CWA ICWA Final - Group III : Management Accounting - Strategic Management - June 2010

CWA ICWA Final - Group III • Management Accounting - Strategic Management • June 2010

This Paper has 49 answerable questions with 0 answered.

F–P13(MSM) Syllabus 2008
Time Allowed : 3 Hours	Full Marks : 100

The figures in the margin on the right side indicate full marks.
Answer Question Nos. 1 and 6, which are compulsory and any other two from Section I and any two from section II.
SECTION I (60 Marks)
Marks

The figures in the margin on the right side indicate full marks.

Answer Question Nos. 1 and 6, which are compulsory and any other two
from Section I and any two from section II.

SECTION I (60 Marks)

Marks

(a)

Choose the most appropriate one from the stated options and write it down:

1x10

(i)

Business Process Re-engineering is

A.	Eliminating loss-making process;
B.	Redesigning operational processes;
C.	Redesigning the product and services;
D.	Recruiting the process engineers.

(0)

(ii)

Air India decreasing the airfare on the Kolkata-Mumbai sector following the introduction of the No-frills airlines is and example of

A.	Cost leadership;
B.	Product differentiation;
C.	Market retention;
D.	Price leadership;

(0)

(iii)

The best test of a successful strategy implementation is

A.	Whether structure is well matched to strategy;
B.	Whether strategies and procedures are observed in a strategy supportive fashion;
C.	Whether actual organizational performance matches or exceeds the targets spelt out in the strategic plan;
D.	Whether it is made after the strategy is formulated, so that it is supportive to the strategy.

(0)

(iv)

The maturity stage of the PLCC is most often associated with

A.	Rapid growth;
B.	Uncertainty in market;
C.	Improvements in manufacturing process;
D.	High exit barriers.

(0)

(v)

Offensive strategy is a strategy

A.	For small companies that consider offensive attacks in the market;
B.	For those companies that search for new inventory opportunities to create competitive advantage;
C.	For the market leader who should attack the competitor by introducing new products that makes existing ones obsolete;
D.	For those companies who are strong in the market but not leaders and might capture a market share from the leader.

(0)

(vi)

Green–mail tactics is where a firm

A.	Purchases its own stocks at a premium to avert a takeover bid;
B.	Forestalls the possible takeover bid through legal mode;
C.	Arranges to sell one of its highly profitable S.B.Us in order to dissuade the predator;
D.	None of the above.

(0)

(vii)

Business forecasting models of qualitative nature are

A.	Regression analysis and economic modelling;
B.	Delphi and nominal group techniques;
C.	Simple average and exponential smoothing;
D.	All of the above.

(0)

(viii)

Red Ocean strategy is concerned with

A.	Creating a market place where there is no competition;
B.	Creating and capturing new demand and making a value-cost trade-off;
C.	Making the product unique in terms of attributes;
D.	Strategy-making based on competition in the existing market place.

(0)

(ix)

The product–market matrix comprising the strategies of market penetration, market development, product development and diversification was first formulated by

A.	Ansoff;
B.	Drucker;
C.	Porter;
D.	Prahlad.

(0)

(x)

If an airline company purchases a hotel, this would be an example of

A.	Strategic alliance;
B.	Backward integration;
C.	Forward integration;
D.	Market expansion.

(0)

(b)

State whether the following statements, based on the quoted terms, are ‘True’ or ‘False’ with justifications for your answer. If any statement is ‘False’, you are required to give the correct terms, duly quoted. No credit will be given for any answer without justifications.

1x5

(i)

"Special Economic Zone", created by the Government of India, encourages industry, investment and FDI.

(0)

(ii)

"Balanced Strategy" is about translating the vision, communicating and linking, business planning, target setting, etc.

(0)

(iii)

"Simulation model" helps to narrate and predict the characteristics of a given system under different conditions.

(0)

(iv)

"Divestiture tactics" aims at initiating action in favour of the predator by destroying the attractiveness of the firm.

(0)

(v)

"Different cultures" in an organization is the major reason for lower success in cross border merger.

(0)

(c)

Define the following terms (in not more than two sentences):

1x5

(i)

Competitive advantage;

(0)

(ii)

Boot strap alliance;

(0)

(iii)

Proforma financial statements;

(0)

(iv)

Human Resource Strategy;

(0)

(v)

Problem child.

(0)

(a)

Now–a–days, the multinational companies presume to follow either an International Strategy or Multi Domestic Strategy or Global Strategy or Transnational Strategy.
Define each of them, with all their respective advantages and disadvantages.

(0)

(b)

Write a brief note on Product orientation vs. Market orientation.

(0)

(a)

What is EVA? How can it be improved?

2+4

(0)

(b)

What are the strategies adopted to combat hostile takeover?

(0)

(a)

SEBI has introduced corporate governance in a comprehensive manner to protect shareholders interests as well as provide teeth in monitoring a companies‘ performance through independent directors. Discuss.

(0)

(b)

Write a short note on:

5+5

(i)

Reverse engineering;

(0)

(ii)

Product development strategy.

(0)

(a)

Define brand equity and identify its valuation methods.

(0)

(b)

How has the classification of costs changed from the traditional method in strategic total cost management?

(0)

SECTION II (40 Marks)

SECTION II (40 Marks)

(a)

Choose the most appropriate one from the following stated options and write it down:

1x5

(i)

Portfolio management reduces

A.	Systematic risk;
B.	Unsystematic risk;
C.	Interest rate risk;
D.	Inflation risk.

(0)

(ii)

VAR means

A.	Variation associated risk;
B.	Valuation and risk;
C.	Value at risk;
D.	Variance at risk.

(0)

(iii)

Business Risk is inherent to a business due to

A.	Its nature and susceptibility to environment, e.g., change of fashion, business cycles;
B.	Its nature and susceptibility to environment, e.g., conflicts like war, insurgency;
C.	Its nature and susceptibility to environment, e.g., cross border terrorism, technological obsolescence, etc.;
D.	All of the above.

(0)

(iv)

Financial risk arises out of

A.	The nature of financial transactions;
B.	The conduct of business and environment;
C.	Both(A) and (B);
D.	None of (A) and (B).

(0)

(v)

Physical risk includes

A.	Natural calamities: fire, tsunami, floods, earthquake, etc.;
B.	Factory accidents due to fire, mishandling of equipment, explosions, etc.;
C.	Occupational hazards;
D.	All of the above.

(0)

(b)

State whether the following statements, based on the quoted terms, are ‘True’ or ‘False’ with justifications for your answer.
If any statement is ‘False’,you are required to give the correct terms, duly quoted. No credit will be given for any answer without justifications.

1x5

(i)

"Purchasing Power Risk" is the uncertainty of the purchasing power of the moneys to be received, in future;

(0)

(ii)

"Risk" arises when different people behave and react differently to the same situation;

(0)

(iii)

"RORAC" is a target measure in which the denominator is adjusted depending on the risk associated with the project;

(0)

(iv)

Product liability policy is one of the products of "industrial insurance"

(0)

(v)

MTA stands for "Make to assembly".

(0)

(a)

Of the seven–fold risk management strategies, "reduction/prevention of risk" is crucially important for an organization. What would be your approaches to attain this? Discuss with suitable examples.

(0)

(b)

"Mathematical models as well as statistical analysis have been helpful in risk assessment/evaluation" Identify the models and measures and discuss them in brief.

(0)

(a)

Discuss the concept of risk pooling and diversification of risk.

5+5

(0)

(b)

What do you understand by ‘Probability of ruin’?

(0)

(a)

What are the rights and responsibilities of:

(i)	Insurer; and

(ii)	Insured, in the sphere of Risk Insurance.

2+2

(0)

(b)

State the two broad functions of insurers.

2+2

(0)

(c)

Describe performance–related measures in the context of Corporate Risk Management.

(0)

10.

Write short notes on:

5x3

(a)

Catastrophic losses,

(0)

(b)

Physical risk,

(0)

(c)

Exposures to Agro & Bio–liabilities.

(0)

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