Business Policy And Strategic Management

ST.JOSEPH’S COLLEGE OF COMMERCE (AUTONOMOUS0

END SEMESTER EXAMINATION – MARCH/ APRIL 2013

M.Com. – IV Semester

Business Policy and Strategic Management

Duration: 3 Hrs                                                                                            Max. Marks: 100 

Section – A

1. Answer Seven questions out of Ten.                      ( 7 x 5 = 35)

 

1. Differentiate between “intended and realized strategies”? Substantiate with examples.

 

2. What is meant by empowerment of the board? Mention three aspects for empowering the

board.

 

3. State five major categories of financial ratios of a company. Briefly explain each of them.

 

4. Discuss situations when it is best to pursue stability strategy.

 

5. Is there any ideal or best organization structure? Discuss.

 

6. Explain SBU structure with a diagram.

 

7. Enunciate the Directional Policy Matrix pioneered by Shell company.

 

8. Define strategic allegiance. Discuss the objectives behind strategic allegiance.

 

9. Comment on the major areas which govern HRM policies and functions?

 

10. What are the major characteristics of an effective strategy evaluation system?

 

Section – B

1. Answer any Three questions out of five.           ( 3 x 15 = 45 )

 

11. What is the difference between corporate mission and corporate objectives? Write on important guidelines for objective setting? Give one example each of good objective setting and bad objective setting.
12. Distinguish between core competence, distinctive competence, strategic competence and threshold competence. Use Examples.
13. What is the general strategy of industry leaders? Differentiate and explain five attack or offensive strategies of challengers?
14. Analyze marketing policies and plans with respect to strategy implementation in terms of 4-Ps and marketing mix application.
15. Who are participants in strategic evaluation system? Explain the strategic controls in the implementation process?

Section – C

• Compulsory Case study                                                                                  (1 x 20 = 20)

 

The Evolution of Strategy at Procter and Gamble.

Founded in 1837, Cincinatti-based Procter and Gamble has long been one of the world’s most international companies. Today, P&G is a global colossus in the consumer products business, with annual sales in excess of $ 68 billion, some 56% of which are generated outside the United States. P&G sells more than 300 brands – including Ivory soap, Tide Pampers, IAMS pet food, Crisco, Gillette and Folgers- to consumers in 180 countries. It has production operations in 80 countries and employs close to 138, 000 people globally.

P&G established its first foreign factory in 1915 when it opened a plant in Canada to produce Ivory soap and Crisco. This was followed in 1930 by the establishment of the company’s first foreign subsidiary in Britain. The pace of international expansion quickened in the 1950s and 1960s as P&G expanded rapidly in western Europe, and then again in the 1970s when the company entered Japan and other Asian nations. Sometimes P&G entered a nation by acquiring an established competitor and its brands, as occurred in the case of Great Britain and Japan, but more typically the company set up operations from the ground floor.

By the late 1970s, the strategy at P&G was well established. The company developed new products in Cincinnati and then relied on semi autonomous foreign subsidiaries, to manufacture, market, and distribute those products in different nations. In many cases, foreign subsidiaries had their own production facilities and tailored the packaging, brand name and marketing message to local tastes and preferences. For years, this strategy delivered a steady stream of new products and reliable growth in sales and profits. By the 1990s, however, profit growth at P&G was slowing.

 

The essence of the problem was simple; P&G’s costs were too high because of extensive duplication of manufacturing, marketing and administrative facilities in different national subsidiaries. The duplication of assets made sense in the world of the 1960s, when national markets were segmented from each other by barriers to cross-border trade. Products produced in Great Britain, for example, could not be sold economically in Germany due to high tariff duties levied on imports into Germany. By the 1980s, however, barriers to cross-border trade were falling rapidly worldwide and fragmented national markets were merging into larger regional or global markets.  Also the retailers through which P&G distributed its products, such as Wal-Mart, Tesco in the United Kingdom and Carrefour in France, were growing larger and more global. These emerging global retailers were demanding price discounts from P&G.

In 1993, P&G embarked on a major reorganization in an attempt to control its cost structure and recognize the new reality of emerging global markets. The company shut down some thirty manufacturing plants around the globe, laid off 13,000 employees and concentrated production in fewer plants that could better realize economies of scale and serve regional markets. These actions cut some $600 million a year out of P&G’s cost structure. It wasn’t enough! Profit growth remained sluggish.

In 1998, P&G launched its second reorganization of the decade. Named Organization 2005, its goal was to transform P&G into a truly global company. The company tore up its old organization, which was based on countries and regions, and replaced it with one based on seven self-contained global business units, ranging from baby care to food products. Each business unit was given complete responsibility for generating profits from its products, and for manufacturing, marketing and product development. Each  business unit was told to rationalize production, concentrating it in fewer, larger facilities; to build global brands wherever possible, thereby  eliminating marketing differences among countries; and to accelerate the development and launch of new products. In 1999, P&G announced that, as a result of this initiative, it would close another ten factories and lay off 15, 000 employees, mostly in Europe where there was still extensive duplication of assets. The annual cost savings were estimated to be about $ 800 million. P&G planned to use the savings to cut prices and increase marketing spending in an effort to gain market share and thus further lower costs through the attainment of scale economies. This time the strategy seemed to be working. Between 2003 and 2006, P&G reported strong growth in both sales and profits. Significantly, P&G’s global competitors, such as Unilever, Kimberly Clark and Colgate Palmolive, were struggling in 2003 to 2006.

 

Questions:

 

1. What strategy was Procter and Gamble pursuing until the late 1990s?

 

2. Why did this strategy succeed for so many years? Why was it no longer working by the 1990s?

 

3. What strategy did P&G adopt in the late 1990s and early 2000s? Does this strategy make

more sense? Why?

 

 

 

St. Joseph’s College of Commerce (Autonomous)

End Semester Examination- MARCH / April 2014

M.COM – IV Semester

 BUSINESS POLICY AND STRATEGIC MANAGEMENT

Duration:  3 Hours                                                                                      Max. Marks: 100

Section – A

1. Answer any SEVEN questions out of TEN. Each carries 5 marks.          (7 x 5  = 35)
2. Explain the relationship between a company’s strategy and its business model. What makes a strategy a winner?
3. Distinguish between a managed corporation and governed corporation.
4. What is a mission statement? What are the distinct features or characteristics of a mission statement? Write a mission statement of a hypothetical company?
5. Differentiate between competence, core competence and distinctive competence with suitable examples.
6. Explain the strategy implications of BCG Portfolio Model.
7. What is the general strategy of market challengers? Differentiate and explain five attack or offensive strategies?
8. Discuss the strategy orientation in SBU. What are the advantages and disadvantages?
9. Discuss the functional policies, and plans in strategy implementation?
10. What are the four pricing strategies implemented by the companies?
11. Explain the balanced score card approach.

 

Section – B

 

1. Answer Three questions out of five. Each carries 15 marks.                 (3 x 15 = 45)

 

11. What are the different approaches to strategic decision making? Discuss the process of strategic decision making in companies.
12. Enumerate the major environmental factors which influence a Company’s business? Which of these according to you, are more important and why?
13. Discuss the merits of generic strategic options available to companies evolved by Michael Porter. What is the best-cost provider strategy? Explain with suitable examples.
14. Define the features of Strategic alliance. What are the forms and objectives of strategic alliance?
15. Analyze various quantitative criteria for performance evaluation of companies. Distinguish between financial criteria and non financial criteria.

 

 

Section – C

III).        Compulsory question –  Case study                                                     (1 x 20 = 20)

 

16.

Zhang Ruimin, Chairman, Haier Corporation

Zhang Ruimin has emphasized a focus strategy in first building Haier into a well-known maker of refrigerators in China and nowa significant force in the US market and beyond. The result has been a 40% annualized growth in sales so far in this century.

It all started several years ago in China with a sledge hammer. Appointed to run a marginal state owned refrigerator factory , Ruimin quickly saw that “the real problem was that workers had no faith in the company and didn’t care. Quality didn’t even enter into any body’s mind.” So after a customer complained, Ruimin lined up 76 defective models on the factory floor. He picked up a sledge hammer and told those who were responsible to smash them. He included himself in the task.  “The message got through that there is no A, B, C, and D quality,” said Ruimin, “There is only acceptable and  unacceptable.” Fast forward to taking Haier into the United States. Instead of trying to compete in the market for large, high-end refrigerators as it does in China, Ruimin chose a market focus strategy, introducing  a multi purpose mini refrigerator designed for use in college dormitories and as a small wine cellar. Haier’s niche products rapidly gained in popularity.

 

Combined with its legendary commitment to quality control that all started with sledge hammer-wielding Zhang Ruimin emphasizing the importance of quality to his employees, Ruimin’s  Haier has leveraged its FOCUS strategy to move into different product lines and grab market share in the United States by choosing market focus, Haier delivered a clear and unique value proposition to American consumers.

 

Questions:

 

1. Which of the generic strategy has an association with Ruimin’s strategy initiative in Haier? Justify your Answer.

 

2. What focus helped Haier in attaining competitive advantage in the market?

 

3. Of the different levels of strategy orientation, which level was given a proper motivation by Zhang Ruimin. What are the various levels of strategy orientation?

 

 

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End Semester Examination –M.Com. IV Semester March-2014

Scheme-Business Policy and Strategic Management

1. Business model: the revenue-cost-profit-economics of its strategy demonstrates its viability of the business enterprise as a whole. Company’s strategy: relates broadly to its competitive initiatives and business approaches (irrespective of financial outcomes it produces) E.g., contrasting business modes of Microsoft and Red Hat Linux. What makes a strategy a winner: i. how well does the strategy fit the company, (internal) situation, ii.is the strategy helping the company to achieve a sustainable competitive advantage (external), iii. Is the strategy resulting in better company performance.
2. Managed corporation: more like traditional model of a company. Focus is on power equations between management and control (Board –CEO relationship).shareholders role is to throw out board. Governed corporation: answer to problems of corporate governance lies in the governed corporation. The focus is not on power- not in monitoring or controlling and controlling the managers- but in improving decision making.

Major differences between the two is in terms of board’s role, characteristics and policies.

3. Mission statement: it embodies the business philosophy of a company’s decision makers, implies the image the company wishes to project for itself, reflects the company’s self concept; indicates the company’s self-concept; indicates the company’s principal product or service areas and the customers needs the company seeks to satisfy. Features:  i. it should be a declaration of organizational purpose, attitude or outlook. ii. it should have a clear customer orientation. iii. It should be a declaration of the  social objectives or policy. Mission statement of a hypothetical company:……………

4.Competence: is he ability to perform a task or achieve some objectives.  Core competence: special or unique internal competence. A core competence is a competitively important activity that a company performs better than other internal activities. Distinctive competence: A distinctive competence is a competitively valuable activity that a company performs better than its rivals.

5. 1. Stars- continue to increase market share at the expense of short term earnings. 2. Cash cows: Maintain share and cost dealership until further investment becomes marginal. 3. Problem Children: Assess chances of dominating segment; If good, go after share; if bad, redefine business or withdraw. 4. Dogs: plan systematic withdrawal so as to maximize cash flow.
6. Challengers are no. 2 and position and tend to challenge leaders of their supremacy. General strategy is attack. E.g., Samsung Vs. Apple (mobile). Offensive strategies: i. Frontal attack, ii. Flank attack, iii Encirclement attack, iv Guerilla attack, v leaping frog attack.
7. Divisions closely approximate strategic business units in all multi-business organizations. The fundamental factor in SBU is to identify independent product/market segment which require distinct strategies. The divisional structure should be much broder with more than one SBU in each division. Advantage: facilitate strategic management of too many business units.- clear strategic focus- enables measurement of performance- easy to add a new business or and divest unprofitable ones. Disadvantage: with too many SBUs effective management becomes a problem –problems of defining autonomy – conflicts of interest likely.
8. In working out functional policies and plans, companies should take care of alignment of strategies in terms of vertical fit and horizontal fit. Vertical fit: [Between Business strategy and Functional (alignment between higher level and lower level strategies)]. Horizontal fit: is alignment or fit between strategies or activities at the same level.
9. i. cost – based pricing, ii. Demand- based pricing, iii. Competition – based pricing, and Value – based pricing.
10. Balanced score card approach to strategy evaluation combines both quantitative and qualitative criteria. It incorporates the expectation of different stakeholders in relating performance to strategy. Perspectives of Balanced score card approach: i. Financial, ii. internal business perspective, iii. customer perspective, iv. Learning and growth perspective.

 

Section B

11. Approaches to strategic decision making: A. Intuitive-Emotional approach, B. Rational Analytical approach, C. Satisfying approach, D. Political –behavioral approach.  Strategic decision making Process:  i.  Problem awareness, ii. Problem diagnosis, iii. Development of alternative solutions, iv. The selection of a solution and v. Implementation of the solutions.
12. Major external environmental factors: the external environment consists of a large number of factors which influence company’s business. They are: Political- Economic – Sociological – Government policies (Controls) – Technology – Competition – intermediaries and suppliers. Organizations should generally be concerned with relevant environment and operating environment. Operating environment , also known as competitive environment consists of factors in the immediate competitive situation like customer profile, level of competition, industry structure, technology, any specific regulation affecting company or industry so on.
13. 1. Cost leadership: exploiting some aspect of the production process, and executing a cost significantly lower than that of competitors. 2. Focused cost leadership: company occupies a specific niche or niches serving only a part of he total market. 3. Differentiation strategy: offering superior performance (high scale advantage). 4. Focused Differentiation: strategy for small and specialist companies. 5. Best cost strategy: a central strategy striking a middle course between low cost advantage and differentiation advantage and broad market and or niche market on the other.
14. Strategic alliance is co-operation between two or more organizations. Strategic alliance are delicate to manage. Features: common objective- shared control – pooling resource by the partners – contribute technology-process- product –designg –sharing specific individual strength.    Forms: i. Competitive, ii. Pre-competitive, iii.  Pro-competitive,  iv.  Non-competitive.     Objectives: i. Development of a new product, ii. Development of new technology, iii. Reducing manufacturing cost, iv. Entering new markets, v. Marketing and sales, Distribution.
15. Measure results or performance in three ways: Comparing: i. current performance with past performance,  ii. performance with industry standards, iii. performance with competitors. Financial Performance:  ROI -ROE –EPS – Price-earnings – Profitability:  Profit/sales ratio – Profitability: Relative profit growth                     Non-financial Performance: Market share: absolute Market share – Market share: relative Market share – Sales Ratio: actual to target sales- Sales Ratio: relative sales growth

Section-C

16. 1. (Differentiation strategy- seems to be the most appropriate)
17. (Consumer oriented approach- seems to be the most appropriate)
18. (Corporate level, business unit level, Functional level – functional level seems to be the most appropriate)

 

 

St. Joseph’s College of Commerce (Autonomous) End Semester Examination –  April 2015 M.COM – IV Semester
P111402: BUSINESS POLICY AND STRATEGIC MANAGEMENT
Duration: 3 Hours                                                                                         Max. Marks: 100
SECTION – A
I)	Answer any SEVEN questions.  Each carries 5 marks.                               (7×5=35)
	1.	What are the Characteristics of Strategic Management Decisions?
	2.	Explain the Dimensions of Strategic Management Decisions.
	3.	Explain how value chain analysis could help in organizational analysis.
	4.	What is a vision? Explain its characteristics.
	5.	Why do firms adapt joint ventures strategy? Discuss the strategic issues involved in joint ventures.
	6.	Discuss the advantages and limitations of multi divisional structure.
	7.	Describe the issues in strategy implementation.
	8.	Elucidate the Nature of Marketing strategy.
	9.	Explain the components to examine when developing a logistics strategy.
	10.	Explain the following:  a) Business Process Reengineering. b) Bench Marking           c) TQM
SECTION – B
II)	Answer any THREE questions.  Each carries 15 marks.                          (3×15=45)
	11.	Discuss the Strategists and their Roles in Strategic Management.
	12.	Enumerate economic environment of business. Discuss various factors of economic environment.
	13.	How do culture, R&D and Management information system contribute to implementation of business level strategy?
	14.	Discuss different types of structures and strategies that would match with each other.
	15.	Enumerate the successful maintenance of strategic control.
SECTION – C
III)	Case Study                                                                                                         (1×20=10)
	16.	In may 2001 the car market Vauxhall announced losses of around 190 million pounds resulting from heavy restructuring costs involving the ending of car production at the luton site. The UK subsidiary of General Motors was also hit hard by increased pressure on new car prices and a decline in output caused by falling demand for the Vectra model. The Company made operating profits of about 25 million pounds in 2000 but these were wiped out by one-off charges of about 200 million pounds to cover the costs of its withdrawal from luton. Out put from Vauxhall’s luton and Ellesmere port plants fell by more than 10 percent in 2000. The reduction was largely due to falling sales of the Vectra which was being replaced by a new model at the start of 2002. The strength of sterling also affected exports to the continent. Vauxhall exported almost 60 percent of production and car derived vans in 2000.   General Motors as a whole lost a total of 190 million pounds in Europe in 2000 compared with a profit of 300 million pounds in 1999. The sharp reversal was one of the reasons for the cutback in production, which also affected plants on the continent.   Discuss the following questions:   a.                  What factors have led General Motors to restructure? b.                  Why was it decided to close down the Luton plant? c.                   How does this restructure programmers help Vauxhall to survive? d.                 What effect will these changes have on the structure of General Motors?

 

 

REG NO:

 

ST. JOSEPH’S COLLEGE OF COMMERCE (AUTONOMOUS)
END SEMESTER EXAMINATIONS –MARCH/APRIL 2016
M.COM – IV SEMESTER
P111402:  BUSINESS POLICY AND STRATEGIC MANAGEMENT
Duration: 3 Hours                                                                                              Max. Marks: 100
SECTION – A
I.	Answer any SEVEN questions.  Each carries 5 marks.                                    (7×5=35)
	1.	How do you carryout environmental analysis? What are the techniques available for it?
	2.	Explain the steps in strategic decision –making process for entrepreneurial Ventures.
	3.	Distinguish between Mission and Objectives and briefly explain different types of Strategies.
	4.	What is BCG matrix? What are its uses and limitations?
	5.	“Corporate planning is not synonymous with long range planning.”  Why? Discuss.
	6.	Explain the essential need for the success of corporate planning system.
	7.	How can the concept of value chain help in making diversification decisions? Critically discuss.
	8.	What is strategic fit? Explain the factors to be considered for selecting the best strategy?
	9.	Critically examine the role of strategic control in management.
	10.	Use the Porter`s Five forces model to analyze an industry of your choice.
SECTION – B
II.	Answer any THREE questions.  Each carries 15 marks.                                (3×15=45)
	11.	Establish in detail the use of SWOT in the analysis of internal strategic assessment.
	12.	Briefly explain Corporate Restructuring? What are the various conditions under’ which corporate restructuring is required?
	13.	Explain in depth the various issues faced by small scale industries and Non Profit organizations .What strategies can they adopt to face those issues.
	14.	Discuss the importance of organization structure and explain the link between structure and strategy.
	15.	Why is it important to integrate R&D into corporate strategy? Briefly discuss the factors which should be taken into consideration if the innovation process is to be managed successfully. Explain giving examples
SECTION – C
III.	Case Study                                                                                                              (1×20=20)

16. MasterCard Faces Strong Buyer Power

 

MasterCard Inc. generates revenue by charging fees to process payments from banks to consumers who swipe MasterCard-brand credit and debit cards, making the banks, not individual consumers, MasterCard’s customers.

 

 

MasterCard issues 916 million cards through 25,000 financial institutions in more than 200 countries.

Rapid consolidation within the banking industry, combined with a 28% market share in global credit and debit card transactions compared with main- rival Visa’s 68% share, means that MasterCard has to work hard to win and keep bank business. Further, MasterCard success depends on its four largest customers, which makes up 30% of annual revenues: JP Morgan Chase, Citigroup, Bank of America and HSBC.

MasterCard strategy focuses on two key elements- pricing and marketing. MasterCard carefully executed price increases between 2007 and 2008, with little customer pushback. At the same time, the company created MasterCard account teams that are tailored to fit the specific key customer needs. The teams drive the growth of customer usage, and thereby company growth. MasterCard’s marketing talent was also reoriented from a dedication to strengthening MasterCard’s brand identity to directly benefit these customers.

 

Questions:

 

1. Identify driving forces that may help MasterCard to make fundamental changes in its competitive environment?

 

1. Advise on the possible key success factors that may help MasterCard Inc. to have a great impact in future competitiveness.

 

 

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