Mid Term Examination

Master of Business Administration

MBA-S-BBA-FR
MGT604
Strategic Management
Time: 2 hours, Full Marks: 30
1. Answer the following questions (Any Two) 2*7.5=15
a. What is strategic management? Discuss the different
tasks of strategic management process.
The term strategic management refers to the managerial process
of forming a strategic vision, setting objectives, crafting a
strategy, implementing and executing the strategy and then over
time initiating whatever corrective adjustments in the vision,
objectives, strategy, and execution are deemed appropriate.
Thus, it is the process through which managers undertake efforts
to ensure long-term adaptation of their organization to its
environment.

Developing a strategic vision and business mission;

Setting objectives;
Creating a strategy to achieve the objectives;
Implementing and Executing the Strategy;
Evaluating Performance, Monitoring New Developments and
Initiating Corrective Adjustments.

b. What is companys external environment? Explain how a

company can analyze the competitive pressures and
strength of its external forces.
All relevant forces outsides a companys boundaries called
External Environment.

c. How value chain analysis can help a firm? Explain the

company value chain and value chain for an entire
industry with figures.

Value chain analysis can help organisations to gain better understanding of

key capabilities and identify areas for improvement. It can help them to
understand how competitors create value; and help organisations to decide
whether to extend or outsource particular activities.

Fig. 4.3:
Representative
Company Value Chain

Fig. 4.4: Representative

Value Chain for an
Entire Industry

2. Answer the following questions in brief (Any Five) 5*3=15

a. Explain the strategies that are initiated in diversified
enterprises.

Operating
Managers

Corporate Strategy is the overall managerial game plan for a

diversified company.
Corporate strategy consists of the moves made to establish
business portions in different industries and approaches used to
manage the companys group of businesses.
Business strategy refers to the managerial game plan for single
business. It is mirrored in the pattern of approaches and moves
crafted by management to produce successful performance in
one specific line of business.
For a single business company, corporate strategy and business
strategy are one and the same.
Functional strategy refers to the managerial game plan for a
particular functional activity, business process, or key department
within a business.
A companys marketing strategy, for example, represents the
managerial game for running the marketing part of business. A

company needs a functional strategy for every major business

activity and organizational unit.
Operating Strategy concerns the even narrower strategic
initiatives and approaches for managing key operating units
(plants, distribution centers) and handling daily operating tasks.
Operating level strategies
b. What is the purpose of strategy making? Please mention
four strategic issues that stand in the way of companys
success in the years ahead.
Positioning your company to be different from your competitors: either
by performing different activities or else by performing similar
activities differently. Strategy tells you what not to do so that you can
prioritize effort to set your product or organization apart.

How to stave off market challenges from new foreign competitors?

How to combat price discounting of rivals?
How to reduce a companys high costs?
How
to
sustain
a
companys
present
growth
in light of slowing buyer demand?
Whether to expand a companys product line?
Whether to acquire a rival firm?
Whether to expand into foreign markets rapidly or cautiously?
What to do about aging demographics of a companys customer base?

c. What is low-cost provider strategy? Explain the reasons

for the failure of the low-cost strategy.
A companys strategy of selling its products at a price lower than
its competitors is known as low cost strategy;
It may invite aggressive cutting by competitors. It may lead to
price-war that may lead to lower profitability;
Cost advantages may not sustain if competitors can easily
imitate the strategy. When competitors are able to copy the cost
advantages, low cost strategy will fail;
If the low-cost product does not contain enough attributes to be
attractive to prospective buyers, the strategy may fail. Low price
is not always appealing to buyers;

 Attractiveness may be lost if the product is featured-poor or

quality deficient;
Cost saving technological breakthroughs by the competitors or
the emergence of lower cost value chain models can nullify a low
cost strategy.
d. Why is company situation analysis necessary? Name the
questions mentioned by Thompson and Strickland that
are considered in performing company situation analysis.
Companys situation analysis prepares the groundwork for
matching the companys strategy both its external and to its
internal resources and competitive capabilities.
Question 1:
How Well Is the Companys Present Strategy
Working?
Question 2: What Are the Companys Resource Strengths and
Weaknesses and Its External Opportunities and Threats?
Question 3: Are the Companys Prices and Costs Competitive?
Question 4: Is the Company Competitively Stronger or Weaker
than Key Rivals?
Question 5: What Strategic Issues and Problems Merit FrontBurner Managerial Attention?
e. What is Differentiation Strategy? Name the common
pitfalls and mistakes done in pursuing differentiation.

Differentiation strategies seek to produce a competitive edge by

incorporating attributes and features into a companys
product/service offering that rivals dont have;
Anything a firm can do to create buyer value represents a
potential basis for differentiation;
If buyers see little value in unique attributes or capabilities a
company stresses, then its differentiation strategy will get a hohum market reception.
Common pitfalls and mistakes in pursuing differentiation include:
Appealing product features are easily copied by rivals;
Differentiating on a feature buyers do not perceive as lowering
their cost or enhancing their well-being;

 Over-differentiating such that product features exceed buyers

needs;
Charging a price premium buyers perceive is too high;
Not understanding or identifying what buyers consider as value.
f. What is SWOT analysis? Explain the steps in SWOT
analysis.
S W O T represents the first letter in
S trengths
W eaknesses
O pportunities
T hreats
For a companys strategy to be well-conceived, it must be
Matched to its resource strengths and weaknesses
Aimed at capturing its best market opportunities and
erecting defenses against external threats to its well-being

Fig. 4.2: The Three

Steps
of SWOT Analysis

g. How focused low cost strategy differs from focused

differentiation strategy?
A focused (or market niche) strategy based on lower cost: concentrating on a narrow
buyer segment and outcompeting rivals by serving niche members at a lower cost
than rivals;
A focused (or market niche) strategy based on differentiation: concentrating on a
narrow buyer segment and outcompeting rivals by offering niche members
customized attributes that meet their tastes and requirements better than rivals
product.

Mid Term Examination

Master of Business Administration
MBA-S-BBA-FR
MGT604
Strategic Management
Time: 2 hours, Full Marks: 30
1. Answer the following questions (Any Two) 2*7.5=15
d. What are the factors that shape a companys strategy? Discuss
the strategies which are initiated at different levels in a
diversified
company?

A Companys Strategy-Making
Hierarchy

e. Explain the value chain of a firm as an analytical tool of

strategic cost analysis. Why a firm should use value chain
technique for situation analysis?
The primary analytical tool of strategic cost analysis is a value chain
identifying the separate activities, functions, and business process that are
performed in designing, producing, marketing, delivering, and supporting a

product or service. A companys value chain shows the linked set of

activities and functions internally. The value chain includes a profit
margin because a markup over the cost of performing the firms value
creating activities is customarily part of the price borne by buyers---creating
value that exceeds the cost of doing so is a fundamental objective of
business.

f. What is competitive strategy? Discuss the generic

competitive strategies used to achieve or defend
competitive advantage of a company.
Competitive strategy consists of business approaches and
initiatives it undertakes to attract customers and fulfill their
expectations, to withstand competitive pressures, and to
strengthen its market position;
Competitive strategy has a narrower scope than business
strategy. It deals exclusively with management action for
competing successfully and providing superior value to
customers.

2. Answer the following questions in brief (Any Five)

5*3=15
h. State the advantages of strategic management in a
business organization.
Providing better guidance to the entire organization on the crucial
point of what it is we are trying to do;
Making managers and organizational members more alert to the
winds of change, new opportunity and threatening developments;
Helping to unify the organization;
Creating a more proactive management posture;
Promoting the development of a constantly evolving business
model that will produce sustained bottom-line success for the
enterprise and ;
Providing managers with rationale for evaluating competing
budget requests-a rationale that argues strongly for steering
resources into strategy-supportive, results-producing areas.

i. What is Driving Forces that tend to change competitive

condition in the industry? Give some examples of most
common Driving Forces.
Industries
change
because
forces
are
driving
industry
participants
to alter their actions
Driving
forces
are
major
underlying
of
changing
industry
competitive conditions

the
causes
and

j. Name the questions mentioned by Thompson and

Stricklandthat answers build an understanding of a firms
surrounding environment and form the basis for matching
its strategy.

 Question 1: What Are the Industrys Dominant Economic

Features?
Question 2: What Kinds of Competitive Forces Are Industry
Members Facing?
Question 3: What Factors Are Driving Industry Change and
What Impacts Will They Have?
Question 4: What Market Positions Do Rivals OccupyWho
Is Strongly Positioned and Who Is Not?
Question 5: What Strategic Moves Are Rivals Likely to Make
Next?
Question 6:
What Are the Key Factors for Future
Competitive Success?
Question 7: Does the Outlook for the Industry Present an
Attractive Opportunity?
k. Thinking Strategically About a Companys Industry and
Competitive Environment
l. Explain the steps needed in conducting SWOT analysis in
a business organization.
State the situation where the Differentiation Strategies works
well.
Where there are many ways to differentiate a product that have
value and please customers;
Where buyer needs and uses are diverse;
Where few rivals are following a similar differentiation approach;
Where
technological
change
and
product innovation are fast-paced .

m.
What is Strategic Group in an industry? Why
Strategic Group Mapping technique is used by a company?
Firms in same strategic group have two or more competitive
characteristics in common
###
n. Define core competence of a company? Please put some
examples of core competence of a business organization.

A core competence is something that a company does well relative to other

internal activities. Most often a companys core competence resides in its
people and in its intellectual capital.A core competence gives a company
competitive capability and thus qualifies as a genuine company strength and
resource. Some examples are expertise in building networks and systems
that enable e-commerce, speeding new or next generation product to the
market, skills in manufacturing high quality product, innovativeness in
developing popular product features, agility in responding to new market
trends and changing competitive conditions, expertise in integrating multiple
technologies to create families of new products etc.

o. State the issues that are considered

companys competitive position.

in

appraising

IDENTIFYING THE STRATEGIC ISSUES

How to stave off market challenges from new foreign competitors?
How to combat price discounting of rivals?
How to reduce a companys high costs?
How to sustain a companys present growth in light of slowing buyer
demand?
Whether to expand a companys product line?
Whether to acquire a rival firm?
Whether to expand into foreign markets rapidly or cautiously?
What to do about aging demographics of a companys customer base?