corporate Strategy B. Business Level Strategy
C Cooperative Strategy D. Internationalization Strategy
Q.1
(b)
Explain the following terms:
1. Tangible Resources
2. Low Cost Strategy
3. Global Strategy
4. Corporate Governance
04
Q.1 (c) Explain : Strategic Group Mapping 04
Q.2(a) Explain in detail: Reasons for diversification 07
(b) Discuss: Why and How an Indian IT firms or any other firms of any Industry has
grown to be a world-class industry.
07
OR
(b) What reasons account for firm?s decisions to use acquisition strategies as a mean
to achieve strategic competitiveness?
07
Q.3(a) Explain SBU Structure and Network Structure 07
(b) Describe the major concerns of financial, marketing, operations, personnel and
information management plans and policies. Point out the significance of each
functional area?s plans and policies for strategy implementation.
07
OR
Q.3(a) Explain Balance Score Card with suitable example. 07
(b) Discuss the salient features of structures for the business strategies of cost
leadership, differentiation, and focus.
07
OR
Q.4(a) Explain the concept of Value Chain Analysis with suitable example. 07
(b) Suppose there is an NGO that works in the tribal areas for spreading health
awareness against indiscriminate use of tobacco and alcohol. Propose an effective
system of strategic evaluation and control that could be used by such an NGO.
07
OR
Q.4(a) Explain in brief: Strong Culture & Weak Culture 07
(b) How can corporate governance foster ethical strategic decisions and behaviors on
the part of managers?
07
Q.5 CASE: Vishala Printers ? Challenges of Differentiation in Cluttered
Markets:
THE FIRM:
Associated Business Corporation (ABC) is a diversified, multi-divisional company
having business presence in capital-industrial products, consumer durables, and
service industries. Through use of strategic planning tools, the company has
successfully evolved a strategy of high-specialization and high ?differentiation for
its products. Combined with the company?s philosophy of high ?ethic practices,
the firm has established for itself a reputation for high quality products in each of
its three businesses. Customers perceive the firm and its products as extremely
14
reliable and give full value for money. As such they readily pay higher prices
charged by the company for the superior products and services. All the three
businesses have an equal prominence in the firm?s business portfolio in terms of
contribution to sales and net profits and each business units has a healthy, though
intense, rivalry with the other two for superior results each year.
THE PRINTING DIVISION:
Vishala Printers is a division of Associated Business Corporation, which
specializes in publishing of scientific journals, annual reports, and business
catalogues. The firm has a most modern laser printing and computer typesetting
unit. It takes pride in the amount it invests (approximately 10 percent of its annual
sales) in maintaining the technological leadership through continuous development
of employees skills and purchase of latest computer hardware and software. The
chief executive of this division, Vipul Mehta,38 is a co-founder of ABC. He is
professionally qualified engineer and an MBA from one of the premier
management institutes of the country. He personally believes that each and every
product that comes out from the Printing Division must be impeccable in quality.
He started the venture in partnership with two others, after having worked for three
years in multination company in India. Over the past few years, the firm has shown
consistent pattern and rate of growth and profitability. The market-to-book ratio
has usually been above five for the previous three years.
CENTRAL INDIA MANUFACTURING CORPORATION (CIMC):
One of Vishala Printers? Major customers is Central India Manufacturing
Corporation. CIMC is a high ?profile public sector unit manufacturing strategic
goods for the country. It is one of the few PSUs making consistent profits. The
yearly volume of business that CIMC provides to Vishala Printers is roughly 20
percent of the latter?s annual turnover. CIMC?s top management regularly
publishes performance reports, catalogues, brochures, periodicals, field survey
reports etc. Some are sent at the highest levels of Government of India including
the Prime Minister and the concerned Cabinet Minister.
Of late, some competitors of Vishala Printers who are in day-to-day printing jobs
in which quality, requirements are not stringent, have been pressing the Finance
and Accounts (F/A) people in CIMC ?to do something? so that they can also get a
share in the seemingly high-margin quality jobs. These are the works which
presently Vishala Printers undertakes for CIMC. The printers had also developed
personal contacts with some influential persons in the organization. Some officers
and staff form (F/A) and Stores offices has earlier visited Mr. Mehta and tried to
negotiate with him an understanding so that the obligation could have become
mutual. They have also dropped suitable arm-twisting hints that ?although we could
have done so, but we have never delayed your payments or made any adverse
comments on the bills presented for payments.? Mr. Mehta has clearly instructed
his staff not to encourage such activities or dealings, and hence the F/A people
were politely refused.
THE DECISION PROBLEM:
Recently the Stores Department of CIMC has taken a policy decision that all
printing jobs will be awarded to one firm on a yearly contract basis. The acceptance
of the tender and final award will be based purely on lowest rate offered. The rates,
once accepted, will be valid for a period one year and would remain frozen till the
end of the period. Mr. Mehta feels that this is a trick devised by some vested
interests in the F/A and Stores sections in connivance with other printers to
eliminate his organization from future contracts with the CIMC. It is universally
known that the rates charged by Vishala Printers are as much as 40-50 percent
higher than the other ?local? printers. Mr. Mehta justifies the difference by saying,
?despite the apparently high differential in rates, the net margins for us are only
about 15-18 percent on the quoted price. Our competitors in their ignorance do not
realize the additional fixed and variable costs that we incur and also the extent of
expertise involved?. Mr. Mehta feels that his rates are extremely reasonable and
fair and any downward price revision will not justify the amount of his personal
and organizational expertise and investments made in executing a high-quality
printing work.
With the consolidation of all printing work on an yearly basis, even the Director of
CIMC would not be able to use has discretionary powers to award others to Vishala
Printers as the value of one single contract will far exceed his authority. Till the
new policy, the Director was using his discretionary authority to overrule the F/A
office?s recommendations on lowest quotations for the prestigious and time-bound
works. Another usual practice has been to form job-committees for important jobs.
The purchase committee chairman could place orders directly on the firm on the
basis of recommendations of the individual job-committees. These committees
took decisions takings into consideration several other factors such as the nature of
job, its purpose, timeliness of delivery, quality of workmanship required which in
turn depended upon the skills and other resources that the printer had, and past
experience of the printer in undertaking similar jobs among others. The committee
members even visited the printer?s premises to make an on-the-spot assessment.
Now this would also not be possible as under the new rules all printing orders were
to be given only to the approved firms. According to Mr. Mehta, ?the work
involves lot of value-addition particularly in respect of intangibles, and these
additions cannot be neatly quantified for the purpose of calculating and evaluating
the rates offered by different competitors. The top management and scientists of
CIMC know that nobody else can provide the kind of service we require-yet they
cannot put this down on paper?.
One senior executive of CIMC made this comment on the quality provided by
Vishala Printers: ?Previously, we had to run around the printers and chase them for
getting the job done?. The proofs usually got delayed and once they were received,
carried many mistakes. The superscript and subscript notations and particularly
mathematical equations used in our scientific papers were never done properly
even after we corrected the proofs. The aesthetic appeal of the catalogue or report
would always give impressions of shoddiness and corner cutting. I cannot say
exactly why the final product was never upto the mark, but the causes probably lay
in a combination of factors such as: the quality of inks used, the layout perspective
of the designers employed by the presses, the quality of skills of the machine-men
operating the offsets, or God knows what! now since Vishala Printers started doing
our prestigious jobs, all our seem to have been taken care of. It is they who chase
us for expediting the proof reading and return. Their usual practice is to sit with us
for about two hours and understand every detail of the job before commencing
work on it. As customers, we were first uncomfortable with this attitude from a
supplier but then understood that ultimately we were the beneficiaries in terms of
a superior product, timely delivery, and sustained commitment-this keeps
everybody on the toes. You know what, once they even refused to go ahead with
our job because our man failed to deliver the proofs for two days, and were ready
to bear as losses all the costs that they has incurred till then on the work. They often
improve upon the grammar of the sentences. I am not a technical man but the
scientist admits that errors of scientific and technical notations (otherwise hard to
detect) which inadvertently creep in the original typed manuscript get corrected at
Vishala. Probably, Mr. Mehta?s engineering and management background is the
reason behind this. We even got appreciation for improved quality and presentation
of our reports from our top boss ? the Secretary in the Ministry. With this new rule
about annual rate contract being introduced, I do not know how we will tackle a
new printer.?
The time is 8:55 in the morning. Mr. Mehta has called a meeting of his senior
managers at 10:00 a.m. to discuss the situation. By 2:00 p.m. the firm has to submit
its bid in a sealed envelope. All the quotations received till the deadline will be
opened in front of those present at 3:00 p.m.
As he sits in his car, Mr. Mehta is not panicky, but in a reflective mood.
Questions:
1. As a strategic manager for the firm, what will you do or suggest to the Chief
Executive to do in the given situation?
2. Given the nature of competition, VP?s overall business strategy, and the
fact that much business is lost because of the values it holds, should (n?t)
the firm change its norms of ethical practices? Will the current values be
sustainable in the long-run?
OR
CASE: Misplace Leadership Lessons
Mumbai residents were enjoying their early morning tea on August 2 when local
TV channels started flashing screen-blasting ?Breaking News?: 489 management
14
students held for ?rave party? and ?Police bust friendship day booze party?. The
night of August 1-2 was a nightmarish experience for the MBA students of Atheros
Institute of Management Studies (AIMS-One of the premier management institutes
in India). They were celebrating their ?Fresher?s and friendship day? party at a
farmhouse ?Badhu? at Theur, a temple village located about 27 K.M away from
Mumbai. Students had excitedly arrived at the farmhouse in 10 buses around 8:30
PM.
It was raining heavily on the night of August 1 at the green, beautiful village. The
day too had a profound religious significance and sentiments leading to huge rush
of devotees coming to visit the famous temple. It was around 11 pm when local
police station received complaints from nearby villagers that some students were
creating a nuisance and playing loud music. According to police ?the organizers
claimed to have permission from the excise customs department, but when we
cross-checked, it was found that no permission was taken. We saw bottles of
alcohol, lying around and some of the students were heavily drunk. We detained
them along with eight more students which included Amar and Asish Kar who had
organized the party. There were 235 girls among 489 students, 302 bottles of liquor
and beer were recovered from the spot. The medical tests of 235 girls at the venue
were done by 7 am on August 2, after which they were released.
Rural Police Chief Pradeep Mashelkar said permission was not taken to serve
alcohol. He said that ?the raid was carried out because of complaints from the
villagers about loud music, road blockage and other public nuisance. It is illegal to
give any premises for ?bar activity? without permission?. Some students were
unaware of the fact that they had to take permission for liquor. According to some
of the girl students they had paid Rs.300 each and that the seniors had forced them
to attend the party at farm house. The Atheros School?s management arranged the
money for the students? bail admitting that, ?Students cannot be left on their own,
so we have arranged the bail money?.
School?s Version:
Dr. Mahima Lonavala, director of the institute said she was worried when students
did not return by 12:30 a, next morning- the time limit permitted by the institute to
the students for a late out. The students had sought permission of hostel authorities
for only a late out. On that day and not for organizing and attending the party. The
director claimed ignorance of the party saying that ?usually students go for late
evening movies or dinners and come back by permitted timings?. According to her,
the institute cannot hold responsible for what the students did outside campus. She
added an inquiry panel had been set up since the students violated hostel rules. We
have now formed a committee under the chairmanship of the vice chancellor and
other teachers who will decide upon the further course of action. Atheros
International is a private college and has the privilege of Deemed University status.
It has a comprehensive code of conduct which prescribes the duties and
responsibilities of the students. It also prescribes the punishments in case of
misconduct of other violation of the code.
FirstRanker.com - FirstRanker's Choice
Seat No.: ________ Enrolment No.___________
GUJARAT TECHNOLOGICAL UNIVERSITY
MBA ? SEMESTER - 3? ? EXAMINATION ? WINTER 2015
Subject Code: 2830001 Date: 30/11/2015
Subject Name: Strategic Management
Time: 10.30 AM to 01.30 PM Total Marks: 70
Instructions:
1. Attempt all questions.
2. Make suitable assumptions wherever necessary.
3. Figures to the right indicate full marks.
Q.1
(a)
06
1.
_________ are returns in excess of what an investors expects to earn from other
investments with a similar amount of risk.
A. Above-average returns B. Risk
C. Average returns D. Strategy
2. Which model checks an attractiveness of an industry?
A. I/O Model B. Five Force Model
C. Resource Based Model D. PESTEL Model
3. ___________ allow the firm to exploit opportunities or neutralize threats in its
external environment.
A. Non-substitutable capabilities B. Rare Capabilities
C Costly to imitate capabilities D. Valuable Capabilities
4. ___________ is a strategy through which two firms agree to integrate their
operations on a relatively coequal basis.
A. Acquisition B. Take over
C Merger D. Restructuring
5. The establishment of a new wholly owned subsidiary is referred to as a
__________
A. Joint Venture B. Greenfield Venture
C Franchising D. Hostile Takeover
6. ___________ is a strategy in which firms work together to achieve a shared
objectives.
A. Corporate Strategy B. Business Level Strategy
C Cooperative Strategy D. Internationalization Strategy
Q.1
(b)
Explain the following terms:
1. Tangible Resources
2. Low Cost Strategy
3. Global Strategy
4. Corporate Governance
04
Q.1 (c) Explain : Strategic Group Mapping 04
Q.2(a) Explain in detail: Reasons for diversification 07
(b) Discuss: Why and How an Indian IT firms or any other firms of any Industry has
grown to be a world-class industry.
07
OR
(b) What reasons account for firm?s decisions to use acquisition strategies as a mean
to achieve strategic competitiveness?
07
Q.3(a) Explain SBU Structure and Network Structure 07
(b) Describe the major concerns of financial, marketing, operations, personnel and
information management plans and policies. Point out the significance of each
functional area?s plans and policies for strategy implementation.
07
OR
Q.3(a) Explain Balance Score Card with suitable example. 07
(b) Discuss the salient features of structures for the business strategies of cost
leadership, differentiation, and focus.
07
OR
Q.4(a) Explain the concept of Value Chain Analysis with suitable example. 07
(b) Suppose there is an NGO that works in the tribal areas for spreading health
awareness against indiscriminate use of tobacco and alcohol. Propose an effective
system of strategic evaluation and control that could be used by such an NGO.
07
OR
Q.4(a) Explain in brief: Strong Culture & Weak Culture 07
(b) How can corporate governance foster ethical strategic decisions and behaviors on
the part of managers?
07
Q.5 CASE: Vishala Printers ? Challenges of Differentiation in Cluttered
Markets:
THE FIRM:
Associated Business Corporation (ABC) is a diversified, multi-divisional company
having business presence in capital-industrial products, consumer durables, and
service industries. Through use of strategic planning tools, the company has
successfully evolved a strategy of high-specialization and high ?differentiation for
its products. Combined with the company?s philosophy of high ?ethic practices,
the firm has established for itself a reputation for high quality products in each of
its three businesses. Customers perceive the firm and its products as extremely
14
reliable and give full value for money. As such they readily pay higher prices
charged by the company for the superior products and services. All the three
businesses have an equal prominence in the firm?s business portfolio in terms of
contribution to sales and net profits and each business units has a healthy, though
intense, rivalry with the other two for superior results each year.
THE PRINTING DIVISION:
Vishala Printers is a division of Associated Business Corporation, which
specializes in publishing of scientific journals, annual reports, and business
catalogues. The firm has a most modern laser printing and computer typesetting
unit. It takes pride in the amount it invests (approximately 10 percent of its annual
sales) in maintaining the technological leadership through continuous development
of employees skills and purchase of latest computer hardware and software. The
chief executive of this division, Vipul Mehta,38 is a co-founder of ABC. He is
professionally qualified engineer and an MBA from one of the premier
management institutes of the country. He personally believes that each and every
product that comes out from the Printing Division must be impeccable in quality.
He started the venture in partnership with two others, after having worked for three
years in multination company in India. Over the past few years, the firm has shown
consistent pattern and rate of growth and profitability. The market-to-book ratio
has usually been above five for the previous three years.
CENTRAL INDIA MANUFACTURING CORPORATION (CIMC):
One of Vishala Printers? Major customers is Central India Manufacturing
Corporation. CIMC is a high ?profile public sector unit manufacturing strategic
goods for the country. It is one of the few PSUs making consistent profits. The
yearly volume of business that CIMC provides to Vishala Printers is roughly 20
percent of the latter?s annual turnover. CIMC?s top management regularly
publishes performance reports, catalogues, brochures, periodicals, field survey
reports etc. Some are sent at the highest levels of Government of India including
the Prime Minister and the concerned Cabinet Minister.
Of late, some competitors of Vishala Printers who are in day-to-day printing jobs
in which quality, requirements are not stringent, have been pressing the Finance
and Accounts (F/A) people in CIMC ?to do something? so that they can also get a
share in the seemingly high-margin quality jobs. These are the works which
presently Vishala Printers undertakes for CIMC. The printers had also developed
personal contacts with some influential persons in the organization. Some officers
and staff form (F/A) and Stores offices has earlier visited Mr. Mehta and tried to
negotiate with him an understanding so that the obligation could have become
mutual. They have also dropped suitable arm-twisting hints that ?although we could
have done so, but we have never delayed your payments or made any adverse
comments on the bills presented for payments.? Mr. Mehta has clearly instructed
his staff not to encourage such activities or dealings, and hence the F/A people
were politely refused.
THE DECISION PROBLEM:
Recently the Stores Department of CIMC has taken a policy decision that all
printing jobs will be awarded to one firm on a yearly contract basis. The acceptance
of the tender and final award will be based purely on lowest rate offered. The rates,
once accepted, will be valid for a period one year and would remain frozen till the
end of the period. Mr. Mehta feels that this is a trick devised by some vested
interests in the F/A and Stores sections in connivance with other printers to
eliminate his organization from future contracts with the CIMC. It is universally
known that the rates charged by Vishala Printers are as much as 40-50 percent
higher than the other ?local? printers. Mr. Mehta justifies the difference by saying,
?despite the apparently high differential in rates, the net margins for us are only
about 15-18 percent on the quoted price. Our competitors in their ignorance do not
realize the additional fixed and variable costs that we incur and also the extent of
expertise involved?. Mr. Mehta feels that his rates are extremely reasonable and
fair and any downward price revision will not justify the amount of his personal
and organizational expertise and investments made in executing a high-quality
printing work.
With the consolidation of all printing work on an yearly basis, even the Director of
CIMC would not be able to use has discretionary powers to award others to Vishala
Printers as the value of one single contract will far exceed his authority. Till the
new policy, the Director was using his discretionary authority to overrule the F/A
office?s recommendations on lowest quotations for the prestigious and time-bound
works. Another usual practice has been to form job-committees for important jobs.
The purchase committee chairman could place orders directly on the firm on the
basis of recommendations of the individual job-committees. These committees
took decisions takings into consideration several other factors such as the nature of
job, its purpose, timeliness of delivery, quality of workmanship required which in
turn depended upon the skills and other resources that the printer had, and past
experience of the printer in undertaking similar jobs among others. The committee
members even visited the printer?s premises to make an on-the-spot assessment.
Now this would also not be possible as under the new rules all printing orders were
to be given only to the approved firms. According to Mr. Mehta, ?the work
involves lot of value-addition particularly in respect of intangibles, and these
additions cannot be neatly quantified for the purpose of calculating and evaluating
the rates offered by different competitors. The top management and scientists of
CIMC know that nobody else can provide the kind of service we require-yet they
cannot put this down on paper?.
One senior executive of CIMC made this comment on the quality provided by
Vishala Printers: ?Previously, we had to run around the printers and chase them for
getting the job done?. The proofs usually got delayed and once they were received,
carried many mistakes. The superscript and subscript notations and particularly
mathematical equations used in our scientific papers were never done properly
even after we corrected the proofs. The aesthetic appeal of the catalogue or report
would always give impressions of shoddiness and corner cutting. I cannot say
exactly why the final product was never upto the mark, but the causes probably lay
in a combination of factors such as: the quality of inks used, the layout perspective
of the designers employed by the presses, the quality of skills of the machine-men
operating the offsets, or God knows what! now since Vishala Printers started doing
our prestigious jobs, all our seem to have been taken care of. It is they who chase
us for expediting the proof reading and return. Their usual practice is to sit with us
for about two hours and understand every detail of the job before commencing
work on it. As customers, we were first uncomfortable with this attitude from a
supplier but then understood that ultimately we were the beneficiaries in terms of
a superior product, timely delivery, and sustained commitment-this keeps
everybody on the toes. You know what, once they even refused to go ahead with
our job because our man failed to deliver the proofs for two days, and were ready
to bear as losses all the costs that they has incurred till then on the work. They often
improve upon the grammar of the sentences. I am not a technical man but the
scientist admits that errors of scientific and technical notations (otherwise hard to
detect) which inadvertently creep in the original typed manuscript get corrected at
Vishala. Probably, Mr. Mehta?s engineering and management background is the
reason behind this. We even got appreciation for improved quality and presentation
of our reports from our top boss ? the Secretary in the Ministry. With this new rule
about annual rate contract being introduced, I do not know how we will tackle a
new printer.?
The time is 8:55 in the morning. Mr. Mehta has called a meeting of his senior
managers at 10:00 a.m. to discuss the situation. By 2:00 p.m. the firm has to submit
its bid in a sealed envelope. All the quotations received till the deadline will be
opened in front of those present at 3:00 p.m.
As he sits in his car, Mr. Mehta is not panicky, but in a reflective mood.
Questions:
1. As a strategic manager for the firm, what will you do or suggest to the Chief
Executive to do in the given situation?
2. Given the nature of competition, VP?s overall business strategy, and the
fact that much business is lost because of the values it holds, should (n?t)
the firm change its norms of ethical practices? Will the current values be
sustainable in the long-run?
OR
CASE: Misplace Leadership Lessons
Mumbai residents were enjoying their early morning tea on August 2 when local
TV channels started flashing screen-blasting ?Breaking News?: 489 management
14
students held for ?rave party? and ?Police bust friendship day booze party?. The
night of August 1-2 was a nightmarish experience for the MBA students of Atheros
Institute of Management Studies (AIMS-One of the premier management institutes
in India). They were celebrating their ?Fresher?s and friendship day? party at a
farmhouse ?Badhu? at Theur, a temple village located about 27 K.M away from
Mumbai. Students had excitedly arrived at the farmhouse in 10 buses around 8:30
PM.
It was raining heavily on the night of August 1 at the green, beautiful village. The
day too had a profound religious significance and sentiments leading to huge rush
of devotees coming to visit the famous temple. It was around 11 pm when local
police station received complaints from nearby villagers that some students were
creating a nuisance and playing loud music. According to police ?the organizers
claimed to have permission from the excise customs department, but when we
cross-checked, it was found that no permission was taken. We saw bottles of
alcohol, lying around and some of the students were heavily drunk. We detained
them along with eight more students which included Amar and Asish Kar who had
organized the party. There were 235 girls among 489 students, 302 bottles of liquor
and beer were recovered from the spot. The medical tests of 235 girls at the venue
were done by 7 am on August 2, after which they were released.
Rural Police Chief Pradeep Mashelkar said permission was not taken to serve
alcohol. He said that ?the raid was carried out because of complaints from the
villagers about loud music, road blockage and other public nuisance. It is illegal to
give any premises for ?bar activity? without permission?. Some students were
unaware of the fact that they had to take permission for liquor. According to some
of the girl students they had paid Rs.300 each and that the seniors had forced them
to attend the party at farm house. The Atheros School?s management arranged the
money for the students? bail admitting that, ?Students cannot be left on their own,
so we have arranged the bail money?.
School?s Version:
Dr. Mahima Lonavala, director of the institute said she was worried when students
did not return by 12:30 a, next morning- the time limit permitted by the institute to
the students for a late out. The students had sought permission of hostel authorities
for only a late out. On that day and not for organizing and attending the party. The
director claimed ignorance of the party saying that ?usually students go for late
evening movies or dinners and come back by permitted timings?. According to her,
the institute cannot hold responsible for what the students did outside campus. She
added an inquiry panel had been set up since the students violated hostel rules. We
have now formed a committee under the chairmanship of the vice chancellor and
other teachers who will decide upon the further course of action. Atheros
International is a private college and has the privilege of Deemed University status.
It has a comprehensive code of conduct which prescribes the duties and
responsibilities of the students. It also prescribes the punishments in case of
misconduct of other violation of the code.
School Administration?s Action:
After a detailed enquiry, examining the reports, documents and evidence and
recoding relevant statements, the committee found that the code had been violated
and deliberated on various punishments mentioned in the code, including the
rustication of the students. There was, however, a consensus that such action would
be unduly harsh and could jeopardize the careers of students. It was noted that the
police had already initiated proceedings and that the law would take its own course.
Since this was their first deviation from the university norms, the committee
recommended a corrective and reformative approach without compromising on the
punitive aspect.
On the recommendation of the six member committee constituted by AIM
authorities, five organizers of the party (all students) were suspended for 15 days
and also had to undertake community service. Rest of the students were also asked
to do community service at a local NGO, supervised by the director herself. All the
participating students had their late nights and night out curtailed for the three
months and return to hostel in the evening had been advanced by an hour.
Counseling sessions were organized for the students to create awareness of legal
norms and the health risks of alcohol consumption, substance abuse and partying.
Legal Action:
After hearing the students and the lawyer, the Judicial Magistrate released 81
students on cash surety of Rs.2000 each. The seven organizers of the party were
taken to the court and released on cash surety of Rs.10,000 each. All the 88 students
had been booked under sections 66(1) (B), 65 (K) (D) (E), 86 of the Bombay
Prohibition act an 110, 112 and 117 of the Bombay Police Act.
The farm house owner who had rented the premises out and the person who
provided the music for the party were also prosecuted. According to the law in
India, One must be 21 years or over to get a drinking permit. If liquor to be served,
permission under the Bombay Prohibition Act is required. If Public music is to be
played, permission under Bombay Police Act is required. Regarding loud music
(loud speaker etc.) Supreme Court?s strict guideline is that no loud music can be
played between 10 P.M. to 6. P.M.
Stakeholder?s Reactions:
This incident and punishments led to divergent views among various sections of
society including common citizens, intellectuals, academicians, students? parents,
student community, and lawyers. Some opined that the police action was justified
and needed to improve the wellness of the society.
FirstRanker.com - FirstRanker's Choice
Seat No.: ________ Enrolment No.___________
GUJARAT TECHNOLOGICAL UNIVERSITY
MBA ? SEMESTER - 3? ? EXAMINATION ? WINTER 2015
Subject Code: 2830001 Date: 30/11/2015
Subject Name: Strategic Management
Time: 10.30 AM to 01.30 PM Total Marks: 70
Instructions:
1. Attempt all questions.
2. Make suitable assumptions wherever necessary.
3. Figures to the right indicate full marks.
Q.1
(a)
06
1.
_________ are returns in excess of what an investors expects to earn from other
investments with a similar amount of risk.
A. Above-average returns B. Risk
C. Average returns D. Strategy
2. Which model checks an attractiveness of an industry?
A. I/O Model B. Five Force Model
C. Resource Based Model D. PESTEL Model
3. ___________ allow the firm to exploit opportunities or neutralize threats in its
external environment.
A. Non-substitutable capabilities B. Rare Capabilities
C Costly to imitate capabilities D. Valuable Capabilities
4. ___________ is a strategy through which two firms agree to integrate their
operations on a relatively coequal basis.
A. Acquisition B. Take over
C Merger D. Restructuring
5. The establishment of a new wholly owned subsidiary is referred to as a
__________
A. Joint Venture B. Greenfield Venture
C Franchising D. Hostile Takeover
6. ___________ is a strategy in which firms work together to achieve a shared
objectives.
A. Corporate Strategy B. Business Level Strategy
C Cooperative Strategy D. Internationalization Strategy
Q.1
(b)
Explain the following terms:
1. Tangible Resources
2. Low Cost Strategy
3. Global Strategy
4. Corporate Governance
04
Q.1 (c) Explain : Strategic Group Mapping 04
Q.2(a) Explain in detail: Reasons for diversification 07
(b) Discuss: Why and How an Indian IT firms or any other firms of any Industry has
grown to be a world-class industry.
07
OR
(b) What reasons account for firm?s decisions to use acquisition strategies as a mean
to achieve strategic competitiveness?
07
Q.3(a) Explain SBU Structure and Network Structure 07
(b) Describe the major concerns of financial, marketing, operations, personnel and
information management plans and policies. Point out the significance of each
functional area?s plans and policies for strategy implementation.
07
OR
Q.3(a) Explain Balance Score Card with suitable example. 07
(b) Discuss the salient features of structures for the business strategies of cost
leadership, differentiation, and focus.
07
OR
Q.4(a) Explain the concept of Value Chain Analysis with suitable example. 07
(b) Suppose there is an NGO that works in the tribal areas for spreading health
awareness against indiscriminate use of tobacco and alcohol. Propose an effective
system of strategic evaluation and control that could be used by such an NGO.
07
OR
Q.4(a) Explain in brief: Strong Culture & Weak Culture 07
(b) How can corporate governance foster ethical strategic decisions and behaviors on
the part of managers?
07
Q.5 CASE: Vishala Printers ? Challenges of Differentiation in Cluttered
Markets:
THE FIRM:
Associated Business Corporation (ABC) is a diversified, multi-divisional company
having business presence in capital-industrial products, consumer durables, and
service industries. Through use of strategic planning tools, the company has
successfully evolved a strategy of high-specialization and high ?differentiation for
its products. Combined with the company?s philosophy of high ?ethic practices,
the firm has established for itself a reputation for high quality products in each of
its three businesses. Customers perceive the firm and its products as extremely
14
reliable and give full value for money. As such they readily pay higher prices
charged by the company for the superior products and services. All the three
businesses have an equal prominence in the firm?s business portfolio in terms of
contribution to sales and net profits and each business units has a healthy, though
intense, rivalry with the other two for superior results each year.
THE PRINTING DIVISION:
Vishala Printers is a division of Associated Business Corporation, which
specializes in publishing of scientific journals, annual reports, and business
catalogues. The firm has a most modern laser printing and computer typesetting
unit. It takes pride in the amount it invests (approximately 10 percent of its annual
sales) in maintaining the technological leadership through continuous development
of employees skills and purchase of latest computer hardware and software. The
chief executive of this division, Vipul Mehta,38 is a co-founder of ABC. He is
professionally qualified engineer and an MBA from one of the premier
management institutes of the country. He personally believes that each and every
product that comes out from the Printing Division must be impeccable in quality.
He started the venture in partnership with two others, after having worked for three
years in multination company in India. Over the past few years, the firm has shown
consistent pattern and rate of growth and profitability. The market-to-book ratio
has usually been above five for the previous three years.
CENTRAL INDIA MANUFACTURING CORPORATION (CIMC):
One of Vishala Printers? Major customers is Central India Manufacturing
Corporation. CIMC is a high ?profile public sector unit manufacturing strategic
goods for the country. It is one of the few PSUs making consistent profits. The
yearly volume of business that CIMC provides to Vishala Printers is roughly 20
percent of the latter?s annual turnover. CIMC?s top management regularly
publishes performance reports, catalogues, brochures, periodicals, field survey
reports etc. Some are sent at the highest levels of Government of India including
the Prime Minister and the concerned Cabinet Minister.
Of late, some competitors of Vishala Printers who are in day-to-day printing jobs
in which quality, requirements are not stringent, have been pressing the Finance
and Accounts (F/A) people in CIMC ?to do something? so that they can also get a
share in the seemingly high-margin quality jobs. These are the works which
presently Vishala Printers undertakes for CIMC. The printers had also developed
personal contacts with some influential persons in the organization. Some officers
and staff form (F/A) and Stores offices has earlier visited Mr. Mehta and tried to
negotiate with him an understanding so that the obligation could have become
mutual. They have also dropped suitable arm-twisting hints that ?although we could
have done so, but we have never delayed your payments or made any adverse
comments on the bills presented for payments.? Mr. Mehta has clearly instructed
his staff not to encourage such activities or dealings, and hence the F/A people
were politely refused.
THE DECISION PROBLEM:
Recently the Stores Department of CIMC has taken a policy decision that all
printing jobs will be awarded to one firm on a yearly contract basis. The acceptance
of the tender and final award will be based purely on lowest rate offered. The rates,
once accepted, will be valid for a period one year and would remain frozen till the
end of the period. Mr. Mehta feels that this is a trick devised by some vested
interests in the F/A and Stores sections in connivance with other printers to
eliminate his organization from future contracts with the CIMC. It is universally
known that the rates charged by Vishala Printers are as much as 40-50 percent
higher than the other ?local? printers. Mr. Mehta justifies the difference by saying,
?despite the apparently high differential in rates, the net margins for us are only
about 15-18 percent on the quoted price. Our competitors in their ignorance do not
realize the additional fixed and variable costs that we incur and also the extent of
expertise involved?. Mr. Mehta feels that his rates are extremely reasonable and
fair and any downward price revision will not justify the amount of his personal
and organizational expertise and investments made in executing a high-quality
printing work.
With the consolidation of all printing work on an yearly basis, even the Director of
CIMC would not be able to use has discretionary powers to award others to Vishala
Printers as the value of one single contract will far exceed his authority. Till the
new policy, the Director was using his discretionary authority to overrule the F/A
office?s recommendations on lowest quotations for the prestigious and time-bound
works. Another usual practice has been to form job-committees for important jobs.
The purchase committee chairman could place orders directly on the firm on the
basis of recommendations of the individual job-committees. These committees
took decisions takings into consideration several other factors such as the nature of
job, its purpose, timeliness of delivery, quality of workmanship required which in
turn depended upon the skills and other resources that the printer had, and past
experience of the printer in undertaking similar jobs among others. The committee
members even visited the printer?s premises to make an on-the-spot assessment.
Now this would also not be possible as under the new rules all printing orders were
to be given only to the approved firms. According to Mr. Mehta, ?the work
involves lot of value-addition particularly in respect of intangibles, and these
additions cannot be neatly quantified for the purpose of calculating and evaluating
the rates offered by different competitors. The top management and scientists of
CIMC know that nobody else can provide the kind of service we require-yet they
cannot put this down on paper?.
One senior executive of CIMC made this comment on the quality provided by
Vishala Printers: ?Previously, we had to run around the printers and chase them for
getting the job done?. The proofs usually got delayed and once they were received,
carried many mistakes. The superscript and subscript notations and particularly
mathematical equations used in our scientific papers were never done properly
even after we corrected the proofs. The aesthetic appeal of the catalogue or report
would always give impressions of shoddiness and corner cutting. I cannot say
exactly why the final product was never upto the mark, but the causes probably lay
in a combination of factors such as: the quality of inks used, the layout perspective
of the designers employed by the presses, the quality of skills of the machine-men
operating the offsets, or God knows what! now since Vishala Printers started doing
our prestigious jobs, all our seem to have been taken care of. It is they who chase
us for expediting the proof reading and return. Their usual practice is to sit with us
for about two hours and understand every detail of the job before commencing
work on it. As customers, we were first uncomfortable with this attitude from a
supplier but then understood that ultimately we were the beneficiaries in terms of
a superior product, timely delivery, and sustained commitment-this keeps
everybody on the toes. You know what, once they even refused to go ahead with
our job because our man failed to deliver the proofs for two days, and were ready
to bear as losses all the costs that they has incurred till then on the work. They often
improve upon the grammar of the sentences. I am not a technical man but the
scientist admits that errors of scientific and technical notations (otherwise hard to
detect) which inadvertently creep in the original typed manuscript get corrected at
Vishala. Probably, Mr. Mehta?s engineering and management background is the
reason behind this. We even got appreciation for improved quality and presentation
of our reports from our top boss ? the Secretary in the Ministry. With this new rule
about annual rate contract being introduced, I do not know how we will tackle a
new printer.?
The time is 8:55 in the morning. Mr. Mehta has called a meeting of his senior
managers at 10:00 a.m. to discuss the situation. By 2:00 p.m. the firm has to submit
its bid in a sealed envelope. All the quotations received till the deadline will be
opened in front of those present at 3:00 p.m.
As he sits in his car, Mr. Mehta is not panicky, but in a reflective mood.
Questions:
1. As a strategic manager for the firm, what will you do or suggest to the Chief
Executive to do in the given situation?
2. Given the nature of competition, VP?s overall business strategy, and the
fact that much business is lost because of the values it holds, should (n?t)
the firm change its norms of ethical practices? Will the current values be
sustainable in the long-run?
OR
CASE: Misplace Leadership Lessons
Mumbai residents were enjoying their early morning tea on August 2 when local
TV channels started flashing screen-blasting ?Breaking News?: 489 management
14
students held for ?rave party? and ?Police bust friendship day booze party?. The
night of August 1-2 was a nightmarish experience for the MBA students of Atheros
Institute of Management Studies (AIMS-One of the premier management institutes
in India). They were celebrating their ?Fresher?s and friendship day? party at a
farmhouse ?Badhu? at Theur, a temple village located about 27 K.M away from
Mumbai. Students had excitedly arrived at the farmhouse in 10 buses around 8:30
PM.
It was raining heavily on the night of August 1 at the green, beautiful village. The
day too had a profound religious significance and sentiments leading to huge rush
of devotees coming to visit the famous temple. It was around 11 pm when local
police station received complaints from nearby villagers that some students were
creating a nuisance and playing loud music. According to police ?the organizers
claimed to have permission from the excise customs department, but when we
cross-checked, it was found that no permission was taken. We saw bottles of
alcohol, lying around and some of the students were heavily drunk. We detained
them along with eight more students which included Amar and Asish Kar who had
organized the party. There were 235 girls among 489 students, 302 bottles of liquor
and beer were recovered from the spot. The medical tests of 235 girls at the venue
were done by 7 am on August 2, after which they were released.
Rural Police Chief Pradeep Mashelkar said permission was not taken to serve
alcohol. He said that ?the raid was carried out because of complaints from the
villagers about loud music, road blockage and other public nuisance. It is illegal to
give any premises for ?bar activity? without permission?. Some students were
unaware of the fact that they had to take permission for liquor. According to some
of the girl students they had paid Rs.300 each and that the seniors had forced them
to attend the party at farm house. The Atheros School?s management arranged the
money for the students? bail admitting that, ?Students cannot be left on their own,
so we have arranged the bail money?.
School?s Version:
Dr. Mahima Lonavala, director of the institute said she was worried when students
did not return by 12:30 a, next morning- the time limit permitted by the institute to
the students for a late out. The students had sought permission of hostel authorities
for only a late out. On that day and not for organizing and attending the party. The
director claimed ignorance of the party saying that ?usually students go for late
evening movies or dinners and come back by permitted timings?. According to her,
the institute cannot hold responsible for what the students did outside campus. She
added an inquiry panel had been set up since the students violated hostel rules. We
have now formed a committee under the chairmanship of the vice chancellor and
other teachers who will decide upon the further course of action. Atheros
International is a private college and has the privilege of Deemed University status.
It has a comprehensive code of conduct which prescribes the duties and
responsibilities of the students. It also prescribes the punishments in case of
misconduct of other violation of the code.
School Administration?s Action:
After a detailed enquiry, examining the reports, documents and evidence and
recoding relevant statements, the committee found that the code had been violated
and deliberated on various punishments mentioned in the code, including the
rustication of the students. There was, however, a consensus that such action would
be unduly harsh and could jeopardize the careers of students. It was noted that the
police had already initiated proceedings and that the law would take its own course.
Since this was their first deviation from the university norms, the committee
recommended a corrective and reformative approach without compromising on the
punitive aspect.
On the recommendation of the six member committee constituted by AIM
authorities, five organizers of the party (all students) were suspended for 15 days
and also had to undertake community service. Rest of the students were also asked
to do community service at a local NGO, supervised by the director herself. All the
participating students had their late nights and night out curtailed for the three
months and return to hostel in the evening had been advanced by an hour.
Counseling sessions were organized for the students to create awareness of legal
norms and the health risks of alcohol consumption, substance abuse and partying.
Legal Action:
After hearing the students and the lawyer, the Judicial Magistrate released 81
students on cash surety of Rs.2000 each. The seven organizers of the party were
taken to the court and released on cash surety of Rs.10,000 each. All the 88 students
had been booked under sections 66(1) (B), 65 (K) (D) (E), 86 of the Bombay
Prohibition act an 110, 112 and 117 of the Bombay Police Act.
The farm house owner who had rented the premises out and the person who
provided the music for the party were also prosecuted. According to the law in
India, One must be 21 years or over to get a drinking permit. If liquor to be served,
permission under the Bombay Prohibition Act is required. If Public music is to be
played, permission under Bombay Police Act is required. Regarding loud music
(loud speaker etc.) Supreme Court?s strict guideline is that no loud music can be
played between 10 P.M. to 6. P.M.
Stakeholder?s Reactions:
This incident and punishments led to divergent views among various sections of
society including common citizens, intellectuals, academicians, students? parents,
student community, and lawyers. Some opined that the police action was justified
and needed to improve the wellness of the society.
Students: As expected, students severely criticized the police action. They said they
were all adults and had the right to party. According to them, the party was at a
private bunglow and the students were not doing anything illegal like taking drugs.
Gaurav Laskar, a second year student at Atheros Law School, said, ?All the
students attending the party were above 18 and they knew what they were doing.
They also had the permission from the college to stay out late. So, why did the
police make such a big issue of the whole incident??Vidya, a student of Atheros
Junior Management College, accused the police of over-reaction saying ?the
students were all adults?.
Academicians: Educationist Devika Nadig too blamed the police, ?There was
nothing vulgar happening. I felt very bad seeing the pictures of the young girls in
the newspaper in the new papers. You can?t do this to young adults.? Vasant Wagh,
former principle of Fergusson College said, ?the police had merely done their job
and it is important for college students not to cross the limits.?
Former University Grant Commission chairman and city?s leading citizen, Dr.
Arun Nigvekar said, ?Students want to enjoy and there is nothing wrong with that.
Institutes must create a platform where parties can be held in healthy manner. This
party was held in a public place and the local residents may have complained,? he
said.
Mr. Sureshchandra Bhosale, Dean of Law Faculty, felt that, ?the police should have
issued a warning instead of detaining the students. The party was at a private place.
The police should also have waited for the report of the chemical analysis before
charging them. The image of students has been needlessly tarnished ? they?ll have
a jail record because of the extreme action of the police.?
Civil Society: One of the local industrialists wondered, ? it?s legitimate event,
especially in the life of youth. I think the students have a right to party. It?s really
unfair of them (the police) to say that the girls wore skimpy clothes. The girls were
wearing skirts, which is a respectable garment across the world. And none of them
were doing drugs.? Lawyer Amitabh Mehta said that such parties were not
uncommon and the police saw these as soft targets. ?The provisions of Bombay
Prohibition Act 1949 that calls for a person consuming liquor to hold a liquor
permit is unrealistic,? he said.
Former Mumbai Police Commissioner Julio Ribeiro said, ? Of course, one can?t
help it if the police go by the book and insist on a permit to serve liquor. But I feel
the police should not take an extreme view in such matters. They could have given
the students a warning and let them off. After all, there was no drug involved.?
Police and State: The rural police chief, however, justified the police action and
said, ?we medically examined the students. Those who had consumed liquor
without permits were prosecuted according to the law.? One of the elderly citizens
FirstRanker.com - FirstRanker's Choice
Seat No.: ________ Enrolment No.___________
GUJARAT TECHNOLOGICAL UNIVERSITY
MBA ? SEMESTER - 3? ? EXAMINATION ? WINTER 2015
Subject Code: 2830001 Date: 30/11/2015
Subject Name: Strategic Management
Time: 10.30 AM to 01.30 PM Total Marks: 70
Instructions:
1. Attempt all questions.
2. Make suitable assumptions wherever necessary.
3. Figures to the right indicate full marks.
Q.1
(a)
06
1.
_________ are returns in excess of what an investors expects to earn from other
investments with a similar amount of risk.
A. Above-average returns B. Risk
C. Average returns D. Strategy
2. Which model checks an attractiveness of an industry?
A. I/O Model B. Five Force Model
C. Resource Based Model D. PESTEL Model
3. ___________ allow the firm to exploit opportunities or neutralize threats in its
external environment.
A. Non-substitutable capabilities B. Rare Capabilities
C Costly to imitate capabilities D. Valuable Capabilities
4. ___________ is a strategy through which two firms agree to integrate their
operations on a relatively coequal basis.
A. Acquisition B. Take over
C Merger D. Restructuring
5. The establishment of a new wholly owned subsidiary is referred to as a
__________
A. Joint Venture B. Greenfield Venture
C Franchising D. Hostile Takeover
6. ___________ is a strategy in which firms work together to achieve a shared
objectives.
A. Corporate Strategy B. Business Level Strategy
C Cooperative Strategy D. Internationalization Strategy
Q.1
(b)
Explain the following terms:
1. Tangible Resources
2. Low Cost Strategy
3. Global Strategy
4. Corporate Governance
04
Q.1 (c) Explain : Strategic Group Mapping 04
Q.2(a) Explain in detail: Reasons for diversification 07
(b) Discuss: Why and How an Indian IT firms or any other firms of any Industry has
grown to be a world-class industry.
07
OR
(b) What reasons account for firm?s decisions to use acquisition strategies as a mean
to achieve strategic competitiveness?
07
Q.3(a) Explain SBU Structure and Network Structure 07
(b) Describe the major concerns of financial, marketing, operations, personnel and
information management plans and policies. Point out the significance of each
functional area?s plans and policies for strategy implementation.
07
OR
Q.3(a) Explain Balance Score Card with suitable example. 07
(b) Discuss the salient features of structures for the business strategies of cost
leadership, differentiation, and focus.
07
OR
Q.4(a) Explain the concept of Value Chain Analysis with suitable example. 07
(b) Suppose there is an NGO that works in the tribal areas for spreading health
awareness against indiscriminate use of tobacco and alcohol. Propose an effective
system of strategic evaluation and control that could be used by such an NGO.
07
OR
Q.4(a) Explain in brief: Strong Culture & Weak Culture 07
(b) How can corporate governance foster ethical strategic decisions and behaviors on
the part of managers?
07
Q.5 CASE: Vishala Printers ? Challenges of Differentiation in Cluttered
Markets:
THE FIRM:
Associated Business Corporation (ABC) is a diversified, multi-divisional company
having business presence in capital-industrial products, consumer durables, and
service industries. Through use of strategic planning tools, the company has
successfully evolved a strategy of high-specialization and high ?differentiation for
its products. Combined with the company?s philosophy of high ?ethic practices,
the firm has established for itself a reputation for high quality products in each of
its three businesses. Customers perceive the firm and its products as extremely
14
reliable and give full value for money. As such they readily pay higher prices
charged by the company for the superior products and services. All the three
businesses have an equal prominence in the firm?s business portfolio in terms of
contribution to sales and net profits and each business units has a healthy, though
intense, rivalry with the other two for superior results each year.
THE PRINTING DIVISION:
Vishala Printers is a division of Associated Business Corporation, which
specializes in publishing of scientific journals, annual reports, and business
catalogues. The firm has a most modern laser printing and computer typesetting
unit. It takes pride in the amount it invests (approximately 10 percent of its annual
sales) in maintaining the technological leadership through continuous development
of employees skills and purchase of latest computer hardware and software. The
chief executive of this division, Vipul Mehta,38 is a co-founder of ABC. He is
professionally qualified engineer and an MBA from one of the premier
management institutes of the country. He personally believes that each and every
product that comes out from the Printing Division must be impeccable in quality.
He started the venture in partnership with two others, after having worked for three
years in multination company in India. Over the past few years, the firm has shown
consistent pattern and rate of growth and profitability. The market-to-book ratio
has usually been above five for the previous three years.
CENTRAL INDIA MANUFACTURING CORPORATION (CIMC):
One of Vishala Printers? Major customers is Central India Manufacturing
Corporation. CIMC is a high ?profile public sector unit manufacturing strategic
goods for the country. It is one of the few PSUs making consistent profits. The
yearly volume of business that CIMC provides to Vishala Printers is roughly 20
percent of the latter?s annual turnover. CIMC?s top management regularly
publishes performance reports, catalogues, brochures, periodicals, field survey
reports etc. Some are sent at the highest levels of Government of India including
the Prime Minister and the concerned Cabinet Minister.
Of late, some competitors of Vishala Printers who are in day-to-day printing jobs
in which quality, requirements are not stringent, have been pressing the Finance
and Accounts (F/A) people in CIMC ?to do something? so that they can also get a
share in the seemingly high-margin quality jobs. These are the works which
presently Vishala Printers undertakes for CIMC. The printers had also developed
personal contacts with some influential persons in the organization. Some officers
and staff form (F/A) and Stores offices has earlier visited Mr. Mehta and tried to
negotiate with him an understanding so that the obligation could have become
mutual. They have also dropped suitable arm-twisting hints that ?although we could
have done so, but we have never delayed your payments or made any adverse
comments on the bills presented for payments.? Mr. Mehta has clearly instructed
his staff not to encourage such activities or dealings, and hence the F/A people
were politely refused.
THE DECISION PROBLEM:
Recently the Stores Department of CIMC has taken a policy decision that all
printing jobs will be awarded to one firm on a yearly contract basis. The acceptance
of the tender and final award will be based purely on lowest rate offered. The rates,
once accepted, will be valid for a period one year and would remain frozen till the
end of the period. Mr. Mehta feels that this is a trick devised by some vested
interests in the F/A and Stores sections in connivance with other printers to
eliminate his organization from future contracts with the CIMC. It is universally
known that the rates charged by Vishala Printers are as much as 40-50 percent
higher than the other ?local? printers. Mr. Mehta justifies the difference by saying,
?despite the apparently high differential in rates, the net margins for us are only
about 15-18 percent on the quoted price. Our competitors in their ignorance do not
realize the additional fixed and variable costs that we incur and also the extent of
expertise involved?. Mr. Mehta feels that his rates are extremely reasonable and
fair and any downward price revision will not justify the amount of his personal
and organizational expertise and investments made in executing a high-quality
printing work.
With the consolidation of all printing work on an yearly basis, even the Director of
CIMC would not be able to use has discretionary powers to award others to Vishala
Printers as the value of one single contract will far exceed his authority. Till the
new policy, the Director was using his discretionary authority to overrule the F/A
office?s recommendations on lowest quotations for the prestigious and time-bound
works. Another usual practice has been to form job-committees for important jobs.
The purchase committee chairman could place orders directly on the firm on the
basis of recommendations of the individual job-committees. These committees
took decisions takings into consideration several other factors such as the nature of
job, its purpose, timeliness of delivery, quality of workmanship required which in
turn depended upon the skills and other resources that the printer had, and past
experience of the printer in undertaking similar jobs among others. The committee
members even visited the printer?s premises to make an on-the-spot assessment.
Now this would also not be possible as under the new rules all printing orders were
to be given only to the approved firms. According to Mr. Mehta, ?the work
involves lot of value-addition particularly in respect of intangibles, and these
additions cannot be neatly quantified for the purpose of calculating and evaluating
the rates offered by different competitors. The top management and scientists of
CIMC know that nobody else can provide the kind of service we require-yet they
cannot put this down on paper?.
One senior executive of CIMC made this comment on the quality provided by
Vishala Printers: ?Previously, we had to run around the printers and chase them for
getting the job done?. The proofs usually got delayed and once they were received,
carried many mistakes. The superscript and subscript notations and particularly
mathematical equations used in our scientific papers were never done properly
even after we corrected the proofs. The aesthetic appeal of the catalogue or report
would always give impressions of shoddiness and corner cutting. I cannot say
exactly why the final product was never upto the mark, but the causes probably lay
in a combination of factors such as: the quality of inks used, the layout perspective
of the designers employed by the presses, the quality of skills of the machine-men
operating the offsets, or God knows what! now since Vishala Printers started doing
our prestigious jobs, all our seem to have been taken care of. It is they who chase
us for expediting the proof reading and return. Their usual practice is to sit with us
for about two hours and understand every detail of the job before commencing
work on it. As customers, we were first uncomfortable with this attitude from a
supplier but then understood that ultimately we were the beneficiaries in terms of
a superior product, timely delivery, and sustained commitment-this keeps
everybody on the toes. You know what, once they even refused to go ahead with
our job because our man failed to deliver the proofs for two days, and were ready
to bear as losses all the costs that they has incurred till then on the work. They often
improve upon the grammar of the sentences. I am not a technical man but the
scientist admits that errors of scientific and technical notations (otherwise hard to
detect) which inadvertently creep in the original typed manuscript get corrected at
Vishala. Probably, Mr. Mehta?s engineering and management background is the
reason behind this. We even got appreciation for improved quality and presentation
of our reports from our top boss ? the Secretary in the Ministry. With this new rule
about annual rate contract being introduced, I do not know how we will tackle a
new printer.?
The time is 8:55 in the morning. Mr. Mehta has called a meeting of his senior
managers at 10:00 a.m. to discuss the situation. By 2:00 p.m. the firm has to submit
its bid in a sealed envelope. All the quotations received till the deadline will be
opened in front of those present at 3:00 p.m.
As he sits in his car, Mr. Mehta is not panicky, but in a reflective mood.
Questions:
1. As a strategic manager for the firm, what will you do or suggest to the Chief
Executive to do in the given situation?
2. Given the nature of competition, VP?s overall business strategy, and the
fact that much business is lost because of the values it holds, should (n?t)
the firm change its norms of ethical practices? Will the current values be
sustainable in the long-run?
OR
CASE: Misplace Leadership Lessons
Mumbai residents were enjoying their early morning tea on August 2 when local
TV channels started flashing screen-blasting ?Breaking News?: 489 management
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students held for ?rave party? and ?Police bust friendship day booze party?. The
night of August 1-2 was a nightmarish experience for the MBA students of Atheros
Institute of Management Studies (AIMS-One of the premier management institutes
in India). They were celebrating their ?Fresher?s and friendship day? party at a
farmhouse ?Badhu? at Theur, a temple village located about 27 K.M away from
Mumbai. Students had excitedly arrived at the farmhouse in 10 buses around 8:30
PM.
It was raining heavily on the night of August 1 at the green, beautiful village. The
day too had a profound religious significance and sentiments leading to huge rush
of devotees coming to visit the famous temple. It was around 11 pm when local
police station received complaints from nearby villagers that some students were
creating a nuisance and playing loud music. According to police ?the organizers
claimed to have permission from the excise customs department, but when we
cross-checked, it was found that no permission was taken. We saw bottles of
alcohol, lying around and some of the students were heavily drunk. We detained
them along with eight more students which included Amar and Asish Kar who had
organized the party. There were 235 girls among 489 students, 302 bottles of liquor
and beer were recovered from the spot. The medical tests of 235 girls at the venue
were done by 7 am on August 2, after which they were released.
Rural Police Chief Pradeep Mashelkar said permission was not taken to serve
alcohol. He said that ?the raid was carried out because of complaints from the
villagers about loud music, road blockage and other public nuisance. It is illegal to
give any premises for ?bar activity? without permission?. Some students were
unaware of the fact that they had to take permission for liquor. According to some
of the girl students they had paid Rs.300 each and that the seniors had forced them
to attend the party at farm house. The Atheros School?s management arranged the
money for the students? bail admitting that, ?Students cannot be left on their own,
so we have arranged the bail money?.
School?s Version:
Dr. Mahima Lonavala, director of the institute said she was worried when students
did not return by 12:30 a, next morning- the time limit permitted by the institute to
the students for a late out. The students had sought permission of hostel authorities
for only a late out. On that day and not for organizing and attending the party. The
director claimed ignorance of the party saying that ?usually students go for late
evening movies or dinners and come back by permitted timings?. According to her,
the institute cannot hold responsible for what the students did outside campus. She
added an inquiry panel had been set up since the students violated hostel rules. We
have now formed a committee under the chairmanship of the vice chancellor and
other teachers who will decide upon the further course of action. Atheros
International is a private college and has the privilege of Deemed University status.
It has a comprehensive code of conduct which prescribes the duties and
responsibilities of the students. It also prescribes the punishments in case of
misconduct of other violation of the code.
School Administration?s Action:
After a detailed enquiry, examining the reports, documents and evidence and
recoding relevant statements, the committee found that the code had been violated
and deliberated on various punishments mentioned in the code, including the
rustication of the students. There was, however, a consensus that such action would
be unduly harsh and could jeopardize the careers of students. It was noted that the
police had already initiated proceedings and that the law would take its own course.
Since this was their first deviation from the university norms, the committee
recommended a corrective and reformative approach without compromising on the
punitive aspect.
On the recommendation of the six member committee constituted by AIM
authorities, five organizers of the party (all students) were suspended for 15 days
and also had to undertake community service. Rest of the students were also asked
to do community service at a local NGO, supervised by the director herself. All the
participating students had their late nights and night out curtailed for the three
months and return to hostel in the evening had been advanced by an hour.
Counseling sessions were organized for the students to create awareness of legal
norms and the health risks of alcohol consumption, substance abuse and partying.
Legal Action:
After hearing the students and the lawyer, the Judicial Magistrate released 81
students on cash surety of Rs.2000 each. The seven organizers of the party were
taken to the court and released on cash surety of Rs.10,000 each. All the 88 students
had been booked under sections 66(1) (B), 65 (K) (D) (E), 86 of the Bombay
Prohibition act an 110, 112 and 117 of the Bombay Police Act.
The farm house owner who had rented the premises out and the person who
provided the music for the party were also prosecuted. According to the law in
India, One must be 21 years or over to get a drinking permit. If liquor to be served,
permission under the Bombay Prohibition Act is required. If Public music is to be
played, permission under Bombay Police Act is required. Regarding loud music
(loud speaker etc.) Supreme Court?s strict guideline is that no loud music can be
played between 10 P.M. to 6. P.M.
Stakeholder?s Reactions:
This incident and punishments led to divergent views among various sections of
society including common citizens, intellectuals, academicians, students? parents,
student community, and lawyers. Some opined that the police action was justified
and needed to improve the wellness of the society.
Students: As expected, students severely criticized the police action. They said they
were all adults and had the right to party. According to them, the party was at a
private bunglow and the students were not doing anything illegal like taking drugs.
Gaurav Laskar, a second year student at Atheros Law School, said, ?All the
students attending the party were above 18 and they knew what they were doing.
They also had the permission from the college to stay out late. So, why did the
police make such a big issue of the whole incident??Vidya, a student of Atheros
Junior Management College, accused the police of over-reaction saying ?the
students were all adults?.
Academicians: Educationist Devika Nadig too blamed the police, ?There was
nothing vulgar happening. I felt very bad seeing the pictures of the young girls in
the newspaper in the new papers. You can?t do this to young adults.? Vasant Wagh,
former principle of Fergusson College said, ?the police had merely done their job
and it is important for college students not to cross the limits.?
Former University Grant Commission chairman and city?s leading citizen, Dr.
Arun Nigvekar said, ?Students want to enjoy and there is nothing wrong with that.
Institutes must create a platform where parties can be held in healthy manner. This
party was held in a public place and the local residents may have complained,? he
said.
Mr. Sureshchandra Bhosale, Dean of Law Faculty, felt that, ?the police should have
issued a warning instead of detaining the students. The party was at a private place.
The police should also have waited for the report of the chemical analysis before
charging them. The image of students has been needlessly tarnished ? they?ll have
a jail record because of the extreme action of the police.?
Civil Society: One of the local industrialists wondered, ? it?s legitimate event,
especially in the life of youth. I think the students have a right to party. It?s really
unfair of them (the police) to say that the girls wore skimpy clothes. The girls were
wearing skirts, which is a respectable garment across the world. And none of them
were doing drugs.? Lawyer Amitabh Mehta said that such parties were not
uncommon and the police saw these as soft targets. ?The provisions of Bombay
Prohibition Act 1949 that calls for a person consuming liquor to hold a liquor
permit is unrealistic,? he said.
Former Mumbai Police Commissioner Julio Ribeiro said, ? Of course, one can?t
help it if the police go by the book and insist on a permit to serve liquor. But I feel
the police should not take an extreme view in such matters. They could have given
the students a warning and let them off. After all, there was no drug involved.?
Police and State: The rural police chief, however, justified the police action and
said, ?we medically examined the students. Those who had consumed liquor
without permits were prosecuted according to the law.? One of the elderly citizens
of The State, Mr. Mohan Dharia (a former minister in the central government)
conducted with the view of the chief and said he did not think that police over
reacted. Ayub Pathan Legal Advisor to the State CID, The State, said, ?If liquor is
to be served and music is to be played, then a permission under the Bombay
Prohibition Act and Bombay Police Act is required?.
College Board Public Apology: Mr. Banerjee, Founder Director AIM, and member
of Atheros Governing Society, expressed regret over the incident, ?I am repentant
over what happened and I express my regrets to the people of Mumbai. After the
party there was a hue and cry that such parties were an attack on the city?s culture.
But I want to assure people that the city?s culture is not so fragile that it will be
destroyed by such incidents.?
Parents of some of the students caught in the muddle explained that ?last year too,
they had attended a Fresher-cum-Friendship Day Party in Badhu, but there were
no problems then. The party was thrown by the second year MBA students as a
welcome to the freshers.? If we parents have no objection, why do the police have
any??
Questions:
1. Is this a case of much a do about nothing? What are the major emerging
issues?
2. Was there any better way to avoid and handle such incidents?
3. Seeing that students did not indulge in any criminal act, were the punitive
actions taken by AIM administration justifiable?
4. What would you have done/say had you been in the role of?
? Student
? School Management
? Citizen
? Police
? Villager living in vicinity of disturbed village
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This post was last modified on 19 February 2020