CWA ICWA Final - Group III : Management Accounting - Strategic Management - June2012

CWA ICWA Final - Group III • Management Accounting - Strategic Management • June 2012

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.
Working Notes should form part of the answer. (Please answer all part of the question at one place)
SECTION I (60 Marks) (Strategic Management)
Answer Question No. 1 and any other two more questions from the rest in this section.

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

Working Notes should form part of the answer.
(Please answer all part of the question at one place)

SECTION I (60 Marks)
(Strategic Management)

Answer Question No. 1 and any other two more questions from the rest in this section.

(a)

In each of the cases/statements given below, one of four alternatives is correct. Indicate the correct answer:

1x10

(i)

McCarthy’s marketing mix refers to

(A)	Price, push, pull and product
(B)	Price, promotion, place and product
(C)	Price, profit, promotion and product
(D)	Price, promotion, profits and product

(0)

(ii)

Pepsi’s "Nothing Official About it" would be an example of

(A)	Mission
(B)	Vision
(C)	Strategic intent
(D)	Policy

(0)

(iii)

Which of the following market structures would be commonly indentified with FMCG products?

(A)	Monopoly
(B)	Monopolistic competition
(C)	Oligopoly
(D)	Perfect competition

(0)

(iv)

Judy Strauss and Raymond Frost’s e–marketing model defines e–business as

(A)	EB = EC + SCM + ERP
(B)	EB = EC + BI + CRM + SCM + ERP
(C)	EB =EC + BI + CRM
(D)	EB = CRM + SCM + ERP

(0)

(v)

The competitive advantage through market share approach is derived from

(A)	Economies of scale
(B)	Experience
(C)	Market power
(D)	All of the above

(0)

(vi)

The introduction of ‘Nano’ by Tata Motors could be viewed as a good example of

(A)	Price leadership
(B)	Cost leadership
(C)	Product leadership
(D)	Technology leadership

(0)

(vii)

ABC involves

(A)	Innovative approach to reduction of cost
(B)	Process analysis, cost drivers and innovative approach to reduction of cost
(C)	Process analysis and innovative approach to reduction of cost
(D)	Process analysis and cost drivers to reduction of cost

(0)

(viii)

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)	Andrews

(0)

(ix)

In the words of Michale Dell, CEO, Dell Computer Corporation, "No advantage and no success are ever permanent. The winners are those who keep moving." This requires the firm to have

(A)	Focus
(B)	Strategic flexibility
(C)	Ability to diversify
(D)	Ability to enter new emerging business

(0)

(x)

Nine-cell GE Matrix is the same as the

(A)	BCG Matrix
(B)	Directional Policy Matrix
(C)	PIMS Matrix
(D)	3 x 3 Competitive Positioning Matrixes

(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)

‘Forward Integration’ means in-house production of critical inputs for the main business.

(0)

(ii)

‘Dogs’ are the products in a high growth market where they have a low market share.

(0)

(iii)

‘Debt recovery’ is an arrangement to have debts collected by a factor company, which advances a proportion of the money it is due to collect.

(0)

(iv)

‘Management buy–in’ refers to the purchase of all or part of a business firm from its owners by the managers.

(0)

(v)

‘Acquisition’ is nothing but the joining of two separate firms to form a single firm.

(0)

(c)

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

1x5

(i)

Tax Haven.

(0)

(ii)

Franchise.

(0)

(iii)

Corporate appraisal.

(0)

(iv)

Market segmentation.

(0)

(v)

Loss–Leader.

(0)

(a)

What do you understand by the term ‘Strategic Positioning’?

5+5+
(5+5)

(0)

(b)

Write the meaning of ‘Throughput Accounting’. In which sector this accounting is mostly applied?

(0)

(c)

Mr. Abraham has recently joined as the Production Manager of Super Food Products Ltd., an Indian subsidiary of a multinational food manufacturer and having an annual turnover of Rs. 500 crores. His first major assignment in the company was to give a new marketing thrust to the several leading known brands of the company whose market share was continuously eroding in the face of growing competition.
To start with, he decided to concentrate on two major brands, Power–pack Instant Milk Powder for family and Tomato Ketchup with an annual turnover of Rs. 80 crores and Rs. 100 crores respectively. These accounted for a market share of 47% and 28% respectively for the financial year 2011–12 as compared to 68% and 45% for the financial year 2008–09. In spite these slide in the market shares; these brands could retain higher consumer preference and loyalty vis–a–vis other competitive brands.
With a view to having a better appreciation of promotional themes, Mr. Abraham convened a meeting with the advertising agency, Progressive Advertising Ltd. The meeting generated several new ideas on how to push brands up in the consumer recall and preference.
In the light of the above, answer the following questions:

(i)	List out the possible reasons why the company has suffered a fall in its market share?

(ii)	If you were the Product Manager, what would be your marketing strategy for arresting the trend of slackening sales in the light of the meeting with the advertising agency?

(0)

(a)

Demand forecast can be made using (i) Delphi technique, (ii) Time series analysis, and (iii) Regression analysis. Highlight the strengths of these techniques and also indicate the situations where these techniques will be relevant.

(0)

(b)

What are the "key success factors" for a business enterprise? How would you determine them? Compare and contrast the different types of standards which can be used for evaluation and control of strategy?

(3+3+3)+
(3+4+4)

(0)

Answer the following in brief:

5x4

(a)

What do you understand by the term "Life Cycle Cost"?

(0)

(b)

Write a note on "Risk Gap" as applicable in corporate business planning.

(0)

(c)

How the BOD as corporate governance mechanism can control and monitor managerial decisions?

(0)

(d)

How a firm’s vision and mission help to achieve organisation’s goal?

(0)

SECTION II (40 Marks) (Risk Management)
Answer Question No.5 and any other two more questions from the rest in this Section. (Please answer all part of the question at one place)

SECTION II (40 Marks)
(Risk Management)

Answer Question No.5 and any other two more questions from the rest in this Section.
(Please answer all part of the question at one place)

(a)

In each of the cases/statements given below, one of four alternatives is correct. Indicate the correct answer.

1x5

(i)

Financial Risk arises out of

(A)	The nature of the financial transaction
(B)	Conduct of business and investment
(C)	Both (A) and (B)
(D)	Increase of competition

(0)

(ii)

Types of risk does not include

(A)	Business Risks
(B)	Market Risks
(C)	Interest Rate Risks
(D)	Uncertainties

(0)

(iii)

Which of the following does not relate to EVA?

(A)	Customer satisfaction
(B)	Operating profits
(C)	Tax
(D)	Cost of capital

(0)

(iv)

Which of the following does not relate to BPR?

(A)	Reverse engineering
(B)	Gap analysis
(C)	Process focus
(D)	Ambition

(0)

(v)

Motorola learning lessons from Domino's Pizza and Federal Express, to improve the speed of delivery for its cellular phones, comes under

(A)	Strategic Benchmarking
(B)	Functional Benchmarking
(C)	Process Benchmarking
(D)	Performance Benchmarking

(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)

Physical risk arising out of social, political, legal and economic environments is often identified through the performance of lead indicators.

(0)

(ii)

Physical hazard is a condition stemming from material characteristics of an object.

(0)

(iii)

Risk cannot be avoided through insurance but may be considered as an means to transfer the risk.

(0)

(iv)

Interest rate risk refers to the uncertainty market volumes in the future and the quantum of future income caused by the variations in the interest rates.

(0)

(v)

The EIRR is the measure most often used to indicate the economic viability of bank financial projects.

(0)

(a)

Enumerate the principles of ‘Risk Management’ as identified by the International Organisation for Standardisation (ISO).

(0)

(b)

When should the insured have an insurable interest in the subject matter of insurance in case of (i) Life Insurance, (ii) Fire Insurance, and (iii) Marine Insurance?

(0)

(c)

Can you do 'risk mapping' for Pharmaceuticals industries involved with developing a new product?

6+(1+
1+2)+5

(0)

(a)

What is meant by ‘Hedging Risk’?

(0)

(b)

Can you suggest an exchange rate risk management through asset–liability management for Indian IT firms becoming global?

(0)

(c)

Discuss ‘pricing’ in relation to insurance products and the role of Management Accountant in this regard.

4+5+
(3+3)

(0)

Write answer any three from the following:

5x3

(a)

What do you understand by the term ‘Subrogation’? Enumerate two examples.

(0)

(b)

What is meant by ‘self-insurance’? Mention two elements.

(0)

(c)

What is ‘Cross Currency Options’?

(0)

(d)

Write a brief note on ‘Corporate Risk Management Strategy’.

(0)

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