301 : Strategic Mangement 5860

a) What is tactics. b) State the stages in strategic management. c) Define vision statement. d) Define Mission
statement. e) What Leverage. f) What is outsourcing. g) Define a blue ocean. h) What is a deliberate strategy.

a) Tactics refer to the specific actions, maneuvers, or methods that are employed to achieve
short-term objectives and goals within a broader strategic plan. Tactics are the practical steps
taken to implement a strategy effectively.

b) The stages in strategic management typically include:

1. Environmental Analysis: This stage involves assessing the internal and external factors that
may affect the organization's strategic choices. It includes a SWOT analysis (Strengths,
Weaknesses, Opportunities, and Threats) to understand the current state of the organization
and its environment.

2. Strategy Formulation: During this stage, organizations define their mission, vision, and
strategic objectives. They also develop various strategic alternatives and choose the best
course of action to achieve their goals.

3. Strategy Implementation: This stage focuses on putting the chosen strategy into action. It
involves allocating resources, setting up structures, and aligning the organization to execute
the strategy effectively.

4. Strategy Evaluation and Control: After implementation, organizations continually monitor

and evaluate the progress of their strategy. This stage involves assessing whether the
strategy is achieving the desired results and making adjustments as needed.

c) A vision statement is a clear, inspirational, and concise declaration of an organization's

long-term goals and aspirations. It outlines what the organization aims to become or achieve
in the future. A well-crafted vision statement provides direction and a sense of purpose to
employees and stakeholders, guiding them toward a common goal.
d) A mission statement is a brief and specific statement that defines an organization's core
purpose, its primary business, and the values that drive its actions. It serves as a foundational
guide for the organization, clarifying why it exists, what it does, and the principles that guide
its decisions and activities.

e) Leverage refers to the strategic use of resources, capabilities, or advantages to achieve a

desired outcome with maximum efficiency and effectiveness. It involves optimizing the use of
available resources to generate a greater impact, often through a specific action or initiative.

f) Outsourcing is the practice of contracting out specific tasks, functions, or processes to

external service providers or third-party companies. Organizations outsource to leverage
external expertise, reduce costs, and focus on their core competencies while entrusting non-
core functions to specialists.

g) A blue ocean, in a strategic context, refers to a market space or industry where there is
little to no competition, as opposed to a "red ocean" where competition is intense. A blue
ocean strategy involves creating new, uncontested market spaces by offering unique
products, services, or solutions that cater to unmet needs or redefine existing market
boundaries.

h) A deliberate strategy is a consciously chosen and well-thought-out plan of action designed

to achieve specific objectives. It involves a systematic approach to decision-making and goal-
setting, often based on extensive analysis and consideration of available alternatives.
Deliberate strategies are typically part of a company's long-term planning and aim to provide
a clear direction for the organization's future.

a) State the role of stakeholders in strategic Management. b) Explain the concept of Environmental
scanning. c) Differentiate between Red and Blue Ocean.

a) The role of stakeholders in strategic management is significant, as they can have a direct or
indirect impact on an organization's strategic decisions and outcomes. Stakeholders are
individuals, groups, or entities that have an interest or concern in an organization and its
activities. Their roles in strategic management include:

- Providing Input: Stakeholders, especially employees, customers, and shareholders, can offer
valuable insights, ideas, and feedback that inform the strategic planning process.
- Influencing Decisions: Stakeholders can exert influence by advocating for specific strategies
or objectives that align with their interests or values.

- Assessing and Monitoring Performance: Various stakeholders, including investors,

regulators, and customers, monitor the organization's performance against its strategic goals.
Their assessments can impact an organization's reputation and success.

- Providing Resources: Stakeholders may provide financial resources, expertise, or other

support to help implement strategic initiatives.

- Holding Accountability: Stakeholders can hold an organization accountable for its actions,
ensuring that it adheres to its stated mission and values.

Effective stakeholder management is essential to balance the interests and expectations of

different stakeholder groups and ensure that strategic decisions align with the broader goals
of the organization.

b) Environmental scanning is a crucial component of strategic management that involves the

systematic and continuous process of monitoring, collecting, analyzing, and interpreting
information about an organization's external environment. This includes the political,
economic, social, technological, environmental, and legal (PESTEL) factors, as well as industry
trends and market dynamics. The primary purposes of environmental scanning are:

- Identifying Opportunities: By understanding the external environment, organizations can

spot emerging opportunities for growth, innovation, or market expansion.

- Recognizing Threats: Environmental scanning helps organizations identify potential risks

and threats that could negatively impact their operations or objectives.

- Anticipating Changes: It allows organizations to anticipate shifts in customer preferences,

market conditions, regulations, and technological advancements.
- Informing Strategic Decision-Making: The information gathered through environmental
scanning guides the development of strategies that are responsive to the external context.

- Promoting Adaptability: A proactive approach to environmental scanning helps

organizations adapt to changes and challenges more effectively.

c) The differentiation between Red Ocean and Blue Ocean is as follows:

- Red Ocean: Red Ocean represents an existing market space where competition is intense,
and businesses primarily compete on factors such as price, product features, and market
share. In a red ocean, companies often follow similar strategies, resulting in a crowded and
competitive marketplace. The term "red" symbolizes the fierce competition, often leading to
price wars and limited differentiation.

- Blue Ocean: Blue Ocean represents an uncontested market space or industry where there is
little or no competition. In a blue ocean, companies create new market opportunities by
offering innovative products or services that cater to unmet customer needs or by redefining
the industry's boundaries. Blue ocean strategies aim to create demand rather than compete
within existing market constraints. The term "blue" signifies calm and uncharted waters,
where companies can thrive by being unique and innovative.

In essence, red ocean strategies focus on competing within existing market boundaries, while
blue ocean strategies seek to redefine and expand those boundaries by offering something
new and distinctive.

a) Explain porters five force model with an example of any industry

b) Discuss the resource based view of the firm and explain the VRIO frame work with examples.

a) Porter's Five Forces Model is a framework used for analyzing the competitive dynamics of
an industry. It examines the various factors that influence the competitiveness and
profitability of an industry. The five forces in the model are:

1. Threat of New Entrants: This force assesses the ease with which new companies can enter
an industry. The higher the barriers to entry, the lower the threat. Barriers can include high
capital requirements, economies of scale, strong brand identity, and government regulations.
For example, the airline industry has significant barriers to entry due to high capital costs,
regulatory requirements, and established players.

2. Bargaining Power of Suppliers: This force focuses on the influence that suppliers have on
the industry. Suppliers with strong bargaining power can raise prices or reduce quality,
impacting industry profitability. In the smartphone industry, key component suppliers like
Apple or Samsung hold significant bargaining power due to their unique technologies.

3. Bargaining Power of Buyers: The bargaining power of buyers assesses the influence
customers have on an industry. When buyers have many options or can easily switch
suppliers, their bargaining power is high. In the retail industry, consumers have high
bargaining power as they can easily compare and switch between retailers.

4. Threat of Substitutes: This force considers the availability of alternative products or

services that can fulfill the same needs. The higher the number of close substitutes, the
greater the threat. In the soft drink industry, bottled water and other non-carbonated
beverages pose a threat to traditional carbonated drinks.

5. Competitive Rivalry: This force examines the level of competition within the industry. If
there are many players, intense rivalry can lead to price wars and lower profitability. For
example, the fast-food industry has intense competition among major players like
McDonald's, Burger King, and Wendy's.

b) The Resource-Based View (RBV) of the firm is a strategic management framework that
focuses on a firm's internal resources and capabilities as sources of competitive advantage.
The VRIO framework is a tool within RBV used to assess whether a firm's resources and
capabilities are valuable, rare, inimitable, and organized to create a sustained competitive
advantage. Here's what each component of VRIO stands for:

1. Valuable: A resource or capability is valuable if it enables a firm to exploit opportunities or

defend against threats in the external environment. For example, a highly skilled and
motivated workforce can be a valuable resource for a technology company.
2. Rare: A resource or capability is rare if it is not widely possessed by other firms in the
industry. For instance, a unique patented technology in the pharmaceutical industry can be
considered rare.

3. Inimitable (or difficult to imitate): A resource or capability is inimitable if it is hard for other
firms to replicate or reproduce. Proprietary manufacturing processes or a strong
organizational culture can be inimitable.

4. Organized: A resource or capability must be effectively organized and integrated into the
firm's operations to generate a sustained competitive advantage. This involves aligning the
resource with the firm's strategy and ensuring it is utilized efficiently.

Example: Consider a technology company that possesses a patented software algorithm for
data analytics:

- Valuable: The patented software algorithm allows the company to offer advanced analytics
solutions, meeting the growing demand for data-driven decision-making.

- Rare: The patented algorithm is unique in the industry, as no other company possesses a
similar technology.

- Inimitable: Competitors find it challenging to develop a similar algorithm due to its

complexity and the legal protection of the patent.

- Organized: The company effectively integrates the algorithm into its software products,
aligning it with its strategic focus on data analytics.

In this case, the patented software algorithm passes the VRIO test and can be a source of
sustained competitive advantage for the technology company.

a) What are the generic competitive strategies? Discuss with examples how an organisation can achieve cost
leadership.

b) What are retrenchment strategies? Explain with examples how to implement a turnaround strategy in an
organisation.
a) The generic competitive strategies, as proposed by Michael Porter, are:

1. Cost Leadership: This strategy aims to become the lowest-cost producer in an industry
while maintaining acceptable quality. Achieving cost leadership involves streamlining
operations, optimizing processes, and reducing expenses. Examples of how an organization
can achieve cost leadership include:

- Economies of Scale: Producing in large volumes to take advantage of economies of scale,

which lower the average cost per unit. For example, Walmart achieves cost leadership
through its vast network of stores and high sales volumes.

- Efficient Supply Chain: Managing the supply chain to reduce costs, minimize inventory,
and improve responsiveness to customer demand. Companies like Amazon have invested in
highly efficient supply chains to lower costs and offer competitive prices.

- Process Optimization: Continuously improving production processes and reducing waste

to enhance efficiency. Toyota's production system is a classic example of process
optimization for cost leadership.

- Standardization: Using standard components or designs to reduce complexity and save on

production and inventory costs. Many computer manufacturers use standardized
components to achieve cost leadership.

2. Differentiation: This strategy involves offering unique or high-quality products and services
that customers are willing to pay a premium for. Differentiation can be achieved through
product innovation, branding, and marketing. Apple is known for its differentiation strategy,
with premium products and a strong brand image that allows them to charge higher prices.

3. Focus (or Niche): In the focus strategy, a company concentrates on serving a specific
market segment or niche. By tailoring products or services to the specific needs of this target
group, the company can achieve a competitive advantage. For example, Rolex focuses on the
high-end luxury watch market, catering to a niche customer base.
Achieving cost leadership typically involves a combination of cost-saving measures, process
efficiencies, and economies of scale. It's important to maintain product quality and
consistently offer competitive prices to succeed in this strategy.

b) Retrenchment strategies are a set of corporate-level strategies used by organizations

when they need to reduce their operations, often due to financial distress, declining
performance, or a need to refocus their business. One common retrenchment strategy is a
turnaround strategy, which is aimed at revitalizing a struggling organization. Implementing a
turnaround strategy involves several steps, which may include:

1. Diagnosis: Identify the root causes of the organization's problems. This could involve a
thorough analysis of financial statements, market conditions, internal processes, and
stakeholder feedback.

2. Leadership Change: In many cases, a change in leadership at the top management level is
necessary to bring fresh perspectives and expertise to the organization.

3. Cost Reduction: Implement cost-cutting measures, such as reducing overhead,

renegotiating contracts, and eliminating non-essential expenses. This can help improve the
financial situation.

4. Strategic Reorientation: Refocus the organization's strategic direction. This might involve
exiting unprofitable or non-core business segments and concentrating on the core strengths
or high-potential areas.

5. Organizational Restructuring: Reorganize the company's structure and processes to

improve efficiency and effectiveness. This may include layoffs, process streamlining, and
changes in the management hierarchy.

6. Operational Improvements: Implement operational changes to enhance productivity and

quality. This can involve process reengineering, technology upgrades, and quality control
measures.
7. Stakeholder Communication: Maintain open and transparent communication with
employees, customers, investors, and other stakeholders to rebuild trust and support.

Example: A retail chain struggling with declining sales and profitability may implement a
turnaround strategy by closing underperforming stores, reducing overhead costs,
renegotiating supplier contracts for better terms, refreshing its product offerings, and
rebranding to attract a new customer base. By making these changes, the company aims to
restore its financial health and profitability.

The specific actions taken in a turnaround strategy will depend on the organization's unique
challenges and circumstances. The goal is to revitalize the organization and return it to a path
of sustainable growth and profitability.
a) What is a Business model? Design a business model for a media house planning to launch an e-newspaper.

b) What is a blue ocean strategy? Explain the use of blue ocean strategy in strategic management.

a) A business model is a framework that outlines how an organization creates, delivers, and
captures value. It defines the fundamental aspects of how a company operates and
generates revenue. To design a business model for a media house planning to launch an e-
newspaper, you can consider the following key components:

1. Value Proposition: Identify what your e-newspaper offers that distinguishes it from
traditional newspapers and other online news sources. This could include unique content,
multimedia features, personalization, or real-time updates.

2. Customer Segments: Define your target audience. Consider demographics, interests, and
behaviors to understand who will subscribe to or consume your e-newspaper.

3. Distribution Channels: Decide how you will deliver your e-newspaper to customers. This
may involve a website, mobile app, or other digital platforms. You could also consider
partnerships with other digital media outlets.
4. Revenue Streams: Determine how you will make money. This could include subscription
fees, advertising, sponsored content, or premium features. You might also explore e-
commerce opportunities related to news content.

5. Key Resources: Identify the critical assets required to run the e-newspaper, such as
content creators, editors, technology infrastructure, and marketing capabilities.

6. Key Activities: Describe the core activities needed to produce and maintain the e-
newspaper. This could encompass content creation, editing, publishing, marketing, and
reader engagement.

7. Key Partnerships: Consider potential collaborations or partnerships with content providers,

advertisers, technology companies, or other media outlets to enhance your offerings.

8. Cost Structure: Outline the costs involved in running the e-newspaper, including editorial
expenses, technology investments, marketing costs, and staff salaries.

9. Customer Relationships: Describe how you will engage with and retain your readers. This
may involve building a community, offering customer support, or tailoring content to their
preferences.

10. Metrics and KPIs: Establish key performance indicators (KPIs) to measure the success of
your business model, such as subscriber growth, retention rate, ad revenue, and website
traffic.

Your e-newspaper's business model should be designed to create value for your audience
while generating sustainable revenue. It should be adaptable to changing market conditions
and evolving reader preferences.

b) A blue ocean strategy is a strategic approach that aims to create uncontested market
space where competition is minimal or non-existent. In a "blue ocean," companies can
pursue new opportunities, differentiate their products or services, and capture untapped
demand. The concept was introduced by W. Chan Kim and Renée Mauborgne in their book
"Blue Ocean Strategy."

Key principles of a blue ocean strategy include:

1. Value Innovation: Instead of competing head-to-head with rivals in existing markets (the
"red ocean"), companies seek to innovate and create value for customers by offering
something new or unique. This often involves the simultaneous pursuit of cost leadership
and differentiation.

2. Market Creation: Blue ocean strategies focus on creating new markets, expanding market
boundaries, or redefining existing markets. This entails identifying unmet needs, underserved
customer segments, or entirely new customer groups.

3. Non-Disruptive Change: Blue ocean strategies aim to implement change without the need
for radical disruptions or high risks. They often build on existing industry knowledge and
resources.

4. Focus on the Big Picture: Blue ocean strategies emphasize long-term thinking and
sustainable value creation rather than short-term gains or price-based competition.

In strategic management, the use of a blue ocean strategy can help organizations break away
from overcrowded and highly competitive markets, where profit margins are often squeezed
due to rivalry. Instead, they seek opportunities for growth and innovation by creating new
markets or redefining existing ones. By doing so, companies can capture new demand and
differentiate themselves in a way that is attractive to customers.

For example, Cirque du Soleil implemented a blue ocean strategy by combining elements of
circus and theatre to create a new form of entertainment that appealed to a broader
audience, differentiating itself from traditional circuses. This approach allowed Cirque du
Soleil to charge premium prices and minimize competition in its own unique market space.
 301 Strategic Management 5946

a) What are the components of strategic intent? b) Enlist the intangible resources in an organisation. c) State
the types of Mergers. d) Define SBU organisation structure. e) What is Four-action framework? f) List the levels
of strategy. g) What is the meaning of competitive advantage? h) Define Low cost strategy.

a) The components of strategic intent typically include:

1. Vision: A compelling and aspirational statement that defines the long-term future and
overall purpose of the organization. It provides a clear picture of what the organization hopes
to achieve.

2. Mission: A concise statement that articulates the fundamental purpose of the

organization, including what it does, for whom it does it, and why it exists.

3. Core Values: The guiding principles or beliefs that underpin the organization's culture and
behavior, shaping how it operates and interacts with stakeholders.

4. Stretch Goals: Ambitious objectives or targets that challenge the organization to achieve
higher levels of performance and innovation, often beyond what is currently considered
achievable.

5. BHAG (Big, Hairy, Audacious Goal): A specific, long-term goal that is both challenging and
inspiring, designed to stimulate innovation and motivate employees.

6. Strategic Objectives: Clear, specific, and measurable goals that support the mission and
vision, outlining what the organization aims to accomplish in the short to medium term.

b) Intangible resources in an organization refer to non-physical, non-monetary assets that

contribute to its value and competitive advantage. Some examples of intangible resources
include:
1. Intellectual Property: Patents, copyrights, trademarks, and trade secrets that protect an
organization's innovations, brand, and proprietary knowledge.

2. Brand Reputation: The perception and recognition of the organization's brand in the
market, which can influence customer loyalty and willingness to pay a premium.

3. Human Capital: The knowledge, skills, and expertise of the workforce, as well as their
ability to collaborate and innovate.

4. Organizational Culture: The shared values, beliefs, and norms that shape how employees
interact, make decisions, and work together.

5. Customer Relationships: The quality and depth of relationships with customers, including
their trust, loyalty, and satisfaction.

6. Supplier Relationships: Strong partnerships and collaborations with suppliers that can
provide a competitive advantage through reliable and cost-effective access to resources.

7. Strategic Alliances: Collaborative agreements with other organizations that can enhance
capabilities, expand market reach, or create synergies.

c) Types of mergers include:

1. Horizontal Merger: This involves the combination of two companies that operate in the
same industry or market, typically as competitors. The goal is to achieve economies of scale,
reduce competition, and increase market share. For example, a merger between two
pharmaceutical companies producing similar drugs.

2. Vertical Merger: Vertical mergers occur when two companies in the same supply chain but
at different stages (e.g., a manufacturer and a distributor) combine. The aim is to streamline
operations, reduce costs, and improve coordination. For instance, a merger between a car
manufacturer and a supplier of automotive components.
3. Conglomerate Merger: Conglomerate mergers involve companies from unrelated
industries or businesses. These mergers can provide diversification and reduce risk by
entering new markets. For example, a merger between a technology company and a food
company.

4. Market Extension Merger: This type of merger occurs when two companies operating in
different geographic markets come together. It aims to expand market reach and access new
customer bases.

5. Product Extension Merger: In a product extension merger, two companies in related

industries merge to offer a broader range of products or services. This can help increase
cross-selling opportunities and revenue streams.

d) SBU stands for "Strategic Business Unit." An SBU organization structure is a management
approach where a large corporation is divided into smaller, self-contained business units,
each responsible for its own operations, strategy, and financial performance. The SBU
structure allows for greater focus, flexibility, and responsiveness to market conditions. Each
SBU operates as if it were an independent business, with its own resources, goals, and
accountability.

e) The Four Action Framework is a strategic tool introduced by W. Chan Kim and Renée
Mauborgne in their book "Blue Ocean Strategy." It is used to challenge an organization to
simultaneously reduce costs and create differentiation in its industry. The framework
involves four key questions:

1. Eliminate: What factors that the industry takes for granted can be eliminated or reduced
to lower costs?

2. Reduce: Which factors can be reduced well below the industry standard to cut expenses?

3. Raise: What factors can be raised well above the industry standard to create
differentiation and value for customers?
4. Create: What entirely new factors can be created to offer a unique value proposition?

By answering these questions, organizations can develop strategies that break away from the
industry norm and create a blue ocean of uncontested market space.

f) The levels of strategy in an organization typically include:

1. Corporate Level Strategy: This focuses on the organization as a whole, determining which
businesses and industries to enter or exit. It involves decisions about diversification, mergers
and acquisitions, and portfolio management.

2. Business Level Strategy: Business-level strategies are concerned with how an organization
competes within a particular industry or market segment. This includes strategies like cost
leadership, differentiation, and focus (niche).

3. Functional Level Strategy: Functional strategies are designed to support the achievement
of business-level strategies by specifying how each functional area (e.g., marketing,
operations, HR) will contribute to overall objectives.

4. Operational Level Strategy: This involves day-to-day decisions and actions that address
specific operational issues, such as production processes, inventory management, and quality
control.

g) Competitive advantage refers to the unique and sustainable edge that an organization has
over its competitors in the marketplace. It can result from a variety of factors, including
superior products or services, lower costs, strong brand recognition, unique capabilities,
innovative technology, and effective customer relationships. A competitive advantage allows
an organization to outperform its rivals, achieve higher profits, and gain a dominant position
in its industry.
h) A low-cost strategy, also known as a cost leadership strategy, is a business approach that
focuses on becoming the lowest-cost producer in an industry while maintaining acceptable
quality. The primary goal is to offer products or services at a lower price than competitors,
attracting price-sensitive customers and achieving a competitive advantage. This strategy
often involves economies of scale, process efficiencies, supply chain optimization, and cost
control measures. Companies that pursue a low-cost strategy aim to capture a significant
market share and generate higher profits through volume sales.

a) How is mission different from vision?

b) What are the reasons for company to form strategic alliance?

c) Explain Management by objectives (MBO).

a) Mission and vision are distinct but related components in strategic management:

- Mission Statement: A mission statement defines the core purpose of an organization. It

outlines what the organization does, for whom it does it, and why it exists. The mission
statement provides a clear and concise description of the organization's present role and
primary objectives. It answers the question, "What is our business?" For example, a mission
statement for a tech company might be, "To provide innovative software solutions that
empower businesses to achieve their full potential."

- Vision Statement: A vision statement describes the desired long-term future and goals of
the organization. It paints a picture of what the organization aspires to become. The vision
statement is inspirational and forward-looking, guiding the organization toward its ultimate
destination. It answers the question, "Where do we want to be in the future?" For example, a
vision statement for the same tech company might be, "To be a global leader in technology
innovation, driving positive change for businesses and society."

In summary, the mission statement focuses on the organization's current purpose and
identity, while the vision statement looks to the future and sets an inspirational direction for
the organization.

b) Companies form strategic alliances for various reasons, which may include:
1. Access to New Markets: Strategic alliances can provide access to new geographic markets,
enabling companies to reach customers they might not have been able to reach on their
own.

2. Complementary Resources and Capabilities: Companies can leverage the complementary

strengths of their alliance partners. By combining resources and expertise, they can create
synergies that enhance their competitive advantage.

3. Risk Sharing: In some cases, strategic alliances allow companies to share risks associated
with a particular project or venture, reducing the individual financial and operational
burdens.

4. Cost Reduction: By pooling resources or sharing costs, companies can achieve economies
of scale and reduce their overall expenses, leading to cost savings.

5. Technology Access: Strategic alliances may provide access to new technologies, research
and development capabilities, or intellectual property, fostering innovation and
competitiveness.

6. Competitive Advantage: Partnering with other firms can help companies gain a
competitive edge in their industry by offering unique products or services or enhancing their
market position.

7. Learning and Knowledge Transfer: Strategic alliances can facilitate the exchange of
knowledge, best practices, and expertise between partner organizations, leading to mutual
learning and development.

8. Market Expansion: Companies can extend their product or service offerings by forming
alliances with organizations that complement their offerings, helping them cater to a broader
customer base.

c) Management by Objectives (MBO) is a systematic management approach that emphasizes

setting clear and specific objectives for individuals, teams, and the organization as a whole.
MBO is a performance-driven process that was first introduced by management guru Peter
Drucker. It involves the following key steps:

1. Goal Setting: The process starts with the establishment of specific and measurable
objectives that are aligned with the overall goals of the organization. These objectives should
be realistic, attainable, and time-bound.

2. Participation: MBO encourages active participation from employees in the goal-setting

process. Employees have a say in defining their own objectives and how they will contribute
to the organization's goals.

3. Action Planning: Once objectives are set, action plans are developed to outline the
strategies and tactics required to achieve these objectives. Each individual or team is
responsible for their own action plan.

4. Monitoring and Review: Progress toward the objectives is regularly monitored and
reviewed. Managers and employees engage in ongoing discussions and assessments to
ensure that the set goals are being met.

5. Feedback and Evaluation: Regular feedback and performance evaluations are provided to
employees, allowing them to make necessary adjustments and improvements in their work
to achieve the objectives.

6. Rewards and Recognition: Successful attainment of objectives is often linked to rewards,

recognition, and performance-related incentives, motivating employees to strive for
excellence.

MBO promotes alignment between individual and organizational goals, enhances

communication and accountability, and emphasizes results-driven performance
management. It has been used in various organizations as a framework for performance
improvement and goal attainment.

a) Explain BCG matrix as a tool of portfolio analysis with suitable example.

b) “Balanced Scorecard is an effective tool for strategy evaluation”. Illustrate.

a) The BCG (Boston Consulting Group) Matrix is a portfolio analysis tool that helps
organizations assess their product or business unit portfolio based on two dimensions:
market growth rate and relative market share. The matrix classifies products or business
units into four categories, each with distinct implications for strategic management:

1. Stars: High market growth rate and high relative market share. Stars are products or
business units with strong market positions in rapidly growing industries. They typically
require significant investment to maintain their growth and market leadership. As market
growth slows, stars may transition into cash cows. For example, when Apple's iPhone was
first introduced, it was a star in a high-growth market.

2. Cash Cows: Low market growth rate and high relative market share. Cash cows are
products or business units that have established themselves in mature or slow-growth
markets. They generate substantial cash flows and profits. Companies often use the profits
from cash cows to invest in other products or businesses. An example is Coca-Cola's core
soda products.

3. Question Marks (or Problem Children): High market growth rate and low relative market
share. Question marks are products or business units with the potential to become stars but
currently face fierce competition and uncertain prospects. Organizations must decide
whether to invest in them to increase market share or divest. For example, a new entrant in
the electric vehicle market may be a question mark.

4. Dogs: Low market growth rate and low relative market share. Dogs are products or
business units with limited growth potential and weak competitive positions. They often
absorb more resources than they generate in returns. Organizations may consider divestiture
or cost-cutting measures for dogs. An example could be an outdated product with declining
demand.

The BCG Matrix is a useful tool for portfolio analysis because it helps organizations allocate
resources effectively among different products or business units, based on their position in
the matrix. It facilitates decision-making about investment, divestment, and growth
strategies.
b) The Balanced Scorecard is an effective tool for strategy evaluation because it provides a
comprehensive framework for measuring and managing an organization's performance in a
balanced and integrated manner. The Balanced Scorecard considers not only financial
metrics but also other critical perspectives, such as customer, internal processes, and
learning and growth. This holistic approach helps organizations evaluate whether their
strategy is being effectively executed and whether it is delivering the desired outcomes.
Here's how the Balanced Scorecard is effective for strategy evaluation:

1. Comprehensive Assessment: The Balanced Scorecard includes key performance indicators

(KPIs) in multiple dimensions, allowing organizations to evaluate performance from various
angles. It ensures that financial and non-financial aspects of the strategy are considered.

2. Alignment with Strategy: The Scorecard links performance measures to the organization's
strategic objectives. This alignment helps ensure that the organization is moving in the
intended direction and achieving its strategic goals.

3. Cause-and-Effect Relationships: The Balanced Scorecard emphasizes the cause-and-effect

relationships between different performance perspectives. It helps organizations understand
how improvements in one area can affect performance in other areas.

4. Strategy Communication: It serves as a communication tool to convey the organization's

strategy to employees at all levels, fostering a shared understanding of strategic goals and
the role each employee plays in achieving them.

5. Feedback and Learning: The learning and growth perspective encourages ongoing learning,
innovation, and employee development. This continuous learning loop helps organizations
adapt and refine their strategies over time.

6. Performance Tracking: The Balanced Scorecard enables organizations to monitor

performance over time, identify areas that require improvement, and make data-driven
decisions to adjust their strategies as needed.

Overall, the Balanced Scorecard is a valuable framework for assessing the effectiveness of a
strategy, monitoring its execution, and making informed decisions to ensure the strategy's
success. It helps organizations evaluate whether they are achieving the right outcomes and
take corrective actions as necessary.

a) For formulating competitive strategy of two-wheeler industry prepare & explain Porter’s Five Force
Competition Model.

b) A home appliance product manufacturing company would like to divert from its current market and goods.
Suggest and explain the various strategic options are available with company.

a) Porter's Five Forces Competition Model is a framework used to analyze the competitive
dynamics of an industry. Let's apply this model to the two-wheeler industry and explain each
force:

1. **Threat of New Entrants:** The two-wheeler industry often faces a moderate to high
threat of new entrants. Factors affecting this force include capital requirements, economies
of scale, brand loyalty, and government regulations. High capital costs for setting up
manufacturing facilities and distribution networks can be a significant barrier to entry, which
may deter new players. However, if a company can overcome these barriers and build a
strong brand, the threat of new entrants increases.

2. **Bargaining Power of Suppliers:** Suppliers in the two-wheeler industry provide various

components like engines, tires, and electronic parts. The bargaining power of suppliers can
be high when there are few suppliers for critical components or when they have established
brands. Companies may be vulnerable if they rely heavily on a single supplier or if switching
costs are high.

3. **Bargaining Power of Buyers:** In the two-wheeler industry, buyers have moderate to

high bargaining power. Consumers have several options and can easily compare prices,
features, and brands. Their bargaining power increases when they have access to information
and when switching costs are low. Manufacturers must focus on quality, innovation, and
customer loyalty to mitigate the power of buyers.

4. **Threat of Substitutes:** Substitutes like public transportation, electric scooters, or

bicycles can pose a moderate threat to the two-wheeler industry. The availability and
convenience of substitutes, along with their cost-effectiveness, affect the industry's
competitiveness. Companies may need to differentiate their products and offer unique
features to counter this threat.
5. **Rivalry Among Competing Firms:** Rivalry in the two-wheeler industry is often high due
to multiple well-established players. Competitive factors include price wars, product
differentiation, marketing strategies, and a focus on innovation. Market leaders must
continuously invest in research and development, marketing, and production efficiency to
maintain or improve their market position.

b) When a home appliance product manufacturing company wishes to diversify from its
current market and goods, it can consider various strategic options. Here are some
possibilities:

1. **Product Diversification:** The company can explore new product categories that are
related to its existing expertise and capabilities. For example, if the company specializes in
kitchen appliances, it can diversify into small kitchen electronics or cookware.

2. **Market Diversification:** The company can enter new geographic markets or target
different customer segments with its existing products. Expanding internationally or focusing
on a different customer demographic can open up new opportunities.

3. **Vertical Integration:** The company can consider vertical integration by expanding into
related parts of the value chain. For example, it might enter the manufacturing of
components used in its appliances, reducing dependence on suppliers.

4. **Technological Innovation:** Investing in research and development to create innovative

products or solutions can be a strategic option. The company can explore smart appliances or
environmentally friendly technologies.

5. **Strategic Alliances:** Forming partnerships or alliances with other companies can

provide access to new markets, distribution channels, or complementary products.
Collaborating with tech companies for smart home integration is one example.
6. **Diversification into Services:** Offering services related to the products, such as
maintenance, repair, or extended warranties, can provide an additional revenue stream and
enhance customer loyalty.

7. **Sustainability and CSR Initiatives:** Aligning with sustainability and corporate social
responsibility (CSR) goals can differentiate the company and open doors to environmentally
conscious customers. This might involve using sustainable materials, reducing energy
consumption, or supporting social causes.

The choice of strategy will depend on the company's resources, capabilities, market research,
risk tolerance, and long-term vision. It's important to conduct a thorough strategic analysis
and feasibility study before embarking on any diversification initiative to ensure that it aligns
with the company's objectives and will lead to sustainable growth and profitability.