December 22, 2021 MAN 301 Strategic and International Management Page 1 of 6

UNIVERSITY OF MANNHEIM
Business School
Prof. Dr. Michael Woywode
Chair of SME Research and Entrepreneurship
Prof. Dr. Matthias Brauer
Chair of Strategic and International Management

HWS 2021
December 22, 2021

MAN 301 Strategic and International Management

Exam
– Questions –

• The exam consists of 6 pages including the cover page.

• The time allowed for this final exam is 90 minutes and the maximum number of points to
be attained in the exam is 90. The number of points for each exercise can thus serve as a
reference for the working time needed.
• You must answer all questions.
• The questions must be answered in English.
• All questions must be answered in the Word document provided. Please convert the Word
document into a PDF file and upload the PDF file at the end of the exam.
• Answers or parts of an answer that you do not wish to be graded are to be deleted.
• The exam is open book. Permitted resources: Lecture slides, personal notes,
recommended literature, and a calculator.
• If you experience technical problems during the exam, please contact the exam
supervisors immediately:
- Robert Dehghan (Last names A-H): robert@mcei.de,
Tel. +49 (0) 621 181 2766
- Martin Jerusalem (Last names J-O): jerusalem@bwl.uni-mannheim.de,
Tel. +49 (0) 621 181 1745
- Louis Vandepoele (Last names P-Z): vandepoele@bwl.uni-mannheim.de,
Tel. +49 (0) 621 181 1739
• We are also available via Zoom:

ZOOM ID: 348 723 9487 | ZOOM Password: 768059

https://uni-mannheim.zoom.us/j/3487239487?pwd=VVBiV3c2UzVEOTRtTE1ranl5U21Ydz09

Best of luck!
December 22, 2021 MAN 301 Strategic and International Management Page 2 of 6

PART I
1 Internal & External Analysis 15 pts
Video gaming is big business – the global market value was over $156 billion in 2020
and is expected to grow up to $269 billion in 2025. The leading game consoles
companies are Konama, Atara and Raspberra. Konama and Atara tend to compete
on stronger technological prowess (e.g. hyper realistic graphics, memory, processing
units), a larger library of more sophisticated games, and deeper pockets of cash. On
the other hand, Raspberra has over the years become especially popular with casual
gamers. Founded in the 19th century as a manufacturer for card games, Raspberra
broadened its portfolio towards children’s toys, and entered the video gaming industry
in the 1970s.

While early home video games were played by die-hards, mostly young men spending
hours playing the same game, Raspberra began courting the casual gamer with the
introduction of its handheld devices in the 1990s, followed by major updates of them
in 2004, 2011 and 2017. The line of handheld game consoles expanded the market by
appealing to (younger) players who were not hard-core video-game enthusiasts. This
customer group was more or less ignored by Raspberra’s competitors.

Raspberra managed to develop its own proprietary characters, such as Super Donkey
or Luigi Kong and still develops proprietary games around these characters. With the
introduction of its WOW console in 2017, Raspberra changed the rules to which the
industry adhered so far: The console had the unique feature of a wireless handheld
pointing device that can detect movements in three dimensions allowing players to
imitate real-life movements like swinging a tennis racket or hurling a bowling ball. This
unique feature allowed Raspberra to court a broader demographics, thereby
continuing to expand Raspberra’s knowledge of its customer base and strengthening
its basis for competitive advantage.

With the introduction of the WOW game console, Raspberra became the market leader
(45% market share) in the current generation of game consoles followed by Atara (29%
market share) and Konama (26% market share). But the competition was not standing
still. Konama introduced MOVE a game console with very similar features like WOW
allowing users to interact with their voice commands and gestures. The development
costs were about several hundred million, but its success was disappointing.

1.1 Please name and describe in your own words the two critical requirements of 4 pts
the resource-based view of a firm.

1.2 Resources and competencies of Raspberra that may result in a sustainable 3 pts
competitive advantage are technological know-how/development competence
as well as the creation of proprietary games and characters. Please name two
other resources and competencies of Raspberra (Bullet are points sufficient).

1.3 Please apply the VRIO-Framework as discussed in the course to the following 8 pts
two resources and competencies and decide if they result in a competitive
advantage, disadvantage or parity for Raspberra (Bullet points are sufficient).

a) Technological know-how/development competence (4 pts)

b) Creation of proprietary games and characters (4 pts)
December 22, 2021 MAN 301 Strategic and International Management Page 3 of 6

2 Business strategy: Vision, mission, and objectives 15 pts

2.1 Please write a coherent essay (in your own words) describing the business 15 pts
strategy of a company touching upon the following point. Please limit your
essay to 300 words.
• Name (5 pts) and explain (10 pts) each of the five steps within the strategy process.

3 The five generic competitive strategies 15 pts

The German car manufacturer Bavaria Auto is in a serious situation. Last year profits
fell by 30%. In just four years the company fell from the 3rd position of the biggest car
manufacturers in the world to the 8th position.

Bavaria Auto charged 10% more than its competitors as the brand stands for premium:
combining innovation with quality. However, global competition, especially in the USA,
France, and the Far East, increased as competitors made huge improvements in
design, quality and production efficiency. Bavaria Auto answered to that with price
reductions resulting in loses in some markets. Especially price wars in China had a big
impact as American competitors reduced their prices by 10%, resulting in a market
share loss of 20% for Bavaria Auto. Bavaria Auto is producing their cars in Germany
where labor costs are 5% higher than the European average.

As the main goal of the company lies on profit maximization and not market share, a
new cost saving program was announced. This program could save costs of more than
$2,6 billion in the next three years. Other actions include acquiring a leasing company,
extension of its car model portfolio and raising the production capacity as worldwide
demand for cars is increasing. Some changes will be made especially in China, with
more luxury cars (from the exclusive Premium Line) being offered and decisions being
made locally rather than centrally from the German headquarters.

However, there are also other internal problems existing at Bavaria Auto: slow
decision-making, strong hierarchy, limited authority for managers to make own
decisions, and bureaucratic processes resulting in a resistance to change behavior.
Therefore, it is also planned to transform the whole organization including processes,
firm behavior, and the implementation of more democratic decision-making structures.

3.1 Please conduct a SWOT analysis for Bavaria Auto based on the information 8 pts
provided. Please name two aspects for each of the four dimensions (Bullet
points are sufficient).

3.2 The CEO of Bavaria Auto needs your help. Please make suggestions based on 7 pts
your insights from the SWOT analysis by using the strategy inferences:

a) How can Bavaria Auto use its strengths to take advantage of the
opportunities. Make two suggestions (4 pts).
b) How can Bavaria Auto overcome its weaknesses preventing it from taking
advantage of the opportunities? Make one suggestion (1,5 pts).
c) How can Bavaria Auto use its strengths to reduce the likelihood and impact
of the threats? Make one suggestion (1,5 pts).

----------------------------
-- END OF PART I --
----------------------------
Please proceed to the next page for PART II of the exam.
December 22, 2021 MAN 301 Strategic and International Management Page 4 of 6

PART II

4 Corporate Strategy and Strategy Implementation 28 pts

Duolever plc, headquartered in London, United Kingdom, is a multinational foods and
beverages company. Founded in 1929, the company started as a producer of butter
and margarine. Over the years, the company extended its product portfolio and began
manufacturing and selling all kinds of foods, such as cereal, icecream and frozen food,
as well as beverages, such as tea, coffee and water. Three years ago, Duolever also
entered the home entertainment market by acquiring the video streaming company
FlixNet Corp. Today, Duolever employs 149,000 people across the globe and has
three business units – Foods, Beverages, and Video Streaming.

Greta Gourmet, who was newly appointed as Duolever’s Chief Executive Officer in
2019, wants to grow Duolever substantially in the coming years by focusing more on
its beverages business: “I want to transform Duolever into the most valuable foods and
beverages firm worldwide. To achieve this, we will expand primarily in the beverages
market and, in particular, in the wine and spirits segment, as it offers the most exciting
growth opportunities”. So far, however, Greta’s growth strategy has yet to pay off, as
Duolever’s revenue and market value have almost stagnated since her appointment.

Greta is clueless why her growth strategy has not delivered the desired results so far,
but she thinks that one reason is her business unit managers’ inability to make proper
decisions and implement her strategy. To accelerate Duolever’s growth anorganically,
Greta is now planning to take over several large wine and spirits producers. However,
Greta has doubts on whether she should make these sizeable acquisitions, since they
require substantial financial resources Duolever does not currently have. Greta has
approached you to evaluate Duolever’s strategic course to help her with her decision.

Greta provides you with the following financial information for Duolever plc:
Duolever plc (Market capitalization = EUR 96,662 million)
Sales Market Expected Expected Stand-alone
(EUR millions) 2020 Share Sales Growth Market Growth Value
Foods 34,225 29% 5% -1% 46,698
Beverages 26,919 37% 1% 4% 42,386
Video
5,333 16% 2% 8% 18,766
Streaming
Total 66,477
Average 3% 3%

From Greta, you also obtained the following figures of Éstlé SA, Duolever’s archrival
and main competitor in the business units Foods and Beverages:
Éstlé SA (Market capitalization = EUR 122,092 million)
Sales Market Expected Expected Stand-alone
(EUR millions) 2020 Share Sales Growth Market Growth Value
Foods 18,305 15% 3% -1% 25,440
Beverages 22,619 31% 3% 4% 38,123
Healthcare 31,958 22% 4% 6% 60,766
Total 72,882
Average 3% 3%
December 22, 2021 MAN 301 Strategic and International Management Page 5 of 6

Finally, Greta researched which company is Duolever’s primary competitor in the video
streaming business and sent you the following financial data of StreamCo Inc.:
StreamCo Inc. (Market capitalization = EUR 189,551 million)
Sales Market Expected Expected Stand-alone
(EUR millions) 2020 Share Sales Growth Market Growth Value
Advertising 12,989 25% 16% 7% 46,698
Video
14,337 39% 22% 8% 62,386
Streaming
Total 27,326
Average 19% 8%

4.1 (a) Please briefly describe Duolever’s corporate strategy with reference to the 8 pts
case. (4 pts)
(b) Which mode of diversification did Duolever pursue when it added FlixNet
Corp. to its portfolio? Justify your answer and provide one specific
disadvantage that might go along with this type of diversification. (4 pts)

4.2 (a) Based on Duolever’s market capitalization and the stand-alone values of its 8 pts
business units, does Duolever currently achieve a corporate surplus? What
does this information convey about the quality of Duolever’s corporate
strategy? Please document all your calculation steps and provide your
reasoning. (5 pts)
(b) Which tool would you recommend to Greta to encourage her business unit
managers to improve their decision-making? Briefly describe the tool and
explain how it might help with implementing Greta’s corporate strategy. (3 pts)

4.3 (a) Greta wants to examine her business units more in detail in a growth/ share 12 pts
matrix (Henderson, 1971). Please position Duolever’s business units in the
growth/ share matrix. Name the category for each business unit and briefly
justify your choice. (6 pts)
(b) Which norm strategies should Greta derive for each of Duolever’s business
units based on your matrix? Please provide your reasoning. (3 pts)
(c) To finance her growth projects, Greta considers the divestiture of
Duolever’s Video Streaming business unit. Which divestiture mode would you
recommend to her? Please explain your recommendation. (3 pts)

5 Global Strategy 17 pts

During summer break, you work as an intern for the Chinese electric car manufacturer
Mio Inc., headquartered in Shanghai, China. Mio was founded in 2010 by the ambitious
and visionary MIT-graduate Jason Xu. Today, Mio is one of the fastest growing electric
car companies worldwide and had 5,000 employees in 2020. Mio produces only one
standardized passenger car, the electric sedan Mio One, which stands out among its
competitors through its high driving range of over 800 km on a fully charged battery.

With regards to Mio’s geographic footprint, Mio is has become a known player on its
Chinese home market. Now, Mio is planning its next ambitious endeavor: an
expansion to Germany. After its Chinese competitor DYB started to operate a
production site in the south of Germany last year, Mio wants to be the second pure-
play electric car manufacturer with a subsidiary in Germany.
December 22, 2021 MAN 301 Strategic and International Management Page 6 of 6

To do so, Mio raised over $400 million in investment capital from venture capital funds
and aims to build Mio’s second wholly owned factory near the German capital Berlin.
In its new factory, Mio plans to produce the same sedan as in its home market China.
Before approving Mio’s large-scale expansion to Germany, Jason would like to assess
Mio’s strategic course and asks you for advice on the matter.

Jason provides you with the following financial data for Mio’s operations:
Mio Inc.

(EUR millions) 2018 2019 2020

Sales 400 700 1,200
of which: Chinese operations 390 600 1,000
EBITDA -50 -30 -10
of which: Chinese operations -20 20 60
Net Profit -70 -50 -30
of which: Chinese operations -40 -5 35
Assets 100 120 150
of which: Chinese operations 85 100 120
Employees 3,000 4,400 5,000
of which: Chinese operations 2,500 4,000 4,200

5.1 Please calculate the transnationality index for Mio Inc. in 2020. Document all 7 pts
your calculation steps. What do the results tell you regarding Mio’s
internationality? (7 pts)

5.2 (a) Which timing strategy is Mio planning to use to enter Germany? Please 10 pts
provide one advantage and one disadvantage of this timing. (4 pts)
(b) Which entry mode does Jason want to choose for Mio’s expansion to
Germany? Please suggest an alternative entry mode for Mio. Discuss your
recommendation. (6 pts)