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Q 2 Explain the concept of SBU in a Multi Business Organization. Identify the

Three levels of Strategy-Corporate, Business and Functional. How do Goals and
Objectives vary at each Level?

The concept is that a strategic business unit is a significant organization segment

that is analyzed to develop organizational strategy aimed at generating future
business or revenue. Corporate Strategy level is fundamentally concerned with
the selection of businesses in which the company should compete and with the
development and coordination of that portfolio of business. The primary items
for this level are the following : reach, competitive contact, managing activities
and business interrelationships and management practices. Business level on
the other hand is a strategic business unit that may be a division, product line or
profit center that can be planned independently from other business units of
the organization. In this level, the strategic issues are less about coordination of
operating units and more about developing and sustaining competitive
advantage for the goods and services they produced. The third is Functional
level, where it is the operating divisions and departments. The strategic issues
at the functional level are related to business processes and value chain. It
involves the development and coordination of resources through which
business unit level strategies can be executed effectively. Functional units of an
organization are involved in higher level strategies by providing input into the
business unit level and corporate level strategy such as providing information
on resources and capabilities on which the higher level can be based. Goals and
objectives are often interchanged at each level. Basically it is more geared
towards what the organization would want to be in future and the means by
which to get there. The means are needed to be quantifiable to gather accurate
interpretation.

Q3. What should be the key Traits of a CEO? What are the forces that design the Strategic Management
Systems?
It is said that no two persons are alike this is also true with regards to their
personality and how they run their corporations/organizations. However below
are some of the traits a CEO should possess to effectively run his/her
organization.

1. Conveys strong sense of vision.

2. Links compensation to performance.

3. Communicates frequently with employees

4. Emphasizes ethics

5. Plans for management succession

6. Communicates frequently with customers

7. Reassigns or Terminates

8. Rewards loyalty

9. Makes sound decisions

Forces that design Strategic Management systems are as follows:

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

Management styles -- how the top management conducts its business and style
of doing its business affects the design towards strategic management. Policy
making is part of the management style that most large and small scale
organizations use in part of designing their strategic management system.
Complexity of Environment -- is the organization in a stable environment? Are
there any competitions to the company's success? Is there a market for the type
of service offered? some of these questions shape how systems are develop for
the organization as strategy will be determined by the answers of the said
questions.

Complexity of Production process -- entails how effective is the process itself.

Takes into consideration the following factors:

Production lead time

Capital intensive

Labor intensive

Manufacturing Process

Technology

market reaction time

Nature of problems -- determining nature of problems help in design of the

system as they can come up with counter measures to solve the situations.

Q 4 Discuss the various grand strategies at the Corporate Level i.e. Stability,
Growth and Retrenchment.

The various Grand Strategies are : these are master or lon-term plans.

1. Stability Strategy
2. Growth Strategy

3. Retrenchment Strategy

4. Combination Strategy

1. Stability Strategy: When a firm attempts to maintain its status-quo with its
existing level of efforts and is satisfied with incremental growth. It will try to
focus on existing business and try to gain competitive advantage by investing in
research and development continue to focus on the return on its investment.

2. Growth Strategy: Organizations may adopt this strategy to achieve an

increased level of objectives when compared to the past. This can be adopted
to:

- Increase Profit, Sales or Market Share

- To reduce cost of production per unit

- To increase in performance objectives

Growth can be in 3 directions:

1.Horizontal Growth - Firm make look for new customers or pursue a new
product

2. Vertical Growth - Increase the growth along the supply chain

3. Diversification - company may start a totally new business or acquire a new

firm, megers & acquisitions or even strategic alliances

3. Retrenchment Strategy: It is taken in a condition when a firm is facing a very

declining growth and facing poor performance, decides to improve by shedding
off some of its busniess or closing down its operatons. This may be due to
organization not able to meet the strategic objectives. It can be followed as
below:

- Cost reductions

- Reduction of functional units or closing down some

- reduce the products

- liquidation of business

Case study

Q1

The Company foresees continued growth and expansion in the coming

few years globally driven by its operations in India and hopes to realign
Indias strengths and world-class market capabilities to deliver services
to its customers. Conduct the SWOT Analysis of Haier s foray in to
Indian market in light of facts given in the narration .
Answer:

SWOT analysis of Haier's foray into Indian Market:

1.Strength

Convenient geographic location

Established distribution channel

Understanding of Indian Market

Diversification

Huge Cash flow

Innovative
Strong mission and vision

2. Weaknesses

Not yet well known in India unlike its competitiors

Chinese brand image

Rural markets not very aware of such brands as they go with trusted ones

Lack of customer trust due to chinese company and after sales service

Korean and Japanese are considered superior compared to chinese

3. Opportunities

Reasearch and development

Consolidation of other distributions channels

Aggressive marketing and brand management

4. Threats

Deiscrimination - the company is identified as a chinese company, low cost low

quality image and lesser market share

Other chinese and korean products are also in competition

Many top higher priced brands are also entering the same segment with
different pricing and product offerings

1 Which approach to the study of leadership emphasizes the role of situational factors and
how these moderate the relationship between leader traits or leadership behaviors and
leadership effectiveness?B Contingency approach
2 Porter has designed a framework to help understand why certain countries achieve global
competitive advantage in certain industries. It also helps internationalizing firms to make
location decisions. The framework is called: B Porter's Five Forces
3 It is generally agreed that the role of strategy is to: D Achieve competitive
advantage
4 Kay (1993) sees the strategy of an organization as matching internal capabilities with: A ts
external relationships
5 An organization's external environment consists of the general or macro environment
and: B The competitive environment
6 The term 'corporate strategy' concerns strategy and strategic decisions D At all levels
in an organization.
7 A key characteristic of strategic decisions is: D They are likely to be concerned
with, or affect, the long-term direction of an organization
8 It is possible to identify different levels of strategy in an organization, these are: D
Corporate; strategic business unit; operational.
9 An organisation's mission can be defined as: A The overriding purpose in line
with the values or expectations of stakeholders.
10 Strategic choices require an understanding of: D The underlying bases for
future strategy at business unit and corporate levels; the options for
developing strategy in terms of directions and methods of development.
11 In Porter's Five Forces, the 'threat of new entrants' relates to: D Barriers to entry
12 Brandenburg and Nalebuff added a sixth force to Porter's Five Forces. It is known as: B
Complementors
13 Barriers to entry into an industry are likely to be high if: D Requirement for
economies of scale is high
14 Buyer power is high if: C Differentiation is low
15 Competitive rivalry will be high if: A There are a few strong players in the
industry
16 A strategic group can be defined as: D A group of firms in an industry
following the same or a similar strategy
17 The key activities in the strategic management process are: D Analysis,
formulation, implementation
18 Strategy analysis is also referred to as: C Situation analysis
19 Strategy formulation takes place at two levels. These are: D Corporate and business
20 The Policies of an organization derive from its: C ObjectiveS
21 The statement of an organization's aspirations can be found in the organization's: D
Vision
22 A substitute product or service is: D An alternative way of meeting the same
need
23 Cross-functional teams are: D A small group of people from different
departments who are mutually accountable to a common set of
performance goals
24 The business unit strategy has three major components: D mission, business unit
goals, and competencies
25 Disney is in the business of: D Creating entertainment, fun and fantasy.
26 A useful framework used to assess a company's investments/divisions is called: D
business portfolio analysis
27 Cash cows are SBU's that typically generate: D large amounts of cash
28 Business unit competencies should be distinctive enough to provide D competitive
advantage
29 TQM is a strategy that is designed to change the quality of a product to satisfy customer
needs by using the concept of D benchmarking
30 Firms may view growth opportunities in these terms: D Current and new markets,
and current and new products
31 The strategic marketing process is how an organization allocates its marketing mix
resources to reach its: A target markets
32 An effective short-hand summary of the situation analysis is a: A SWOT analysis
33 In the strategic marketing process, once you get results you go into the: A control
phase
34 Ansoff had four market-product strategies to expand sales. They included market
penetration, (2) product development, (3) market development and:
A diversification
35 Aggregating prospective buyers into groups is called: A market segmentation
36 One key to effective implementation is setting: D goals
37 When actual performance results are better than what the plan called for, managers
should: A Find creative ways to exploit the situation.
 38 Value for shareholders of a firm is measured by: A stock performance and
profitability
39 The _____ for PepsiCo is "We believe our commercial success depends upon offering
quality and value to our consumers and customers; providing products that are safe,
wholesome, economically efficient and environmentally sound; and providing a fair return
to our investors while adhering to the highest standards of quality." A mission
40 A firm can acknowledge the critical importance of its _____, by having explicit goals that
state its intention to improve work conditions by adding more lighting and providing the
workers with more and better safety equipment. A employee welfare

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Email: amitymbaassignment@gmail.com
Call: 9971223030