Question paper patternNOV. 2011

In all 7 Questions – 50 marks

(Q. Nos. 8 to Q. No 14)Question no 8 Compulsory + Attempt any 5 more

Q. No 8 a. ………………………… 3 Marksb. ………………………… 3 Marksc. ………………………… 3 Marksd. ………………………… 3 Markse. ………………………… 3 Marks

3 X 5 = 15

Q. No 9a True or false / reasons

4 + 3 = 7

1. ………………………… 2 marks2. ………………………… 2 marks

b Fill in the blanks1. ………………………… 1 marks2. ………………………… 1 marks3. ………………………… 1 marks

4

3

Q. No 101. ………………………… 1 Mark

2. ………………………… 1 Mark

3. ………………………… 1 Mark

4. ………………………… 1 Mark

5. ………………………… 1 Mark

1 X 7 = 7

Q. No 11a

1 X 7 = 71. ………………………… 1 marks

2. ………………………… 1 marks

b 1. ………………………… 1 marks

2. ………………………… 1 marks

3. ………………………… 1 marks

4

3

6. ………………………… 1 Mark

7. ………………………… 1 Mark

Explain concepts

Explain concepts

3. ………………………… 1 marks

4. ………………………… 1 marks

Q. No 12

a ………………………… 4 Marks

b. ………………………… 3 Marks

4 + 3 = 7

Q. No 13 4 + 3 = 7

a. ………………………… 4 marks

b. ………………………… 3 marks

Distinguish between

Q. No 14a. ………………………… 4 marks

b. ………………………… 3 marks

Short note 4 + 3 = 7

Question Number 8 is compulsory. Answer any five questions from the rest. Marks8. (a) Elaborate the characteristics of Business Environment with reference to decision Making.

3(b) Industry is a composite of competitive pressures in five areas of the

overall market. Briefly explain the competitive pressures. 3

(c) You are appointed as a Strategic Manager by XYZ Co. Ltd. Being a Strategic Manager what should be your tasks to perform? 3

(d) Successful implementation of any project needs additional funds. What are the different sources of raising funds and their impact on the financial strategy which you as a Financial Manager consider? 3

(e) Describe briefly the use of Strategic Management techniques in Educational Institutions. 39. (a) State with reasons which of the following statements is correct of incorrect: 2 x 2 = 4

(i) The process of strategy avoids matching potential of the organization with the environment opportunities.

(ii) The role of human resource manager is significant in building up core competency of the firm.

(b) Fill in the blanks in the following statements with the most appropriate word: 3 x 1 = 3

(i) Strategic Management is not a box of tricks or a handle of techniques is analytical thinking and _______ of resources to action.

(ii) Benchmarking is a process of continuous improvement in search for _______ advantage.

(iii) Divestment is a part of rehabilitation and is adopted when a ______ has been attempted but has proved to be unsuccessful.

10. Explain the meaning of the following concepts: 7 x 1 = 7(i) Joint Venture(ii) Service Marketing (iii) Value Chain Analysis(iv) Enlightened Marketing

(v) Strategic Vision (vi) Person Marketing (vii)Logistic Strategic 11. (a) In the light of BCG Growth Matrix state the situation under which the following strategic under which the following strategic options are suitable 4 x 1 = 4

(i) Build(ii) Hold(iii)Harvest(iv)Divest

(b) Explain the strategic role of Human Resources Management in the following areas: 3 x 1 = 3

(i) Facilitation of Change(ii) Building Core Competency(iii) Development of Work Ethics and Culture.

12. (a) What is Strategic Decision Making? Briefly explain the major dimensions of strategic decisions. 1 + 3 = 4

(b)What are the requirements for the successful implementation of supply chain management system? Discuss. 3

13. Distinguish between the following:(a) Micro Environment and macro Environment.4(b) Concentric Diversification and Conglomerate

Diversification. 3

14. Write short notes on the following: 4 + 3 = 7 (a) Role of It in Business Process reengineering. (b) Importance of Corporate Culture.

2

CHAPTERS

1. Business Environment

2. Business Policy & Strategic Management

3. Strategic Analysis

4. Strategic Policy

6. Strategic implementation & control

7. Reaching Strategic Edge

5. Formulation of Strategy

3

14. Porter’s Five Forces Model – Competitive Analysis

CONTENTS CHAPTER 1 : BUSINESS ENVIRONMENT

1. Introduction2. Business3. Objectives of a Business (Eco & Soc.)4. Environmental Influences on Business5. Why Environmental Analysis?6. Characteristics of Business Environment8. Relationship between Organization and its Environment9. The Micro and Micro Environment10. Elements of Macro Environment11. Elements of Macro Environment 12. Strategic Responses to the Environment (3 types)

13. Competitive Environment (Porter)

4

10. Strategic Levels in Organizations (3 levels)

CHAPTER 2BUSINESS POLICY AND STRATEGIC MANAGEMENT

1. Introduction

2. Business Policy as a Discipline (1911-Harward)

3. What is a Strategy (s-s)

4. Generic strategic alternatives (4 types)

5. The Dynamics of Competitive Strategy (5 factors)

6. Strategic Management (start – vision- end- edge)7. Strategic Decision Making

8. The Task of Strategic Management

9. Vision, Mission and Objectives

5

1. Introduction2. Strategic Analyses3. Situational Analysis4. The Methods of Industry and Competitive Analysis5. Swot Analysis6. Tows Matrix7. Portfolio Analysis (BCG,Ansoff’s,GEC,portfolio)

1. Introduction2. Corporate Strategy3. The Stages of Corporate Strategy Formulation Implementation (whole story) 4. Strategic Alternatives (Cost leadership, generic)

CHAPTER 3 STRATEGIC ANALYSIS

CHAPTER 4 STRATEGIC PLANNING

6

1. Introduction (facilitate flow of SM to all depts)2. Marketing Strategy Formulation3. Financial Strategy Formulation4. Production Strategy Formulation5. Logistics Strategy6. Research and Development7. Human Resource Strategy Formulation

CHAPTER 5 FORMULATION OF FUNCTIONAL

STRATECY

7

1. Introduction2. Interrelationships between Strategy Formulation and implementation3. Issues in Strategy Implementation4. Organization and Strategy Implementation5. Strategic Business Units & Core Competence6. Leadership and Strategic Implementation7. Building a Strategy-Supportive Corporate Culture

CHAPTER 6STRATEGIC IMPLEMENTATION AND CONTROL

8

1. Introduction2. Business Process Reengineering3. Benchmarking4. Total Quality Management (TQM)5. Six Sigma and Management6. Contemporary Strategic Issues

CHAPTER 7 REACHING STRATEGIC EDGE

9

BUSINESS ENVIRONMENT

Chapter 1

10

2. L. H. Haney“Business is a human activity directed towards

producing or acquiring wealth through buying and selling activities.”

Entity ViewCompany / corporation

Work View(occ/profession) Process

(Buy/sell/produce)

MEANING OF BUSINESS

DEFINITION OF BUSINESS

1. B. O. Wheeler“Business is an institution organised & operated to provide goods &

services to society under the incentive of private gain.”

11

Smooth workflow2. Stability Least resistance in hostile environment

Conservative & cautious objective

Dynamic response

S

S

G

E

P

O

Objectives of Business

Basic objective 1. Survival Will & anxiety to remain in Business

Depends upon nature of business / competence / Financial strength / Eco. conditions

12

4. Efficiency Productivity - Input - output ratios

Utilise resources efficiently

3. GrowthQualitative- Image / product innovation / Brand image / ISO 9000 / HR / Foreign Entry

Quantitative – Net worth (Total cap. + Res. + ) value / volume / assets / sales/ output / no. of people / capacity / power - R/W mat.

S

S

G

E

P

O

Operational objective

13S

S

G

E

P

O

6. Others Employee welfare

Compliance of laws

Societal welfare

Stakeholders satisfaction

Survival5. Profitability Main objective

Creation of wealth for shareholdersSelf – reliance Competitive strengthQly. Product to customer

Business does not function in an isolated vacuum

What are the interactions / exchanges between organizations & environment ?

OR

Exchange of information Exchange of resources Exchange of influence & power

Inflow Outflow Men materials

machines etc.

Other Inputs Inflow Outflow

14

Business does not function in an isolated vacuum

What are the interactions / exchanges between organizations & environment ?

OR

Exchange of information Exchange of resources Exchange of influence & power

Inflow Outflow

Market condition

Technological

Demographical

Govt. policies

Activities of other co’s

AdverisementsAnnual ReportsPress releasesStock exchangesTrade unionsGovt. agenciesEmployees

15

21

Exchange of resources Exchange of influence & power

Inflow

outflowInflow Outflow

Exchange of information

Inflow

Outflow

5M’s M M M M M

Goods & services

Values & interests

Govt.

Other organisation

Suppler

Investor

Customers

If a firm has comand over resources, it can dictate termsEg. MonopolyEg. Qly. Managers(Infosys)

16

17

1. Does not exist in vacuum.

2. Buss. will thrive only if it interacts with environment.

3. Passive to environment will fade away.

4. Givers and takers

5. Opportunities and threats

6. Identity, appraise and respond

7. Monitor the environment for growth/survival and prosperity

Brief Note on Environmental Influence on Business

18

(a) Study current environment(b) Study change in environment(c) Inputs for strategic Decision making(d) Strategic thinking for fresh view points

1. Complex - factors / events / conditions2. Dynamic - Fast changing3. Multifaceted - Depends upon the perception of the observer4. Far - reaching impact opportunities / threats

Characteristic of Business Environment

Why ? Environmental Analysis ?

19

1. Diversity - All factors cannot be studied2. Uncertainty - Technological changes3. Complexity - Don’t rely on past4. Take source - risk - Don’t be overcautious

1. Monitor - Gather info.2. Audit - Static or dynamic3. Evaluate - Eco / political / social / cultural4. Review Task

Problems in understanding environment

Framework for understanding environment

20

Problems in understanding environment1. Diversity - All factors cannot be studied2. Uncertainty - Technological changes3. Complexity - Don’t rely on past

25

Strategic responses to Env.

1. Env. - Stable – least resistance – non-ambitious

2. Env. - Dynamic – approach with caution - anticipate

3. Env. - Hostile or turbulent - dynamic response - proactive

(SWOT Analysis)What are the various environmental influences on business?

Item Description Example1. Opportunity Opportunity is a favorable

condition in the Firms ‘environments which enables it to consolidate and strengthen its position.

Increase in consumer income, and growing demand for the products or services that a company provides.

2. Threat Threat is an Unfavorable condition in the Firms environment which creates a risk for, or causes damage to the Firm

Emergence of strong new competitors who are likely to offer stiff competition to the existing companies

3. Strength Strength is an inherent capacity which a Firm can use to gain strategic advantage over its competitors

Superior R& D skills which can be used for new product development so that the company gains competitive advantage Huge production infrastructure leading to mass production & economies of scale.

4. Weakness Weakness is an inherent limitation or constraint which creates a strategic disadvantage.

Over dependence on a single product line or single Customer or Supplier which is potentially risky for a Firm in times of crisis

21

Q. What are the board categories or components of environment ?

22

MICRO ENVIRONMENT

1. Micro Environment is the immediate environment

2. Internal Environment Task Environment

3. Micro Environment is related to small area or immediate periphrey of an Firm

4. Micro-Environment affects business and marketing in the daily operating level

5. Some of the issues relating to micro env. are

PTO

23

MACRO-ENVIRONMENT

A. General Env.B. External to the firmB. External to the firmC. Consists of individuals, groups, agencies, organisation etcD. Some of the issues of macro env. are

A. Employees of the firm B. Customer baseC. Way of raising finance D. Link between the firm and supplierE. CompetitorsF. Intermediaries

24

A. Threats due to competition

B. New technology which is a threats to the products

C. Bargaining power of suppliers

D. Bargaining power of consumers

Micro Environment Elements

Competitors : Organization Itself

a) Objectives, goals, strengthsb) Owners:c) Governing Body:d) Employees:

Suppliers : Market : Intermediaries : Consumers/Customers :

Q. Explain the elements of Micro Environment ?

25

Macro Environment Elements

Socio culturalEnv.

Population &Env.

EconomicEnv.

Legal & PoliticalEnv.

TechnologicalEnv.

GlobalEnv.

26

Q. Explain the factors Socio-Cultural environment which have an impact on business.

1. Like social traditions, values and beliefs, level and standards ofliteracy and education,

2. Mission, objective setting

3. Factors in this environment that influence

(b) Social attitudes and values

(c) Family structure

(d) Role of women

(e) Educational levels

(a) Social concerns

27

Q. Write short notes on Demographic environment.

(a) Population Size :

(b) Geographic Distribution :

(c) Ethnic Mix :

(d) Income Distribution :

28

Q. Write short notes on Economic Environment.1. General situation in the region and the nation

2. Strength and size of the market

3. Key economic factors to be considered are -

(a) Rates :(b) GDP Aspects :(c) Customer related :(d) External Trade :(e) General :

4. Level of political morality,

5. Law and Order situation,

Continue….

29

6. Public attitude towards business,

7. Specific legal enactments and framework in which theenterprise has to function,

8. Specific legal enactments and framework in which theenterprise has to function,

9. Degree of effectiveness with which laws are implemented,

10. Government policies (fiscal, monetary, industrial, labour and export-import policies),

11. Extent and nature of governmental intervention in theeconomy and the industry.

12. Purposefulness and efficiency of Governmental agencies.

30

Q. Explain the various aspects of Technological Environment.1. Technology and Business are highly inter-related.

2. Technology influences the business operations.

3. Factors to be considered in the Technological Environment are -

(a) Pull effect of technological change,

(b) Opportunities arising out of technological inventions,

(c) Risk and uncertainty of technological development,

31

(d) Role of R & D in a country and Government’s R & D budget,

(e) Technologies used by the Company (Manufacturing and Information Technologies),

(f) Role of technology i.e. its Criticality,

(g) Sources of Technology (Internal or External),

(h) Investment in Technology,

(i) Areas of utilization of Technology and Requirement of additional technology.

32

Technology Resaches

PeopleThroughpeople

Business

SpendR & D

Changing technology

Rise &Decline

ofproducts

ExpectationOf

Consumers

Social change

Increasedproductivity

JobsBecome

Moreintellectual

Techno-structure

Professional

managers

Regulation&

opposition

Systemcomplexity

DemandFor

capital

Figure showing : Interference between Business & Technology

33

Q. What are the reasons for Globalization ? [or]What are the advantages of Globalization ?

1. Rapid shrinking of time and distance

2. Global Market

3. Cheaper source of Raw Materials

4. Foreign investment

5. Lower Transportation Costs

6. Global Technology

7. Increasing emphasis

8. The rise of service - oriented

34

Q. What are the effects / manifestations of Globalization?

1. Global locations :

2. Inter-linked and inter-dependent economies :

3. Lower Trade barriers :

4. Infrastructure :

5. Privatization :

6. Entrepreneurship :

7. Mobility of skilled resources :

8. Efficiency and Quality :

9. Regional Blocks :

35

38MAICHAEL PORTER’S FIVE FORCES MODEL FOR COMPETITIVE ANALYSIS

Potential development of substitute products

Potential entry of new competitors

Bargaining power of suppliers Bargaining power of consumersRivalry amongCompeting firms

Harvard Business School

Prof.MAICHAEL PORTER

39Rivalry among competing firms1) Most powerful

2) Everyone has strategy to compete3) Your Strategy must have competitive advantage4) Tool is Retaliatory or Counter moves such as : -

a) Lowering Priceb) Add on featuresc) Extended warrantyb) Increased Advertisinge) Set up E- commerce sites

( MTNL)(Airline - Hotel)(3 year on Spark, G.Motors)(“What an Idea sir ji”)( Make My Trip/Foreign Tour Amazon watches)

5) Intensity is higher as competitors increase

6) Rivalry increases when consumers can switch over easily(cell phone – number portability)

7) Paves the way for more Mergers and Acquisitions

8) Else, Profit declines9) Industry becomes un attractive

(1)

40Potential entry of new competitorsIntensity of competition increases when

a) Ind. Attractiveness increases(e.g. 1. cellular phones 2. shopping malls)b) When new entrants appear

What Prevents Competitors ?[ Barriers to entry]1) Technology

2) Economies of scale3) Experiences4) Customer loyalty5) Brand image6) Huge capital7) Distribution channels8) Raw materials9) Potential Saturation of Market

Rule : - Strategists have to watch out for new entrants and their strategies so that we can make counter attacks.

(2)

41Potential development of substitute products(3)

Plastic containers Vs Glass and Aluminum

Paper glasses / cups Vs Glass / plastic/cups

PVC Vs steel

Disposable Vs Conventional Durable

Soft squeeze tubes Vs Metal tubes

1) So, be conscious about your pricing 2) Else, consumer may switch over

3) Be serious about your firm’s Market

4) Penetration or increased capacity.

42 BP(7)Bargaining power of suppliers(4)

1) Concentration on suppliers

2) Alternate source of supply

3) Switching over cost is cheap/less.

4) supplier resorting to forward integration

5) Customer is least important to the supplier.

(Indian Oil)

(because of specialization)

(Raymond wollen Mills Ltd.)

(without cartel)

43 BP(8)Bargaining power of consumers(5)

1) Concentration of Buyers

2) Alternate sources of supply.

3) Switching over cost is cheap/less

4) Threat of backward integration

5) Availability of substitutes

(Opp. Of 4 - 1)

(Opp. Of 4 - 4)

(Opp. Of 4 - 3)

What did you learn from Michal Porter ?Collective strength of the above 5 forces to determineWeather current business is attractive or not ?

44 BP(9)Concept of co-operation1. Individually2. Collectively (OPEC)3. Forms 1. cartel

2. Same family control / Tatas / Birlas3. Brand Tie - ups Godrej - HUL

Colgate - HULITC Agarbatti - Match Box (Ship)

4. KIERETSUS 1. Co-operative Networks2. Related Industries3. Allow competition4. Interlocking of Capital5. Common Board of Directors (ITC - Oberoi)6. Independent Companies7. Preference for members in business8. Different from Coglomerates9. No Agreement to share information10. But share activities such as purchases, distribution, etc.

45 BP(10)Political and Legal Environment1) State of political development

2) Degree of politicalisation of business issues(1. Valentine Day 2. Coke controversy 3. sons of the soil 4. language issues)

3) Level of Political Morality( Nano – in west Bengal)

4) Law and order situation

5) Political stability( Industrial Revolution in England)

6) Political ideology of the Ruling Party

7) Efficiency of government Agencies

8) Government policies – Industrial, Monetary, Export-Import policies