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ENTERPRISE INFORMATION SYSTEMS &STRATEGIC MANAGEMENT TEST SERIES – 4SOLUTIONSTime Allowed : 3 hrs.Max. Marks : 100Date : 30.04.2019SECTION – AQuestion No. 1 and 2 is compulsory.Candidates are also required to answer any TWO questions from the remaining THREE questions.Q.1.Multiple choice questions:(15 Marks)(a)Methods for justification of a BPA approval may not include-(i)New revenue generation opportunities(ii)Provide integrated response to multiple risks(iii)Charging for instant access to records(iv)Savings in employee salary by not having to replace those due to attrition(b)______ is part of overall software which actually interacts with the user and it is directly related with them, as it is very first part of software process.(i)Back end(ii)Front end(iii)First end(iv)Initial end(c)Which of the following is not a mobile operating system?(i)Tizen(ii)Windows(iii)Firefox OS(iv)Opera(d)Which of the following is not an example of internal controls in bank branch?(i)A system of job rotation among staff exists(ii)All books are to be balanced periodically(iii)Fraud prone items are in the custody of at least two officials of the branch(iv)None of the above(e)The underlying premise of ERM is that every entity whether for profit, not for profit or a government body exists to provide value for its _____(i)Customers(ii)Shareholders(iii)Employees(iv)Stakeholders(f)From the three layers of software, which layer receives the inputs from the users and performs certain validations?(i)Operating system layer(ii)Application layer(iii)Database layer(iv)System layer(g)Repudiation of contract means(i)The electronic transaction maybe denied(ii)The data transmitted are not lost or duplicated(iii)The buyer is unknown(iv)Service is denied due to non-availability of system(h)Which of the following is not a type of deposit to a commercial bank?(i)Recurring deposit(ii)Grant of advances(iii)Fixed deposit(iv)All of the above(i)Which of the following is not a category of business processes?(i)Operational processes(ii)Supporting processes(iii)Management processes(iv)Functional processes(j)ERP is an enterprise-wide information system designed to _____ all the resources, information and activities needed to complete business process.(i)Co-operate(ii)Coordinate(iii)Reallocate(iv)Merge(k)An electronic library is a type of-(i)Information retrieval system(ii)NFC technology(iii)Traditional technology(iv)Operating systems(l)Which of the following is not a specialized service of a bank?(i)Life insurance(ii)Maintaining general ledger(iii)Underwriting(iv)Non-life insurance(m)ERM consists of ___ inter related components(i)Six(ii)Eight(iii)Five(iv)Four(n)What can be a major aspect for success of any organization that can also be proved as major problem if not achieved?(i)Communicate with other business units(ii)Maintaining relations with other business(iii)Regular transactions(iv)Customer satisfaction(o)Which of the following is not a benefit of E-business to an individual?(i)Convenience(ii)Provides a dynamic market(iii)Easy to find reviews(iv)Anytime accessQ.2.Answer the following in brief.(2 marks each)(a)(i) Production Planning (PP) Module : PP Module is another important module that includes software designed specifically for production planning and management. This module also consists of master data, system configuration and transactions in order to accomplish plan procedure for production. PP module collaborate with master data, sales and operations planning, distribution resource planning, material requirements planning, product cost planning and so on while working towards production management in enterprises.(ii)Type of information in an MIS report: There can be as many types of MIS reports as there are divisions within a business. For example, information about sales revenue and business expenses would be useful in MIS reports for finance and accounting managers. Warehouse managers would benefit from MIS reports about product inventory and shipping information. Total sales from the past year could go into an MIS report for marketing and sales managers.(iii)XBRL Tagging:XBRL Tagging is the process by which any financial data is tagged with the most appropriate element in an accounting taxonomy (a dictionary of accounting terms) that best represents the data in addition to tags that facilitate identification/classification (such as enterprise, reporting period, reporting currency, unit of measurement etc.). Since all XBRL reports use the same taxonomy, numbers associated with the same element are comparable irrespective of how they are described by those releasing the financial prehensive definitions and accurate data tags allow preparation, validation, publication, exchange, consumption; and analysis of business information of all kinds. Information in reports prepared using the XBRL standard is interchangeable between different information systems in entirely different organizations. This allows for the exchange of business information across a reporting chain. People that want to report information, share information, publish performance information and allow straight through information processing all rely on XBRL.(iv)Christmas Card: It is a well-known example of Trojan and was detected on internal E-mail of IBM system. On typing the word ‘Christmas’, it will draw the Christmas tree as expected, but in addition, it will send copies of similar output to all other users connected to the network. Because of this message on other terminals, other users cannot save their half-finished work.(v)Cache Memory: There is a huge speed difference between Registers and Primary Memory. To bridge these speed differences, we have cache memory. Cache (pronounced as cash) is a smaller, faster memory, which stores copies of the data from the most frequently used main memory locations so that Processor/Registers can access it more rapidly than main memory. It is the property of locality of reference, which allows improving substantially the effective memory access time in a computer system.(b)Customer Relationship Management is a system which aims at improving the relationship with existing customers, finding new prospective customers, and winning back former customers. This system can be brought into effect with software which helps in collecting, organizing, and managing the customer information.CRM manages the enterprise’s relationship with its customers. This includes determining who the high-value customers are and documenting what interactions the customers have had with the enterprise. Only large ERP packages have a CRM module. The CRM module uses the existing ERP tables as the source of its data. This is primarily the Contact, Customer, and Sales tables. CRM does not exchange transactions with other modules as CRM does not have transactions. Implementing a CRM strategy is advantageous to both small-scale and large-scale business ventures. If you want to find out what are the benefits of using CRM for your business, then read further to know the key points.Key benefits of a CRM module are as under.?Improved customer relations: One of the prime benefits of using a CRM is obtaining better customer satisfaction. By using this strategy, all dealings involving servicing, marketing, and selling out products to the customers can be carried out in an organized and systematic way. Better services can be provided to customers through improved understanding of their issues and this in turn helps in increasing customer loyalty and decreasing customer agitation. In this way, continuous feedback from the customers regarding the products and services can be received. It is also possible that the customers may recommend the product to their acquaintances, when efficient and satisfactory services are provided.?Increase customer revenues: By using a CRM strategy for any business, the revenue of the company can be increased. Using the data collected, marketing campaigns can be popularized in a more effective way. With the help of CRM software, it can be ensured that the product promotions reach a different and brand new set of customers, and not the ones who had already purchased the product, and thus effectively increase the customer revenue.?Maximize up-selling and cross-selling: A CRM system allows up-selling which is the practice of giving customers premium products that fall in the same category of their purchase. The strategy also facilitates cross selling which is the practice of offering complementary products to customers, based on their previous purchases. This is done by interacting with the customers and getting an idea about their wants, needs, and patterns of purchase. The details thus obtained will be stored in a central database, which is accessible to all company executives. So, when an opportunity is spotted, the executives can promote their products to the customers, thus maximizing up-selling and cross selling.?Better internal communication: Following a CRM strategy helps in building up better communication within the company. The sharing of customer data between different departments will enable them to work as a team. This is better than functioning as an isolated entity, as it will help in increasing the company’s profitability and enabling better service to customers.?Optimize marketing: CRM enables to understand the customer needs andbehaviour, thereby allowing any enterprise to identify the correct time to market its product to the customers. CRM will also give an idea about the most profitablecustomer groups, and by using this information similar prospective groups, at the right time will be targeted. In this way, marketing resources can be optimized efficiently and time is not wasted on less profitable customer groups.Q.3.Discuss the following:(a)The Human Resources life cycle refers to human resources management and covers all the stages of an employee’s time within a specific enterprise and the role the human resources department plays at each stage. Typical stage of HR cycle includes the following:1.Recruiting and On-boarding: Recruiting is the process of hiring a new employee.The role of the human resources department in this stage is to assist in hiring. This might include placing the job ads, selecting candidates whose resumes look promising, conducting employment interviews and administering assessments such as personality profiles to choose the best applicant for the position. In a small business where the owner performs these duties personally, the HR person would assist in a support role. In some organizations, the recruiting stage is referred to as “hiring support.” On boarding is the process of getting the successful applicant set up in the system as a new employee.2.Orientation and Career Planning: Orientation is the process by which the employee becomes a member of the company’s work force through learning her new job duties, establishing relationships with co-workers and supervisors and developing a niche. Career planning is the stage at which the employee and her supervisors work out her long-term career goals with the company. The human resources department may make additional use of personality profile testing at this stage to help the employee determine her best career options with the company.3.Career Development: Career development opportunities are essential to keep an employee engaged with the company over time. After an employee, has established himself at the company and determined his long-term career objectives, the human resources department should try to help him meet his goals, if they’re realistic. This can include professional growth and training to prepare the employee for more responsible positions with the company. The company also assesses the employee’s work history and performance at this stage to determine whether he has been a successful hire.4.Termination or Transition: Some employees will leave a company through retirement after a long and successful career. Others will choose to move on to other opportunities or be laid off. Whatever the reason, all employees will eventually leave the company. The role of HR in this process is to manage the transition by ensuring that all policies and procedures are followed, carrying out an exit interview if that is company policy and removing the employee from the system. These stages can be handled internally or with the help of enterprises that provide services to manage the employee life cycle.(b)Master Data: As defined above, master data is relatively permanent data that is not expected to change again and again. It may change, but not again and again. In accounting systems, there may be following type of master data a.Accounting Master Data – This includes names of ledgers, groups, cost centers, accounting voucher types, etc. E.g. Capital Ledger is created once and not expected to change frequently. Similarly, all other ledgers like, sales, purchase, expenses and income ledgers are created once and not expected to change again and again. Opening balance carried forward from previous year to next year is also a part of master data and not expected to change.b.Inventory Master Data – This includes stock items, stock groups, godowns, inventory voucher types, etc. Stock item is something which bought andsold for business purpose, a trading goods. E.g. If a person is into the business of dealing in white goods, stock items shall be Television, Fridge, Air Conditioner, etc. For a person running a medicine shop, all types of medicines shall be stock items for him/her. c.Payroll Master Data – Payroll is another area connecting with Accounting Systems. Payroll is a system for calculation of salary and recoding of transactions relating to employees. Master data in case of payroll can be names of employees, group of employees, salary structure, pay heads, etc. These data are not expected to change frequently. E.g. Employee created in the system will remain as it is for a longer period of time, his/her salary structure may change but not frequently, pay heads associated with his/her salary structure will be relatively permanent. d.Statutory Master Data – This is a master data relating to statute/law. It may be different for different type of taxes. E.g. Goods and Service Tax (GST), Nature of Payments for Tax Deducted at Source (TDS), etc. This data also shall be relatively permanent. We don’t have any control on this data as statutory changes are made by Government and not by us. In case of change in tax rates, forms, categories, we need to update/change our master data.Q.4.Discuss the following:(a)The business and technological environment in which the entities operate are rapidly changing on account of the E-Commerce platforms on which most of them now operate. Therefore, it is imperative for the consideration of Cyber Security Risks in the audit procedures. Risk Assessment is always a very important part and parcel of the audit procedures. One of the most important aspects to be kept in mind during the risk assessment process is giving due consideration to the changing risks in the entity and its environment due to the ever-evolving technology landscape which can have a potential impact on the financial statements. There could be cyber security risks with Direct as well as Indirect impact. -A Direct Financial Impact could be if the Application at the Company’s Retailers which contains financial information has weak passwords at all OSI layers resulting in harming the integrity of data.-An Indirect Operational Impact could be if the sensitive customer information in the form of Bank Account Numbers Recipes of Patented products, etc. could be breached which would result in legal and regulatory actions on the Company on account of breach of confidential information.(b)Business Process Automation (BPA) is the technology-enabled automation of activities or services that accomplish a specific function and can be implemented for many different functions of company activities, including sales, management, operations, supply chain, human resources, information technology, etc. In other words, BPA is the tactic a business uses to automate processes to operate efficiently and effectively. It consists of integrating applications and using software applications throughout the organization. BPA is the tradition of analyzing, documenting, optimizing and then automating business processes.Objectives of BPA:The success of any business process automation shall only be achieved when BPA ensures the following:-Confidentiality: To ensure that data is only available to persons who have right to see the same;-Integrity: To ensure that no un-authorized amendments can be made in the data;-Availability: To ensure that data is available when asked for; and-Timeliness: To ensure that data is made available in at the right time. To ensure that all the above parameters are met, BPA needs to have appropriate internal controls put in place.Q.5.Answer the following in brief:(a)Data Analytics is the process of examining data sets to draw conclusions about the information they contain, increasingly with the aid of specialized systems and software. Data analytics technologies and techniques are widely used in commercial industries to enable organizations to make more-informed business decisions and by scientists and researchers to verify or disprove scientific models, theories and hypotheses.As a term, Data Analytics predominantly refers to an assortment of applications, from basic Business Intelligence (BI), reporting and Online Analytical Processing (OLAP) to various forms of advanced analytics. In that sense, it’s similar in nature to business analytics, another umbrella term for approaches to analyzing data -- with the difference that the latter is oriented to business uses, while data analytics has a broader focus. The expansive view of the term isn’t universal, though: In some cases, people use data analytics specifically to mean advanced analytics, treating BI as a separate category.Data Analytics initiatives can help businesses increase revenues, improve operationalefficiency, optimize marketing campaigns and customer service efforts, respond more quickly to emerging market trends and gain a competitive edge over rivals -- all with the ultimate goal of boosting business performance. Depending on the particular application, the data that’s analyzed can consist of either historical records or new information that has been processed for real-time analytics uses. In addition, it can come from a mix of internal systems and external data sources.Types of Data Analytics ApplicationsAt a high level, Data Analytics methodologies include Exploratory Data Analysis (EDA),which aims to find patterns and relationships in data, and Confirmatory Data Analysis (CDA), which applies statistical techniques to determine whether hypotheses about a data set are True or False. EDA is often compared to detective work, while CDA is akin to the work of a judge or jury during a court trial - a distinction first drawn by statistician John W. Tukey in his 1977 book Exploratory Data Analysis.Data Analytics can also be separated into quantitative data analysis and qualitative data analysis. The former involves analysis of numerical data with quantifiable variables that can be compared or measured statistically. The qualitative approach is more interpretive - it focuses on understanding the content of non-numerical data like text, images, audio and video, including common phrases, themes and points of view.At the application level, BI and reporting provides business executives and other corporate workers with actionable information about key performance indicators, business operations, customers and more. In the past, data queries and reports typically were created for end users by BI developers working in IT or for a centralized BI team; now, organizations increasingly use self-service BI tools that let execs, business analysts and operational workers run their own ad hoc queries and build reports themselves.More advanced types of data analytics include data mining, which involves sorting through large data sets to identify trends, patterns and relationships; predictive analytics, which seeks to predict customer behaviour, equipment failures and other future events; and machine learning, an artificial intelligence technique that uses automated algorithms to churn through data sets more quickly than data scientists can do via conventional analytical modelling. Big data analytics applies data mining, predictive analytics and machine learning tools to sets of big data that often contain unstructured and semi-structured data. Text mining provides a means of analyzing documents, emails and other text-based content.Data Analytics initiatives support a wide variety of business uses. For example, banks and credit card companies analyze withdrawal and spending patterns to prevent fraud and identity theft. E-commerce companies and marketing services providers do clickstream analysis to identify website visitors who are more likely to buy a product or service based on navigation and page-viewing patterns. Mobile network operators examine customer data to forecast churn so they can take steps to prevent defections to business rivals; to boost customer relationship management efforts, they and other companies also engage in CRM analytics to segment customers for marketing campaigns and equip call center workers with up-to-date information about callers.Healthcare organizations mine patient data to evaluate the effectiveness of treatments for cancer and other diseases.(b)Quality & Consistency?Ensures that every action is performed identically - resulting in high quality, reliable results and stakeholders will consistently experience the same level of service.Time Saving?Automation reduces the number of tasks employees would otherwise need to do manually. ?It frees up time to work on items that add genuine value to the business, allowing innovation and increasing employees’ levels of motivation.Visibility?Automated processes are controlled and consistently operate accurately within the defined timeline. It gives visibility of the process status to the organisation.Improved Operational Efficiency?Automation reduces the time it takes to achieve a task, the effort required to undertake it and the cost of completing it successfully. ?Automation not only ensures systems run smoothly and efficiently, but that errors are eliminated and that best practices are constantly ernance & Reliability?The consistency of automated processes means stakeholders can rely on business processes to operate and offer reliable processes to customers, maintaining a competitive advantage.Reduced Turnaround Times?Eliminate unnecessary tasks and realign process steps to optimise the flow of information throughout production, service, billing and collection. This adjustment of processes distills operational performance and reduces the turnaround times for both staff and external customers.Reduced Costs?Manual tasks, given that they are performed one-at-a-time and at a slower rate than an automated task, will cost more. Automation allows us to accomplish more by utilising fewer resources.SECTION – BQuestion No. 1 and 2 is compulsory.Candidates are also required to answer any TWO questions from the remaining THREE questions.Q.1.Multiple choice questions:(15 Marks)(a)Business policy emphasis is on the _____ aspect of strategic management(i)Implementation(ii)Rational Analytical(iii)Controlling(iv)Planning(b)Misdiagnosing the industry factors critical to long-term success _____(i)Lowers the internal risk(ii)Doesn’t affect anything(iii)Raises the risk(iv)None of the above(c)What is the essence of differentiation strategy?(i)Incorporating greater differentiated features into the product(ii)Lower buying costs(iii)Being unique in a way that it is valuable and appealing to wide range of buyers(iv)None of the above(d)The monitoring and measuring of results of elements of marketing mix, their evaluation and taking corrective action is termed as ____.(i)Strategic marketing(ii)Functional strategy(iii)Strategic control(iv)Expanding marketing mix(e)ITC sells a variety of products and the company has different divisional units for the products. Who is responsible for the sales and profits of each division?(i)CEO(ii)Managing Director(iii)Divisional Managers(iv)Line Managers(f)______ is an entrepreneurial activity whereas ______ is an administrative task(i)Strategy implementation, strategy formulation(ii)Forward linkage, backward linkage(iii)Strategy formulation, Strategy implementation(iv)Backward linkage, forward linkage(g)The principle of win-win situation can be achieved through-(i)Reactive strategic advantage(ii)Competitive advantage over competition(iii)Proactive advantage(iv)External environment management(h)Strategy of a firm, at a particular point of time, is result of a series of ____ taken over ______(i)Small decisions, extended period of time(ii)Small decisions, external environment(iii)Strategic decisions, competition of firms(iv)Both (ii) and (iii) above(i)What does industry suffers from when the competitors face high exit barriers?(i)Fixed exit cost(ii)Low exit cost(iii)Low profitability(iv)High profitability(j)The branded shops spend a lot in construction of their showrooms in order to make it eye-catching for their customers. Which ‘P’ of modern marketing mix is referred to?(i)Place(ii)Promotion(iii)Physical evidence(iv)Product(k)Why is a network structured organization termed as ‘non structure’?(i)Because it has no management hierarchy(ii)Because work load is not systematically distributed(iii)Because company has no physical existence(iv)Because, here in-house functions are eliminated(l)In order to adjust to a new environment, some internal changing of individuals thoughts are required. This process is called-(i)Identification(ii)Internalization(iii)Compliance(iv)None of the above(m)______ is range blueprint of an organisations desired image, direction and destination(i)Plans(ii)Strategy(iii)Budgets(iv)Methods(n)____ is necessary for a firm to compete in the market.(i)Competitive strategy(ii)Competitive advantage(iii)Core competence(iv)Globalisation(o)Which of the following is not a generic strategy?(i)Low cost strategy(ii)Differentiation strategy(iii)Market dominator strategy(iv)Niche market dominator strategyQ.2.Answer the following.(2 marks each)(a)(i)Focused differentiation : A focused differentiation strategy requires offering unique features that fulfill the demands of a narrow market. As with a focused low cost strategy, narrow markets are defined indifferent ways indifferent settings. Somefirmsusing a focused differentiation strategy concentrate their efforts on a particular sales channel, such as selling over the internet only. Others target particular demographic groups. Firms that compete based on uniqueness and target a narrow market are following a focused differentiations strategy. Forexample, Rolls-Royce sells limited number of high-end, custom-built cars.(ii)Person Marketing: People are also marketed. Person marketing consists of activities undertaken to create, maintain or change attitudes and behaviour towards particular person. For example, politicians, sports stars, film stars, etc. i.e., market themselves to get votes, or to promote their careers.(iii)Co-generic merger : In Co-generic merger two or more merging organizations are associated in some way or the other related to the production processes, business markets, or basic required technologies. Such merger include the extension of the product line or acquiring components that are required in the daily operations. It offers great opportunities to businesses to diversify around a common set of resources and strategic requirements. For example, an organization in the white goods category such as refrigerators can diversify by merging with another organization having business in kitchen appliances.(iv)Strategic vision : A Strategic vision is a road map of a company’s future – providing specifics about technology and customer focus, the geographic and product markets to be pursued, the capabilities it plans to develop, and the kind of company that management is trying to create.The three elements of a strategic vision are:ing up with a mission statement that defines what business the company is presently in and conveys the essence of “Who we are and where we are now?”2.Using the mission statement as basis for deciding on a long-term course makingchoices about “Where we are going?”municating the strategic vision in clear, exciting terms that would arouse organization wide commitment(v)Best cost provider : The new model of best cost provider strategy is a further development to fabovethreegeneric strategies. It is directed towards giving customers more value for the money by emphasizing both low cost and up scale differences. The objective is to keep costs and prices lower than those of other sellers of comparable products. Best-cost provider strategy involves providing customers more value for the money by emphasizing low cost and better quality difference. It can be done:(a)Through offering products at lower price than what is being offered by rivals for products with compare able quality and features or(b)Charging similar price as by the rivals for products with much higher quality and better features.(b)Marketing mix forms an important part of overall competitive marketing strategy. The marketing mix is the set of controllable marketing variables that the firm blends to produce the response it wants in the target market. The marketing mix consists of everything that the firm can do to influence the demand for its product. These variables are often referred to as the “4 Ps.” The 4 Ps stand for product, price, place and promotion. An effective marketing program blends all of the marketing mix elements into a coordinated program designed to achieve the company’s marketing objectives by delivering value to consumers. The 4 Ps are from a marketer’s angle. When translated to the perspective of customers, they may be termed as 4 Cs. Product may be referred as customer solution, price as customer cost, place as convenience and promotion as communication.(i)Product stands for the combination of “goods-and-service” that the companyoffers to the target market. Strategies are needed for managing existing productover time adding new ones and dropping failed products. Strategic decisions must also be made regarding branding, packaging and other product features such as warranties. Products and markets are infinitely dynamic. An organization has to capturesuch dynamics through a set of policies and strategies. Some products have consistent customer demand over long period of time while others have short life spans. There are products that have wide range of quality and workmanship and these also change over time. There are industrial or consumer products, essentials or luxury products, durables or perishables. Products can be differentiated on the basis of size, shape, colour, packaging, brand names, after-sales service and so on. Organizations seek to hammer into customers’ minds that their products are different from others. It does not matter whether the differentiation is real or imaginary. Quite often the differentiation is psychological rather than physical. It is enough if customers are persuaded to believe that the marketer’s product is different from others. Organizations formalize product differentiation through designating ‘brand names’ to their respective products. These are generally reinforced with legal sanction and protection. Brands enable customers to identify the product and the organization behind it. The products’ and even firms’ image is built around brands through advertising and other promotional strategies. Customers tend to develop strong brand loyalty for a particular product over a period of time.(ii)Price stands for the amount of money customers have to pay to obtain the product. Necessary strategies pertain to the location of the customers, price flexibility, related items within a product line and terms of sale. The price of aproduct is its composite expression of its value and utility to the customer, its demand, quality, reliability, safety, the competition it faces, the desired profit and so on. In an industry there would be organizations with low cost products and other organizations with high costs. The low cost organizations may adopt aggressive pricing strategy as they enjoy more freedom of action in respect of their prices. They may also afford selective decrease in price to push their sales. Theoretically, organizations may also adopt cost plus pricing wherein a margin is added to the cost of the product to determine its price. However, in the competitive environment such an approach may not be feasible. More and more companies of today have to accept the market price with minor deviations while fixing the prices of their products. They reduce their cost in order to maintain their profitability. For a new product pricing strategies for entering a market need to be designed. In pricing a really new product at least three objectives must be kept in mind. -Making the product acceptable to the customers.-Producing a reasonable margin over cost.-Catering to a market that helps in developing market share.For a new product, an organization may either choose to skim or penetrate themarket. In skimming pricing policy, prices are set at a very high level. The product is directed to those buyers who are relatively price insensitive but sensitive to the novelty of the new product. For example, call rates of mobile telephony were set very high initially. Since the initial off take of the product is low, high price, in a way, helps in rationing of supply in favour of those who can afford it. In penetration firm keeps a temptingly low price for a new product which itself is selling point. A very large number of the potential consumer may be able to afford and willing to try the product. The pricing kept by Reliance Jio is penetration.(iii)Place stands for company activities that make the product available to target consumers. One of the most basic marketing decision is choosing the most appropriate marketing channel. Strategies should be taken for the management of channel(s) by which ownership of product is transferred from producers to customers and in many cases, the system(s) by which goods are moved from where they are produced from they are purchased by the final customers. Strategies applicable to the intermediaries such as wholesalers and retailers must be designed. The distribution policies of a company are important determinants of the functions of marketing. The decision to utilize a particular marketing channel or channels sets the pattern of operations of sales force. We will learn more about place when we study logistics later in this chapter.(iv)Promotion stands for activities that communicate the merits of the product and persuade target consumers to buy it. Strategies are needed to combine individual methods such as advertising, personal selling, and sales promotion into a coordinated campaign. In addition promotional strategies must be adjusted as a product move from an earlier stage from a later stage of its lifeQ.3.Answer the following(a)Core competencies are capabilities that serve as a source of competitive advantage for a firm over its rivals. C.K. Prahalad and Gary Hamel have advocated a concept of core competency, which is a widely-used concept in management theories. They defined core competency as the collective learning in the organization, especially coordinating diverse production skills and integrating multiple streams of technologies. An organization’s combination of technological and managerial know-how, wisdom and experience are a complex set of capabilities and resources that can lead to a competitive advantage compared to a competitor. Competency is defined as a combination of skills and techniques rather than individual skill or separate technique. For core competencies, it is characteristic to have a combination of skills and techniques, which makes the whole organization utilize theseseveral separate individual capabilities. Therefore, core competencies cannot be built on one capability or single technological know-how, instead, it has to be the integration of many resources. The optimal way to define core competence is to consider it as sum of 5- 15 areas of developed expertise. According to C.K. Prahalad and Gary Hamel, major core competencies are identified in three areas - competitor differentiation, customer value, and application to other petitor differentiation is one of the main three conditions. The company can consider having a core competence if the competence is unique and it is difficult for competitors to imitate. This can provide a company an edge compared to competitors. It allows the company to provide better products or services to market with no fear that competitors can copy it. The company has to keep on improving these skills in order to sustain its competitive position. Competence does not necessarily have to exist within one company in order to define as core competence. Although all companies operating in the same market would have the equal skills and resources, if one company can perform this significantly better; the company has obtained a core competence. The second condition to be met is customer value. When purchasing a product or service it has to deliver a fundamental benefit for the end customer in order to be a core competence. It will include all the skills needed to provide fundamental benefits. The service or the product has to have real impact on the customer as the reason to choose to purchase them. If customer has chosen the company without this impact, then competence is not a core competence and it will not affect the company’s market position. The last condition refers to application of competencies to other markets. Core competence must be applicable to the whole organization; it cannot be only one particular skill or specified area of expertise. Therefore, although some special capability would be essential or crucial for the success of business activity, it will not be considered as core competence, if it is not fundamental from the whole organization’s point of view. Thus, a core competence is a unique set of skills and expertise, which will be used through out the organisation to open up potential markets to be exploited.(b)Kurt Lewin’s Model of Change: To make the change lasting, Kurt Lewin proposed three phases of the change process for moving the organization from the present to the future. These stages are unfreezing, changing and refreezing.(i)Unfreezing the situation: The process of unfreezing simply makes the individualsaware of the necessity for change and prepares them for such a change. Lewin proposes that the changes should not come as a surprise to the members of the organization. Sudden and unannounced change would be socially destructive and morale lowering. The management must pave the way for the change by first “unfreezing the situation”, so that members would be willing and ready to accept the change. Unfreezing is the process of breaking down the old attitudes and behaviours, customs and traditions so that they start with a clean slate. This can be achieved by making announcements, holding meetings and promoting the new ideas throughout the organization(ii)Changing to the new situation: Once the unfreezing process has been completed and the members of the organization recognise the need for change and have been fully prepared to accept such change, their behaviour patterns need tobe redefined. H.C. Kellman has proposed three methods for reassigning newpatterns of behaviour. These are compliance, identification and internalisation. Compliance: It is achieved by strictly enforcing the reward and punishment strategy for good or bad behaviour. Fear of punishment, actual punishment or actual reward seems to change behaviour for the better.Identification: Identification occurs when members are psychologically impressed upon to identify themselves with some given role models whose behaviour they would like to adopt and try to become like them.Internalization: Internalization involves some internal changing of the individual’s thought processes in order to adjust to the changes introduced. They have given freedom to learn and adopt new behaviour in order to succeed in the new set of circumstances.(iii)Refreezing: Refreezing occurs when the new behaviour becomes a normal way of life. The new behaviour must replace the former behaviour completely for successful and permanent change to take place. In order for the new behaviourto become permanent, it must be continuously reinforced so that this new acquired behaviour does not diminish or extinguish.Change process is not a one time application but a continuous process due to dynamism and ever changing environment. The process of unfreezing, changing and refreezing is a cyclical one and remains continuously in action.Q.4.Discuss the following:(a)Although inextricably linked, strategy implementation is fundamentally different from strategy formulation in the following ways:Strategy Formulation Strategy Implementation-Strategy formulation focuses on effectiveness.-Strategy implementation focuses on efficiency.-Strategy formulation is primarily an intellectual process.-Strategy implementation is primarily an operational process.-Strategy formulation requires conceptual intuitive and analytical skills.-Strategy implementation requires motivation and leadership skills.-Strategy formulation requires coordination among the executives atthe top level. -Strategy implementation requires coordination among the executives at the middle and lower levels.(b)Forward and backward integration form part of vertically integrated diversification. In vertically integrated diversification, firms opt to engage in businesses that are vertically related to the existing business of the firm. The firm remains vertically within the same process. While diversifying, firms opt to engage in businesses that are linked forward or backward in the chain and enters specific product/process steps with the intention of making them into new businesses for the firm. Backward integration is a step towards creation of effective supply by entering business of input providers. Strategy employed to expand profits and gain greater control over production of a product whereby a company will purchase or build a business that will increase its own supply capability or lower its cost of production. On the other hand, forward integration is moving forward in the value chain and entering business lines that use existing products. Forward integration will also take place where organisations enter into businesses of distribution channels.Q.5.Answer the following in brief:(a)Characteristics of Stability Strategy-A firm opting for stability strategy stays with the same business, same product-market posture and functions, maintaining same level of effort as at present.-The endeavour is to enhance functional efficiencies in an incremental way, through better deployment and utilization of resources. The assessment of thefirm is that the desired income and profits would be forthcoming through such incremental improvements in functional efficiencies.-Stability strategy does not involve a redefinition of the business of the corporation.-It is basically a safety-oriented, status quo oriented strategy. -It does not warrant much of fresh investments. -It involves minor improvements in the product and its packaging.-The risk is also less.-With the stability strategy, the firm has the benefit of concentrating its resources and attention on the existing businesses/products and markets.-The growth objective of firms employing this strategy is quite modest. Conversely, only firms with modest growth objective choose for this strategy.(b)Competitive landscape is a business analysis which identifies competitors, either direct or indirect. Competitive landscape is about identifying and understanding the competitors and at the same time, it permits the comprehension of their vision, mission, core values, niche market, strengths and weaknesses. Understanding of competitive landscape requires an application of “competitive intelligence”. An in-depth investigation and analysis of a firm’s competition allows it to assess the competitor’s strengths and weaknesses in the marketplace and helps it to choose and implement effective strategies that will improve its competitive advantage. Steps to understand the Competitive Landscapei.Identify the competitor: The first step to understand the competitive landscapeis to identify the competitors in the firm’s industry and have actual data abouttheir respective market share.This answers the question: Who are the competitors?ii.Understand the competitors: Once the competitors have been identified, the strategist can use market research report, internet, newspapers, social media, industry reports, and various other sources to understand the products and services offered by them in different markets.This answers the question: - What are their product and services?iii.Determine the strengths of the competitors: What are the strength of the competitors? What do they do well? Do they offer great products? Do they utilize marketing in a way that comparatively reaches out to more consumers. Why do customers give them their business?This answers the questions: -What are their financial positions?-What gives them cost and price advantage?-What are they likely to do next?-How strong is their distribution network?-What are their human resource strengths?iv.Determine the weaknesses of the competitors: Weaknesses (and strengths) can be identified by going through consumer reports and reviews appearing in various media. After all, consumers are often willing to give their opinions, especially when the products or services are either great or very poor.This answers the question-Where are they lacking?v.Put all of the information together: At this stage, the strategist should put together all information about competitors and draw inference about what they are not offering and what the firm can do to fill in the gaps. The strategist can also know the areas which need to be strengthen by the firm. This answers the questions: -What will the business do with this information?-What improvements does the firm need to make?-How can the firm exploit the weaknesses of competitors?All THE BEST! ................
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