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Solutions SPPU Pervious Year Question papers
STRATEGIC MANAGEMENT By Dr. Rakesh Bhati
M.B.A. - II
301 - GC - 11 : STRATEGIC MANAGEMENT
(2019 Pattern) (Semester - III)
(MAY-JUNE 2023)
Q1) Answer any five from the following. [10]
a) Define KPI.
Ans: KPI stands for Key Performance Indicator. It is a measurable and quantifiable metric
that is used to evaluate the success or performance of an organization, a specific project, a
department, or an individual. KPIs are crucial in business and other settings because they
provide a clear and objective way to assess progress toward specific goals and objectives.
KPIs can vary widely depending on the goals and objectives of the entity being measured.
They are typically chosen based on the organization's priorities and what aspects of
performance are most critical to its success. Some common examples of KPIs include metrics
related to sales growth, customer satisfaction, revenue, profitability, employee productivity,
and more. The selection of KPIs should align with an organization's strategic objectives and
provide meaningful insights into its performance.
b) Define critical success factors.
Ans: Critical Success Factors (CSFs) are specific elements or variables that are essential for
an organization, project, or initiative to achieve its objectives and be successful. These factors
represent the key areas or activities that have a significant impact on the overall success of a
business or project. Identifying and focusing on CSFs is important for strategic planning and
decision-making, as they help prioritize resources and efforts where they matter most.
CSFs can vary from one organization or project to another, depending on their unique goals
and circumstances. They are typically determined through a careful analysis of the business
environment and the specific objectives at hand.
c) Define organisation capability.
Ans: Organizational capability, often referred to as organizational capability or capacity,
refers to the collective ability and capacity of an organization to achieve its goals and
objectives. It encompasses the skills, knowledge, resources, processes, and competencies
that an organization possesses or can develop to effectively execute its strategies and fulfill
its mission.
Organizational capability is crucial for achieving sustained success and competitiveness. It is
often assessed and developed as part of strategic planning to ensure that the organization
has the necessary resources and competencies to meet its objectives and adapt to changing
circumstances. It also plays a significant role in an organization's ability to respond to
challenges, seize opportunities, and remain resilient in a dynamic business environment.
d) Define red ocean.
Solutions SPPU Pervious Year Question papers
STRATEGIC MANAGEMENT By Dr. Rakesh Bhati
Ans: "Red Ocean" is a term commonly used in business strategy to describe a market
environment characterized by intense competition among existing firms. In a red ocean,
numerous companies are vying for the same customers and market share, often leading to
price wars, shrinking profit margins, and a saturated marketplace where differentiation
between competitors is minimal.
The term "red ocean" is derived from the idea that the fierce competition turns the
metaphorical business waters red, symbolizing the bloodshed or conflict among competitors.
In a red ocean, companies typically compete within well-defined industry boundaries, and
the emphasis is often on cost-cutting and incremental improvements to gain a competitive
advantage.
To break away from the limitations of a red ocean and explore new opportunities, businesses
often turn to "Blue Ocean Strategy." This strategy involves identifying and creating new,
untapped market spaces, where competition is limited or nonexistent, and offering unique
value propositions to customers. By doing so, companies can escape the intense rivalry and
competition of red oceans and potentially find more profitable and sustainable growth in
blue oceans.
e) Define a merger.
Ans: A merger is a corporate strategy in which two or more companies combine to form a
single, new entity or integrate their operations, assets, and ownership structures. Mergers
are typically undertaken for various reasons, including: Expansion, Synergy, Diversification,
Market Power, and Strategic Objectives. There are different types of mergers, including
Horizontal Merger , Vertical Merger, Conglomerate Merger, Market Extension Merger and
Product Extension Merger
f) Define value curve.
Ans: A value curve, in the context of business and marketing strategy, is a graphical
representation or chart that illustrates the perceived value that a product or service delivers
to customers compared to the competition. It is a tool used in strategic analysis to help
businesses understand and map how their offerings differ from those of competitors and
where they can create a unique value proposition.
The concept of a value curve is closely associated with the "Blue Ocean Strategy," where
businesses aim to create new, uncontested market spaces by offering unique value
propositions that diverge from the competition. By carefully analyzing and adjusting their
value curves, companies can identify opportunities to create their own niche or market
segment and move away from direct competition in a crowded "red ocean."
g) What is a value chain.
Ans: The value chain concept was introduced by Michael Porter in his book "Competitive
Advantage" and is widely used as a framework for strategic analysis and planning in
business.
A value chain is a concept in business management and strategy that describes the full
range of activities and processes that a company goes through to create, deliver, and
ultimately provide value to its customers. The value chain is a systematic way of analyzing
Solutions SPPU Pervious Year Question papers
STRATEGIC MANAGEMENT By Dr. Rakesh Bhati
an organization's operations, from the acquisition of raw materials and resources to the
production, distribution, marketing, and sale of goods and services. It helps businesses
understand how each activity contributes to the creation of value and how they can optimize
these processes to improve overall performance and profitability.
Analyzing the value chain helps companies identify opportunities to reduce costs,
improve quality, enhance customer satisfaction, and gain a competitive advantage. By
understanding how each activity contributes to value creation, businesses can make
informed decisions about where to focus their resources and efforts to optimize their
operations and increase profitability.
h) What is an emergent strategy.
Ans: An emergent strategy is a term used in the field of strategic management to describe a
strategy that develops gradually over time in response to changing circumstances and
unplanned events, rather than being deliberately planned in advance. It is a flexible and
adaptive approach to strategy that acknowledges the uncertainty and complexity of the
business environment. Emergent strategies often arise as a result of learning from
experience, experimentation, and the organization's ability to adapt to unforeseen challenges
and opportunities.
Embracing an emergent strategy can be beneficial in situations where rigid, pre-determined
plans may not be effective due to unpredictability and complexity. However, it also requires
strong leadership, a culture of learning, and the ability to manage and balance the tensions
between planned and emergent strategies.
Q2) Answer any two of the following. [10]
a) Explain the concept of strategic intent.
Ans: Strategic intent is a concept in strategic management that emphasizes the
importance of setting ambitious, long-term goals and objectives that go beyond current
capabilities and resources. It was popularized by Gary Hamel and C.K. Prahalad in the 1980s.
The central idea behind strategic intent is to inspire and motivate an organization to achieve
extraordinary results and drive continuous innovation and improvement.
Key components of the concept of strategic intent include:
1. Ambitious Vision: Strategic intent starts with a visionary and audacious long-term goal.
This goal should be challenging and go beyond what the organization believes is currently
achievable. It serves as a rallying point for the entire organization and paints a compelling
picture of the future.
2. Stretch Goals: The objectives associated with strategic intent are often referred to as
"stretch goals" because they push the organization beyond its comfort zone. These goals
encourage innovation, creativity, and a mindset of continuous improvement to reach new
heights.
3. Focused Efforts: Achieving strategic intent requires a laser focus on the goal and the
allocation of resources, capabilities, and efforts towards its realization. It necessitates a
commitment to pursuing the long-term objective relentlessly.
Solutions SPPU Pervious Year Question papers
STRATEGIC MANAGEMENT By Dr. Rakesh Bhati
4. Alignment: All aspects of the organization, from leadership to individual employees,
should be aligned with the strategic intent. The intent should guide decision-making and
influence the organization's culture, strategy, and day-to-day actions.
5. Adaptability: While the strategic intent provides a long-term direction, it must also allow
for adaptability and learning along the way. As circumstances change, the organization
may need to adjust its approach and tactics to achieve the overarching vision.
6. Inspiration: A well-crafted strategic intent can inspire and motivate employees by
offering a compelling reason for their work and creating a sense of purpose.
Strategic intent is often contrasted with traditional strategic planning, which tends to
focus on short-to-medium-term goals that are more directly linked to current resources and
capabilities. While both approaches have their merits, strategic intent encourages
organizations to think big and strive for breakthrough innovations and exceptional
performance.
One of the classic examples of a company that applied the concept of strategic intent is
Honda. Honda's strategic intent in the 1960s was to become the world's leading motorcycle
manufacturer, and it set stretch goals to achieve this vision. Eventually, Honda expanded into
the automotive industry and became one of the world's leading automakers.
b) Explain the concept of strategy canvas.
Ans: The strategy canvas is a strategic planning and visual tool that is used to analyze and
compare an organization's strategy in relation to its competitors. Developed by W. Chan
Kim and Renée Mauborgne, the strategy canvas is a graphical representation that helps
businesses understand their current market position and identify opportunities for
differentiation and innovation.
Key elements and concepts associated with the strategy canvas include:
1. Value Curve: The strategy canvas typically consists of a graph that displays a company's
value proposition in comparison to its competitors. It represents the key factors (or
attributes) that are important to customers in a particular industry or market.
2. Attribute Levels: Each attribute on the strategy canvas is assigned a value or level,
reflecting how the company and its competitors perform in that specific area. Attribute
levels can range from low to high, with high levels indicating better performance.
3. Competitor Profiles: The strategy canvas often includes multiple lines or curves, each
representing a different competitor in the industry. This allows for a side-by-side
comparison of how the company's value proposition aligns with or differs from
competitors.
4. Blue Ocean vs. Red Ocean: The strategy canvas is often used in conjunction with the
"Blue Ocean Strategy" framework. A red ocean represents existing markets with high
competition, while a blue ocean represents untapped market spaces with less
competition. The goal is to move away from red oceans (direct competition) by creating
blue oceans (differentiation and innovation).
c) Explain strategy control.
Ans: "Strategy control" is a concept often used in the context of strategic management
and business planning. It refers to the various mechanisms and processes that an
organization puts in place to monitor, adjust, and ensure the effective implementation of
Solutions SPPU Pervious Year Question papers
STRATEGIC MANAGEMENT By Dr. Rakesh Bhati
its strategic plans. The primary goal of strategy control is to ensure that the organization
is moving in the desired direction and that its strategic objectives are being met. It
ensures that an organization's strategic plans are not just set and forgotten but
continuously monitored, adjusted, and executed to achieve the desired goals. It helps
organizations adapt to changing circumstances and make data-driven decisions to
improve performance and maintain competitiveness.
Here are some key aspects of strategy control:
1. Setting performance metrics: Organizations need to establish key performance
indicators (KPIs) and other relevant metrics that align with their strategic goals. These
metrics help in quantifying and measuring progress toward the strategic objectives.
2. Monitoring progress: Regular monitoring of performance against the established
metrics is essential. This can involve collecting and analyzing data on various aspects of
the organization's operations and comparing it to the predetermined targets.
3. Deviation identification: Strategy control involves identifying any significant deviations
between the planned strategy and actual performance. When discrepancies are spotted,
it's crucial to understand the reasons behind them and assess their impact on the
strategic goals.
4. Taking corrective action: When deviations or issues are identified, organizations must
take appropriate corrective actions. This might involve adjusting the strategy, revising
the plan, allocating resources differently, or addressing specific operational challenges.
5. Feedback loops: Strategy control systems often incorporate feedback loops to ensure
that information flows throughout the organization. This feedback helps in making timely
and informed decisions.
6. Risk management: Part of strategy control involves assessing and managing risks that
may affect the successful implementation of the strategic plan. This can include risk
mitigation strategies and contingency planning.
7. Adaptability: In today's dynamic business environment, strategies may need to be
adjusted or adapted more frequently. Strategy control allows organizations to be flexible
and responsive to changes in the external environment or shifts in internal conditions.
8. Reporting and communication: Effective strategy control relies on clear reporting and
communication mechanisms to ensure that relevant information is shared with all
stakeholders within the organization. This can include regular progress reports,
meetings, and other forms of communication.
9. Technology and tools: Many organizations use various software and technology tools to
help with strategy control. These tools can aid in data collection, analysis, and reporting,
making the process more efficient and accurate.
Q3) a) What is BCG matrix? Explain how BCG matrix can be used to classify firm
businesses. [10]
Ans: The BCG Matrix, also known as the Boston Consulting Group Matrix, is a strategic
management tool used to analyze and categorize a company's portfolio of business units or
products based on their market growth rate and relative market share. It was developed by
the Boston Consulting Group in the early 1970s. The BCG Matrix is designed to help
companies make strategic decisions about resource allocation and investment in different
parts of their business.
Solutions SPPU Pervious Year Question papers
STRATEGIC MANAGEMENT By Dr. Rakesh Bhati
The horizontal axis of the BCG Matrix represents the amount of market share of a product
and its strength in the particular market. By using relative market share, it helps measure a
company’s competitiveness.
The vertical axis of the BCG Matrix represents the growth rate of a product and its potential
to grow in a particular market.
In addition, there are four quadrants in the BCG Matrix:
 Question marks: Products with high market growth but a low market share.
 Stars: Products with high market growth and a high market share.
 Dogs: Products with low market growth and a low market share.
 Cash cows: Products with low market growth but a high market share.
The assumption in the matrix is that an increase in relative market share will result in
increased cash flow. A firm benefits from utilizing economies of scale and gains a cost
advantage relative to competitors. The market growth rate varies from industry to industry
but usually shows a cut-off point of 10% – growth rates higher than 10% are considered
high, while growth rates lower than 10% are considered low.
BCG Matrix to classify a firm's businesses:
1. Gather Data:
 Collect data on the market share of each business unit or product in the firm's
portfolio.
 Determine the market growth rate for each business unit or product. This can be
based on historical data or market research.
2. Plot the Business Units:
 Create a matrix with two axes: the vertical axis represents the market growth rate,
and the horizontal axis represents the relative market share.
 Plot each business unit or product on the matrix based on its market share and
market growth rate.
3. Categorize Business Units:
 Once you've plotted the business units on the matrix, you can categorize them into
one of the four quadrants:
 Stars: High market share in a high-growth market.
 Cash Cows: High market share in a low-growth market.
 Question Marks: Low market share in a high-growth market.
 Dogs: Low market share in a low-growth market.
4. Analyze and Prioritize:
 Stars: These business units have high potential but also require substantial
investment to maintain their market share. Consider investing in these to support
their growth.
 Cash Cows: These units are mature and profitable. They generate cash that can be
used to support other business units or invest in new opportunities.
 Question Marks: These units have potential but are uncertain. They require a
strategic decision on whether to invest further or divest.
 Dogs: These units have limited potential and may not be worth further investment.
Consider divestiture or discontinuation unless there are strategic reasons to keep
them.
5. Develop a Strategy:
Solutions SPPU Pervious Year Question papers
STRATEGIC MANAGEMENT By Dr. Rakesh Bhati
 Develop a strategic plan for each category of business units. For example, for stars,
focus on growth strategies and resource allocation. For cash cows, consider cost
management and profit maximization. For question marks, evaluate whether to
invest for growth or divest. For dogs, decide on exit or turnaround strategies.
6. Regular Review:
 The BCG Matrix is not a one-time analysis. It should be reviewed regularly as
market conditions and the relative position of business units can change over time.
Adjust your strategies and resource allocation accordingly.
7. Consider External Factors:
 While the BCG Matrix provides a framework for internal analysis, it should be used
in conjunction with other strategic tools and consider external factors such as
competitive dynamics, industry trends, and customer preferences.
The BCG Matrix is a valuable tool for classifying and prioritizing a firm's businesses or
products, but it should be used as part of a comprehensive strategic planning process. It
helps firms allocate resources more effectively, optimize their portfolio, and make informed
decisions about their strategic direction.
OR
b) What is GE 9-cell matrix? Explain how GE 9-cell matrix can be used for strategic
decisions. [10]
Ans: The GE 9-Cell Matrix, also known as the GE/McKinsey Matrix, is a strategic management
tool used for evaluating and prioritizing a company's diverse business units or product lines.
This matrix was developed in 1970s by the General Electric Company with the assistance of
the consulting firm, McKinsey & Co, USA. This is also called GE multifactor portfolio matrix. The
GE matrix has been developed to overcome the obvious limitations of BCG matrix. This matrix
builds upon the concepts of the BCG Matrix (Boston Consulting Group Matrix) but offers a more
nuanced and comprehensive analysis by considering multiple factors.
The GE 9-Cell Matrix assesses business units or product lines based on two primary dimensions:
1. Industry Attractiveness: This dimension evaluates the overall attractiveness of the
industry in which a business unit operates. Factors considered might include market
growth rate, profitability, competition, technological changes, regulatory factors, and
customer demand.
2. Competitive Strength (or Business Unit Strength): This dimension assesses the
competitive strength or position of the business unit within its industry. Factors taken
into account can include market share, product quality, brand recognition, innovation
capabilities, distribution channels, and cost structure.
These two dimensions are divided into three categories, each with three levels, creating a 3x3
grid. The nine resulting cells are used to categorize and prioritize the business units:
High Industry Attractiveness (Vertical Axis):
Solutions SPPU Pervious Year Question papers
STRATEGIC MANAGEMENT By Dr. Rakesh Bhati
 High Competitive Strength (Horizontal Axis): These business units are considered the
most attractive and strongest, with excellent growth opportunities. They are positioned
in the upper-right corner of the matrix. Companies should invest heavily in and pursue
growth strategies for these units.
 Medium Competitive Strength: These business units are moderately attractive but have
only average competitive strength. Consider investing in and supporting these units as
they have growth potential but may require additional resources.
 Low Competitive Strength: These business units are in an attractive industry but have
low competitive strength. Strategies should be devised to improve their competitive
position, potentially through partnerships, innovation, or other means.
Medium Industry Attractiveness (Vertical Axis):
 High Competitive Strength: These business units have a strong competitive position but
are in an industry with moderate growth prospects. These units may continue to generate
profit but might require efficiency and cost management.
 Medium Competitive Strength: Business units in this category are in industries with
average attractiveness and have an average competitive position. They may require
careful evaluation to determine their strategic path.
 Low Competitive Strength: Business units in moderately attractive industries with low
competitive strength may need significant improvements or consider divestiture.
Low Industry Attractiveness (Vertical Axis):
 High Competitive Strength: These business units have a strong competitive position but
are in industries with limited growth prospects. Companies may choose to maintain and
optimize these units for cash generation but should be cautious about investing heavily
in them.
 Medium Competitive Strength: Business units in unattractive industries with average
competitive strength should be carefully reviewed, and strategic decisions should be
based on their individual circumstances.
 Low Competitive Strength: These units, in unattractive industries with low competitive
strength, may be candidates for divestiture or exit strategies unless there are compelling
reasons to keep them.
The GE 9-Cell Matrix provides a more detailed and nuanced analysis of a company's portfolio
than the BCG Matrix. It helps companies make informed decisions about resource allocation,
strategic planning, and portfolio management based on the specific characteristics of each
business unit and its industry.
Q4) a) Explain McKinsey’s 7 - S framework and discuss it application in strategic
management. [10]
Ans: The McKinsey 7-S Framework is a management model developed by the consulting firm
McKinsey & Company in the late 1970s. It is designed to help organizations analyze and
improve their internal alignment and effectiveness by considering seven key elements that
Solutions SPPU Pervious Year Question papers
STRATEGIC MANAGEMENT By Dr. Rakesh Bhati
all start with the letter "S." The framework is particularly useful for understanding the
interconnectedness of various aspects of an organization and how they impact its
performance. The seven "S" elements are as follows:
1. Strategy: This represents the organization's plan for achieving its goals and
objectives. It includes the company's vision, mission, strategic goals, and the actions
it plans to take to achieve them.
2. Structure: Structure refers to the organization's formal framework, including its
hierarchy, reporting relationships, and the division of responsibilities and roles
among its employees. It also encompasses the organization's design, departments,
and how work flows within the company.
3. Systems: Systems involve the procedures, processes, and workflows that help the
organization operate efficiently. This includes both formal systems (such as
accounting, IT, and performance measurement) and informal systems (such as
communication processes and decision-making methods).
4. Skills: Skills pertain to the capabilities and competencies of the organization's
employees. This includes their individual skills and expertise, as well as their
collective abilities to perform their roles effectively. Skills also relate to the training
and development programs in place.
5. Staff: Staff refers to the organization's human resources, including its number of
employees, their qualifications, experience, and cultural diversity. It also covers
aspects like recruitment, retention, and employee morale.
6. Style: Style represents the leadership and management approach within the
organization. It includes the leadership style of top management, communication
patterns, and the prevailing organizational culture. The culture can be a critical factor
in determining how the organization operates and how employees behave.
7. Shared Values: Shared values are the core beliefs and principles that guide the
organization. They reflect the organization's culture and are the foundation for its
decision-making and actions. These values shape the behavior and attitudes of
employees.
The key concept of the 7-S Framework is that all seven elements are interrelated and
interdependent. Changes in one element can have a cascading effect on the others. Therefore,
to ensure the effective functioning of an organization, these elements must be aligned and
mutually reinforcing.
When using the McKinsey 7-S Framework, organizations can assess their current state in
each of these seven areas and determine whether there is alignment and consistency among
them. If there are discrepancies or issues, the framework can guide organizations in making
adjustments to improve their overall performance and effectiveness. It is a valuable tool for
strategic planning, organizational change, and transformation efforts.
McKinsey's 7-S Framework is a valuable tool in the field of strategic management, and its
application can help organizations effectively develop and implement their strategies. Here's
how the framework is applied in strategic management:
1. Diagnosis and Analysis:
 Current State Assessment: The 7-S Framework is used to conduct a
comprehensive analysis of the organization's current state. Each of the seven
elements (strategy, structure, systems, skills, staff, style, shared values) is
evaluated to understand how they are aligned or misaligned within the
organization.
Solutions SPPU Pervious Year Question papers
STRATEGIC MANAGEMENT By Dr. Rakesh Bhati
2. Alignment and Consistency:
 Alignment Assessment: The framework helps in assessing the alignment and
consistency among the seven elements. An organization's strategy should be
aligned with its structure, systems, skills, and other elements. Inconsistencies
or gaps can be identified through this analysis.
3. Strategic Planning:
 Formulation: During the strategic planning process, the 7-S Framework helps
organizations ensure that the chosen strategy is consistent with the other
elements. It prompts questions like, "Does our proposed strategy fit with our
current structure and capabilities?"
4. Organizational Change:
 Change Management: When organizations embark on strategic change
initiatives, the 7-S Framework serves as a tool for managing change. It helps in
understanding which elements need to be adjusted to support the new
strategy and facilitates communication about the change.
5. Resource Allocation:
 Resource Allocation: In strategic management, resource allocation decisions
are critical. The 7-S Framework assists in determining where resources (such
as budget, personnel, and technology) should be directed to support the
strategy effectively.
6. Crisis Management:
 Crisis Response: During crises, organizations can use the framework to
quickly assess which elements need immediate attention to address the crisis
while maintaining alignment with the overall strategy.
7. Mergers and Acquisitions:
 Integration: When organizations go through mergers or acquisitions, the 7-S
Framework helps in assessing how the two entities can be integrated
successfully by aligning their structures, cultures, and other elements.
8. Culture and Leadership:
 Cultural Change: Organizations can use the framework to address cultural
change. By focusing on the shared values, leadership style, and staff skills, they
can create a culture that supports the strategic direction.
9. Performance Measurement and Feedback:
 Performance Metrics: The framework guides the selection of performance
metrics. Organizations can choose indicators that are aligned with the specific
elements of the framework relevant to their strategic goals.
10. Continuous Monitoring:
 Regular Assessment: Strategic management is an ongoing process.
Organizations can periodically reassess the alignment of the 7-S elements to
ensure that they continue to support the evolving strategy.
In summary, McKinsey's 7-S Framework is a versatile tool in strategic management that
helps organizations assess their current state, make informed decisions about their strategic
direction, and align their internal elements to achieve their strategic goals. It is particularly
useful for understanding the complex interplay between various aspects of an organization
and ensuring that they work together cohesively to drive success.
OR
Solutions SPPU Pervious Year Question papers
STRATEGIC MANAGEMENT By Dr. Rakesh Bhati
b) What are grand strategies ? Discuss in detail various growth strategies with examples.
[10]
Ans: Grand strategies are high-level, overarching plans that guide an organization's long-term
direction and goals. These strategies are typically designed to provide a broad framework for an
organization's actions and decisions over an extended period, often spanning several years or
even decades. Grand strategies are essential for organizations to achieve their mission, fulfill
their vision, and realize their objectives. There are several common types of grand strategies,
which include:
1. Growth Strategies: Market Penetration, Market Development, Product Development,
Diversification
2. Stability Strategies: Maintaining the Status Quo
3. Retrenchment Strategies: Turnaround, Divestment
4. Combination Strategies: Focused Growth, Renewal
5. Competitive Strategies: Cost Leadership, Differentiation, Focus (Niche) Strategy
6. Cooperative Strategies: Strategic Alliances
7. International Strategies: Global Expansion
8. Innovation Strategies: Innovation and Technology Leadership
9. Sustainability Strategies: Sustainable and Environmental Initiatives
Grand strategies are typically developed at the highest levels of an organization, such as by top
executives or the board of directors. They provide a framework for the organization's overall
direction and influence lower-level strategies and decision-making throughout the organization.
The choice of a grand strategy depends on the organization's internal and external environment,
its mission and values, and its goals for the long term.
Growth strategies are approaches that organizations use to increase their market share, expand
their customer base, and achieve higher revenues and profitability. Here are various growth
strategies with examples:
1. Market Penetration:
 Definition: Market penetration involves increasing market share in existing
markets or with existing products. This strategy typically focuses on selling more
of the same products or services to current customers.
 Example: A fast-food chain offering limited-time promotions to encourage
existing customers to visit more frequently or buy larger portions. McDonald's
"Dollar Menu" is an example of a market penetration strategy.
2. Market Development:
 Definition: Market development aims to enter new markets, regions, or customer
segments with existing products or services. It expands the customer base by
finding new opportunities.
 Example: An e-commerce company like Amazon expanding from the United
States to international markets, entering new countries to reach a global customer
base.
3. Product Development:
 Definition: Product development involves creating and introducing new products
or services to existing markets or customer segments. It seeks to meet evolving
customer needs and preferences.
Solutions SPPU Pervious Year Question papers
STRATEGIC MANAGEMENT By Dr. Rakesh Bhati
 Example: Apple regularly introduces new versions of its iPhone, iPod, and Mac
products, appealing to its existing customer base with enhanced features and
innovations.
4. Diversification:
 Definition: Diversification aims to enter new markets or industries, either related
or unrelated to the current business. It spreads risk and can create new revenue
streams.
 Example: The Walt Disney Company, originally an animation studio, diversified
into theme parks (related diversification) and later into media networks like ABC
and ESPN (unrelated diversification).
5. Cost Leadership:
 Definition: Cost leadership involves becoming the lowest-cost producer or
provider in an industry. It allows an organization to offer products or services at
lower prices and gain a competitive advantage.
 Example: Walmart is known for its cost leadership strategy, offering everyday low
prices in retail. This strategy has made it one of the largest and most successful
retailers globally.
6. Differentiation:
 Definition: Differentiation focuses on making products or services unique and
distinct from those of competitors. This can involve innovation, quality, design, or
other unique features.
 Example: Apple's strategy of product differentiation is evident in its emphasis on
design, user experience, and proprietary technology, setting its products apart
from competitors.
7. Focus (Niche) Strategy:
 Definition: Focus strategy concentrates on serving a specific market segment or
niche, allowing for specialized and customized offerings.
 Example: Tesla initially focused on the niche market for electric vehicles. It has
since expanded but remains known for its focus on sustainable transportation and
technology.
8. Mergers and Acquisitions:
 Definition: Mergers and acquisitions involve acquiring or merging with other
companies to achieve growth, expand market reach, or access complementary
resources.
 Example: Facebook's acquisition of Instagram and WhatsApp to strengthen its
social media ecosystem and reach a broader user base.
9. Strategic Alliances:
 Definition: Strategic alliances involve partnerships with other organizations to
achieve common goals, share resources, or enter new markets.
 Example: The partnership between Starbucks and Barnes & Noble to open
Starbucks coffee shops in Barnes & Noble bookstores is an example of a strategic
alliance.
10. Global Expansion:
 Definition: Global expansion strategies aim to enter international markets, either
by exporting products, establishing subsidiaries, or forming joint ventures abroad.
 Example: McDonald's global expansion strategy has made it one of the most
recognized fast-food chains worldwide, with restaurants in over 100 countries.
Solutions SPPU Pervious Year Question papers
STRATEGIC MANAGEMENT By Dr. Rakesh Bhati
11. Innovation and Technology Leadership:
 Definition: Innovation strategies focus on being at the forefront of innovation and
technology in the industry, giving the organization a competitive edge.
 Example: Google's emphasis on innovation, particularly in search algorithms and
online advertising, has positioned it as a leader in the technology and internet
industry.
12. Sustainability and Environmental Initiatives:
 Definition: Sustainability strategies aim to align operations with environmental
and social responsibility goals, catering to consumers' increasing demand for
sustainable products and practices.
 Example: The sustainable sourcing and environmental initiatives of companies
like Patagonia, which promotes ethical and environmentally friendly products.
Organizations often combine multiple growth strategies to achieve their long-term objectives.
The choice of strategy depends on the organization's internal strengths and weaknesses, the
external market conditions, and its overall mission and vision. Effective implementation and
continuous adaptation are essential for successful growth strategy execution.
Q5) a) What is balanced score card ? Discuss how it can be used as a tool for strategy
evaluation [10]
The Balanced Scorecard (BSC) is a strategic performance management framework and
measurement system that allows organizations to translate their vision and strategy into a set
of performance indicators. Developed by Robert Kaplan and David Norton in the early 1990s,
the Balanced Scorecard is a comprehensive tool that provides a balanced view of an
organization's performance by considering multiple perspectives beyond just financial metrics.
It helps organizations monitor, measure, and manage their strategic objectives and key
performance indicators (KPIs). The Balanced Scorecard is a versatile tool for strategy evaluation
because it provides a structured and balanced approach to assessing an organization's
performance and progress toward its strategic objectives. It promotes clarity, alignment,
adaptability, and a focus on both financial and non-financial aspects of performance. By regularly
monitoring KPIs, organizations can make informed decisions, identify areas for improvement,
and increase the likelihood of successfully executing their strategies.
The Balanced Scorecard typically consists of four key perspectives, each associated with specific
performance measures:
1. Financial Perspective: This perspective focuses on financial performance and results. It
includes traditional financial metrics such as revenue, profit margins, return on
investment (ROI), and cash flow. The financial perspective helps assess whether the
organization's strategy is leading to improved financial outcomes.
2. Customer Perspective: This perspective emphasizes the customer's viewpoint and aims
to measure the organization's ability to satisfy customer needs and expectations. Key
performance indicators may include customer satisfaction, market share, customer
retention rates, and the number of new customers acquired.
3. Internal Process Perspective: This perspective evaluates the organization's internal
processes and activities. It seeks to identify areas where the organization can improve its
Solutions SPPU Pervious Year Question papers
STRATEGIC MANAGEMENT By Dr. Rakesh Bhati
efficiency, quality, and innovation. Key measures might include cycle time, defect rates,
process improvements, and product development time.
4. Learning and Growth Perspective (or Organizational Capacity): This perspective
focuses on the organization's ability to learn, adapt, and grow. It includes measures
related to employee training, skills development, innovation, and organizational culture.
It is essential for enabling the organization to adapt to changes and innovate over time.
In addition to these four perspectives, the Balanced Scorecard framework typically incorporates
the following elements:
 Strategic Objectives: For each perspective, organizations define strategic objectives that
are aligned with their overall mission and vision. These objectives serve as the foundation
for the selection of key performance indicators.
 Key Performance Indicators (KPIs): KPIs are specific, quantifiable measures that are
used to assess progress toward achieving strategic objectives. These are tracked and
reported regularly to provide insight into performance.
 Targets and Initiatives: Organizations set specific targets or goals for each KPI,
providing a clear benchmark for success. They also develop initiatives or action plans to
address any performance gaps.
 Cascading Scorecards: In larger organizations, the Balanced Scorecard may be cascaded
from the corporate level to various business units or departments, ensuring alignment
with the overall strategy.
The Balanced Scorecard is a valuable tool for strategic management because it provides a holistic
and balanced view of an organization's performance, going beyond just financial results. It helps
organizations align their actions with their strategic objectives, communicate the strategy
throughout the organization, and make informed decisions to drive continuous improvement. It
is widely used in various industries and sectors to facilitate strategic planning, performance
measurement, and strategy execution.
The Balanced Scorecard can be used as a tool for strategy evaluation:
1. Translation of Strategy into Objectives:
 The Balanced Scorecard begins by translating the organization's strategic
objectives into specific, measurable, and actionable goals in four key perspectives:
financial, customer, internal processes, and learning and growth (or
organizational capacity). This ensures that the strategy is clearly defined and
understood at all levels of the organization.
2. Development of Key Performance Indicators (KPIs):
 For each strategic objective, KPIs are identified. These are the specific metrics that
will be used to measure progress. KPIs are carefully chosen to reflect the critical
success factors of the organization's strategy.
3. Setting Targets and Benchmarks:
 Targets and benchmarks are established for each KPI, representing the desired
level of performance. These targets help assess whether the organization is
making progress toward its strategic goals.
4. Alignment Across Perspectives:
 The Balanced Scorecard ensures that KPIs are balanced across the four
perspectives. This alignment helps organizations avoid a situation where success
in one area (e.g., financial performance) comes at the expense of other critical
aspects of the business (e.g., customer satisfaction or employee development).
Solutions SPPU Pervious Year Question papers
STRATEGIC MANAGEMENT By Dr. Rakesh Bhati
5. Regular Monitoring and Reporting:
 Organizations continuously monitor and report on the performance of the KPIs.
The frequency of reporting may vary, but it is typically regular (e.g., monthly or
quarterly) to provide real-time feedback on progress.
6. Performance Evaluation and Analysis:
 Regular performance evaluation allows organizations to analyze the results,
assess whether they are on track to achieve their strategic objectives, and identify
areas of improvement or concern. It provides a balanced view that includes
financial and non-financial perspectives.
7. Strategic Learning and Adaptation:
 The Balanced Scorecard promotes a culture of learning and adaptation. If KPIs
show that the organization is not meeting its targets or that certain strategic
initiatives are not delivering the desired results, it triggers a review of the strategy
and the consideration of necessary adjustments.
8. Communication and Alignment:
 The Balanced Scorecard serves as a powerful communication tool, ensuring that
everyone in the organization understands the strategy and their role in its
execution. It aligns individual and departmental goals with the overarching
strategic objectives.
9. Cascading Scorecards:
 In larger organizations, the Balanced Scorecard can be cascaded from the
corporate level to business units, departments, and teams, ensuring alignment at
every level of the organization.
10. Integration with Resource Allocation:
 Organizations can use the Balanced Scorecard as a basis for resource allocation
decisions, directing investments, time, and efforts to the areas that are most
critical for achieving strategic success.
OR
b) Discuss strategic and operational control?
Ans: Strategic control and operational control are two important components of an
organization's management control system. They serve distinct purposes and focus on different
aspects of an organization's activities. Here's an overview of both:
Strategic Control:
1. Definition: Strategic control is the process of monitoring and assessing an organization's
overall strategic direction and performance to ensure that it aligns with its long-term
goals and objectives.
2. Focus: It focuses on the high-level, long-term aspects of the organization's strategy. It is
concerned with ensuring that the organization is moving in the right strategic direction
and making necessary adjustments to stay on course.
3. Time Horizon: Strategic control has a long time horizon, typically spanning several years
or more. It is concerned with the organization's strategic planning and execution over an
extended period.
4. Key Elements:
Solutions SPPU Pervious Year Question papers
STRATEGIC MANAGEMENT By Dr. Rakesh Bhati
 Setting Objectives: Defining long-term strategic objectives and goals.
 Performance Measurement: Using key performance indicators (KPIs) to assess
progress toward strategic objectives.
 Environmental Analysis: Monitoring the external environment for changes that
may impact the organization's strategy.
 Reviewing and Adapting: Reviewing the strategy and making adjustments as
needed to remain aligned with the organization's mission and vision.
5. Examples:
 Reviewing the progress of a multi-year strategic plan.
 Assessing the impact of changing market conditions on long-term strategic
objectives.
 Evaluating the performance of a diversified portfolio of business units.
Operational Control:
1. Definition: Operational control is the process of managing and monitoring the day-to-
day activities and processes within an organization to ensure that they are efficient,
effective, and aligned with the organization's short-term goals and objectives.
2. Focus: It concentrates on the operational and tactical aspects of the organization's
activities. It is concerned with optimizing processes, meeting short-term targets, and
ensuring daily operations run smoothly.
3. Time Horizon: Operational control has a short to medium time horizon, often focusing
on current or near-term activities and tasks.
4. Key Elements:
 Task and Process Management: Overseeing and managing specific tasks,
activities, and processes.
 Quality Control: Ensuring that products and services meet quality standards.
 Resource Allocation: Managing resources like personnel, materials, and budgets
for efficient day-to-day operations.
 Short-term Planning: Developing and implementing plans for achieving short-
term objectives.
5. Examples:
 Supervising the production line to meet daily output targets.
 Ensuring that customer service representatives respond to inquiries within a
specified time frame.
 Managing inventory levels to prevent shortages or overstocking.
The strategic control and operational control serve different but complementary roles in an
organization's management. While strategic control focuses on the long-term alignment of the
organization with its strategic objectives, operational control concentrates on the efficient and
effective execution of daily activities to achieve short-term goals. Both types of control are
essential for the success of an organization, and they should work together to ensure that the
organization remains on the right strategic path while effectively managing its day-to-day
operations.

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301strategic management.pdf

  • 1. Solutions SPPU Pervious Year Question papers STRATEGIC MANAGEMENT By Dr. Rakesh Bhati M.B.A. - II 301 - GC - 11 : STRATEGIC MANAGEMENT (2019 Pattern) (Semester - III) (MAY-JUNE 2023) Q1) Answer any five from the following. [10] a) Define KPI. Ans: KPI stands for Key Performance Indicator. It is a measurable and quantifiable metric that is used to evaluate the success or performance of an organization, a specific project, a department, or an individual. KPIs are crucial in business and other settings because they provide a clear and objective way to assess progress toward specific goals and objectives. KPIs can vary widely depending on the goals and objectives of the entity being measured. They are typically chosen based on the organization's priorities and what aspects of performance are most critical to its success. Some common examples of KPIs include metrics related to sales growth, customer satisfaction, revenue, profitability, employee productivity, and more. The selection of KPIs should align with an organization's strategic objectives and provide meaningful insights into its performance. b) Define critical success factors. Ans: Critical Success Factors (CSFs) are specific elements or variables that are essential for an organization, project, or initiative to achieve its objectives and be successful. These factors represent the key areas or activities that have a significant impact on the overall success of a business or project. Identifying and focusing on CSFs is important for strategic planning and decision-making, as they help prioritize resources and efforts where they matter most. CSFs can vary from one organization or project to another, depending on their unique goals and circumstances. They are typically determined through a careful analysis of the business environment and the specific objectives at hand. c) Define organisation capability. Ans: Organizational capability, often referred to as organizational capability or capacity, refers to the collective ability and capacity of an organization to achieve its goals and objectives. It encompasses the skills, knowledge, resources, processes, and competencies that an organization possesses or can develop to effectively execute its strategies and fulfill its mission. Organizational capability is crucial for achieving sustained success and competitiveness. It is often assessed and developed as part of strategic planning to ensure that the organization has the necessary resources and competencies to meet its objectives and adapt to changing circumstances. It also plays a significant role in an organization's ability to respond to challenges, seize opportunities, and remain resilient in a dynamic business environment. d) Define red ocean.
  • 2. Solutions SPPU Pervious Year Question papers STRATEGIC MANAGEMENT By Dr. Rakesh Bhati Ans: "Red Ocean" is a term commonly used in business strategy to describe a market environment characterized by intense competition among existing firms. In a red ocean, numerous companies are vying for the same customers and market share, often leading to price wars, shrinking profit margins, and a saturated marketplace where differentiation between competitors is minimal. The term "red ocean" is derived from the idea that the fierce competition turns the metaphorical business waters red, symbolizing the bloodshed or conflict among competitors. In a red ocean, companies typically compete within well-defined industry boundaries, and the emphasis is often on cost-cutting and incremental improvements to gain a competitive advantage. To break away from the limitations of a red ocean and explore new opportunities, businesses often turn to "Blue Ocean Strategy." This strategy involves identifying and creating new, untapped market spaces, where competition is limited or nonexistent, and offering unique value propositions to customers. By doing so, companies can escape the intense rivalry and competition of red oceans and potentially find more profitable and sustainable growth in blue oceans. e) Define a merger. Ans: A merger is a corporate strategy in which two or more companies combine to form a single, new entity or integrate their operations, assets, and ownership structures. Mergers are typically undertaken for various reasons, including: Expansion, Synergy, Diversification, Market Power, and Strategic Objectives. There are different types of mergers, including Horizontal Merger , Vertical Merger, Conglomerate Merger, Market Extension Merger and Product Extension Merger f) Define value curve. Ans: A value curve, in the context of business and marketing strategy, is a graphical representation or chart that illustrates the perceived value that a product or service delivers to customers compared to the competition. It is a tool used in strategic analysis to help businesses understand and map how their offerings differ from those of competitors and where they can create a unique value proposition. The concept of a value curve is closely associated with the "Blue Ocean Strategy," where businesses aim to create new, uncontested market spaces by offering unique value propositions that diverge from the competition. By carefully analyzing and adjusting their value curves, companies can identify opportunities to create their own niche or market segment and move away from direct competition in a crowded "red ocean." g) What is a value chain. Ans: The value chain concept was introduced by Michael Porter in his book "Competitive Advantage" and is widely used as a framework for strategic analysis and planning in business. A value chain is a concept in business management and strategy that describes the full range of activities and processes that a company goes through to create, deliver, and ultimately provide value to its customers. The value chain is a systematic way of analyzing
  • 3. Solutions SPPU Pervious Year Question papers STRATEGIC MANAGEMENT By Dr. Rakesh Bhati an organization's operations, from the acquisition of raw materials and resources to the production, distribution, marketing, and sale of goods and services. It helps businesses understand how each activity contributes to the creation of value and how they can optimize these processes to improve overall performance and profitability. Analyzing the value chain helps companies identify opportunities to reduce costs, improve quality, enhance customer satisfaction, and gain a competitive advantage. By understanding how each activity contributes to value creation, businesses can make informed decisions about where to focus their resources and efforts to optimize their operations and increase profitability. h) What is an emergent strategy. Ans: An emergent strategy is a term used in the field of strategic management to describe a strategy that develops gradually over time in response to changing circumstances and unplanned events, rather than being deliberately planned in advance. It is a flexible and adaptive approach to strategy that acknowledges the uncertainty and complexity of the business environment. Emergent strategies often arise as a result of learning from experience, experimentation, and the organization's ability to adapt to unforeseen challenges and opportunities. Embracing an emergent strategy can be beneficial in situations where rigid, pre-determined plans may not be effective due to unpredictability and complexity. However, it also requires strong leadership, a culture of learning, and the ability to manage and balance the tensions between planned and emergent strategies. Q2) Answer any two of the following. [10] a) Explain the concept of strategic intent. Ans: Strategic intent is a concept in strategic management that emphasizes the importance of setting ambitious, long-term goals and objectives that go beyond current capabilities and resources. It was popularized by Gary Hamel and C.K. Prahalad in the 1980s. The central idea behind strategic intent is to inspire and motivate an organization to achieve extraordinary results and drive continuous innovation and improvement. Key components of the concept of strategic intent include: 1. Ambitious Vision: Strategic intent starts with a visionary and audacious long-term goal. This goal should be challenging and go beyond what the organization believes is currently achievable. It serves as a rallying point for the entire organization and paints a compelling picture of the future. 2. Stretch Goals: The objectives associated with strategic intent are often referred to as "stretch goals" because they push the organization beyond its comfort zone. These goals encourage innovation, creativity, and a mindset of continuous improvement to reach new heights. 3. Focused Efforts: Achieving strategic intent requires a laser focus on the goal and the allocation of resources, capabilities, and efforts towards its realization. It necessitates a commitment to pursuing the long-term objective relentlessly.
  • 4. Solutions SPPU Pervious Year Question papers STRATEGIC MANAGEMENT By Dr. Rakesh Bhati 4. Alignment: All aspects of the organization, from leadership to individual employees, should be aligned with the strategic intent. The intent should guide decision-making and influence the organization's culture, strategy, and day-to-day actions. 5. Adaptability: While the strategic intent provides a long-term direction, it must also allow for adaptability and learning along the way. As circumstances change, the organization may need to adjust its approach and tactics to achieve the overarching vision. 6. Inspiration: A well-crafted strategic intent can inspire and motivate employees by offering a compelling reason for their work and creating a sense of purpose. Strategic intent is often contrasted with traditional strategic planning, which tends to focus on short-to-medium-term goals that are more directly linked to current resources and capabilities. While both approaches have their merits, strategic intent encourages organizations to think big and strive for breakthrough innovations and exceptional performance. One of the classic examples of a company that applied the concept of strategic intent is Honda. Honda's strategic intent in the 1960s was to become the world's leading motorcycle manufacturer, and it set stretch goals to achieve this vision. Eventually, Honda expanded into the automotive industry and became one of the world's leading automakers. b) Explain the concept of strategy canvas. Ans: The strategy canvas is a strategic planning and visual tool that is used to analyze and compare an organization's strategy in relation to its competitors. Developed by W. Chan Kim and Renée Mauborgne, the strategy canvas is a graphical representation that helps businesses understand their current market position and identify opportunities for differentiation and innovation. Key elements and concepts associated with the strategy canvas include: 1. Value Curve: The strategy canvas typically consists of a graph that displays a company's value proposition in comparison to its competitors. It represents the key factors (or attributes) that are important to customers in a particular industry or market. 2. Attribute Levels: Each attribute on the strategy canvas is assigned a value or level, reflecting how the company and its competitors perform in that specific area. Attribute levels can range from low to high, with high levels indicating better performance. 3. Competitor Profiles: The strategy canvas often includes multiple lines or curves, each representing a different competitor in the industry. This allows for a side-by-side comparison of how the company's value proposition aligns with or differs from competitors. 4. Blue Ocean vs. Red Ocean: The strategy canvas is often used in conjunction with the "Blue Ocean Strategy" framework. A red ocean represents existing markets with high competition, while a blue ocean represents untapped market spaces with less competition. The goal is to move away from red oceans (direct competition) by creating blue oceans (differentiation and innovation). c) Explain strategy control. Ans: "Strategy control" is a concept often used in the context of strategic management and business planning. It refers to the various mechanisms and processes that an organization puts in place to monitor, adjust, and ensure the effective implementation of
  • 5. Solutions SPPU Pervious Year Question papers STRATEGIC MANAGEMENT By Dr. Rakesh Bhati its strategic plans. The primary goal of strategy control is to ensure that the organization is moving in the desired direction and that its strategic objectives are being met. It ensures that an organization's strategic plans are not just set and forgotten but continuously monitored, adjusted, and executed to achieve the desired goals. It helps organizations adapt to changing circumstances and make data-driven decisions to improve performance and maintain competitiveness. Here are some key aspects of strategy control: 1. Setting performance metrics: Organizations need to establish key performance indicators (KPIs) and other relevant metrics that align with their strategic goals. These metrics help in quantifying and measuring progress toward the strategic objectives. 2. Monitoring progress: Regular monitoring of performance against the established metrics is essential. This can involve collecting and analyzing data on various aspects of the organization's operations and comparing it to the predetermined targets. 3. Deviation identification: Strategy control involves identifying any significant deviations between the planned strategy and actual performance. When discrepancies are spotted, it's crucial to understand the reasons behind them and assess their impact on the strategic goals. 4. Taking corrective action: When deviations or issues are identified, organizations must take appropriate corrective actions. This might involve adjusting the strategy, revising the plan, allocating resources differently, or addressing specific operational challenges. 5. Feedback loops: Strategy control systems often incorporate feedback loops to ensure that information flows throughout the organization. This feedback helps in making timely and informed decisions. 6. Risk management: Part of strategy control involves assessing and managing risks that may affect the successful implementation of the strategic plan. This can include risk mitigation strategies and contingency planning. 7. Adaptability: In today's dynamic business environment, strategies may need to be adjusted or adapted more frequently. Strategy control allows organizations to be flexible and responsive to changes in the external environment or shifts in internal conditions. 8. Reporting and communication: Effective strategy control relies on clear reporting and communication mechanisms to ensure that relevant information is shared with all stakeholders within the organization. This can include regular progress reports, meetings, and other forms of communication. 9. Technology and tools: Many organizations use various software and technology tools to help with strategy control. These tools can aid in data collection, analysis, and reporting, making the process more efficient and accurate. Q3) a) What is BCG matrix? Explain how BCG matrix can be used to classify firm businesses. [10] Ans: The BCG Matrix, also known as the Boston Consulting Group Matrix, is a strategic management tool used to analyze and categorize a company's portfolio of business units or products based on their market growth rate and relative market share. It was developed by the Boston Consulting Group in the early 1970s. The BCG Matrix is designed to help companies make strategic decisions about resource allocation and investment in different parts of their business.
  • 6. Solutions SPPU Pervious Year Question papers STRATEGIC MANAGEMENT By Dr. Rakesh Bhati The horizontal axis of the BCG Matrix represents the amount of market share of a product and its strength in the particular market. By using relative market share, it helps measure a company’s competitiveness. The vertical axis of the BCG Matrix represents the growth rate of a product and its potential to grow in a particular market. In addition, there are four quadrants in the BCG Matrix:  Question marks: Products with high market growth but a low market share.  Stars: Products with high market growth and a high market share.  Dogs: Products with low market growth and a low market share.  Cash cows: Products with low market growth but a high market share. The assumption in the matrix is that an increase in relative market share will result in increased cash flow. A firm benefits from utilizing economies of scale and gains a cost advantage relative to competitors. The market growth rate varies from industry to industry but usually shows a cut-off point of 10% – growth rates higher than 10% are considered high, while growth rates lower than 10% are considered low. BCG Matrix to classify a firm's businesses: 1. Gather Data:  Collect data on the market share of each business unit or product in the firm's portfolio.  Determine the market growth rate for each business unit or product. This can be based on historical data or market research. 2. Plot the Business Units:  Create a matrix with two axes: the vertical axis represents the market growth rate, and the horizontal axis represents the relative market share.  Plot each business unit or product on the matrix based on its market share and market growth rate. 3. Categorize Business Units:  Once you've plotted the business units on the matrix, you can categorize them into one of the four quadrants:  Stars: High market share in a high-growth market.  Cash Cows: High market share in a low-growth market.  Question Marks: Low market share in a high-growth market.  Dogs: Low market share in a low-growth market. 4. Analyze and Prioritize:  Stars: These business units have high potential but also require substantial investment to maintain their market share. Consider investing in these to support their growth.  Cash Cows: These units are mature and profitable. They generate cash that can be used to support other business units or invest in new opportunities.  Question Marks: These units have potential but are uncertain. They require a strategic decision on whether to invest further or divest.  Dogs: These units have limited potential and may not be worth further investment. Consider divestiture or discontinuation unless there are strategic reasons to keep them. 5. Develop a Strategy:
  • 7. Solutions SPPU Pervious Year Question papers STRATEGIC MANAGEMENT By Dr. Rakesh Bhati  Develop a strategic plan for each category of business units. For example, for stars, focus on growth strategies and resource allocation. For cash cows, consider cost management and profit maximization. For question marks, evaluate whether to invest for growth or divest. For dogs, decide on exit or turnaround strategies. 6. Regular Review:  The BCG Matrix is not a one-time analysis. It should be reviewed regularly as market conditions and the relative position of business units can change over time. Adjust your strategies and resource allocation accordingly. 7. Consider External Factors:  While the BCG Matrix provides a framework for internal analysis, it should be used in conjunction with other strategic tools and consider external factors such as competitive dynamics, industry trends, and customer preferences. The BCG Matrix is a valuable tool for classifying and prioritizing a firm's businesses or products, but it should be used as part of a comprehensive strategic planning process. It helps firms allocate resources more effectively, optimize their portfolio, and make informed decisions about their strategic direction. OR b) What is GE 9-cell matrix? Explain how GE 9-cell matrix can be used for strategic decisions. [10] Ans: The GE 9-Cell Matrix, also known as the GE/McKinsey Matrix, is a strategic management tool used for evaluating and prioritizing a company's diverse business units or product lines. This matrix was developed in 1970s by the General Electric Company with the assistance of the consulting firm, McKinsey & Co, USA. This is also called GE multifactor portfolio matrix. The GE matrix has been developed to overcome the obvious limitations of BCG matrix. This matrix builds upon the concepts of the BCG Matrix (Boston Consulting Group Matrix) but offers a more nuanced and comprehensive analysis by considering multiple factors. The GE 9-Cell Matrix assesses business units or product lines based on two primary dimensions: 1. Industry Attractiveness: This dimension evaluates the overall attractiveness of the industry in which a business unit operates. Factors considered might include market growth rate, profitability, competition, technological changes, regulatory factors, and customer demand. 2. Competitive Strength (or Business Unit Strength): This dimension assesses the competitive strength or position of the business unit within its industry. Factors taken into account can include market share, product quality, brand recognition, innovation capabilities, distribution channels, and cost structure. These two dimensions are divided into three categories, each with three levels, creating a 3x3 grid. The nine resulting cells are used to categorize and prioritize the business units: High Industry Attractiveness (Vertical Axis):
  • 8. Solutions SPPU Pervious Year Question papers STRATEGIC MANAGEMENT By Dr. Rakesh Bhati  High Competitive Strength (Horizontal Axis): These business units are considered the most attractive and strongest, with excellent growth opportunities. They are positioned in the upper-right corner of the matrix. Companies should invest heavily in and pursue growth strategies for these units.  Medium Competitive Strength: These business units are moderately attractive but have only average competitive strength. Consider investing in and supporting these units as they have growth potential but may require additional resources.  Low Competitive Strength: These business units are in an attractive industry but have low competitive strength. Strategies should be devised to improve their competitive position, potentially through partnerships, innovation, or other means. Medium Industry Attractiveness (Vertical Axis):  High Competitive Strength: These business units have a strong competitive position but are in an industry with moderate growth prospects. These units may continue to generate profit but might require efficiency and cost management.  Medium Competitive Strength: Business units in this category are in industries with average attractiveness and have an average competitive position. They may require careful evaluation to determine their strategic path.  Low Competitive Strength: Business units in moderately attractive industries with low competitive strength may need significant improvements or consider divestiture. Low Industry Attractiveness (Vertical Axis):  High Competitive Strength: These business units have a strong competitive position but are in industries with limited growth prospects. Companies may choose to maintain and optimize these units for cash generation but should be cautious about investing heavily in them.  Medium Competitive Strength: Business units in unattractive industries with average competitive strength should be carefully reviewed, and strategic decisions should be based on their individual circumstances.  Low Competitive Strength: These units, in unattractive industries with low competitive strength, may be candidates for divestiture or exit strategies unless there are compelling reasons to keep them. The GE 9-Cell Matrix provides a more detailed and nuanced analysis of a company's portfolio than the BCG Matrix. It helps companies make informed decisions about resource allocation, strategic planning, and portfolio management based on the specific characteristics of each business unit and its industry. Q4) a) Explain McKinsey’s 7 - S framework and discuss it application in strategic management. [10] Ans: The McKinsey 7-S Framework is a management model developed by the consulting firm McKinsey & Company in the late 1970s. It is designed to help organizations analyze and improve their internal alignment and effectiveness by considering seven key elements that
  • 9. Solutions SPPU Pervious Year Question papers STRATEGIC MANAGEMENT By Dr. Rakesh Bhati all start with the letter "S." The framework is particularly useful for understanding the interconnectedness of various aspects of an organization and how they impact its performance. The seven "S" elements are as follows: 1. Strategy: This represents the organization's plan for achieving its goals and objectives. It includes the company's vision, mission, strategic goals, and the actions it plans to take to achieve them. 2. Structure: Structure refers to the organization's formal framework, including its hierarchy, reporting relationships, and the division of responsibilities and roles among its employees. It also encompasses the organization's design, departments, and how work flows within the company. 3. Systems: Systems involve the procedures, processes, and workflows that help the organization operate efficiently. This includes both formal systems (such as accounting, IT, and performance measurement) and informal systems (such as communication processes and decision-making methods). 4. Skills: Skills pertain to the capabilities and competencies of the organization's employees. This includes their individual skills and expertise, as well as their collective abilities to perform their roles effectively. Skills also relate to the training and development programs in place. 5. Staff: Staff refers to the organization's human resources, including its number of employees, their qualifications, experience, and cultural diversity. It also covers aspects like recruitment, retention, and employee morale. 6. Style: Style represents the leadership and management approach within the organization. It includes the leadership style of top management, communication patterns, and the prevailing organizational culture. The culture can be a critical factor in determining how the organization operates and how employees behave. 7. Shared Values: Shared values are the core beliefs and principles that guide the organization. They reflect the organization's culture and are the foundation for its decision-making and actions. These values shape the behavior and attitudes of employees. The key concept of the 7-S Framework is that all seven elements are interrelated and interdependent. Changes in one element can have a cascading effect on the others. Therefore, to ensure the effective functioning of an organization, these elements must be aligned and mutually reinforcing. When using the McKinsey 7-S Framework, organizations can assess their current state in each of these seven areas and determine whether there is alignment and consistency among them. If there are discrepancies or issues, the framework can guide organizations in making adjustments to improve their overall performance and effectiveness. It is a valuable tool for strategic planning, organizational change, and transformation efforts. McKinsey's 7-S Framework is a valuable tool in the field of strategic management, and its application can help organizations effectively develop and implement their strategies. Here's how the framework is applied in strategic management: 1. Diagnosis and Analysis:  Current State Assessment: The 7-S Framework is used to conduct a comprehensive analysis of the organization's current state. Each of the seven elements (strategy, structure, systems, skills, staff, style, shared values) is evaluated to understand how they are aligned or misaligned within the organization.
  • 10. Solutions SPPU Pervious Year Question papers STRATEGIC MANAGEMENT By Dr. Rakesh Bhati 2. Alignment and Consistency:  Alignment Assessment: The framework helps in assessing the alignment and consistency among the seven elements. An organization's strategy should be aligned with its structure, systems, skills, and other elements. Inconsistencies or gaps can be identified through this analysis. 3. Strategic Planning:  Formulation: During the strategic planning process, the 7-S Framework helps organizations ensure that the chosen strategy is consistent with the other elements. It prompts questions like, "Does our proposed strategy fit with our current structure and capabilities?" 4. Organizational Change:  Change Management: When organizations embark on strategic change initiatives, the 7-S Framework serves as a tool for managing change. It helps in understanding which elements need to be adjusted to support the new strategy and facilitates communication about the change. 5. Resource Allocation:  Resource Allocation: In strategic management, resource allocation decisions are critical. The 7-S Framework assists in determining where resources (such as budget, personnel, and technology) should be directed to support the strategy effectively. 6. Crisis Management:  Crisis Response: During crises, organizations can use the framework to quickly assess which elements need immediate attention to address the crisis while maintaining alignment with the overall strategy. 7. Mergers and Acquisitions:  Integration: When organizations go through mergers or acquisitions, the 7-S Framework helps in assessing how the two entities can be integrated successfully by aligning their structures, cultures, and other elements. 8. Culture and Leadership:  Cultural Change: Organizations can use the framework to address cultural change. By focusing on the shared values, leadership style, and staff skills, they can create a culture that supports the strategic direction. 9. Performance Measurement and Feedback:  Performance Metrics: The framework guides the selection of performance metrics. Organizations can choose indicators that are aligned with the specific elements of the framework relevant to their strategic goals. 10. Continuous Monitoring:  Regular Assessment: Strategic management is an ongoing process. Organizations can periodically reassess the alignment of the 7-S elements to ensure that they continue to support the evolving strategy. In summary, McKinsey's 7-S Framework is a versatile tool in strategic management that helps organizations assess their current state, make informed decisions about their strategic direction, and align their internal elements to achieve their strategic goals. It is particularly useful for understanding the complex interplay between various aspects of an organization and ensuring that they work together cohesively to drive success. OR
  • 11. Solutions SPPU Pervious Year Question papers STRATEGIC MANAGEMENT By Dr. Rakesh Bhati b) What are grand strategies ? Discuss in detail various growth strategies with examples. [10] Ans: Grand strategies are high-level, overarching plans that guide an organization's long-term direction and goals. These strategies are typically designed to provide a broad framework for an organization's actions and decisions over an extended period, often spanning several years or even decades. Grand strategies are essential for organizations to achieve their mission, fulfill their vision, and realize their objectives. There are several common types of grand strategies, which include: 1. Growth Strategies: Market Penetration, Market Development, Product Development, Diversification 2. Stability Strategies: Maintaining the Status Quo 3. Retrenchment Strategies: Turnaround, Divestment 4. Combination Strategies: Focused Growth, Renewal 5. Competitive Strategies: Cost Leadership, Differentiation, Focus (Niche) Strategy 6. Cooperative Strategies: Strategic Alliances 7. International Strategies: Global Expansion 8. Innovation Strategies: Innovation and Technology Leadership 9. Sustainability Strategies: Sustainable and Environmental Initiatives Grand strategies are typically developed at the highest levels of an organization, such as by top executives or the board of directors. They provide a framework for the organization's overall direction and influence lower-level strategies and decision-making throughout the organization. The choice of a grand strategy depends on the organization's internal and external environment, its mission and values, and its goals for the long term. Growth strategies are approaches that organizations use to increase their market share, expand their customer base, and achieve higher revenues and profitability. Here are various growth strategies with examples: 1. Market Penetration:  Definition: Market penetration involves increasing market share in existing markets or with existing products. This strategy typically focuses on selling more of the same products or services to current customers.  Example: A fast-food chain offering limited-time promotions to encourage existing customers to visit more frequently or buy larger portions. McDonald's "Dollar Menu" is an example of a market penetration strategy. 2. Market Development:  Definition: Market development aims to enter new markets, regions, or customer segments with existing products or services. It expands the customer base by finding new opportunities.  Example: An e-commerce company like Amazon expanding from the United States to international markets, entering new countries to reach a global customer base. 3. Product Development:  Definition: Product development involves creating and introducing new products or services to existing markets or customer segments. It seeks to meet evolving customer needs and preferences.
  • 12. Solutions SPPU Pervious Year Question papers STRATEGIC MANAGEMENT By Dr. Rakesh Bhati  Example: Apple regularly introduces new versions of its iPhone, iPod, and Mac products, appealing to its existing customer base with enhanced features and innovations. 4. Diversification:  Definition: Diversification aims to enter new markets or industries, either related or unrelated to the current business. It spreads risk and can create new revenue streams.  Example: The Walt Disney Company, originally an animation studio, diversified into theme parks (related diversification) and later into media networks like ABC and ESPN (unrelated diversification). 5. Cost Leadership:  Definition: Cost leadership involves becoming the lowest-cost producer or provider in an industry. It allows an organization to offer products or services at lower prices and gain a competitive advantage.  Example: Walmart is known for its cost leadership strategy, offering everyday low prices in retail. This strategy has made it one of the largest and most successful retailers globally. 6. Differentiation:  Definition: Differentiation focuses on making products or services unique and distinct from those of competitors. This can involve innovation, quality, design, or other unique features.  Example: Apple's strategy of product differentiation is evident in its emphasis on design, user experience, and proprietary technology, setting its products apart from competitors. 7. Focus (Niche) Strategy:  Definition: Focus strategy concentrates on serving a specific market segment or niche, allowing for specialized and customized offerings.  Example: Tesla initially focused on the niche market for electric vehicles. It has since expanded but remains known for its focus on sustainable transportation and technology. 8. Mergers and Acquisitions:  Definition: Mergers and acquisitions involve acquiring or merging with other companies to achieve growth, expand market reach, or access complementary resources.  Example: Facebook's acquisition of Instagram and WhatsApp to strengthen its social media ecosystem and reach a broader user base. 9. Strategic Alliances:  Definition: Strategic alliances involve partnerships with other organizations to achieve common goals, share resources, or enter new markets.  Example: The partnership between Starbucks and Barnes & Noble to open Starbucks coffee shops in Barnes & Noble bookstores is an example of a strategic alliance. 10. Global Expansion:  Definition: Global expansion strategies aim to enter international markets, either by exporting products, establishing subsidiaries, or forming joint ventures abroad.  Example: McDonald's global expansion strategy has made it one of the most recognized fast-food chains worldwide, with restaurants in over 100 countries.
  • 13. Solutions SPPU Pervious Year Question papers STRATEGIC MANAGEMENT By Dr. Rakesh Bhati 11. Innovation and Technology Leadership:  Definition: Innovation strategies focus on being at the forefront of innovation and technology in the industry, giving the organization a competitive edge.  Example: Google's emphasis on innovation, particularly in search algorithms and online advertising, has positioned it as a leader in the technology and internet industry. 12. Sustainability and Environmental Initiatives:  Definition: Sustainability strategies aim to align operations with environmental and social responsibility goals, catering to consumers' increasing demand for sustainable products and practices.  Example: The sustainable sourcing and environmental initiatives of companies like Patagonia, which promotes ethical and environmentally friendly products. Organizations often combine multiple growth strategies to achieve their long-term objectives. The choice of strategy depends on the organization's internal strengths and weaknesses, the external market conditions, and its overall mission and vision. Effective implementation and continuous adaptation are essential for successful growth strategy execution. Q5) a) What is balanced score card ? Discuss how it can be used as a tool for strategy evaluation [10] The Balanced Scorecard (BSC) is a strategic performance management framework and measurement system that allows organizations to translate their vision and strategy into a set of performance indicators. Developed by Robert Kaplan and David Norton in the early 1990s, the Balanced Scorecard is a comprehensive tool that provides a balanced view of an organization's performance by considering multiple perspectives beyond just financial metrics. It helps organizations monitor, measure, and manage their strategic objectives and key performance indicators (KPIs). The Balanced Scorecard is a versatile tool for strategy evaluation because it provides a structured and balanced approach to assessing an organization's performance and progress toward its strategic objectives. It promotes clarity, alignment, adaptability, and a focus on both financial and non-financial aspects of performance. By regularly monitoring KPIs, organizations can make informed decisions, identify areas for improvement, and increase the likelihood of successfully executing their strategies. The Balanced Scorecard typically consists of four key perspectives, each associated with specific performance measures: 1. Financial Perspective: This perspective focuses on financial performance and results. It includes traditional financial metrics such as revenue, profit margins, return on investment (ROI), and cash flow. The financial perspective helps assess whether the organization's strategy is leading to improved financial outcomes. 2. Customer Perspective: This perspective emphasizes the customer's viewpoint and aims to measure the organization's ability to satisfy customer needs and expectations. Key performance indicators may include customer satisfaction, market share, customer retention rates, and the number of new customers acquired. 3. Internal Process Perspective: This perspective evaluates the organization's internal processes and activities. It seeks to identify areas where the organization can improve its
  • 14. Solutions SPPU Pervious Year Question papers STRATEGIC MANAGEMENT By Dr. Rakesh Bhati efficiency, quality, and innovation. Key measures might include cycle time, defect rates, process improvements, and product development time. 4. Learning and Growth Perspective (or Organizational Capacity): This perspective focuses on the organization's ability to learn, adapt, and grow. It includes measures related to employee training, skills development, innovation, and organizational culture. It is essential for enabling the organization to adapt to changes and innovate over time. In addition to these four perspectives, the Balanced Scorecard framework typically incorporates the following elements:  Strategic Objectives: For each perspective, organizations define strategic objectives that are aligned with their overall mission and vision. These objectives serve as the foundation for the selection of key performance indicators.  Key Performance Indicators (KPIs): KPIs are specific, quantifiable measures that are used to assess progress toward achieving strategic objectives. These are tracked and reported regularly to provide insight into performance.  Targets and Initiatives: Organizations set specific targets or goals for each KPI, providing a clear benchmark for success. They also develop initiatives or action plans to address any performance gaps.  Cascading Scorecards: In larger organizations, the Balanced Scorecard may be cascaded from the corporate level to various business units or departments, ensuring alignment with the overall strategy. The Balanced Scorecard is a valuable tool for strategic management because it provides a holistic and balanced view of an organization's performance, going beyond just financial results. It helps organizations align their actions with their strategic objectives, communicate the strategy throughout the organization, and make informed decisions to drive continuous improvement. It is widely used in various industries and sectors to facilitate strategic planning, performance measurement, and strategy execution. The Balanced Scorecard can be used as a tool for strategy evaluation: 1. Translation of Strategy into Objectives:  The Balanced Scorecard begins by translating the organization's strategic objectives into specific, measurable, and actionable goals in four key perspectives: financial, customer, internal processes, and learning and growth (or organizational capacity). This ensures that the strategy is clearly defined and understood at all levels of the organization. 2. Development of Key Performance Indicators (KPIs):  For each strategic objective, KPIs are identified. These are the specific metrics that will be used to measure progress. KPIs are carefully chosen to reflect the critical success factors of the organization's strategy. 3. Setting Targets and Benchmarks:  Targets and benchmarks are established for each KPI, representing the desired level of performance. These targets help assess whether the organization is making progress toward its strategic goals. 4. Alignment Across Perspectives:  The Balanced Scorecard ensures that KPIs are balanced across the four perspectives. This alignment helps organizations avoid a situation where success in one area (e.g., financial performance) comes at the expense of other critical aspects of the business (e.g., customer satisfaction or employee development).
  • 15. Solutions SPPU Pervious Year Question papers STRATEGIC MANAGEMENT By Dr. Rakesh Bhati 5. Regular Monitoring and Reporting:  Organizations continuously monitor and report on the performance of the KPIs. The frequency of reporting may vary, but it is typically regular (e.g., monthly or quarterly) to provide real-time feedback on progress. 6. Performance Evaluation and Analysis:  Regular performance evaluation allows organizations to analyze the results, assess whether they are on track to achieve their strategic objectives, and identify areas of improvement or concern. It provides a balanced view that includes financial and non-financial perspectives. 7. Strategic Learning and Adaptation:  The Balanced Scorecard promotes a culture of learning and adaptation. If KPIs show that the organization is not meeting its targets or that certain strategic initiatives are not delivering the desired results, it triggers a review of the strategy and the consideration of necessary adjustments. 8. Communication and Alignment:  The Balanced Scorecard serves as a powerful communication tool, ensuring that everyone in the organization understands the strategy and their role in its execution. It aligns individual and departmental goals with the overarching strategic objectives. 9. Cascading Scorecards:  In larger organizations, the Balanced Scorecard can be cascaded from the corporate level to business units, departments, and teams, ensuring alignment at every level of the organization. 10. Integration with Resource Allocation:  Organizations can use the Balanced Scorecard as a basis for resource allocation decisions, directing investments, time, and efforts to the areas that are most critical for achieving strategic success. OR b) Discuss strategic and operational control? Ans: Strategic control and operational control are two important components of an organization's management control system. They serve distinct purposes and focus on different aspects of an organization's activities. Here's an overview of both: Strategic Control: 1. Definition: Strategic control is the process of monitoring and assessing an organization's overall strategic direction and performance to ensure that it aligns with its long-term goals and objectives. 2. Focus: It focuses on the high-level, long-term aspects of the organization's strategy. It is concerned with ensuring that the organization is moving in the right strategic direction and making necessary adjustments to stay on course. 3. Time Horizon: Strategic control has a long time horizon, typically spanning several years or more. It is concerned with the organization's strategic planning and execution over an extended period. 4. Key Elements:
  • 16. Solutions SPPU Pervious Year Question papers STRATEGIC MANAGEMENT By Dr. Rakesh Bhati  Setting Objectives: Defining long-term strategic objectives and goals.  Performance Measurement: Using key performance indicators (KPIs) to assess progress toward strategic objectives.  Environmental Analysis: Monitoring the external environment for changes that may impact the organization's strategy.  Reviewing and Adapting: Reviewing the strategy and making adjustments as needed to remain aligned with the organization's mission and vision. 5. Examples:  Reviewing the progress of a multi-year strategic plan.  Assessing the impact of changing market conditions on long-term strategic objectives.  Evaluating the performance of a diversified portfolio of business units. Operational Control: 1. Definition: Operational control is the process of managing and monitoring the day-to- day activities and processes within an organization to ensure that they are efficient, effective, and aligned with the organization's short-term goals and objectives. 2. Focus: It concentrates on the operational and tactical aspects of the organization's activities. It is concerned with optimizing processes, meeting short-term targets, and ensuring daily operations run smoothly. 3. Time Horizon: Operational control has a short to medium time horizon, often focusing on current or near-term activities and tasks. 4. Key Elements:  Task and Process Management: Overseeing and managing specific tasks, activities, and processes.  Quality Control: Ensuring that products and services meet quality standards.  Resource Allocation: Managing resources like personnel, materials, and budgets for efficient day-to-day operations.  Short-term Planning: Developing and implementing plans for achieving short- term objectives. 5. Examples:  Supervising the production line to meet daily output targets.  Ensuring that customer service representatives respond to inquiries within a specified time frame.  Managing inventory levels to prevent shortages or overstocking. The strategic control and operational control serve different but complementary roles in an organization's management. While strategic control focuses on the long-term alignment of the organization with its strategic objectives, operational control concentrates on the efficient and effective execution of daily activities to achieve short-term goals. Both types of control are essential for the success of an organization, and they should work together to ensure that the organization remains on the right strategic path while effectively managing its day-to-day operations.