Vous êtes sur la page 1sur 6

MGT 602 BS-I / 0907

Class of 2008 Semester III End-Semester Examinations MGT 602 Business Strategy-I Part A
Q. While understanding a company's strategy, you should avoid analyzing a. Geographic spread b. Alliances c. Merger d. Acquisitions e. Revenue model Q. Strategic objective could be: Q. Mission statement includes: a. Strategic choice b. Competitive view c. Holistic view d. Company's name e. Focus now and future Q. Organizations objectives for stretch should be a. Speed of strategy b. Challenging c. Strategic targets d. Financial targets e. Outlining business model Q. Organizational strategy encapsulates: a. Endowments b. Functional objectives c. Companys position d. Planned and emergent acts e. Changeless goals Q. Strategic objective is not: a. Lowest cost b. Customer satisfaction c. Current earnings d. Market share e. Quality leadership Q. Firms strategic choice for competitive advantage is dependent more on: a. Firms weaknesses b. Regulatory conditions c. Firms resourcefulness d. Firms objectives e. Firms culture Q. Industry analysis does not require: a. Competitive forces analysis b. SWOT analysis c. Intensity of competition analysis d. Analysis of industry CSF e. Macro-economic conditions Q. Which of the following can be defined as a functional strategy? a. Internal units activities b. Parts of the department c. Parts of the division d. Sub-part of the corporate strategy e. Strategy that functions a. EPS up by 10.5% b. AAA+ rating c. Value through quality offering d. Productivity from 70% to 80% e. 10% annual turnover increase Q. Strategic vision does not benefit: a. Future state b. Competitive action c. Managements view d. Decision-making e. Workers

MGT 602 BS-I / 0907 Q. Intensity of competitive rivalry is strong when: a. Demand is exploding b. Customers are fickle c. Buyers are influenced Q. Competitive strategy of a firm consists of: a. Business strategies b. Offensive strategies c. Defensive strategies

d. Value strategies e. Wealth strategies

d. Rivals acquire competitive strength e. Choice is high

Q. Substitute offering pose threat when: a. Loyalty is high b. Rival sellers are weak c. Entry barriers are high

Q. Strategic offensives initiatives to:

can

not

be

the

a. Change competitors' strengths b. Change guerrilla warfare c. Change the rules of the game d. Change competitors' weaknesses e. Change competitive strikes

d. Discounts prevail e. Switching costs are low

Q. Which of the following is the best probable substitute? a. Ice-cream and slurpies b. Motorcycle and Scooter c. Sprite and 7-Up

Q. For a firm, first-mover advantages can benefit in terms of: a. Defense b. Offense c. Alliances

d. Amazon.com and eBay e. Custard and Mousse

d. Advantageous initial conditions e. Differentiation strategy

Q. Critical Success Factors (CSF or KSF) concern: a. Industry's economic factors b. Resources and competencies c. Company's strategic effect

Q. Which strategy is best suited in going international? a. Low focus b. Low differentiation c. Cost Focus

d. Industry attractiveness e. Functional characteristics

d. Differentiation focus e. Lowest cost provider

Q. Firms situation analysis questions: a. Company's weaknesses strengths and not

Q. The demand side of the internet economy comprise of: a. Website users b. Operating systems specialists c. Developers of visual equipments

b. Companys competitive position c. Industry supply chain

d. Cost and Price e. Integral strategic change

d. Communications experts e. Content specialists

MGT 602 BS-I / 0907

Q. In a dynamic market environment, competition requires a firm to regularly manage: a. Quality b. Differentiation c. Focus d. Costs e. Change Q. For a firm, diversification strategy makes sense when: a. Firm acquires resources b. Current market is all used up c. Value chain is efficient d. Scope of integration is high e. Straddling is essential Q. Diversification strategy (related) is best suited when it is: a. Based on easier expansion b. Based on risk-free terms c. Based on economies of scope d. Built on existing strengths e. Based on strategic fit Q. Unrelated diversification is not best while: a. Undertaking strategic alliances b. Having higher business risk c. Managing complex businesses d. Going multinational e. Investing in related businesses Q. Building total quality management into organizational culture means: a. Total quality in operations b. Hiring the best quality people c. Building quality competencies through core

Q. Strategy linked reward structure entails: a. Rewards linked to firms vision b. Rewards linked to high performance c. Rewards linked to job satisfaction d. Rewards linked to labor costs e. Rewards linked to strategic goals and targets Q. Firms organizational culture can be seen in: a. Competitive strategy b. Organizational values c. Organizations processes and systems d. Organizational objectives e. Each and every individual in the firm Q. Cultural change and subsequent alignment includes: a. Aligning with the symbolic requirements b. Realizing the facets of current culture that support strategy c. Communication across all levels d. Forming an adaptive culture for change e. Changing companys values Q. Non-compliance to company's values statement does not usually result in: a. Retrenchment b. Declaration c. Communication of values d. Top managements endorsement on values e. Compliance to code of conduct Q. Strategic leadership means: a. Energizing employees by higher profits b. Forming rules and responsibilities for efficient functioning c. Delegating and making everyone responsible for success d. Being ethical and moral to all activities that the firm does e. Keeping the firm in sync with the changing times on a sustainable competitive basis

d. Quality training on a regular basis e. There's no total quality management

END O 3 F PART A

MGT 602 BS-I / 0907

Part B: 50 marks: 120 minutes


Problems testing, Conceptual Understanding and Application, Analytical Ability, Caselets, Situational Analysis / Applications of concepts
1. Explain the four categories in BCG matrix. Outline the conditions/category under which the harvest strategy can be deployed. (10 marks) Suggested Answer: ICMR Text Book (February 2005) Introduction to Business Strategy pp 62-64 Salient points: The four categories are: Cash Cows, Stars, Question Marks and Dogs. The harvest strategy can be deployed under conditions of low market growth rate and low relative competitive position or market share. Harvest or liquidated strategy can be deployed on the categories of dogs. 2. How can value chain be used to design the structure of an organization? (10 marks) Suggested Answer: ICMR Text Book (February 2005) Introduction to Business Strategy pp 121 Salient points: Value chain can be used to identify and gain competitive advantage. Value chain integrates all those functions that are inter-related and inter-dependent. Value chain identifies and classifies various activities systematically. Value chain coordinates all the relevant linkages. Value chain deploys critical resources at critical places and removes non value making activities. 3. Compare and contrast Blue Ocean strategy with Red Ocean strategy. (10 marks) Suggested Answer: Salient points: Coined by authors W. Chan Kim and Renee Mauborge Blue ocean strategy create uncontested market space that makes competition irrelevant; break value to cost trade-off; create and capture new demand Red ocean strategies fight for existing demand and make value to cost trade-off. 4. If the industry state is fragmented, explain the absence of economies of scale and experience curve. (10 marks) Suggested Answer: ICMR Text Book (2005) Introduction to Business Strategy pp 86-87 Salient points: Simple process, straight forward warehousing operations, high labor content, high personal service content, and intrinsic impossibility to mechanize or routinize operations are reasons for lack of economies of scale and experience curve.

MGT 602 BS-I / 0907

5. Outline the implementation pitfalls of generic strategies, in terms of risks associated with cost leadership, differentiation and focus. (10 marks) Suggested Answer: ICMR Text Book (2005) Introduction to Business Strategy pp 84-86 Salient points: Company might fail to successfully implement and sustain the strategy The value of the strategic advantage provided by the strategy may disappear with the evolution of the industry

Part C: 20 Marks: 30 Minutes


Case Analysis
6. Read the case and answer the following questions

Case: Moving Up the Value Chain at Infosys


Firm strives to create more value in their offering to the customer and obtain a higher price for the same. This is usually termed as moving up the value chain. In fact, this should be termed as moving up the value offering. Value chain provides a way to improve the value offering. It is a common wisdom now that value can be identified on generic strategies of differentiation and cost leadership. Companies, the world over, have found outsourcing as one of the answer to keep the cost efficient and find new sources of differentiation. In fact, the Indian software industry came in existence and thrived on such premise, and the emergence of Infosys is no different. Companies found outsourcing to low cost countries as the obvious path to create more value for their customers, and in return to stay competitive. IT Companies in United States (US), initially chose Mexico as a location for cost efficiency, then moved on to East Asian countries like Taiwan, moved again to China, and maybe tomorrow will move out of China for some other lower cost location. It is important to note that cost efficiency is dynamic in nature and a particular country or industry or firm needs to work hard to stay as a preferred source of cost efficiency through low labor cost, or higher productivity. India has moved up the value offering to retain its competitive advantage. Infosys has improved its value offering by leveraging its intellectual capital in an interesting way. Infosys has moved up the value offering through process innovation on its value chain Global Delivery Model (GDM)that is built on the context of distributed project management and multi-location engagement teams. GDM works only with a good understanding of the value chain and its integration, as it dismantles the value chain and its activities, and rebuilds a new one that has the potential to be comparably efficient without compromising on the effectiveness of the services. GDM takes the work (project or job) to the place which makes most economic sense, lowers risks and optimizes cost. Infosys has created business value with measurable economic value added (EVA) for its clients. During the initial years, Infosys deployed GDM only for application development. With advancements in technology and communications, the scope of GDM widened to new services including package implementation, independent validation, infrastructure management, business process management, testing, consulting, and systems integration. In 2003, Infosys launched GDM Plus, an enhanced service delivery model, a combination of more services and excellence in execution. Infosys defined GDM Plus as an integrated delivery model that encompassed vertical solutions, expanded vertical footprint and execution excellence. According to Infosys, GDM Plus was its strategic response to the changing market conditions and the competitive landscape to deliver high volumes to customers. Execution excellence was to be achieved through business solutions, technology, domain expertise, quality, operational efficiency, and people development, address all major elements of the value chain. 5

MGT 602 BS-I / 0907 With added services including IT consulting, turn-key implementation, systems integration and business process outsourcing forming a part of GDM, Infosys has gradually moved up the value chain. Infosys has restructured itself from its presence into multi-country geographic markets to global domains, such as enterprise solutions, engineering, financial services, healthcare, manufacturing, retail and distribution, telecom, and utilities. With the help of GDM, Infosys could judiciously allocate tasks and integrate offsite and onsite tasks for faster and efficient completion of the project. Benefits from GDM were achieved only with a clearer understanding of the value chain of the project. Infosys moved up the value chain through the GDM model by rendering its services better and faster, than the competitors. This becomes evident when one realizes that during the period of 19992004, Infosys has made strong revenue growth even with dipping manpower utilization across its development centres. a. Explain, how Infosys can increase its value offering through value chain? b. Explain, how Infosys can differentiate itself from its competitors by using the value chain? (20 marks) Suggested Answer: a. Infosys uses the GDM Model to modify and develop the value chain for its clients and creates value for them. Case instances show that value chain is not divorced from certain continuous improvements such as, improvements in the operations, marketing and support activities. Infosys exemplifies how it becomes essential for a company to move up the value chain to retain some source of competitive advantage. However, the turbulence in environmental change, rigid framework, and restrictions such as, dependence on history, cost and time, creates inertia in modifying the value chain and the desired change, to a radical scale. Although, it is difficult to provide value with restrictions, it is still more difficult to overcome the inertia for radical change. As shown in the case of Infosys, there are primarily two ways in reconfiguration and change of the value chain. One is through the more followed path of forward or backward integration for overall control of the value chain, and the other is by creating a new approach to channel offering through adoption of new process or technology. Infosys through its approach to global sourcing and dispersed operations, leveraged on its GDM Model. It is evident that value creation is linked with the firms initiatives in enabling customers to help and build relationships with the natural participants of the value system. Customer is involved in the co-creation of the value, giving scope to radical new ideas and new approaches to be generated and tried. Infosys tryst with better understanding of their clients process leads them to utilize their GDM model efficiently. Infosys deploys its workforce globally, efficiently through the GDM model. b. A firm can create differentiation primarily by two broad ways. One option is to create some uniquenesscost advantage can also be a unique featureto the individual value activity, a path chosen by most firms. Value offering through cost advantage needs to be essentially dynamic and ever-increasing, as created by Infosys. Moving up the value chain is a form of continuous change that organization can improve over time. The other option is by reconfiguring the value chain, but is relatively costly and warrants concerted efforts over a longer period of time. Such kind of radical change will provide a source of sustainable competitive advantage for the firm as it becomes difficult for the competition to emulate. As Porter states, Opportunities to achieve dramatic levels of differentiation often result from reconfiguring the value chain. Creating a new value chain or changing the offering by moving up the value chain that will provide value to the customer is an innovative process. Porter suggests that new value chain can be configured by starting from the buyers value chaincustomers valueand then link the same differently to other value activities right up to sourcing of raw materials, with a strong focus on cost. The value chain throws up opportunities for competitive advantage through uniqueness. The required uniqueness can be found by identifying refinements in the primary and support activities, and also by studying the linkages up close. These factors not only improve the process, but also find new ways to redefine the process for customer benefit. Infosys found a critical factor in keeping the inventories extra lean, for which it has dove-tailed all the elements of the value chain into each other. Further by doing so, they have found numerous sources of competitive advantage that may seem impossible for the competition.

6 END OF THE QUESTION PAPER

Vous aimerez peut-être aussi