| 1. | (a) | State whether the following statements, based on the quoted terms, 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) | "Strategic Management" is concerned with the formulation of possible courses of actions, their evaluation and the choice between them. | | (0) |
| | | (ii) | "Technology upgradation" means carrying out required changes/modifications in the design acquired from collaborators. | | (0) |
| | | (iii) | ‘Cash cows’ are products in a high–growth market but where they have a low market share. | | (0) |
| | | (iv) | ‘Kanban’ attempts to identify key results and does not list all the tasks of each manager. | | (0) |
| | | (v) | ‘Diversification’ means selling off a firm’s operations or pulling out of certain product market areas. | | (0) |
| | (b) | Define the following terms (in not more than one/two sentences): | 1x5 | |
| | | (i) | Overtrading | | (0) |
| | | (ii) | Corporate appraisal | | (0) |
| | | (iii) | Devaluation | | (0) |
| | | (iv) | EFT | | (0) |
| | | (v) | Franchise. | | (0) |
| | (c) | Choose the most appropriate one from the stated options and write it down: | 2x5 | |
| | | (i) | Which of the following market structures would be commonly identified with FMCG products? | (A) | Monopoly | | (B) | Monopolistic competition | | (C) | Oligopoly | | (D) | Perfect competition. |
| | (0) |
| | | (ii) | The effort by the manufacturer to persuade middlemen to stock and promote his product (eg. Trade discount) is termed as: | A) | Pull | | (B) | Push | | (C) | Swap | | (D) | None of these |
| | (0) |
| | | (iii) | In PLC, ‘Dodos’ indicates: | (A) | Negative cash flows | | (B) | Low share and low growth | | (C) | Low share, negative growth and negative cash flows. | | (D) | High share, low growth and large cash flows. |
| | (0) |
| | | (iv) | The product–market matrix comprising of strategies of Penetration, Market development, Product development and Diversification was first formulated by: | (A) | Ansoff | | (B) | Drucker | | (C) | Porter | | (D) | Prahlad |
| | (0) |
| | | (v) | If an organization acquires its supplier, it is an example of: | (A) | Horizontal integration | | (B) | Forward vertical integration | | (C) | Backwards vertical integration | | (D) | Downstream vertical integration. |
| | (0) |
| | | (vi) | Typically Profits are highest in which state of the industry life–cycle. | (A) | Introduction | | (B) | Growth | | (C) | Maturity | | (D) | Decline. |
| | (0) |
| | | (vii) | Diversification into many unrelated areas is an example of: | (A) | Risk Management | | (B) | Good Management | | (C) | Uncertainty reduction | | (D) | Sustainability. |
| | (0) |
| | | (viii) | Segmentation is a way of: | (A) | Subdividing Markets | | (B) | Subdividing industries | | (C) | Differentiating products | | (D) | Subdividing organisations into departments. |
| | (0) |
| | | (ix) | The strategy which concentrates around a production market is: | (A) | Vertical Integration | | (B) | Niche | | (C) | Horizontal Expansion | | (D) | Diversification. |
| | (0) |
| | | (x) | Delphi Technique is used in | (A) | Budgeting | | (B) | Projecting Business | | (C) | Market Research Technique | | (D) | Technological Forecasting. |
| | (0) |
| 2. | Case Study: You have recently been appointed as a Management Accountant of ABC Ltd., ABC is a small engineering company. It manufactures precision parts. The market in which it sells is small. It faces severe competition. With its existing production facilities, it can undertake only small engineering jobs. Large scale works are turned away. The volume of work so turned away is increasing. The company has achieved steady increase in profit over the past few years. The Board of the company feels that it can increase it profits further by having additional facilities to carry on large scale works that are being turned away now. Budgetary Control and Standard Costing are the sole outputs of the current management accounting system. These reports are comprehensive and are being produced punctually. Jobs are priced by adding a percentage to the total costs calculated on the basis of standard costs. The annual budget is split into monthly parts and are flexed to take into account the particular month’s actual production. Monthly Variance reports are produced to the concerned managers.
You are required to:
(a) Comment critically on the Management Accounting Reports currently produced, in consideration of the need for the Board of ABC Ltd., to be provided with information that assists in strategic decision making.
(b) State the critical success factors of any Strategic Management Accounting System. | 8+8 | (0) |
| 3. | (a) | Discuss briefly on the importance of ‘globalization on competition. | 8 | (0) |
| | (b) | Define and explain what ‘gap analysis’ involves. Consider how gap–analysis might be applied to a product. | 8 | (0) |
| 4. | How would you classify ‘Strategic alternative’ based on:
(i) risk
(ii) growth.
Discuss specific contributions, if any, with regard to the above. | 8+8 | (0) |
|
| 5. | (a) | Should an organization formulate its strategy as a reaction to its environment or should it aim to use its resources to create an environment that it favourable to itself. Justify your answer using relevant examples. | 8 | (0) |
| | (b) | It has been known for many years that the returns from diversification are often poor. Why do managers persist with it as a strategy? | 8 | (0) |
| 6. | (a) | One major route to competitive advantage and hence profitability, is market share. Identify the sources or factors for consideration in following this route. | 8 | (0) |
| | (b) | Discuss very briefly on the four important strategic options for market share. | 8 | (0) |
| 7. | (a) | Identify the different factors about which firms can become complacent at each stage of the life–cycle and the dangers that this can pose. | 8 | (0) |
| | (b) | Discuss a Marketing Warfare view point of competition. | 8 | (0) |
| 8. | Write short notes on any four out of the following: | 4x4 | |
| | (a) | Benchmarking, | | (0) |
| | (b) | Profit Impact on Marketing Strategy (PIMS), | | (0) |
| | (c) | Strategic Leader, | | (0) |
| | (d) | Market Signals, | | (0) |
| | (e) | Reasons for failure of new products. | | (0) |
