| 1. | (a) | Choose the most appropriate one from the stated options and write it down: | 1x10=10 | |
| | | (i) | The acquisition of Corus by Tata Steel would be an example of | (a) | Harizontal integration | | (b) | Vertical integration | | (c) | Concentric diversification | | (d) | Forward integration |
| | (0) |
| | | (ii) | According to Porter, industry attractiveness depends on | (a) | The technology | | (b) | The competitor’s technology | | (c) | Cost of production | | (d) | The structure of the industry |
| | (0) |
| | | (iii) | The strategy of the Reliance Group in India would be a good example of | (a) | Conglomerate diversification | | (b) | Market development | | (c) | Price transfers | | (d) | Concentric diversification |
| | (0) |
| | | (iv) | In 1982 there were 4 firms producing colour TVs in India. In 1988 there were 44, In 2004 there are 5 firms that account for 80% of market share. This would be an example of | (a) | Product penetration | | (b) | Market consolidation | | (c) | Technology convergence | | (d) | Web structures |
| | (0) |
| | | (v) | In Product life cycle "DODOS" indicates | (a) | Negative cash flows | | (b) | High shares, low growth, large cash flows | | (c) | Low share and low growth | | (d) | Low share, negative growth and negative cash flow |
| | (0) |
| | | (vi) | Consultants who contributed to the concept of TQM | (a) | W. Edwards Deming | | (b) | Joseph Juran | | (c) | A. V. Feigenbaum | | (d) | All of the above. |
| | (0) |
| | | (vii) | Strategy/s that may be chosen by a company for existing business | (a) | Divestment | | (b) | Harvest | | (c) | Liquidation | | (d) | Any of the above |
| | (0) |
| | | (viii) | When a firm with substantial internal strength faces major environmental threats, it should pursue | (a) | Turn around strategy | | (b) | Related diversification strategy | | (c) | Sell out strategy | | (d) | Market penetration strategy |
| | (0) |
| | | (ix) | The strategy of HMT Ltd., streamlining its product line and thereby eliminating a few dozens of various specifications and concentrating on producing cost-effective varieties only could be viewed as a good example of | (a) | Retrenchment | | (b) | Restructuring | | (c) | Pruning | | (d) | Divestment |
| | (0) |
| | | (x) | Benchmarking is | (a) | The analytical tool to identify high cost activities based on the "Pareto Analysis" | | (b) | The search for industry’s best practices that lead to superior performance | | (c) | The simulation of cost reduction schemes that help to build commitment and improvement of actions. | | (d) | The framework that earmarks a linkage with suppliers and customers. |
| | (0) |
| | (b) | Define the following terms in just a sentence or two: | 1x5=5 | |
| | | (i) | Barriers to entry | | (0) |
| | | (ii) | Cash cows | | (0) |
| | | (iii) | Conglomerate diversification | | (0) |
| | | (iv) | Likert scales | | (0) |
| | | (v) | Tax haven | | (0) |
| | (c) | State whether the following statements are ‘true’ or ‘false’: | 1x5=5 | |
| | | (i) | "Niche" means concentrating around a product and market | | (0) |
| | | (ii) | Offensive strategy is appropriate for small companies and requires that they concentrate on just on segment of market. | | (0) |
| | | (iii) | The ‘generic product’' is the basic product in terms of what it is | | (0) |
| | | (iv) | A cost–plus policy can lead to inflexibility in a firm’s pricing decisions | | (0) |
| | | (v) | Performance measures for monitoring strategies cannot be mainly financial | | (0) |
| 2. | Discuss in what sense Government as a segment of the environment may be regarded both as an aid and as an impediment to business | 8+8 | (0) |
| 3. | (a) | List eight environmental factors that affect an organization’s strategy and why. | 4+4 | (0) |
| | (b) | Explain in what circumstances you would recommend that organization to adopt | (i) | Strategic Planning, and |
| (ii) | Freewheeling opportunism |
| 4+4 | (0) |
| 4. | Case Study: BB Ltd., is business organized as three divisions and head office. The divisions are based on market groupings, which are Retail. Wholesale and Government. The divisions do not trade with each other. The main method of control of the divisions has been the requirement to earn a return on investment (ROI) of 15% per annum. The definition of return and capital employed is provided by head office, at the criterion ROI rate of 15%. The recent experience of BB Ltd., is that the group as a whole has been able to earn the 15% but there have been wide variations between the results obtained by different divisions. The infringes another group policy that forbids cross–subsidisation, i.e., each and every division must earn the criterion ROI. BB Ltd. is now considering divestment strategies and this could include the closure of one or more of its divisions. The head office is aware that the Boston Product Market Portfolio Matrix (BPMPM) is widely used within the divisions in the formulation and review of marketing strategies. As it is so widely known within the group and is generally regarded by the divisions as being useful, the head office is considering employing this approach to assist in the divestment decision. You are required to: | (i) | Evaluate the use by BB Ltd. of the concept of ROI and its policy that forbids cross–subsidisation. |
(2½+2½) | (ii) | Describe the extent to which the BPMPM could be applied by BB Ltd. in its divestment decision. Evaluate the appropriateness of the use of the BPMPM for this purpose. (5 marks) |
| (iii) | Recommend, and justify, two other models that could be used in making a divestment decision. Demonstrate how BB Ltd. could utilize these models to make this decision. (3+3 marks) |
| 16 | (0) |
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| 5. | (a) | Examine the degree to which the three concepts of product positioning, product differentiation and market segmentation relate to each other. | 8 | (0) |
| | (b) | Suggest a framework identifying atleast four criteria to evaluate the effectiveness of advertisement. | 2x4 | (0) |
| 6. | (a) | It has been argued that products have life cycles whereas brands do not. Required: | (i) | Discuss the validity of the above arguments. |
| (ii) | Explain the role of brands in the construction of barriers to entry. |
| 3+5 | (0) |
| | (b) | Briefly discuss "Market Communication" and its effectiveness. | 2+6 | (0) |
| 7. | Companies that fail to develop new products are putting themselves at risk. At the same time, new product development is risky. Required: | (a) | List the reasons for failure of new products. |
| (b) | List and briefly explain the factors that hinder the process of new product development. |
| 8+8 | (0) |
| 8. | Write short notes on any two out of the following | 8x2 | |
| | (a) | Profit Impact on Marketing Strategy (PIMS); | | (0) |
| | (b) | Strategic leader; | | (0) |
| | (c) | Ansoff’s Matrix; | | (0) |
| | (d) | Market signals. | | (0) |
