CMS FOR MANAGEMENT

Assignment A
Question 1: Describe the benefits of Good Strategic Planning? Define and give examples of key
terms of Strategic Management?
Answer:
Strategic planning provides a variety of benefits in the organization. Below are some of the benefits:
1.

Clearly define the purpose of the organization and to establish realistic goals and objectives
consistent with that of the mission in defined time frame within the organizations capacity for
implementation.
2. Communicate those goals and objectives to the organizations employees.
3. Develop sense of ownership of the plan.

4.

Ensure the most effective use is made of the organizations resources by focusing the resources on
key priorities.

5.

Provides a base from which progress can be measured and establish a mechanism for informed
change when needed.

6.

Brings everyones best and most reasoned efforts have an important value in building a consensus
about where an organization is going.

Key terms of Strategic Management

1.

Purpose this includes the reason why an organization exists. It includes a description of its
current and future business. The purpose of an organization is its primary role in society, a
broadly defined aim (such as manufacturing electronic equipment) that it may share with many
other organizations of its type.

2.

Mission it is the unique reason of an organization for its existence and

what sets it apart from all others. The organization's mission describes why the organization
exists and guides what it should be doing. Often, the organization's mission is defined in a
formal, written mission statement. Decisions on mission are the most important strategic
decisions, because the mission is meant to guide the entire organization. Although the terms
"purpose" and "mission" are often used interchangeably, to distinguish between them may help
in understanding organizational goals.

3.

Goals this is the desired future state that the organization attempts to realize. It is a personal or
organizational desired end-point in some sort of assumed development. Many people endeavor
to reach goals within a finite time by setting deadlines.

4.

Objectives refers to specific targets for which measurable results can be obtained. It also
points out to the specific kinds of result the organization

seeks to achieve through its existence and operations. What the organization hopes to
accomplish.
5.

Strategy are means by which long term objectives will be achieved. Its role is to identify the
general approaches that the organization utilize to achieve its organizational objectives.

6.

Tactics are specific actions, sequences of actions and schedules an organization uses to fulfill
its strategy. It is also considered as game plan.

7.

Policy - Policies include guidelines, procedures, rules, programs, and budgets established
to support efforts to achieve stated objectives. Therefore, policies become important
management tools for implementing them.

8.

Strategists - are the individuals who are involved in the strategic management process.
Several levels of management may be involved in strategic decision making. However, the
people responsible for major strategic decisions are the board of director, president, the chief
executive officer, the chief operating officer, and the division managers.

Question 2: Explain the concept of SBU in a Multi Business Organization. Identify the Three levels of
Strategy-Corporate, Business and Functional. How do Goals and Objectives vary at each Level?

Answer:
The concept is that a strategic business unit is a significant organization segment that is analyzed to develop
organizational strategy aimed at generating future business or revenue.

Corporate Strategy level is fundamentally concerned with the selection of businesses in which the company
should compete and with the development and coordination of that portfolio of business. The primary items
for this level are the following: reach, competitive contact, managing activities and business interrelationships
and management practices.

Business level on the other hand is a strategic business unit that may be a division, product line or profit
center that can be planned independently from other business units of the organization. In this level, the
strategic issues are less about coordination of operating units and more about developing and sustaining
competitive advantage for the goods and services they produced.

The third is Functional level, where it is the operating divisions and departments. The strategic issues at the
functional level are related to business processes and value chain. It involves the development and
coordination of resources through which business unit level strategies can be executed effectively. Functional
units of an organization are involved in higher level strategies by providing input into the business unit level
and corporate level strategy such as providing information on resources and capabilities on which the higher
level can be based.

Goals and objectives are often interchanged at each level. Basically it is more geared towards what the
organization would want to be in the future and the means by which to get there. The means are needed to be
quantifiable to gather accurate interpretations.

Question 3: What should be the key Traits of a CEO? What are the forces that design the
Strategic Management Systems?
Answer:
It is noted that no two persons are alike this is also true with regards to their personality and how they run
their corporations/organizations. However, below are some of the traits a CEO should possess to
effectively run his/her organization.
1.
2.
3.
4.
5.
6.
7.
8.
9.

Conveys strong sense of vision

Links compensation to performance
Communicates frequently with employees
Emphasizes ethics
Plans for management succession
Communicates frequently with customers
Reassigns or Terminates
Rewards loyalty
Makes sound decisions

Forces that design Strategic Management systems are as follows:

Organizations - based on their size are either gearing towards formality and more details which speaks for
large organizations while for small companies, they tend towards less details and are not too formal.

Management styles how the top management conducts its business and style of doing its business affects the
design towards strategic management. Policy making is part of the management style that most large and
small scale organizations use in part of designing their strategic management system.

Complexity of Environment is the organization in a stable environment? Are there any competitions to the
companys success? Iis there a market for the type of service offered? Some of these questions shape how
systems are develop for the organization as strategy will be determined by the answers of the said questions.

Complexity of Production process entails how effective is the process itself. Takes into consideration the
following factors:
o Production lead time o
Capital intensive
o Labor intensive
o Manufacturing process

o
o

Technology
Market reaction time

Nature of problems determining nature of problems help in the design of the system as they can come up
with counter measures to solve the situation.

Question 4: Discuss the various grand strategies at the Corporate Level i.e. Stability, Growth and
Retrenchment.
Answer:
In Growth, the company seeking growth faces different subgroups for it: horizontal growth
(concentration), diversification and vertical growth.
Horizontal growth there are 3 components to horizontal growth. First a companymay decide to
look for new customers. Second, a company may decide to pursue new product. Third, the company
may pursue new locations.
Vertical Integration it is an integration along a supply chain. An example would be if a retailer
now manufactures the products it sells, that is considered as increasing its level of vertical
integration.
Diversification there are 2 types of diversification. First is related diversification, which is a
common core of ones resources and capabilities. With this, synergy rises because the related activity
can increase the value and economies of scale can save money. Second is the unrelated
diversification where it is used to lower the relative risk. Basically it is like a portfolio, the more
different each portfolio is to each other the better. Another example is that when a product is
released. It is done so over several markets to hedge risk of failure.

In Stability, when a company is seeking slow growth or stagnation, management usually seeks strategies
geared towards stability. There are 3 elements to which stability is used to strategize.

Pause if the internal resources are already stretched thin, organizations will often scale down a bit
and focus on control.
Proceeding with caution if there are problems in the macro environment, the company may
opt for a strategy that goes for a formidable growth..
Profit if the company has loyal customers, solid base, the strategy is to go for research and
development.
Retrenchment this strategy revolves around cutting sales. It is also a strategy that seeks to reduce size or
diversity of an organizations operations. Expenditures are also cut off or minimize to become financially
stable. Manpower headcount is also

affected when there is retrenchment. As the size of manpower is lowered to meet viable financial
stability.
Question 5: Discuss the following Factors affecting Strategic Choices in brief:
Nature of environment stable?
Firms internal realities
Ambition of CEO / owners
Company culture
Firms capacity to execute the strategy.
Resource allocation
Answer:
Nature of environment stable?
Organizations conduct an environmental analysis to determine if the business they intend to
operate is going to be stable given the present environment. This will also be an avenue to
determine what are the strength, opportunities, weakness and threats present in the
environment being planned for.

Firms internal realities

Top management of every organization has its inbound realities that generally influence how they
conduct their businesses. Its in this that they come up with strategies to strengthen said realities and
bolster to the success of the organization as a whole.

Ambition of CEO / owners

CEOs ambition towards their business is for it to be a profitable and very successful venture. They
are the ones who are very active in formulating the mission and vision of the organization and how
it should be ran. They visualize their products to have an impact on the desired market and for
some to diversify to other markets so as to increase profits and make the organization grow.

Company culture
Strategic choices are normally grounded on the culture of the company. This is brought about by the
types of people presently employed or involved in the organization. Any strategy to be undertaken
has to take into consideration if

it is acceptable to the whole organization or it will spell doom as this will not
progress.

Firms capacity to execute the strategy.

Planning strategies is very different from acting on them. This will require commitment from
personnel of all levels in the organization. The capacity to enact planned strategies is a testament to
the organizations internal relations making it simple and effortless.

Resource allocation
Resources are very important in planning for strategic choices as this will be considered as the
organizations lifeline. Without resources the organization cannot come up or manufacture products
they intend to release to a specific market. Most strategies are centered on what is the current
resource allocation and is it enough to meet the needs of the organization for production of goods.

Assignment B

Question: Explain the concept of Porters five forces Model used for Industry Analysis? What are the
major factors that become barriers to entry in the New Industry?

Answer:
Porters model draws upon the 5 forces to determine the competitive intensity and attractiveness of a market.
The term attractiveness is descriptive towards the overall profitability of an industry or organization.

Major factors that become barriers to entry by new players are as follows:
Government Policies with the onset of different government regulations, this poses as a sort of control over
companies that can cause as barriers. Organizations are required to apply for licenses and permits to operate
which also asks them to pay a rather large sum of money.

Capital considered being one of the important factors that a company/organization must have for its
business to succeed. Capital is already included prior to coming up with the rest of the organization. This
includes: resources to facilities, manpower, inventory, salaries, and benefits among others. Capital
investments differ on the type of business being planned or put up.

Switching cost this is a cost wherein a customer changes from one supplier or marketplace to another. The
higher these costs are, the more difficult it is to execute change. Since most of the consumers are bent straight
on a product they have grown accustomed to, when a new product comes along almost the same features, they
tend not to switch as they think it is more costly to learn the basics of the new product and that it will lead to
more time spent on figuring out the new product.

Economies of Scale this comes as a barrier for new entrants because established companies can produce
large scale quantities of their products and sell them much cheaper than new entrants. In this case, new entrant
produces the same product at a smaller quantity but of higher cost. Suppliers and customers will not do
business with the new entrant due to high cost per product.

Product Differentiation brand loyalty plays a factor to this barrier. Many customers who have already
accepted a specific product as unique tends to cling to it. New entrants who try to penetrate the market of the
said specific product has to spend more in terms of advertising and enticing the loyal customers to try their
product and hope to get them aboard. This is difficult for new entrants as they need to have extra resources
and capital to make this possible.

Cost disadvantages independent of scale a barrier for new entrants as the materials needed for the
production of a specific goods are either patented to an organization or the raw materials are exclusive to its
competitors. Also, the technology to produce commodities is also inherent to an organization.

Access to Distribution channels new entrants are finding it hard to look for ways to distribute their
products as the established organizations already had their distribution channels identified and has exclusivity.
Additional costs will be needed to look for alternative ways to distribute the products to its expected markets.

Question 2: What used to be national markets with local companies competing for business has become
a global market with everyone competing for everyone's business everywhere. Explain the 3 generic
strategies by Porter for Competitive advantage in the light of above statement.

Answer:
Globalization has hit firms harder as they now compete with products that can be considered as of more
durability and cheap. The mindset of most of the consumers is that if its foreign made or made from a 1 ST
world country it must be durable. In addition that if sold alongside its local competitor, the foreign one is
much cheaper. To pursue an advantage over an organizations rivals, drastic measures have to be set up to
challenge globalization and the entry of competitors.

Changing prices will provide a temporary advantage towards the competitors. By improving product
differentiation, features, implementing innovations in the manufacturing process provides a positive
advantage as well. Using vertical integration or a well known distribution channel to corner other market
brackets is a sound strategy to combat globalization

Exploiting relationship with suppliers is another way to compete wherein the organization can set quality
standards and thus requiring its suppliers to follow suit. This increases the credibility and increases the
reputation of the organization as one who sells high quality goods.

Local companies need to step up and come up with revolutionary and innovative ideas to rival other
competitors from other countries. Advertising and re-thinking the supplier and customers buying power is a
way to help take advantage over a big market. Diversification can also be done so as to make the organization
survive on different types of market rather than concentrate on one.

Question 3: What do you understand by the term Business Portfolio? How do BCG and GE matrix help
a multi-business organization analyze its current business portfolio and decide which businesses should
receive more or less investment.

Answer:
Business portfolio is an appropriate mix or collection of investments held by an institution or an individual.

BCG Matrix is based on the product life cycle theory that can used to determine what priorities should be
given in a portfolio of a business unit. It can help understand frequently made strategy mistake of having a
one-size-fits-all approach. To ensure long term value creation, the company should have a portfolio of
products that contains both high-growth products in need of cash inputs and low growth products that
generate lots of cash. The idea behind BCG is that the bigger the market share a product has or the faster the
products market grows the better it is for the company.

The practical use of the BCG matrix is that it offers a very useful map of the organizations product or service
strengths and weaknesses at least in terms of current profitability as well as the likely cash flows.

The GE Matrix is an alternative technique used in brand marketing and product management to help the
company decide what product/s to add to its portfolio and which market opportunities are worthy of continued
investment. It is plotted on a 2-dimensional grid wherein the Y-axis makes up the attractive measures while
the X-axis contains business strength measures.

Its strategic implications can lead to resource allocation recommendations to help grow, harvest or hold a
business unit. The planning of the company should invest in the opportunities or segments that are both
attractive and in which it has established some measure of competitive advantage. It cross references market
attractiveness and business position using three criteria for each: high, medium and low. The market
attractiveness considers variables relating to the market itself, including the rate of market growth, market
size, potential barriers toentering the market, the number and size of competitors, the actual profit margins
currently enjoyed, and the technological implications of involvement in the market. The business position
criteria look at thebusinesss strengths and weaknesses in a variety of fields. These include its position in
relation to its competitors, and the businesss ability to handle product research, development and ultimate
production. It also considers how well placed the management is to deploy these resources

Case Study
Question 1: The Company foresees continued growth and expansion in the coming few years globally
driven by its operations in India and hopes to realign Indias strengths and world-class market
capabilities to deliver services to its customers. Conduct the SWOT Analysis of Haiers foray in to
Indian market in light of facts given in the narration .

Answer:
Strength
Convenient geographic location
Established distribution channel
Understanding of Indian market
Diversification
Huge cash flow
Innovative
Strong mission and vision
Opportunities
Research and Development
Consolidation of other distribution
channels
Aggressive marketing and brand
management

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Weaknesses
Not yet well known in India unlike its
competitors.

Threats
Discrimination the company is
identified as a Chinese company.
Low market share

Assignment C

Objective Questions
1.

Which approach to the study of leadership emphasizes the role of situational factors and how these
moderate the relationship between leader traits or leadership behaviors and leadership
effectiveness?
a) Leader-oriented approach.
b) Contingency approach.
c) Transactional approach.
d) Transformational approach
2.

3.

Porter has designed a framework to help understand why certain countries achieve global
competitive advantage in certain industries. It also helps internationalizing firms to make
location decisions. The framework is called:
a) Porter's value chain
b) Porter's Five Forces
c) Porter's Generic Strategies
d) Porter's Diamond

It is generally agreed that the role of strategy is to:

a) Make best use of resources
b) Make profits for the organization
c) Make the best products and services
d) Achieve competitive advantage
4.

Kay (1993) sees the strategy of an organization as matching internal capabilities

with:
a)
b)
c)
d)

5.

Its external relationships

Its customer needs
The industry life cycle
The external environment
An organization's external environment consists of the general or macro environment
and:

a)
b)
c)
d)

The internal environment

The competitive environment
The specific environment
The micro-environment

6.

The term 'corporate strategy' concerns strategy and strategic decisions

a) In the private sector only.
b) Developed by the senior management in an organization.
c) In certain types of organizations.
d) At all levels in an organization.

7.

A key characteristic of strategic decisions is:

a) They are normally definite decisions about the future of the
organization.

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b)

c)
d)

8.

It is possible to identify different levels of strategy in an organization, these are:

a)
b)
c)
d)

9.

They identify specific areas of strategic interest for the

management of an organization.
They result in better organizational performance.
They are likely to be concerned with, or affect, the long-term direction of an organization.

Corporate and functional.

Corporate and Business
Strategic and tactical.
Corporate; strategic business unit; operational.

An organisation's mission can be defined as:

a) The overriding purpose in line with the values or expectations of
stakeholders.
b)
c)
d)

The overriding purpose regardless of the values or expectations of

stakeholders.

The organisation's business plan.

The desired future state of the organisation.

10. Strategic choices require an understanding of:

a) the business environment, the competition and the strategic capability of
the organisation.
b) The key drivers of change.
c) The organisational strengths and weaknesses.
d) The underlying bases for future strategy at business unit and corporate
levels; the options for developing strategy in terms of directions and
methods of development.
11. In Porter's Five Forces, the 'threat of new entrants' relates to:
a) Substitutes
b) Switching costs
c) Buyer power
d) Barriers to entry
12. Brandenburg and Nalebuff added a sixth force to Porter's Five Forces. It is known as:
a)
b)
c)
d)

Seller power
Complementors
Substitutes
Government regulation

13. Barriers to entry into an industry are likely to be high if:

a) Switching costs are low
b) Differentiation is low
c) Access to distribution channels is high
d) Requirement for economies of scale is high
14. Buyer power is high if:
a) They have little information
b) The buyer requires a high quality product for their own production
c) Differentiation is low

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d)

Switching costs are low

15. Competitive rivalry will be high if:

a) There are a few strong players in the industry
b) There is a high degree of differentiation
c) The industry is in its infancy
d) The industry is fragmented
16. A strategic group can be defined as:
a) A group of key resources and competences that are necessary to achieve
competitive advantage
b) A group of customers that have similar characteristics
c) An industry recipe
d) A group of firms in an industry following the same or a similar strategy
17. The key activities in the strategic management process are:
a) Analysis, formulation, review
b) Analysis, implementation, review
c) Formulation, analysis, implementation
d) Analysis, formulation, implementation
18. Strategy analysis is also referred to as:
a) Strategy diagnosis
b) Rational analysis
c) Situation analysis
d) SWOT analysis
19. Strategy formulation takes place at two levels. These are:
a) Conscious and sub-conscious
b) Implicit and explicit
c) Values and operational
d) Corporate and business
20. The Policies of an organization derive from its:
a) Purpose
b) Vision
c) Objectives
d) Strategy
21. The statement of an organization's aspirations can be found in the organization's:
a)
b)
c)
d)

Policies
Mission
Strategy
Vision

22. A substitute product or service is:

a) A new entrant into the industry
b) A competitor's product or service
c) A less attractive way of meeting the same need
d) An alternative way of meeting the same need

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23. Cross-functional teams are:

a) The representative voice of senior management.
b) A small group of specialists who collaborate on a task force.
c) A small group of people who come together to resolve business unit issues.
d)

A small group of people from different departments who are mutually accountable
to a common set of performance goals.

24. The business unit strategy has three major components:

a) business mission, department mission, and daily plans
b) competencies, abilities, and problem statements
c) marketing, advertising and pricing objectives
d) mission, business unit goals, and competencies
25. Disney is in the business of:
a) Building theme parks.
b) Designing new imaginative characters.
c) Making money.
d) Creating entertainment, fun and fantasy.
26. A useful framework used to assess a company's investments/divisions is called:
a)
b)
c)
d)

corporate insight analysis

company productivity analysis
SBU knowledge analysis
business portfolio analysis

27. Cash cows are SBU's that typically generate:

a)
b)
c)
d)

large awareness levels but few sales

paper losses in the long run
problems for product managers
large amounts of cash

28. Business unit competencies should be distinctive enough to provide

a) clear understanding of who you want to lead the company
b) opportunity to compete on a productivity basis
c) additional strategic mission
d) competitive advantage
29. TQM is a strategy that is designed to change the quality of a product to satisfy
customer needs by using the concept of
a) reverse brainstorming
b) brainstorming
c) product life cycle analysis
d) benchmarking
30. Firms may view growth opportunities in these terms:
a) New markets, and current and new products
b) New markets and new products
c) Current markets and current products
d) Current and new markets, and current and new products

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31. The strategic marketing process is how an organization allocates its marketing mix
resources to reach its:
a) target markets
b) area of expertise
c) competition
d) stated business ideas
32. An effective short-hand summary of the situation analysis is a:
a) SWOT analysis
b) SBU analysis
c) BCG analysis
d) Competition analysis
33. In the strategic marketing process, once you get results you go into the:
a) control phase
b) marketing plan
c) planning phase
d) marketing program
34. Ansoff had four market-product strategies to expand sales. They included
(1) market penetration, (2) product development, (3) market
development and:
a)
b)
c)
d)

diversification
current customer retention
distribution enhancement
product simplification

35. Aggregating prospective buyers into groups is called:

a) market segmentation
b) BCG matrix analysis
c) grouping
d) market categorization
36. One key to effective implementation is setting:
a) schedule of events
b) milestones
c) good managers in motion
d) goals
37. When actual performance results are better than what the plan called for, managers should:
a)
b)
c)
d)

Find creative ways to exploit the situation.

Issue more stock options to employees.
Increase prices.
Ignore it.

38. Value for shareholders of a firm is measured by:

a) stock performance and profitability
b) sales revenue
c) satisfactory employee targets
d) profitable year-end balance sheet

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39. The _____ for PepsiCo is "We believe our commercial success depends upon offering quality and
value to our consumers and customers; providing products that are safe, wholesome, economically
efficient and environmentally sound; and providing a fair return to our investors while adhering to
the highest standards of quality."

a)
b)
c)
d)

mission
organizational code of conduct
functional code
benefits statement

40. A firm can acknowledge the critical importance of its _____, by having explicit goals that
state its intention to improve work conditions by adding more lighting and providing the
workers with more and better safety equipment.
a)
b)
c)
d)

employee welfare
market share
sales revenue
satisfaction

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