1. | (a) | State whether the following statements are ‘True’ or ‘False’ with justification for your answer. If any given statement is ‘False’, you are required to give the correct terms, duly quoted. No credit will be given for answers without justifications. | 1x5 | |
| | (i) | ‘Management buy–out’ refers to the purchase of all or any part of a business firm from its owners by new managers from outside the business firm. | | (0) |
| | (ii) | ‘CVP model’ is a simple break–even model. | | (0) |
| | (iii) | ‘Acquisition’ is nothing but the joining of two separate firms to form a single firm. | | (0) |
| | (iv) | ‘Stars’ are the products in a high–growth market but where they have a low market share. | | (0) |
| | (v) | ‘Time Value’ refers to the difference between the market value of an option and its intrinsic value. | | (0) |
| (b) | Define the following terms (in not more than one/two sentences): | 1x5 | |
| | (i) | Barriers to entry; | | (0) |
| | (ii) | Stake–holder; | | (0) |
| | (iii) | Market Skimming; | | (0) |
| | (iv) | Strategic vision; | | (0) |
| | (v) | Values. | | (0) |
| (c) | Choose the most appropriate one from the stated options and write it down: | 1x10 | |
| | (i) | The introduction of ‘Nano’ by Tata Motors could be viewed as a good example of (A) (B) (C) (D) | Price leadership; Cost leadership; Product leadership; Technology leadership. | | | (0) |
| | (ii) | Which of the following market structures would be commonly identified with FMCG products? (A) (B) (C) (D) | Monopoly; Monopolistic competition; Oligopoly; Perfect competition. | | | (0) |
| | (iii) | What are the enduring statements of purpose that distinguish one business from other similar firms? (A) (B) (C) (D) | Policies; Mission statements; Objectives; Rules. | | | (0) |
| | (iv) | Nine–cell GE Matrix is the same as the (A) (B) (C) (D) | BCG Matrix; Directional Policy Matrix; PIMS Matrix; 3x3 Competitive positioning Matrix. | | | (0) |
| | (v) | The major elements of physical distribution are (A) (B) (C) (D) | Transportation and inventory management; Order processing and protective packaging; Acquisition, warehousing and material handling; All of the above. | | | (0) |
| | (vi) | Loss leader is the (A) (B) (C) (D) | Leader who is unable to conceptualize and analyze strategic decisions/problems; Leader who fails to make SWOT exercise of his firm; Product that is not successful in a competitive bid; Product that is sold at lower than normal margin to attract more customers. | | | (0) |
| | (vii) | Brand names such as Coca–Cola, Sony, McDonald’s and Nike are a source of competitive advantage as (A) (B) (C) (D) | They are owned by global firms; They are more than 50 year old They are well – managed brands; They are highly innovative firms. | | | (0) |
| | (viii) | Nike & Reebok focus on design and marketing while outsourcing most of their manufacturing because (A) (B) (C) (D) | The ensures better quality; Its cheaper; Enables them to nurture their critical competencies; They emulate each other. | | | (0) |
| | (ix) | In the words of Michael Dell, CEO, Dell Computer Corporation, "No advantage and no success is ever permanent. The winners are those who keep moving". This requires the firm to have (A) (B) (C) (D) | Focus; Strategic flexibility; Ability to diversify; Ability to enter new emerging industries. | | | (0) |
| | (x) | Focus on cost reductions (A) | May result in overlooking competitor’s efforts to differentiate what has traditionally been undifferentiated commodity like product; | (B) (C) (D) | Is the best way to compete to earn higher profits; Takes care of charges in customer needs and expectations; Can not create value for the customers. | | | (0) |
2. | (a) | The task of crafting a strategy is a work–in–progress and not a one–time event because strategy is partly proactive and partly reactive. Explain the given statement using any real life examples of companies. | 10 | (0) |
| (b) | Comment on how the strategic designers of twenty–first century will devise ways to model environmental changes. | 6 | (0) |
3. | (a) | How does buyer bargaining power create competitive pressures? Explain using relevant examples. | 8 | (0) |
| (b) | What is Ethics? Discuss with suitable examples. | 8 | (0) |
4. | (a) | When does a Low–Cost provider strategy work best? | 8 | (0) |
| (b) | A number of criticisms are being laid at the way Management Accounting is actually functioning. What are your views in the context of the present day business scenario? | 8 | (0) |
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5. | What is ‘Outsourcing’? Why do firms outsource? Will ’Outsourcing’s’ importance grow in the 21st century? If so, why? | 2+2+6+6 | (0) |
6. | Discuss four types of ‘Marketing Warfare’ from the view point of competition. | 4+4+4+4 | (0) |
7. | Case Study SE Ltd. is a defense contractor faced with a changing environment. In the past all the work done by SE Ltd. was for the Government and it was performed on a ‘cost–plus’ basis. The company was exposed to minimal competition. Now, Government believes that the ‘Cost–plus’ system encouraged inefficiency. In the future, SE Ltd. will be required to quote fixed prices for Government business. Government defense contracts are being increasingly given to SE Ltd.’s foreign competitors, who have been undercutting SE Ltd’s prices. In addition, SE Ltd. is faced with a general contraction of defense expenditure by the Government. SE Ltd.’s existing costing system is aggregated; that is, all overheads are recovered on direct labour cost. SE Ltd. has to have confidence in its costs, in order to get the Government orders at an economic price and to compete internationally. You are required to: (a) | State the factors that would influence SE Ltd. when it formulates a Strategic Plan to meet the new situation. | (b) | State the strategic responses that are available to SE Ltd. in the new environment. | (c) | State what SE Ltd.‘s management accounting responses should be? | | 6+5+5 | (0) |
8. | Write a short notes on: | 4x4 | |
| (a) | Channels of distribution; | | (0) |
| (b) | Three commonly used sales promotional schemes; | | (0) |
| (c) | Role of Board of Directors in Strategy making and its execution; | | (0) |
| (d) | Market communication. | | (0) |