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INDEX
INTRODUCTION TO STRATEGIC MANAGEMENT ............................................................................... 4

STRATEGIC ANALYSIS: EXTERNAL ENVIRONMENT .......................................................................... 9

STRATEGIC ANALYSIS: INTERNAL ENVIRONMENT ......................................................................... 16

STRATEGIC CHOICES........................................................................................................................... 28

STRATEGIC IMPLEMENTATION AND EVALUATION ......................................................................... 41

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INTRODUCTION TO STRATEGIC MANAGEMENT

1. Define Strategic Management and Discuss Its Limitations

Question Essence: Explains what strategic management is (vision, objectives, strategy) and why it
can’t guarantee success.

Answer Gist: Strategic management is the managerial process of developing a vision, setting
objectives, crafting a strategy, implementing, and evaluating it. Its limitations: (i)
Complex/turbulent environment with uncertain future shaping. (ii) Time-consuming, possibly
affecting daily operations. (iii) Costly in terms of expert planners and thorough analyses. (iv)
Unpredictable competition, making rival moves hard to anticipate.

2. “Strategy Is Partly Proactive and Partly Reactive.” Do You Agree?

Question Essence: Shows how strategies blend planned (proactive) actions with adjustments
(reactive) to changing conditions.

Answer Gist: Proactive strategy involves planned initiatives and foresight; reactive strategy adapts
to unexpected market shifts or competitor actions. Realistically, most firms employ both. Proactive
often gives first-mover advantage; however, reactive capability remains vital to respond to surprises.

3. Role of Corporate-Level Managers in Strategic Management

Question Essence: Highlights what top executives (CEO, board) do in guiding the entire
organization.

Answer Gist: At the corporate level, they define mission and goals, decide which businesses to
enter/exit, allocate resources, formulate and implement overarching strategies, and lead the
organization. Their decisions have company-wide impact involving large resource commitments.

4. Mission Statement: Definition and Characteristics

Question Essence: Seeks a brief explanation of “Mission,” points to consider while writing it and its
need or significance.

Answer Gist: A mission statement clarifies the firm’s current scope “who we are and what we do.”
It explains why the firm exists and often answers “What business are we in?” Major elements include
addressing company’s products/services, target market, core competencies/technology, and how it
plans to achieve its goals—thereby providing clear direction for all stakeholders. Significance: A
mission statement clarifies firm’s current objectives and serves multiple needs(significance):
ensuring unanimity of purpose, guiding resource allocation, setting an organizational climate, and
facilitating the setting of goals. This helps every stakeholder understand the firm’s direction and
priorities.

5. Benefits of Strategic Management

Question Essence: Why adopting a strategic approach helps an organization remain competitive in
changing environments.

Answer Gist: It sets direction (mission/goals), allows a proactive stance (rather than reactive),
provides a decision framework (for products/markets/investments), helps identify and seize
opportunities, avoids costly mistakes, enhances longevity through adaptability, and develops
competitive advantage via core competencies.

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6. Characteristics of Objectives to Be Meaningful

Question Essence: Explains how to structure objectives so they effectively guide performance.

Answer Gist: Objectives should define the firm’s relation to its environment, support its mission,
and guide strategic decisions. They must be concrete, specific, measurable, time-bound, challenging
yet realistic, mutually consistent, and set within resource/environmental constraints.

7. Drafting Vision and Mission Statements (Example: FMCG/Cosmetics/Pharma)

Question Essence: Illustrates how to formulate vision and mission statements focused on ecological
benefits or future leadership.

Answer Gist: Vision describes the firm’s future aspiration (e.g., “To be India’s leading beauty care
company” / “To be a global leader in pharmaceuticals”). Mission details what it does now, why it
exists, and how it meets societal needs (e.g., producing herbal/cost-effective products, improving
lives through quality and innovation).

8. Difference Between Three Levels of Strategy (Corporate, Business, Functional)

Question Essence: Compares strategy at corporate level (top), business level (division), and
functional level (department).

Answer Gist: Corporate: CEO/top executives decide overall vision, goals, markets to enter/exit, and
resource allocation. Business: Division heads formulate competitive strategies for each SBU.
Functional: Department managers (HR, marketing, etc.) handle strategy implementation in their
specific areas.

9. Decline in Sales Due to Online Competition (Ramesh Sharma Case)

Question Essence: Analyzes Ramesh Sharma’s declining sales situation—he uses strategic
management but faces a shift in consumer buying habits (toward online stores) which illustrates the
limitations of strategic management.

Answer Gist: Strategic management cannot guarantee success because the environment is highly
complex (online entrants change competition), predicting future trends is challenging, and the
process is both time-consuming and costly. Ramesh Sharma’s smaller operation also struggles to
anticipate or match the moves of large online players. Despite these constraints, continued strategic
efforts (like seeking expert advice or customizing offerings) remain essential to adapt to the new
retail landscape.

10. Difference Between Vision and Mission

Question Essence: Requires a concise distinction between a company’s Vision (future-focused)

and Mission (present-focused), detailing how each guides an organization’s direction and actions.

Answer Gist: Vision emphasizes “where” the firm aims to be long-term (broad, possibly unchanged
for decades), whereas Mission focuses on “how” the firm executes current activities to achieve that
future (more specific roadmap that may change occasionally). Vision galvanizes people toward a
defined objective, while Mission states ongoing steps aligned with organizational values.

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11. Key Areas for a Strategic Planner to Achieve Results

Question Essence: Lists common long-term objectives guiding strategic planning.

Answer Gist: Areas often include: Profitability (financial returns), Productivity (resource
efficiency), Competitive Position (market standing), Employee Development & Relations (human
resource focus), Technological Leadership (innovation), and Public Responsibility (CSR and
societal obligations).

12. Strategic Management: Definition and Benefits

Question Essence: Asks “What is strategic management?” and “What benefits accrue by following
a strategic approach?”

Answer Gist: Strategic management involves crafting a vision, scanning environments (internal &
external), formulating strategies, implementing them, and then evaluating for ongoing adjustment.
Benefits include guiding the firm’s direction and goals, enabling proactive rather than reactive
decisions, providing frameworks for major choices (products, markets, investments), spotting and
seizing new opportunities, avoiding costly pitfalls, enhancing competitive longevity, and building
unique advantages for survival and growth.

13. Yummy Foods vs. Tasty Foods: Proactive vs. Reactive Strategies

Question Essence: Two competing businesses (Yummy/Tasty or ALBELA/JustBE) showcase

contrasting strategic approaches—one adopts proactive moves (launching new offerings) while
the other reacts after seeing success. The question identifies which approach each takes, discusses
the nature of these strategies, and asks which is superior.

Answer Gist: Proactive firm continuously plans and introduces innovations first, gaining
advantages in customers’ minds (first-mover benefits). Reactive firm adapts only after changes
occur, losing early opportunities. A company’s real strategy blends both proactive (intended)
actions and adaptive (reactive) responses as the environment evolves. Proactive is generally
stronger if resources permit, because it helps firm shape market trends, but an adaptive element
is necessary for responding to unforeseen developments.

14. Functional Managers’ Involvement in Decision-Making (Dharam Singh Case)

Question Essence: Explains why functional-level managers (close to operations) should also
contribute to strategy formation, not just top-level managers.

Answer Gist: Functional managers provide ground-level insights crucial for realistic and effective
strategies. Excluding them risks flawed plans and poor execution. Their participation strengthens
implementation and organizational alignment.

15. Elements of Strategic Intent (Vision, Mission, Goals, Values)

Question Essence: Describes how strategic intent guides the organization via these core
components.

Answer Gist: Vision depicts future aspirations; Mission explains current scope and reason for
existence; Goals/Objectives translate vision/mission into measurable targets; Values are
underlying principles guiding all decisions and actions.

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16. “Objectives” and “Goals” Provide Meaning and Direction

Question Essence: Explains how “Objectives” and “Goals” provide direction and meaning to an
organization’s efforts.

Answer Gist: Objectives are the performance targets or results a business strives for, functioning
as a yardstick to measure progress. Though sometimes used synonymously with goals, objectives
are open-ended, while goals tend to be more close-ended. Both help translate the broader vision
and mission into actionable outcomes, guiding organizational success and providing a clear sense
of purpose and direction.

17. Mission Statement Focus: “Who We Are and What We Do”

Question Essence: Emphasizes the present scope of a firm’s business, distinct from future-
oriented vision.

Answer Gist: A mission defines the role played in society, answering “What business are we in?”
from a market/customer perspective. It clarifies the firm’s current capabilities, activities, and
focus.

18. “A Strategic Vision Is a Road Map of a Company’s Future.” Comment.

Question Essence: Explains the concept of “strategic vision” as a future-oriented road map for an
organization, illustrating how leaders should define and communicate their aspirations. The
question also invites drafting a sample vision statement for a known educational institution.

Answer Gist: A strategic vision looks ahead at the kind of enterprise the organization aims to
become. It outlines future direction, fosters enthusiasm, and prepares for emerging
challenges/opportunities. Key essentials include innovative thinking, rational entrepreneurship,
and creating internal excitement by clearly illuminating the path forward. Example: An
educational institution aspiring to be the top research hub.

19. Tech Innovators Inc.: Functional/Divisional vs. Horizontal vs. Matrix

Question Essence: A technology company, Tech Innovators Inc., wants to select an organizational
structure (Functional & Divisional, Horizontal, or Matrix) that best supports its goal of AI/ML
leadership.

Answer Gist: The Matrix approach is most suitable since it enables cross-functional collaboration
crucial for complex AI projects and encourages innovative teamwork. Although complex due to
dual reporting, the Matrix Relationship aligns varied expertise and resources dynamically, driving
cutting-edge AI development and achieving the firm’s strategic aims.

20. “A Company Should Focus on External Perspective to Define Its Mission.”

Question Essence: Clarifies why the mission must emphasize the company’s role in meeting
external/societal needs.

Answer Gist: Mission answers “What business are we in?” from a market-driven viewpoint,
highlighting how the firm meets societal or consumer needs. This external orientation ensures
relevance and clarifies organizational purpose beyond internal operations.

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21. Kamal Sweets Corner: Competitive Advantage by Launching “Dahi Samosa”

Question Essence: Kamal Sweets Corner faced heavy competition and lost 50% of sales. A
consultant suggested creating a new snack (Dahi Samosa) to regain business, illustrating an
important advantage of strategic management. The question asks which key importance was
leveraged, and whether the strategy was reactive or proactive—and which approach is generally
better.

Answer Gist: The crucial importance is developing a core competency/competitive

advantage—in this case, a novel product. Since the owners acted after sales had fallen, the
strategy was reactive rather than proactive. Generally, proactive strategies are more beneficial,
because they allow earlier adaptation, preventing large losses and giving more time to respond to
market changes.

22. “Management at All Levels Develops Strategies”: Corporate, Business, Functional

Question Essence: Explains that strategy is developed at multiple levels (corporate, business,
functional), each corresponding to different managerial tiers and scope.

Answer Gist: Corporate-Level Strategies are top-management decisions for the entire
organization (e.g., expansion, mergers, R&D investments), providing overall direction. Business-
Level Strategies are created by managers of individual business units (SBUs), translating
corporate intent into concrete plans to enhance profitability of each distinct unit. Functional-
Level Strategies are made by managers in specific areas (HR, marketing, etc.), focusing on actions
that implement higher-level strategies in day-to-day operations.

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STRATEGIC ANALYSIS: EXTERNAL ENVIRONMENT

1. Porter’s Five Forces in an Industry

Question Essence: Explains Porter’s Five Forces, which are key sources of competition in any
industry.

Answer Gist: • Five Forces: 1. Rivalry among Existing Competitors (market maneuvering, jockeying
for buyer patronage). 2. Threat of New Entrants (barriers to entry, new capacity in the market). 3.
Threat of Substitutes (alternative products meeting the same need). 4. Bargaining Power of
Suppliers (their ability to raise input costs or reduce quality). 5. Bargaining Power of Buyers (their
ability to demand lower prices or better service). • Strategic Steps: Identify pressures for each force,
evaluate their strength, and assess whether the collective force level allows for attractive profits.

2. Understanding the Competitive Landscape (Case: Suresh Singhania)

Question Essence: Outlines how to analyze and understand competitors (both direct and indirect)
thoroughly. Suresh owns an agri-based private company in Sangrur, Punjab, producing puree,
ketchup, and sauces. Sales have declined in the last couple of years. A management expert advises
him to “first understand the competitive landscape.”

Answer Gist: 1. Identify the Competitors and quantify their market share (Who are they? How big?).
2. Understand Their Products/Services (features, range, target markets). 3. Determine Competitors’
Strengths (financial, distribution network, cost/price advantage). 4. Determine Competitors’
Weaknesses (negative reviews, poor quality, limited brand recognition). 5. Synthesize and Draw
Inferences (look at gaps that Suresh’s firm can fill, areas to improve, strategies to stand out).

3. Product Life Cycle (PLC) and Its Significance

Question Essence: Defines the Product Life Cycle (PLC)—introduction, growth, maturity, decline—
and explains its significance in portfolio diagnosis.

Answer Gist: PLC describes how a product’s sales evolve over time: (i) Introduction: Low sales,
limited awareness, high promotion costs. (ii) Growth: Rapid acceptance, falling prices, growing
competition. (iii) Maturity: Sales peak, growth slows, price wars/promotions common. (iv) Decline:
Sales drop, product becomes less relevant. Significance: Helps diagnose each product’s life stage in
a firm’s portfolio, guiding strategic decisions (e.g., expansion for growing products, harvesting or
divestment for declining). It allows balanced portfolio management, alerts managers to product
health, and prompts timely corrective actions.

Alternate PLC Question (Case Variation)

Question Essence: A newly launched product initially had slow sales, limited market, high prices
(Introduction), then later rapid demand expansion, falling prices, and growing competition
(Growth).
Identify which PLC stages the product has gone through.

Answer Gist: • Introduction Stage → slow growth, limited markets, high initial pricing. • Growth
Stage → demand expands quickly, competition grows, prices often drop, higher profitability until
competition intensifies.

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4. Characteristics of a Global / International Company

Question Essence: Defines how a company is deemed “global” or “international.”

Answer Gist: 1. Multiple manufacturing units worldwide under common ownership. 2. Shared
resources (finance, patents, brand names) across units. 3. Common strategic responses in each
market; each unit works under an integrated strategy.

5. Key Success Factors (KSFs)

Question Essence: Explains that certain elements are critical to success in an industry and must be
mastered by all competitors.

Answer Gist: • KSFs can be product attributes, capabilities, resources, or strategic moves essential
for profitability and competitiveness. • Identify them by asking: 1. Why do customers prefer certain
brands? 2. What resources/capabilities are needed for success? 3. How to gain sustainable
advantage? • Companies must excel on these factors to outperform rivals.

6. Experience Curve – Concept and Relevance

Question Essence: How cumulative production experience leads to lower per-unit costs over time.

Answer Gist: 1. As a firm produces more, it “learns” and becomes more efficient, driving costs down.
2. Implication: Larger (more experienced) firms have a cost advantage, which creates a barrier
against smaller, newer entrants. 3. Strategic Angle: Gaining market share quickly can reinforce the
experience curve benefits, discouraging competition.

7. Value Chain Analysis

Question Essence: Explains Value Chain Analysis—a method to examine each activity in a firm’s
value-adding process—and briefly covers the five primary activities in the value chain.

Answer Gist: Value Chain Analysis identifies how each stage of input transformation to output (and
after-sales service) contributes to value creation or loss. Primary Activities are (i) Inbound Logistics
(receiving, storing, distributing inputs), (ii) Operations (transforming inputs to outputs), (iii)
Outbound Logistics (delivering products to end-users), (iv) Marketing & Sales (promoting/selling
offerings), and (v) Service (after-sales support). These rely on Support Activities—Infrastructure,
Tech Development, HR Management, and Procurement—to ensure overall efficiency and
competitiveness.

8. Barriers to Entry (Case: Rahul Sharma’s Truck Manufacturing)

Question Essence: Rahul Sharma is concerned about new entrants in the truck-manufacturing
market.
Asks about which barriers might protect existing firms.

Answer Gist: 1. Capital Requirements: High investment in plants/machinery. 2. Economies of Scale:

Established players produce at lower cost/unit. 3. Product Differentiation / Brand Equity:
Newcomers must overcome brand loyalty. 4. Switching Costs for customers can deter new entrants.
5. Potential Retaliation from existing firms. 6. Access to Distribution Channels can be limited.

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9. Porter’s Five Forces for a Vacuum Cleaner Company (Case: Rajiv Arya)

Question Essence: Rajiv Arya runs a vacuum cleaner firm. Four other similar-sized manufacturers
exist, each with comparable products, and many patents exist in this segment. The supplier base is
large. Which forces matter the most for this scenario?

Answer Gist: Significant Forces: 1. Rivalry Among Existing Competitors: High because all are of
similar size and product range. 2. Threat of New Entrants: Lower, thanks to patents and established
players. 3. Bargaining Power of Suppliers: Low due to a large supplier base. 4. Bargaining Power of
Customers and Threat of Substitutes: Could be moderate if substitutes (like maids or other cleaning
methods) are viable.

10. Eco-carry Bags Ltd. vs. Paper and Cloth Bags (Threat of Substitutes)

Question Essence: Eco-carry Bags produces recyclable plastic bags but faces competition from
paper/cloth bags, which consumers are embracing. Identifies that paper/cloth bags are
“substitutes” in Porter’s model.

Answer Gist: Threat of Substitutes: Paper/cloth bags serve the same function (carrying goods),
can erode demand for plastic bags, especially if viewed as more eco-friendly. Firms need to watch
how substitutes’ price/performance influences consumers.

11. Conditions for Cut-Throat Rivalry Among Competitors

Question Essence: Describes when competition is especially fierce, driving industry profitability
down.

Answer Gist: 1. No clear market leader. 2. Many competitors of similar size. 3. High fixed costs. 4.
High exit barriers (firms can’t easily leave). 5. Low product differentiation. 6. Slow market growth
(everyone fights for the same pie).

12. Buyer Power – “Buyers Can Exert Considerable Pressure”

Question Essence: Explains how or why buyers push for lower prices and better terms.

Answer Gist: Buyers have high power if: 1. They buy in large volumes (big accounts). 2. The
product is not critical, so switching is easy. 3. They know all competitive offers/substitutes. 4. They
are more concentrated than the suppliers.

13. PLC Stage of “Fresh Breath” Air Purifier (Case: ABC Ltd.)

Question Essence: Describes “Fresh Breath” air purifier (ABC Ltd.) experiencing a slowdown after
high growth, toughening competition, and potential price cuts/promotional campaigns—
indicating which PLC stage? Alternatively, asks to identify the PLC stages of a product that began
with slow sales, limited markets, high prices but then saw rising demand and growing competition.

Answer Gist: In the ABC Ltd. scenario, “Fresh Breath” is in the Maturity stage: sales growth is
minimal (~1%), competitors have entered, and strategies involve price cuts and promotions to
maintain market share. For the newly launched product’s scenario, the Introduction stage is
marked by slow sales, limited markets, and high pricing, followed by the Growth stage with
expanding demand, falling prices, and intensified competition.

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14. Registration Requirements Creating Barriers (Case: Easy Access)

Question Essence: Easy Access, a marketing services company, and its rivals persuaded the
government to institute a cumbersome registration process—deterring new market entrants.
Shows how firms can raise barriers to entry via lobbying for regulations.

Answer Gist: 1. This increases costs and complexity for newcomers. 2. Reduced new competition
→ existing firms benefit by maintaining or growing profits. 3. The threat of new entrants is
curtailed.

15. Key Characteristics of Business Products (Case: Reshuffle Corp Variation)

Question Essence: Reshuffle Corp, an office-furniture manufacturer, faces cheaper online

competition. The question addresses how to differentiate products and how product
characteristics matter.

Answer Gist: 1. Tangible vs. Intangible (furniture can be seen and touched, plus intangible service
aspects). 2. Pricing influenced by cost, market demand, competition. 3. Features (design,
durability, brand value) create satisfaction. 4. Product is central to strategic activities. 5. Finite
product life — must innovate or refresh offerings.

16. PESTLE Framework for a New Country (Case: ABC Corp)

Question Essence: ABC Corp, a multinational consumer electronics company, wants to expand
into a new country. They use PESTLE to evaluate external factors (macro-environmental
risks/opportunities) before market entry.

Answer Gist: 1. Political (stability, foreign investment rules). 2. Economic (GDP, inflation, exchange
rates). 3. Social (culture, demographics, consumer attitudes). 4. Technological (infrastructure, tech
adoption). 5. Legal (compliance, IP laws, labor regulations). 6. Environmental (sustainability
concerns, climate). • This comprehensive scan guides strategic and informed decisions.

17. Growth Phase of the Product Life Cycle

Question Essence: Summarizes the “Growth Stage” in the PLC.

Answer Gist: 1. Product gains market acceptance; sales/profits rise quickly. 2. Competition enters,
attracted by profits. 3. Marketing and promotion expand to build brand loyalty. 4. Price wars can
start if multiple competitors chase the same customers.

18. Bargaining Power of Suppliers (Case: Baby Turtle)

Question Essence: Identifies the Porter’s Five Force applicable (Bargaining Power of Suppliers)
for Baby Turtle, which sources a crucial core material from one renowned supplier. The question
also asks about main factors driving this pressure, and whether Baby Turtle has any advantage
against it.

Answer Gist: Supplier Power poses a significant threat due to a single, essential input with limited
substitutes. Factors increasing this pressure include high dependence on that material and few
alternatives. However, Baby Turtle can mitigate it somewhat because the same waterproof
material is used by many industries, implying multiple potential suppliers—even if switching in
the short term is complex.

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19. Supplier Power & Industry Profitability

Question Essence: Connects how strong suppliers can reduce an industry’s attractiveness by
raising input costs.

Answer Gist: • Fewer concentrated suppliers = More supplier power → Higher costs for buyers →
Lower profitability. • Many competing suppliers = Less supplier power → Lower input costs →
Higher profitability.

20. Issues in Strategic Analysis

Question Essence: Highlights important considerations while formulating strategies over time.

Answer Gist: 1. Strategy evolves gradually, influenced by many small decisions. 2. Balance external
& internal factors (environment vs. resources). 3. Risk is inevitable; identify potential imbalances.
External vs. Internal risks both require attention: External misalignment with environmental
forces can undermine strategy, while internal issues (organizational or routine operational
constraints) may derail execution.

21. Overcoming Entry Barriers for a Low-Cost Detergent (Startup Case)

Question Essence: A startup wants to launch a low-cost detergent in a market dominated by a

large FMCG. Suggests how the new entrant can manage or overcome the barriers.

Answer Gist: 1. Price Advantage: Keep production/marketing expenses lean to match or undercut
big FMCG prices. 2. Focus on a Single Product: Develop niche expertise. 3. Strong Finance: Prepare
for possible retaliation by the dominant firm. 4. Target Specific Segments: Convert them first; then
expand. 5. Leverage Government or Environmental Factors for advantage (small-business
incentives, lower taxes). 6. Build Brand Identity: Emphasize quality, local identity, or a unique
angle.

22. Reasons for Globalization / Internationalization

Question Essence: Why do firms go global or expand internationally?

Answer Gist: 1. Time & Distance Shrinking (faster communication/transport). 2. Need for Growth
(domestic market may be saturated). 3. Lower Costs Abroad (labor, materials). 4. Trade Barriers
Reduced (globalization efforts). 5. Strategic Alliances to tackle competition or new tech demands.

23. Exit Barriers – Pulkit’s Cloud Kitchen

Question Essence: Pulkit bought real estate in obscure locations for cloud kitchens. Then
government/court orders require well-ventilated spaces. His original investment is now
problematic. Shows how “exit barriers” can trap a business in a non-viable setup.

Answer Gist: 1. Pulkit’s real estate may be ill-suited after new regulations. 2. High exit barriers =
difficulty repurposing or selling the properties. 3. This can force staying in a less-profitable or
suboptimal situation.

24. Business Environment & Its Importance (Case: Yash’s Tech Startup)

Question Essence: Defines “business environment” and how close interaction with it fosters
strategic success.

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Answer Gist: 1. The environment includes all external factors (economic, tech, social, etc.). 2.
Determining opportunities/threats: e.g., helpful government policies. 3. Directing growth: by
leveraging location advantages. 4. Continuous learning & adaptation: managers update
knowledge. 5. Better image: showing responsiveness to local conditions. 6. Handling competition
more effectively.

25. Threat of Substitutes – Factors Affecting Strength

Question Essence: Substitutes can cap pricing and shift demand away from an industry’s primary
offerings.

Answer Gist: 1. Price-Performance trade-offs: If substitutes provide better value, customers

switch quickly. 2. Customer switching costs: Low = stronger threat. 3. Perceived product
differentiation: The more a product stands out, the less threat from a substitute.

26. Three Cases Under Porter’s Five Forces

Question Essence: Three mini-scenarios illustrating different forces (1) Supplier with a large
base of customers, (2) Sports goods manufacturer with economies of scale, (3) Nearly identical
competitor products.

Answer Gist: 1. Supplier with Large Customer Base → Bargaining Power of Suppliers (they can
negotiate strongly if they’re unique or in short supply). 2. Economies of Scale → Barrier to Entry
(large-scale production lowers costs, deters newcomers). 3. Similar Products by Competitors →
Threat of Substitutes or high Rivalry (customers may switch easily if there's little differentiation).

27. Marketing Strategy Using Consumer Behavior (Case: New Smartphone)

Question Essence: Shows how understanding external/internal factors of consumer behavior

shapes marketing.

Answer Gist: 1. External Influences: Use tech influencers, online communities, social media buzz.
2. Internal Motivations: Emphasize cutting-edge specs, design, and performance (tech lovers want
the “latest and greatest”). 3. Decision Making: Provide detailed comparisons, transparent specs for
rational evaluation. 4. Post-purchase Support: Great customer service fosters brand loyalty and
positive word-of-mouth.

28. Threat of New Entrants (Case: GreenThrift Inc.)

Question Essence: GreenThrift Inc. sells second-hand/upcycled clothing. New sustainable

fashion brands emerge, offering organic/recycled materials. Identifies which force is relevant
when new brands enter with similar values.

Answer Gist: 1. Threat of New Entrants: These new sustainable brands intensify competition,
potentially taking market share. 2. They limit how much GreenThrift can raise prices and may
spark a race to differentiate or cut costs. 3. In sustainability-focused segments, brand ethics and
eco-credentials matter heavily—new entrants with strong brand stories can quickly gain traction.

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STRATEGIC ANALYSIS: INTERNAL ENVIRONMENT

1. Short Note on SWOT Analysis

Question Essence: The question asks for a concise explanation of SWOT (Strengths, Weaknesses,
Opportunities, Threats) analysis—what it is, why it is performed, and why it should be done prior
to selecting a strategy.

Answer Gist: • Meaning of SWOT Analysis

o SWOT is a structured technique that identifies four critical elements influencing a business’s
objectives. o Strengths & Weaknesses are internal factors (capabilities, resources, constraints within
the firm). o Opportunities & Threats are external factors (favorable/unfavorable conditions in the
industry or macro-environment).

• Purpose & Significance: Logical Framework: SWOT guides a systematic examination of where the
company excels or lags and what external prospects or dangers exist. 2. Holistic View: It merges both
external (industry trends, competitor actions) and internal (key resources, competencies) factors. 3.
Strategy Formulation: By pinpointing how strengths can be used to exploit opportunities (and how
to address weaknesses or prepare for threats), managers can better generate and evaluate strategic
alternatives. 4. Clarity in Decision-making: Presents data in a simple matrix so strategic choices
become more transparent.

2. Michael Porter’s Generic Strategy – Focused Differentiation

(Luxury Jet, Moneyload Bank, Quick N Sturdy Inc., StarTech Solutions)

Question Essence: Each example highlights a firm that competes by targeting a narrow segment
(niche) and offering a unique product/service: • Luxury Jet operates small charter aircraft for
business houses and high-net-worth individuals. • Moneyload Bank focuses on high-worth
customers with premium, personalized banking services and charges significant annual fees. • Quick
N Sturdy Inc. wants to launch a new luxury/sports car for a specific customer group; the product is
unique, and the market niche is profitable yet too small for larger players. • StarTech Solutions serves
niche, high-end aerospace clients with specialized cutting-edge tech, refusing to diversify widely.

Answer Gist: • Focus Strategy (Narrow Target): These firms pursue a specific, limited customer
segment rather than the broader market. • Differentiation Aspect: They offer unique or special
features, be it luxury, convenience, exclusivity, or superior service, making the product/service stand
out strongly within that niche. 1. Advantages of Focused Differentiation: o Strong customer loyalty
because the firm deeply understands and caters to niche needs. o Ability to charge a premium (since
the offering is perceived as special). o Less likelihood of large competitors invading the niche (they
often focus on bigger segments). 2. Disadvantages of Focused Differentiation: o Narrow market size
can limit growth potential. o High operating costs if the offering is highly customized or requires
significant R&D. o Market shifts in niche preferences can quickly undercut profitability. o Potential
for competitive imitation if others see the niche becoming lucrative.

3. What Is Marketing? Distinguish Between Social Marketing and Service Marketing

Question Essence: The question defines “marketing” as satisfying customer needs profitably and
then asks to differentiate Social Marketing (promoting a social idea/cause) from Service Marketing
(marketing intangible offerings).

Answer Gist: • Marketing involves identifying customer needs, planning offerings, creating value,
and exchanging that value for consideration (money, loyalty, etc.). • Social Marketing: o Focuses on
influencing behaviors or acceptance of a social idea or cause (e.g., anti-smoking campaigns, blood

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donation drives). o Typically undertaken by governments, NGOs, or specific public-interest

organizations. o Success measured by the extent of behavioral change rather than direct profit. •
Service Marketing: o Deals with intangible, perishable, inseparable, and variable offerings (e.g.,
banking, insurance, hotels). o Customer satisfaction often hinges on service quality and the
experience provided (since you cannot “own” a service). o Emphasizes processes, people, and
physical evidence because intangibility complicates consumer evaluation.

4. Strategic Group Mapping (Mr. Banerjee’s Tool)

Question Essence: Mr. Banerjee heads marketing in a company that has 13–15 main rivals at the
national level. He wants to understand their market positions collectively by clustering them into
like groups rather than studying each individually.

Answer Gist: • Strategic Group Mapping: An approach to visually cluster industry competitors with
similar strategies or positions. • Steps: 1. Identify Competitive Differentiators: E.g., product/price
range, distribution channels, geographic coverage, degree of vertical integration, or service level. 2.
Plot Firms on a 2D axis using two key differentiators (like low-to-high price vs. narrow-to-broad
product line). 3. Group Firms that overlap in strategy space (forming strategic groups). 4. Draw
Circles around each group sized by the group’s share of total industry sales. • This visual helps see
who competes most directly and how crowded certain strategy spaces are.

5. Four Criteria of Sustainable Competitive Advantage

(Valuable, Rare, Costly to Imitate, Non-substitutable)

Question Essence: The question examines how firms identify which capabilities qualify as core
competencies. These capabilities must meet four criteria to sustain a competitive advantage.

Answer Gist: 1. Valuable: Helps exploit opportunities or neutralize threats. E.g., advanced R&D
capability that stays ahead of market trends. 2. Rare: Few rivals have it; it can’t be commonplace or
generic. E.g., a patented process or a highly specialized expertise. 3. Costly to Imitate: Difficult, time-
consuming, or expensive for competitors to replicate. E.g., brand reputation built over decades. 4.
Non-substitutable: No strategic equivalent/alternative resource/capability can serve the same
function. This ensures competitors cannot simply swap in another approach. A capability meeting
all four is truly a core competency that can yield lasting advantage.

6. Four Characteristics of Resources & capabilities (Sustainable of Competitive Advantage)-XYZ

Corp.

Question Essence: Mohan, the new CEO of XYZ Corp., wants to develop managerial competencies
to dominate the tech industry within five years. The question highlights how a firm’s resources and
capabilities must possess certain characteristics to maintain an edge over time and ensure
profitability.

Answer Gist: • Four Key Characteristics of resources/capabilities that impact sustainability and
profit appropriation: 1. Durability: How long the resource stays valuable before it wears out or
becomes obsolete. For instance, brand equity can last decades, but certain patents expire quickly. 2.
Transferability: If competitors can easily obtain similar resources (e.g., hiring away key talent),
advantage erodes faster. More difficult transfer = more sustained advantage. 3. Imitability: If the
resource is based on complex tacit knowledge or unique culture, rivals find it harder to copy. 4.
Appropriability: Ensures the firm (not just employees or partners) captures the value created. If star
employees leave with the knowledge or supply-chain partners demand a big share, the firm can lose

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out. Mohan should invest in non-easily transferable resources, hard-to-imitate capabilities, and
ensure corporate structures let XYZ capture the returns.

7. Michael Porter’s Generic Strategies (Cost Leadership, Differentiation, Focus)

Question Essence: The question asks how organizations can achieve a competitive advantage by
using one of three strategic bases suggested by Porter.

Answer Gist: • Cost Leadership: Aim for lowest per-unit cost to win price-sensitive buyers. Achieved
by large-scale operations, cost-saving tech, tight overhead control. • Differentiation: Offer unique
product/service attributes that buyers value so they’ll pay premium prices. Achieved by product
innovation, strong branding, advanced features, or top-tier customer service. • Focus: Concentrate
on a narrow market (a specific segment, region, or specialized product line) and apply either cost
leadership or differentiation in that niche. These strategies provide a baseline for outcompeting
rivals based on cost, uniqueness, or serving a targeted segment better than broader-scope
competitors.

8. ABC Ltd. (Beverages) – Differentiation Strategy

Question Essence: ABC Ltd. dominates soft drinks with 35% market share. It pioneered sugar-free
beverages, priced higher than regular, targeting health-conscious segments. The question identifies
which Porter strategy is being used and how it’s achieved.

Answer Gist: • ABC Ltd. is employing a differentiation strategy by: 1. Introducing a unique formula
(sugar-free) via heavy R&D investment. 2. Charging a premium because of the product’s novelty and
health benefits. 3. Gaining strong acceptance from a niche that values sugar-free drinks. • How to
Achieve Differentiation: o Offer genuine product utility (health advantage). o Align features with
consumer preferences. o Emphasize brand image of health and innovation. o Leverage R&D for
continuous improvement. • This yields premium margins and brand loyalty among health-focused
consumers, reducing direct competition from standard soft drinks.

9. Cost Leadership vs. Differentiation (Distinction)

Question Essence: The question requests a clear comparison of Cost Leadership and
Differentiation—both are broad competitive strategies but differ in approach to cost, uniqueness,
and customer price-sensitivity.

Answer Gist: • Cost Leadership: 1. Prioritizes efficiency, economies of scale, rigorous cost control.
2. Aims to attract price-sensitive consumers. 3. Often leads to lower selling prices than rivals to gain
market share. • Differentiation: 1. Focuses on unique attributes (design, brand, quality, features) that
consumers perceive as valuable. 2. Targets less price-sensitive consumers who pay extra for
uniqueness. 3. Allows for premium pricing and fosters brand loyalty.

10. Core Competencies: Competitor Differentiation, Customer Value, Application to Other

Markets

Question Essence: The question references C.K. Prahalad and Gary Hamel, stating that an
organization’s major core competencies must help it stand out vs. competitors, create meaningful
customer value, and be extendable to other markets or products.

Answer Gist: 1. Competitor Differentiation: A core competency is difficult for rivals to replicate or
match. Examples could be specialized R&D or an iconic brand identity. 2. Customer Value: The
competency must provide a tangible benefit that influences customers’ buying decisions (e.g.,

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better product performance, reliability, or brand prestige). 3. Applicability to Other Markets: It

shouldn’t be confined to a single product line. A truly powerful core competence (like advanced
materials science or strong distribution networks) can be leveraged across multiple product
categories or geographic markets.

11. Augmented Marketing

Question Essence: The question highlights how modern marketers go beyond the core product
by offering additional services or benefits—boosting customer satisfaction and differentiating
themselves.

Answer Gist: • Augmented Marketing: Adding “extra” elements around a product or service to
increase its perceived value. o Example offerings: Extended warranties, after-sales support, special
service packages, loyalty programs, or technology-based add-ons (movies on demand, online
repair). • This approach creates new layers of value that delight customers, strengthen brand
loyalty, and justify premium pricing.

12. Mota Shoes & Buffrine Tie-Up (Differentiation Strategy)

Question Essence: A century-old footwear company known for formal shoes tries to reinvent its
brand. It partners with a foreign giant (“Buffrine”) to offer a new line (“Hideseek”) featuring extra-
soft, premium casual footwear. It prices these at a premium to capture a younger audience’s
attention.

Answer Gist: • Differentiation Strategy: 1. Rebranding: Shifting from formal-only to

casual/premium products for younger demographics. 2. Tie-up with Buffrine: Gains advanced
design/technology, boosting perceived quality. 3. Premium Pricing: Reflects the product’s new
style, comfort, and brand synergy. • This approach helps Mota Shoes: o Build a new image and
capture a segment that values style. o Command higher margins due to uniqueness. o Differentiate
from generic/cheap footwear.

13. Steps to Construct a Strategic Group Map

Question Essence: Details how to visually compare firms in an industry by grouping them
according to similar competitive characteristics.

Answer Gist: 1. Choose Variables that distinguish competitive approaches (e.g., price range,
product-line breadth, distribution type). 2. Plot Competitors on a 2D grid using these variables. 3.
Group Firms that occupy similar positions (same or close coordinates). 4. Draw Circles around
each group proportionally to each group’s share of industry sales.

14. Cost Leadership Strategy (BudgetSmart Retailers)

Question Essence: BudgetSmart Retailers faces rising operational costs (rent, labor, inventory)
and fierce competition (discount stores, online platforms). To preserve profitability, they
streamline supply chain (bulk procurement) and optimize operations (store layouts, staff
training).

Answer Gist: • Pursuing Cost Leadership: 1. Bulk Purchasing → Lowers input costs. 2. Efficient
Layout → Reduces time and labor overhead. 3. Lean Operations → Minimizes waste, focuses on
cost containment. 4. Staff Training → Boosts productivity, better customer service at scale. • Effect:
BudgetSmart can offer competitive prices while still making profits, appealing to price-sensitive

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shoppers. • Risks: Rival imitation, shifts in consumer preference for premium experiences, or
disruptive tech changing retail norms.

15. Three Major Bases of Differentiation: Product, Pricing, Organization

Question Essence: Analyzes how firms can differentiate via product attributes, pricing models, or
organizational advantages.

Answer Gist: 1. Product-Based Differentiation: o Uniqueness from R&D, novel features, design, or
superior performance. o May be expensive (e.g., heavy product innovation or specialized features).
2. Price-Based Differentiation: o Either extremely low price vs. competitors or higher “prestige”
pricing to signal exclusivity. o Must align with overall brand strategy (cost leadership or premium
brand). 3. Organizational Differentiation: o Maximizing brand power, location advantages, or
unique corporate culture that competitors cannot imitate. o Often leverages intangible assets like
brand loyalty or specialized processes.

16. XXP India (Home Appliances) – Differentiation Strategy

Question Essence: The home appliances market is anticipated to grow by 15–20%. XXP India
plans new, innovative product designs plus loyalty programs to attract more consumers and stand
apart from rivals, hoping to remain profitable despite potential COVID-19 or other uncertainties.

Answer Gist: • Differentiation Strategy: 1. Innovation: Launching fresh designs, advanced features
(e.g., energy-saving, smart-home integrations). 2. Brand Image: Positioning as forward-thinking
and quality-driven. 3. Loyalty Programs: Encouraging repeat purchases and customer retention. •
Advantages: Premium pricing potential, brand loyalty, less direct competition on price alone. •
With an emphasis on unique attributes, XXP can stay profitable even if input costs or competition
intensify.

17. Differential Marketing vs. De-marketing

Question Essence: Clarifies two different marketing strategies regarding how demand is
managed or segmented.

Answer Gist: • Differential Marketing: o A firm targets multiple segments and tailors different
offerings to each. o Aims to expand the overall customer base by meeting varied segment needs. •
De-marketing: o Attempts to reduce demand intentionally (temporarily or permanently), often if
the product is in short supply or the firm wants to discourage certain uses. o Ensures demand does
not exceed supply or addresses issues with over-consumption.

18. “Value for Money” Retail Chain – Core Competence in Low Cost

Question Essence: This retail chain thrives by keeping operational costs exceptionally low and
passing savings to customers. Management wants to push cost advantages further, specifically
focusing on procurement.

Answer Gist: • Core Competence: o Superior ability to manage large volumes while controlling
overhead, thereby selling goods at lower prices but still profitably. • This cost-centric approach is
not easily imitated if it involves unique supply-chain relationships, robust volume negotiations, or
efficient store layouts. • Maintaining this competency requires constant cost vigilance and
ensuring the chain’s scale and brand support it.

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19. Gennex – Differentiation in Computer Hardware/Software

Question Essence: Gennex invests heavily in R&D, consistently launching innovative hardware and
software features. These unique product characteristics give it an ongoing edge over rivals.

Answer Gist: • Differentiation Strategy at Gennex includes: 1. Cutting-edge R&D → novel designs,
advanced components. 2. Branding as a premium, innovative firm. 3. Potential to charge premium
prices. • By offering something “not available” with competitors, Gennex fosters strong brand
loyalty and can stay ahead if it continuously updates and improves its product lines.

20. Porter’s Three Generic Strategies – Purpose & Examples

Question Essence: Explains Michael Porter’s three generic strategies (cost leadership,
differentiation, focus), their purpose in gaining competitive advantage, and examples of each. Also
matches specific business scenarios (Dell’s direct marketing, low-cost software strategy, and NDTV
focusing on news segments) to the appropriate generic strategy.

Answer Gist: 1. Cost Leadership: Producing standardized offerings at the lowest per-unit cost for
price-sensitive buyers, often achieved by aggressive cost reduction in development, production,
marketing, distribution. 2. Differentiation: Creating unique offerings (design, features, branding)
that appeal to less price-sensitive customers, emphasizing distinct attributes to stand out from
rivals. 3. Focus: Targeting a narrow customer segment with tailored offerings (either via cost focus
or differentiation focus). Smaller firms or those identifying profitable niches often adopt this
strategy. Examples: 1. Dell’s direct marketing = Differentiation based on product delivery model.
2. Ultra-low-priced microcomputer software = Cost Leadership. 3. NDTV channels = Focus on a
specific audience niche (news, financial channels).

21. Relationship Marketing, Service Marketing, Enlightened Marketing, Person Marketing

Question Essence: Outlines four distinct marketing concepts/approaches typically found in

modern businesses or personal branding.

Answer Gist: 1. Relationship Marketing: Creating, maintaining, and enhancing strong, value-laden
customer relationships. Loyal frequent-flyer programs or membership clubs are prime examples.
2. Service Marketing: Managing the marketing mix for intangible offerings where simultaneous
production & consumption occur (e.g., hospitality, banking). 3. Enlightened Marketing:
Emphasizes sustainable, socially responsible marketing in the long run—focusing on real
consumer well-being. 4. Person Marketing: Used by individuals (politicians, celebrities) to shape
or change public attitudes/behaviors in their favor.

22. Domolo (Premium Cycles) vs. Mr. Vijay’s Cheaper Option – Best-Cost Provider

Question Essence: Domolo cycles range from ₹15k to ₹1 lakh, targeting affluent fitness
enthusiasts. Demand jumped 150%. Mr. Vijay sees an opportunity to cater to cost-sensitive people
with more affordable yet reasonable-quality cycles and accessories.

Answer Gist: • Best-Cost Provider Strategy for Mr. Vijay: 1. Offer nearly similar quality but at a
lower price. 2. Or charge the same price with better features than rivals. • This approach meets an
underserved segment: those who want a blend of quality + affordability. • By focusing on cost
efficiency, decent design, and lower markups, Mr. Vijay can capture price-conscious buyers who
can’t afford Domolo’s premium range.

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23. Channels & Channel Analysis

Question Essence: Discusses what distribution channels are, why channel analysis is critical for
businesses, and the basic types of channels (sales, product, service).

Answer Gist: • Meaning of Channels: Distribution paths that products/services take from
producer to final consumer. • Importance of Channel Analysis: o Helps identify potential ways to
reach new markets or customers. o Ensures alignment with consumer needs—whether direct
distribution or multi-layered. o Aids in cost management, inventory control, and customer
satisfaction (especially with after-sales service). • Types of Channels: 1. Sales Channel: Who does
the selling (retailers, wholesalers, e-commerce). 2. Product Channel: Physical handling and
logistics from factory to end user. 3. Service Channel: Support or maintenance infrastructure
around the main product offering.

24. Mendelow’s Matrix (Stakeholder Analysis)

Question Essence: How a firm can systematically classify stakeholders based on their power and
interest, then tailor communication and management approaches.

Answer Gist: • Mendelow’s Matrix has two axes: Power (high–low) and Interest (high–low). •
Quadrants: 1. Key Players (high power, high interest): Must closely involve and satisfy. 2. Keep
Satisfied (high power, low interest): Communicate enough to prevent negative influence. 3. Keep
Informed (low power, high interest): Regular updates to keep them supportive. 4. Low Priority
(low power, low interest): Minimal effort but monitor if their power/interest changes. • Proper
stakeholder management reduces conflict and increases project or strategic success.

25. Competitive Advantage (Concept)

Question Essence: Explains the notion that a firm gains a superior position over rivals by offering
more value (via lower cost or differentiation), thus translating to higher profits, larger market
share, or both.

Answer Gist: • Competitive Advantage is achieved when: 1. The firm consistently produces
greater value for customers than competitors can. 2. This leads to tangible outcomes (increased
sales, market share, brand equity). • It may stem from low-cost leadership, unique product
features, exceptional processes, or a strategic resource that competitors cannot replicate easily. •
Sustainable advantage requires continuous adaptation and protection of what makes the firm
distinct.

26. Meaning of Core Competencies

Question Essence: Clarifies how core competencies are central, hard-to-imitate

abilities/capabilities that significantly contribute to a firm’s competitive advantage.

Answer Gist: • Core Competencies: 1. Distinct internal strengths or knowledge sets that rivals find
difficult to match. 2. Lead directly to creating superior customer value. 3. Are redeployable across
different markets or product lines. • They can involve technological expertise, brand-building
capability, or specialized managerial processes that strengthen the firm’s strategic position.

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27. Strategic Groups

Question Essence: Describes how an industry can be broken into groups of companies that
pursue similar strategies or occupy similar positions (e.g., low-cost national chains vs. small luxury
boutiques).

Answer Gist: • A Strategic Group: A cluster of rival firms with comparable product lines, quality
ranges, distribution methods, or brand positioning. • By analyzing strategic groups, one can see:
1. Which rivals compete most directly. 2. How difficult it might be to switch from one group to
another (mobility barriers). 3. Where untapped “white space” might lie if certain combinations of
strategy factors are underrepresented.

28. Opportunities/Threats from Cheaper Domestic Airfares & Bank Interest Cuts

Question Essence: Focuses on how two different macro changes (1) a significant reduction in
domestic airfares, (2) a cut in bank interest rates—can produce distinct opportunities and threats
for various industries.

Answer Gist: 1. Significant Reduction in Domestic Airfares o Opportunities: Tourism industry

(hotels, resorts), hospitality services, local attractions (increased travel). o Threats: Railway sector,
bus transportation companies (fewer passengers). 2. Cut in Interest Rates by Banks o
Opportunities: Real estate (cheaper housing loans), automobile industry (lower financing costs),
consumer durables (easier credit). o Threats: Banking sector margins shrink, savings/investment
instruments lose attractiveness.

29. Trend of Organizing IPL-Style Tournaments in Other Sports

Question Essence: Analyzes the proliferation of professional league formats (like IPL in cricket)
in additional sports—football, kabaddi, hockey—and how this scenario creates opportunities and
threats for various businesses.

Answer Gist: • Opportunities: 1. Sports goods manufacturers (increased equipment sales). 2.

Stadium/ground operators (rental fees, expansions). 3. Media & Broadcasting networks (TV
contracts, advertising revenue). 4. Tourism & hotels (fans traveling to matches). • Threats: 1. Other
forms of entertainment (cinema, TV serials) might see audience diversion. 2. Potential issues of
corruption, match-fixing, or oversaturation. 3. Smaller sports events might struggle to attract
sponsors if big leagues dominate.

30. Growth of Nuclear Families (Both Spouses Working)

Question Essence: Highlights a demographic shift toward dual-income nuclear families, creating
a different consumer mindset—more disposable income, time constraints, demand for
convenience.

Answer Gist: • Opportunities: o Ready-to-eat/cook food products, child-care facilities, time-

saving appliances (microwaves, washing machines), professional services (housekeeping). •
Threats: o Traditional suppliers of fresh produce or raw materials might see reduced demand if
families rely more on packaged/processed goods. o Certain social or entertainment activities that
depended on at-home spouses can decline.

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31. “Speed” Retail Chain – Core Competence in Low Cost

Question Essence: “Speed” is a leading retail chain known for extremely low operating costs. Its
CEO aims to strengthen this position by focusing on lowering procurement costs, thereby
possibly expanding margin or further reducing prices.

Answer Gist: • Core Competence: Unique cost-efficiency capability that allows “Speed” to sell
goods at low prices while still profiting. • By leveraging scale, efficient supply chains, or
specialized knowledge, it maintains a cost advantage. • This approach can be hard for rivals to
replicate if “Speed” has exclusive supplier deals, refined store formats, or high sales volume
fueling discounts.

32. Success of IPL & Extension to Other Sports (Rohit’s Charitable Organization)

Question Essence: Rohit conducts free training camps for youths in cricket, football, hockey,
badminton, etc. With the popularity of IPL, leagues in multiple sports are on the rise. He wonders
how that benefits sports in general and which industries gain or lose.

Answer Gist: • Positive Impact on Sports: More money, publicity, competitive spirit, and youth
engagement. • Opportunities: o Event management in sports, stadium operators, sports-goods
makers, media broadcasting. o Tourism if fans travel for matches. • Threats: o Other entertainment
forms (movies, concerts) competing for viewer attention. o Possible corruption or overshadowing
of local smaller events. o If the leagues overshadow grassroots development, some areas may not
benefit.

33. Rohit Patel’s Small Chemist Shop vs. Online Medicine Sellers

Question Essence: Rohit, operating in central Ahmedabad, faces online competition. He wants to
know which competencies he can build to gain a lasting local edge (valuable, rare, difficult to
imitate, non-substitutable).

Answer Gist: • Potential Core Competencies: 1. Personal Relationship & Trust: Customers trust
immediate, face-to-face interactions. 2. Speedy Home Delivery: Within a short radius, he can beat
online shipping times. 3. Extended Working Hours: Convenience for local community. 4. Credit
Facilities: Month-end payments for regulars. • Combined, these intangible benefits create a loyal
local customer base, offsetting the large-scale but impersonal online rivals.

34. STU’s Role in Infrastructure Projects (Opportunities & Threats)

Question Essence: STU, historically active in large highway projects in India, aims to contribute
to new central government projects. The question addresses how STU should identify relevant
opportunities and threats in the macro environment.

Answer Gist: • Opportunities: 1. Forming alliances or joint ventures with governmental bodies. 2.
Growing construction demands (roads, bridges, tunnels). 3. Potential synergy with new
technology solutions. 4. Global brand recognition if it succeeds in landmark projects. • Threats: 1.
Economic uncertainties or changing government policies/budgets. 2. Natural disasters or
resource constraints (cement, steel). 3. Intense competition from both domestic and international
infrastructure companies. 4. Pandemics or large-scale disruptions.

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35. Spacetek Pvt. Ltd. – Focus Strategy

Question Essence: Spacetek is an IT firm in a fiercely competitive sector but chooses to serve a
specific niche of distinctive high-end clients. Other rivals don’t specialize in this segment. The
question identifies the strategy and its pros/cons.

Answer Gist: • Focus Strategy: Concentrates on a small but profitable client segment needing
advanced, specialized solutions. • Advantages: Premium pricing, strong loyalty, less direct rivalry.
• Disadvantages: Market size is limited; sudden preference changes can be disastrous; high costs
to maintain specialized offerings; big players might enter if they see big profits in that niche.

36. Sohan & Ramesh – Cost Leadership vs. Differentiation in Biscuits

Question Essence: Two partners disagree on pricing. Sohan wants to compete via high
volume/low cost. Ramesh wants an exclusive image with higher prices and special product
changes. The question aligns them with Porter’s cost leadership and differentiation.

Answer Gist: • Sohan = Cost Leadership: Low price to attract mass consumer base. Profit from
volume rather than margin. • Ramesh = Differentiation: Add unique features or branding. Higher
price signals quality or exclusivity. • Both are valid but differ in target customers, brand image, and
operational focus.

37. Infant Care Store Chain – Differentiation Strategy

Question Essence: Infant Care is a one-stop shop offering everything for new mothers and infants
(classes, strollers, baby furniture, etc.). Because of its convenience and specialized range, it charges
a premium price.

Answer Gist: • Differentiation: The store is perceived as unique due to comprehensive infant-
related solutions. • Customers pay extra for time-saving convenience, specialized selection, and
trusting the store’s curated items. • The chain’s strategy fosters brand loyalty—parents see it as a
go-to for all baby needs, sustaining premium pricing.

38. Telecom Industry – Capabilities That Serve as Competitive Advantage

Question Essence: The question focuses on what kinds of capabilities help a telecom company
outdo its competitors. In a market with rapid tech changes and cutthroat rivalry, capabilities that
stand out can be crucial.

Answer Gist: • Core Capabilities might include: 1. Advanced Network Infrastructure: Reliable
coverage, fast data speeds. 2. Brand Equity: Strong brand recognized for quality or innovation. 3.
Customer Service Excellence: Quick resolutions, loyalty programs. 4. Tech Partnerships: Ties with
device makers or content providers. • If these are valuable, rare, hard to imitate, and non-
substitutable, they become an enduring edge.

39. SWOT for EasyLife Corp. (New Smart Home Devices)

Question Essence: EasyLife, a leading consumer electronics firm, plans to launch smart home
devices. The question asks for a thorough SWOT analysis of this new venture.

Answer Gist: • Strengths: Brand reputation, existing distribution network, proven R&D in
consumer electronics. • Weaknesses: Limited direct experience in smart home category,
potentially large R&D investment. • Opportunities: Rising demand for home automation,
possibility of partnerships with existing IoT platforms, cross-selling to existing loyal customers. •

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Threats: Established rivals in the smart-home space, rapid tech evolution requiring constant
updates, potential data security issues undermining brand trust. EasyLife should leverage brand
loyalty and strong distribution while carefully managing R&D costs and cybersecurity aspects.

40. M/s. Maa ki Pasand – Combining Focused Cost & Focused Differentiation

Question Essence: In the baby-care products market, some customers are price-conscious, while
others are happy to pay premium rates for upscale products. Maa ki Pasand intends to charge
lower prices for one segment and higher premium for another set of specialized items.

Answer Gist: • Focus Strategy with a dual approach: 1. Focused Cost Leadership: Low prices for
budget-conscious parents. 2. Focused Differentiation: Unique, premium baby products for affluent
customers seeking exclusivity or superior quality. • Advantages: o Tapping both sides of the
market, potentially boosting overall revenues. o Gaining loyalty from cost-sensitive buyers while
also profiting from premium margins in the upscale line. • Disadvantages: o Requires distinct
operational systems—efficient cost control on one hand, specialized branding/design on the other.
o Market is still “narrow” (only baby-care), so each sub-niche might be small. o Larger competitors
could replicate either approach if they see enough profitability.

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STRATEGIC CHOICES
1. Ansoff’s Product-Market Growth Matrix

Question Essence: Explains how Ansoff’s Matrix helps managers plan strategies for future growth
by examining existing/new products and existing/new markets. The question may reference a
pharmaceutical company like Aurobindo or Sky Chemical wanting to grow.

Answer Gist: • Ansoff’s Matrix features four strategic options: 1. Market Penetration: Sell existing
products in existing markets more aggressively (price cuts, promotions, wider distribution). 2.
Market Development: Expand existing products to new markets (new regions, new segments). 3.
Product Development: Offer new or significantly improved products to existing markets (R&D, line
extensions). 4. Diversification: Enter new markets with new products (riskiest, as both product and
market are unfamiliar). Companies (e.g., a pharma firm) can choose among these simultaneously.
For instance, they might do market penetration for established drugs, market development by
expanding geographically, product development through new formulations, or diversification by
moving into new product areas outside pharma.

2. Turnaround Strategy for a Loss-Making Company

Question Essence: Describes a struggling company (e.g., a textile mill, XYZ company, a bicycle firm,
or Nebula Pvt. Ltd. with heavy losses) needing to reverse its decline. It is the retrenchment strategies
where the internal emphasis is on efficiency.

Answer Gist: • Turnaround Strategy: Aimed at restoring profitability, solvency, liquidity, cash flow.
• Conditions indicating need: Persistent negative cash flow, Uncompetitive products/service,
Declining market share, Deterioration in physical facilities, Over-staffing, High Employee turnover,
Low morale, Mismanagement • Action Plan typically involves: 1. Assess Problems (root causes,
damage). 2. Analyze & Develop Strategic Plan (SWOT-based, set goals). 3. Implement Emergency
Actions (cut costs, restructure, dispose of non-core assets, reduce overhead). 4. Restructure Business
(revise product lines, HR changes, leadership revamp). 5. Return to Normal (stabilize finances, invest
in new growth areas).

3. Concentric vs. Conglomerate Diversification

Question Essence: Explains diversification (new products in new markets) and compares
concentric (related) vs. conglomerate (unrelated) forms.

Answer Gist: • Diversification: High-risk strategy adding new products/markets. • Concentric

(Related) Diversification: New business is linked to existing operations via similar
processes/technology/markets. o Lower risk (familiar domain). Example: A clothing manufacturer
adding shoe production (both in the fashion domain). • Conglomerate (Unrelated) Diversification:
No link with existing businesses (different products/markets). Higher risk (entirely new domain).
Example: A cement firm entering consumer electronics.

4. Strategic Alliance: GWA & TPR Group

Question Essence: Highlights a collaboration between two companies (e.g., GWA, a Japanese auto
firm, and TPR Group, an Indian motorcycle firm) to achieve strategic objectives neither could
accomplish alone.

Answer Gist: • Strategic Alliance: A partnership where each firm remains independent, yet they
share control, benefits, and resources. • Advantages: 1. Organizational: Learn new skills, share
complementary capabilities, gain distribution. 2. Economic: Reduce costs/risks by pooling

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resources, achieve economies of scale, exploit co-specialization. 3. Strategic: Improve competitive

positioning, sometimes neutralize rivals; access new markets/technologies. 4. Political: Overcome
entry barriers (local partners), expand foreign presence.

5. Divestment Strategy: Definition & Reasons

Question Essence: Explains divestment: selling/liquidating parts (SBUs or major divisions) of a

business, often as part of restructuring.

Answer Gist: • Divestment is chosen when: 1. Turnaround fails or is deemed infeasible. 2. Acquired
business is a mismatch and cannot be integrated. 3. Persistent negative cash flow in a certain
segment. 4. Strong external competition or need for technological upgrades. 5. Firm sees better
alternative use of capital. The firm sells or spins off unprofitable or non-core segments to focus on
more promising lines.

6. Divestment for X Pvt. Ltd. (Co-working Spaces)

Question Essence: X Pvt. Ltd.’s co-working space venture became unprofitable/unsustainable due
to external factors (pandemic). They must decide a strategic way to handle this failing segment,
while their other businesses remain viable. Similarly, in another scenario, Product Beta struggles in
a tough market—retrenchment strategies are considered.

Answer Gist: A divestment strategy is recommended. Reason: The co-working/product Beta

business is unprofitable and unlikely to recover soon under current conditions. Rationale: Divesting
(selling/spinning off) the loss-making unit frees resources/capital for healthier segments, avoids
draining profits from the rest of the portfolio, and allows re-focus on core or more promising lines.
Benefits: Minimizes exposure to ongoing losses, redirects funds to better investment opportunities,
and strengthens overall financial stability.

7. Strategy Options for a Sick Company (Electric Appliances / XYZ)

Question Essence: A sick firm with heavy losses, eroded net worth must consider how to
restructure or exit underperforming segments.

Answer Gist: • Retrenchment Strategy is central, involving: 1. Turnaround (internal reorganization

to become lean and competitive). 2. Divestment (selling off underperforming units). 3. Liquidation
(final resort, closing operations, selling assets). Approach depends on severity, potential for revival,
and stakeholder willingness to invest in salvage efforts.

8. Divestment vs. Liquidation Strategy

Question Essence: Contrasts divestment (selling a portion of a business) with liquidation

(closing the entire company).

Answer Gist: Divestment: o Sell or spin off an unprofitable SBU/segment. o Usually part of a
restructuring plan; the broader firm aims to survive. Liquidation: o Extreme measure: entire firm
closes, assets are sold. o Leads to job losses and a definitive end to the business.

9. Mergers & Acquisitions as Growth Strategies + Types of Mergers

Question Essence: Describes how M&As allow quick expansion, synergy, or new market/product
entry. Also outlines horizontal, vertical, co-generic, and conglomerate mergers.

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Answer Gist: • Merger: Combining two firms into one new entity (often friendly). • Acquisition: One
firm buys another (the target may cease to exist independently). • Types: 1. Horizontal: Merge
competitors in same industry stage. 2. Vertical: Merge up/down supply chain (backward/forward).
3. Co-generic: Firms share related markets/tech (e.g., complementary products). 4. Conglomerate:
Unrelated businesses combine.

10. Turnaround Strategy: When & How

Question Essence: Conditions that demand a turnaround (persistent negative cash flow,
uncompetitive offerings, etc.) and the steps to implement it, often illustrated with an example (e.g.,
ABC Inc. in healthcare, reversing market share decline).

Answer Gist: • Turnaround: An internal retrenchment focusing on restoring performance. •

Indicators: Negative profits, overstaffing, mismanagement, technology gaps. • Work Plan: 1. Assess
current issues. 2. Devise strategic plan (goals, resource allocation). 3. Emergency actions (cut
costs, restructure). 4. Reshape business (product mix, rebranding). 5. Return to normal
profitability.

11. Market Development vs. Product Development (Ansoff)

Question Essence: Contrasts two of Ansoff’s growth strategies: selling existing products in new
markets vs. creating new products for existing markets.

Answer Gist: • Market Development: o Same product, new market segments or geographies. o
E.g., exporting existing goods to a new country. • Product Development: o New/improved products
offered to the same (existing) target market. o E.g., upgrading or adding features to capture more
share.

12. Stability Strategy: Definition & Reasons

Question Essence: Explains stability strategy, wherein a firm aims to maintain current market
share and operations without major expansions.
Answer Gist: • Stability: The firm continues serving the same or similar markets with existing
products. • Reasons: 1. Product at maturity stage. 2. Risk aversion or limited resources for
expansion. 3. Environment is stable, or expansion is perceived threatening. 4. Allows consolidation
after rapid growth.

13. Expansion Strategy & Its Two Types (Intensification, Diversification)

Question Essence: Defines expansion as enlarging a firm’s scope substantially, exploring new
frontiers.
Answer Gist: • Expansion Strategy: o Entails major strategic initiatives, increased investments,
new products/markets. o Motivations: Desire for growth, synergy, bigger market power, survival
in changing conditions. • Two Broad Types: 1. Intensification: Growing existing business lines
(market penetration, product/market development). 2. Diversification: Venturing into new
products and/or markets (related or unrelated).

14. Leatherite Ltd. or FlyBee Example (Concentric Diversification)

Question Essence: A firm that currently makes one line of leather goods or stationery decides to
add a related line (e.g., from footwear to bags). Or FlyBee making notebooks now starts making
pens—complementary and still related.

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Answer Gist: • Concentric (Related) Diversification: 1. The new product line (bags or pens) shares
synergy with existing knowledge, channels, or tech. 2. Lower risk than unrelated, uses existing
brand & distribution.

15. BCG Matrix Construction & Utility

Question Essence: Outlines how the Boston Consulting Group (BCG) matrix positions SBUs based
on market growth rate (vertical axis) and relative market share (horizontal axis).

Answer Gist: • Four Quadrants: 1. Stars: High growth, high share. Need heavy investment, can
become future cash cows. 2. Cash Cows: Low growth, high share. Generate strong cash flow, need
less investment. 3. Question Marks: High growth, low share. Require significant cash to improve
share or risk becoming dogs. 4. Dogs: Low growth, low share. Often candidates for divestment. •
Strategic Value: Helps allocate resources—decide where to invest, hold, harvest, or divest.

16. BCG Matrix Example (Soorya Ltd.)

Question Essence: A practical example with data on four products (A, B, C, D) showing different
percentages of revenue, market share, profits, and industry growth. Products are placed in
Star/Question/ Cow/Dog quadrants.

Answer Gist: • Product A: High share & high growth → Star. • Product B: High growth & lower
share → Question Mark. • Product C: High share & negative growth → Cash Cow (but the market is
declining). • Product D: Low share & negative growth → Dog. Each classification aids strategic
decisions: invest in A/B, harvest or maintain C, possibly divest D.

17. ADL Matrix & Competitive Position

Question Essence: The Arthur D. Little (ADL) approach uses industry maturity + competitive
position to classify SBUs into dominant, strong, favorable, tenable, or weak positions.

Answer Gist: • ADL focuses on business strength vs. industry life-cycle stage (embryonic, growth,
mature, aging). • Competitive Positions: 1. Dominant (rare, often near-monopoly). 2. Strong (wide
strategic choice). 3. Favourable (reasonable freedom, not top-tier but can hold its own). 4. Tenable
(vulnerable, but viable). 5. Weak (unsatisfactory performance, must act to improve or exit). The
matrix helps formulate strategies for each stage/position.

18. BCG Matrix & Four Strategic Options (Build, Hold, Harvest, Divest)

Question Essence: Connects each quadrant of BCG (Stars, Cash Cows, Question Marks, Dogs) to
typical recommended strategies.

Answer Gist: 1. Build: Usually for Question Marks to gain share or for Stars to solidify leadership.
2. Hold: Often for Stars or strong Cows to maintain share. 3. Harvest: Typically for Cash Cows,
maximize short-term cash flow. 4. Divest: Generally for Dogs (low share, low growth) to free
resources.

19. GE Model (Business Planning Matrix)

Question Essence: Also known as the McKinsey/GE matrix, it evaluates market attractiveness
(vertical axis) and business strength (horizontal axis).

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Answer Gist: • Market Attractiveness factors: size, growth, profitability, competitive intensity, etc.
• Business Strength factors: market share, brand, cost position, distribution strength. • Nine-Cell
Grid (like traffic lights): o Green: Invest/Grow. o Amber: Select/Earn (caution). o Red:
Harvest/Divest. • Guides resource allocation across multiple SBUs.

20. Four Diversification Types & Difference (Concentric vs. Vertical)

Question Essence: Diversification can be vertically integrated (forward/backward), horizontally

integrated, concentric, or conglomerate. The question also explains how concentric differs from
vertical diversification.

Answer Gist: • Vertical: Moves up or down the supply chain, e.g., a carmaker acquiring a steel plant
(backward) or distribution channel (forward). • Horizontal: Takes over or merges with similar
businesses at the same stage in the value chain. • Concentric: Adds related products via synergy in
processes or marketing (but not up/down chain). • Conglomerate: Unrelated product lines. •
Difference (Concentric vs. Vertical): Concentric extends product lines on the same level; vertical
extends up or down the supply chain.

21. Vertical vs. Horizontal Integration

Question Essence: Clarifies two forms of integration: controlling more steps in the chain
(vertical) vs. adding operations at the same level (horizontal).

Answer Gist: • Vertical Integration: o Backward (control supply) or forward (control distribution).
o Helps secure supply or distribution channels, reduces dependency. • Horizontal Integration: o
Acquire or merge with a competitor or related firm at the same stage. o Increases market share,
economies of scale, reduces competition.

22. Woodworld Ltd.: Strategic Options

Question Essence: Woodworld sells traditional, low-cost furniture but is losing share as
consumer tastes shift to more modern, higher-quality designs.

Answer Gist: • Possible strategic choices: 1. Product Development: Invest in modern design,
upgrade materials. 2. Acquire or partner with a competitor offering contemporary products. 3.
Unrelated diversification into new lines if synergy in furniture is lost. 4. Market Development if
they see new geographies for traditional designs. • Likely must minimize reliance on outdated
products and pivot to better design or new avenues.

23. Forward Integration vs. Backward Integration

Question Essence: Explains how a firm moves up/down the value chain, either controlling
distribution (forward) or supply (backward).

Answer Gist: • Forward: Expanding or taking ownership of distribution channels (closer to end
user). E.g., a coffee bean producer opening coffee shops. • Backward: Acquiring or entering the
supplier’s domain. E.g., a bakery buying a wheat farm. • Both are forms of vertically integrated
diversification.

24. Pizza Galleria Turnaround Plan

Question Essence: Pizza Galleria once had a monopoly but new rivals like Modiano & Uncle Jack
enter with aggressive pricing. The chain faces losses and wants to consider a turnaround.

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Answer Gist: • Turnaround action plan: 1. Assess root causes (cost structure, brand image, new
competitor strategies). 2. Develop a strategic plan (short-term finances, rebranding, product
range). 3. Implement emergency actions (reduce overhead, focus on popular pizzas, strengthen
delivery, marketing). 4. Restructure (people mix, alliances, maybe new menu). 5. Return to normal
profitability.

25. “Stability Strategy” Is Opposite of “Expansion Strategy”

Question Essence: Shows that stability focuses on consolidating existing strengths with minimal
changes, whereas expansion involves larger transformations and resource commitments.

Answer Gist: • Stability: o Maintain current scope, gradually improve functional efficiency. o Less
risky, suits stable or mature environments. • Expansion: o Substantially broaden scope, can be high
risk/high reward. o Targets new markets, new product lines, or acquisitions/mergers. • They
stand on opposite ends: one preserves status quo, the other aggressively grows.

26. Jynklo Ltd. (Gaming) Entering Premium Sports Drinks – Conglomerate

Question Essence: Jynklo is in the online gaming industry but decides to produce a premium
sports drink (completely unrelated product).

Answer Gist: • This is Conglomerate Diversification: o No synergy with existing gaming business.
o Potentially higher risk, but can spread risk across unrelated markets. • If managed well, it can
open new revenue streams but demands entirely new expertise.

27. Re-definition of Business in Expansion vs. Retrenchment

Question Essence: Points out that both expansion and retrenchment redefine a business, but the
method is different (adding vs. cutting).

Answer Gist: • Expansion: Enlarge scope, invest more heavily. • Retrenchment: Reduce scope,
possibly divest or cut costs. • Both involve redefining business boundaries, but expansion is
outward growth, while retrenchment is inward contraction or refocusing.

28. BCG Matrix: Cash Cow Scenario & “Star” Division

Question Essence: Uses the BCG Growth-Share Matrix to identify a business division’s
classification (e.g., Cash Cow or Star) and the strategic approach (Hold, Build, Harvest, Divest).

Answer Gist: A mature, high-market-share division with slow growth is a Cash Cow: stable
profitability, generating surplus cash with low investment needs. Strategy is typically
Hold/Harvest, using the division’s cash flow to support other high-growth or new ventures. A
leading division in a high-growth market qualifies as a Star: it holds significant market share in a
rapidly expanding sector. Although it needs continued investment to maintain its leadership, the
division can eventually mature into a Cash Cow once the market growth slows.

29. Expansion Through Acquisitions & Mergers

Question Essence: Firms sometimes pick external growth by acquiring or merging with other
businesses, bypassing time-consuming internal expansions.

Answer Gist: • Acquisitions: One firm buys another. • Mergers: Two firms combine into one new
entity. • Motives: Quick market entry, synergy in resources/tech, economies of scale, or eliminating
competition. • Risks: Cultural clashes, overpaying, integration difficulties.

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30. Vastralok Ltd. (Silk Cloth to Cotton Cloth) – Concentric Diversification

Question Essence: Vastralok, manufacturing silk cloth, decides to add cotton cloth. Both are in
the textile domain, sharing synergy.

Answer Gist: • Concentric Diversification: The new product line is closely related (similar
processes, channels, markets). • Synergy Gains: Same distribution, overlapping brand reputation.
• Risk: Lower than unrelated diversification as the domain is known.

31. Turnaround Strategy: Reasons to Adopt

Question Essence: Explains why companies implement turnaround—an internal retrenchment

to fix underperformance.

Answer Gist: • Reasons: 1. Performance drastically deteriorates, threatening survival. 2. Negative

or low profitability, low morale, or mismanagement. 3. Return the company to acceptable levels of
financial/operational health. • Involves tackling root causes (operational inefficiency, poor
leadership, changing environment) quickly and decisively.

32. Expansion vs. Retrenchment Strategies

Question Essence: Compares how expansion enlarges scope vs. retrenchment reduces it.

Answer Gist: 1. Expansion: o Adding products/markets, large resource commitment, aims for
growth. o Associated with dynamism, new opportunities, sometimes higher risk. 2. Retrenchment:
o Cutbacks, closures, or attempts to fix inefficiencies (turnaround, divest, liquidation). o Redefines
business by scaling down to a sustainable core.

33. Retrenchment Strategy: Meaning

Question Essence: Focuses on a firm drastically curtailing scope, possibly selling off segments or
trimming unprofitable areas.

Answer Gist: • Retrenchment: 1. A move to reduce the level of activities, cut costs, or divest non-
core SBUs. 2. Often triggered by adversity (market decline, financial stress). 3. Aims to stabilize the
firm by refocusing on its viable core or pivoting strategy.

34. Co-generic Merger vs. Conglomerate Merger

Question Essence: Contrasts two categories of external diversification.

Answer Gist: • Co-generic Merger: o Firms share some similarity in markets/technologies but
aren’t direct competitors. o E.g., a refrigerator manufacturer acquiring a microwave-oven brand. •
Conglomerate Merger: o Entirely unrelated lines, no operational synergy in production or
marketing. o E.g., a cement manufacturer merging with a financial services firm.

35. Identifying Growth Strategies in Four Cases (Ansoff Variation)

Question Essence: Examples: 1. Advertising new uses of an existing product. 2. Revising

textbooks (existing market or new?). 3. Manufacturing raw materials (vertical integration?). 4.
Entering multiple new markets (conglomerate?).

Answer Gist: 1. Market Penetration: More intensive marketing for the same product (toothpaste
co. urging 2x brushing). 2. Product Development: Updating or revising a product for the same

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market (publishing). 3. Backward Integration if it’s about raw materials for existing product line.
4. Conglomerate Diversification if the new markets are unrelated to existing lines.

36. Bakery Producing Pastries

Question Essence: A bakery that previously made bread/cakes adds pastries and similar items.

Answer Gist: • This is concentric diversification or product development in the same domain. •
The new line (pastries) is closely related to existing bakery operations, leveraging shared
equipment, techniques, and distribution.

37. “Question Marks” in BCG Matrix

Question Essence: Explains the concept of “Question Marks” in the BCG Growth-Share matrix
(high-growth, low-share businesses) and potential strategic options for them.

Answer Gist: Question Marks typically represent new or emerging businesses in a rapidly
expanding market but without strong share. They demand significant cash to grow or maintain
position. Strategic choices can vary: Invest/Expand if the firm believes it can build market share,
turning Question Marks into Stars. Divest/Retrench if growth potential or share gains seem
unlikely, to avoid them morphing into Dogs.

38. Ansoff Examples: Identifying Strategies

Question Essence: Shows four short scenarios (e.g., selling existing product with new usage,
diversifying from hotels to dairy, forging into foreign markets, launching new product for existing
customers).

Answer Gist: 1. Market Penetration: Same product, encouraging more usage. 2. Diversification:
Hotel company enters dairy. 3. Market Development: Utility vehicle firm goes international. 4.
Product Development: Auto manufacturer launching a new segment (ungeared scooters).

39. Ajanta & Sons (Alarm Maker): Two Options in Ansoff

Question Essence: Option 1: Repackage the same alarm for a lower-income group at lower cost
(new market, same product). Option 2: Develop new high-tech alarms for industrial clients (new
product, new market).

Answer Gist: 1. Market Development: Existing product, new market. 2. Diversification: New
product, new market (riskier but potentially more profitable in the industrial segment).

40. BCG Matrix: Stars, Question Marks, Cash Cows, Dogs (Strategic Implications)

Question Essence: Elaborates each quadrant’s meaning and recommended approach.

Answer Gist: Stars: Must invest to maintain leading share in high-growth markets. • Question
Marks: Decide whether to invest heavily or divest if prospects aren’t strong. • Cash Cows: Generate
steady cash; hold or harvest. • Dogs: Usually drain resources; divest or liquidate unless they have
strategic purpose.

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41. Conglomerate Merger (Short Note)

Question Essence: Describes an external growth form where two unrelated businesses merge.

Answer Gist: • Conglomerate Merger: o Firms in unrelated industries combine. o No direct

operational synergy, but possible financial synergy or risk diversification. o E.g., a textile company
merging with an FMCG firm.

42. Concentric (Related) Diversification (Short Note)

Question Essence: A strategy where a company adds products/services closely related to existing
lines.

Answer Gist: • Concentric: o Expands around a common set of resources/technologies. o Seeks

synergy in R&D, production, marketing channels. o Lower risk than unrelated expansions.

43. Meaning & Examples of Various Strategies

Question Essence: Covers a quick overview of forward integration, backward integration,

horizontal integration, conglomerate, divestment, liquidation, concentric diversification—plus
examples.

Answer Gist: 1. Forward Integration: Acquire or control distribution channels (manufacturer →

retailer). 2. Backward Integration: Acquire or control suppliers (auto → tire maker). 3. Horizontal
Integration: Merge/ acquire competitor at same stage (ICICI Bank acquiring Bank of Rajasthan).
4. Conglomerate Diversification: Unrelated expansions. 5. Divestment: Selling off a part of the
business. 6. Liquidation: Closing entire firm. 7. Concentric Diversification: Adding related products
in the same domain.

44. Gautam & Siddhartha’s Corporate Strategies

Question Essence: Two brothers in cloth manufacturing differ: Gautam wants to acquire an
unrelated stationery firm (conglomerate), Siddhartha wants to produce garments from the cloth
(vertical integration forward).

Answer Gist: • Conglomerate Diversification: Gautam’s approach to purchase a stationery

business is unrelated. • Forward Integration (Vertical): Siddhartha’s plan to move from fabric to
garments is forward in the supply chain. • Risks: o Conglomerate: Entirely new domain, no synergy.
o Vertical: Must manage new distribution/marketing challenges.

45. Organo Supermarket Buying Farms: Backward Integration

Question Essence: A supermarket chain wants to own the farms supplying fresh produce to gain
supply chain control.

Answer Gist: • Backward Integration: Takes ownership of the upstream supply. • Benefits: 1.
Ensures stable supply, quality control. 2. Reduces dependency on external suppliers. 3. Potential
cost savings if managed efficiently.

46. Swift Insurance Offering Auto Insurance – Related (Horizontal) Diversification

Question Essence: Swift, a medical insurance firm, moves into auto insurance—related lines
within the insurance sector.

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Answer Gist: • Related Diversification (horizontal). o They share brand reputation, distribution,
and risk-assessment processes. o Gains synergy in marketing to existing clients for different
insurance needs. • Usually lowers risk compared to unrelated expansions.

47. Soft Cloth Ltd. with Heavy Losses in a Recession

Question Essence: A cloth manufacturer hammered by a global recession, also facing intense
import competition. Sees negative cash flows, can’t pay salaries.

Answer Gist: • Retrenchment is essential. Must drastically reduce scope, fix finances. • Could
attempt: 1. Turnaround if feasible. 2. Divest unprofitable lines. 3. Liquidate if all else fails. Focus on
core, cut overhead, or possibly shift to stable product lines.

48. Mini Theatre Ltd.: Divestment of Low-Viewership Regional Content

Question Essence: Mini Theatre app invests in web-based content. Some regional segments are
expensive with minimal returns. They decide to sell those rights and stop future development.

Answer Gist: • Divestment: Shedding a loss-making portion. • Rationale: 1. Free resources from
unprofitable segments. 2. Reinvest in more promising content. 3. Streamline operations to
improve overall profitability.

49. Health Pharma Pvt. Ltd. & Hygiene Laboratories Plc.

Question Essence: Two pharmaceutical companies plan a new entity “Health N Hygiene Pharma
Ltd.” (merger) or one acquires the other (acquisition).

Answer Gist: 1. Merger: o Two roughly equal firms combine into a new, co-owned entity. o Often
a friendly, mutual synergy approach. 2. Acquisition: o One buys another, with the acquired firm
typically ceasing independent existence. • Differences revolve around ownership structure, brand
identity, and execution approach.

50. Atrix Ltd. (Mechanical Instruments) Facing Tech Shift to Electronics

Question Essence: Atrix’s mechanical instruments are losing market share to new electronic
gauges. They must adapt or risk obsolescence.

Answer Gist: • Possible strategies: 1. Product Development: Invest in electronics, phase out purely
mechanical. 2. Technology tie-ups or JV with electronic specialists. 3. If synergy is limited, consider
diversification or partial divestment. Must reduce reliance on outdated technology quickly.

51. Innovation & Expenses: “Are They Unnecessary?”

Question Essence: Addresses the statement that “Innovation is expensive and doesn’t yield
sufficient returns.”

Answer Gist: • Disagree: Innovation is crucial for long-term growth and competitiveness. •
Benefits: 1. Solves customer problems, fosters new markets. 2. Drives productivity gains
(automation, cost efficiencies). 3. Builds competitive advantage (differentiated products). • While
initial costs can be high, well-executed innovation often results in increased revenue, market share,
and brand strength over time.

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52. TechNova & ElectroWave Collaboration – Co-generic Merger

Question Essence: Two companies with complementary strengths—software (TechNova) and

hardware (ElectroWave)—join to create new electronics products, tapping synergy between
software OS and device manufacturing.

Answer Gist: • Co-generic Merger: Related but not direct competitors. Combine complementary
capabilities: software + hardware. Aim to expand product range (laptops, smartphones) in new
markets. • This synergy can reduce cost, increase market appeal, and share resources effectively.

53. Start-ups & Stability Strategy

Question Essence: The question posits that start-ups rarely opt for stability and asks under what
conditions a firm might consider stability, providing main reasons.

Answer Gist: • Start-ups typically focus on rapid growth or seizing opportunities. Stability is more
common for mature firms or stable environments. • Stability Strategy makes sense when: 1.
Products are at or near maturity, environment stable. 2. Firm seeks to consolidate after fast
growth. 3. Risk aversion or resource constraints discourage major expansions. • Reasons: o
Minimizing changes (safe approach). o Protecting market share in a stable environment. o
Maximizing returns on existing resources without large new investments.

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STRATEGIC IMPLEMENTATION AND EVALUATION

1. Strategic Control and Its Types

Question Essence: • Asks what strategic control is and why it matters for organizations. • Stresses
that strategic control keeps the organization on its planned path by identifying problems, changes
in premises, and making necessary adjustments. • Also requests a brief explanation of four types
(premise control, strategic surveillance, special alert control, implementation control).

Answer Gist: • Strategic Control: Ongoing process of evaluating a chosen strategy as it is formulated
and implemented, focusing on: 1. Whether the strategy is executed as intended. 2. Whether
outcomes match the firm’s strategic objectives. • Four Types: 1. Premise Control- Monitors the
critical assumptions/premises on which the strategy is founded (e.g., market growth rate, tech
trends). If they change, managers reassess the strategy. 2. Strategic Surveillance-A broad-based
scanning of various information sources to detect unanticipated developments that could affect
strategy. Less focused than premise control; it’s more like a general early-warning system. 3. Special
Alert Control- Activated by sudden, major, often crisis-level events (e.g., natural disasters,
competitor’s big merger). Triggers immediate, in-depth review of strategy. 4. Implementation
Control- Monitors whether strategic actions and steps are unfolding according to plan. Looks at
results of incremental or sequential steps to see if changes to the overall strategy might be needed.

2. Principal Aspects of Strategy Execution

Question Essence: Outlines the principal aspects of strategy execution (or implementation) in
converting strategic plans into actions/results.

Answer Gist: Good execution requires creating strong fits between the strategy and (i)
organizational capabilities, (ii) reward structures, (iii) internal processes, and (iv) the culture/work
climate. Key aspects include allocating sufficient resources, staffing with required expertise, setting
supportive policies/procedures, adopting best practices and continuous improvement, installing
suitable information systems, motivating personnel with rewards/incentives, building a conducive
culture, and providing strong internal leadership to drive and refine execution.

3. Difference Between Strategy Formulation and Strategy Implementation

Question Essence: • Compares formulation (deciding) vs. implementation (doing). • Often appears
as a short-answer or essay question in strategic management.

Answer Gist: • Strategy Formulation o Concerned with creating the strategy. o Primarily an
intellectual, analytical, top-level process. o Emphasizes effectiveness: identifying what the
organization should do. • Strategy Implementation o Concerned with executing the strategy. o
Operational, more about middle/lower-level managers mobilizing resources and people. o
Emphasizes efficiency: doing tasks right and on time. o Involves motivating, leadership, ensuring
organizational structure fits the strategy.

4. Network Structure (Case: LMN Ltd. or Samar Electronics)

Question Essence: The question highlights a scenario in which a company (like LMN or Samar) is
operating in a fast-changing/unstable environment and decides to outsource most tasks to
specialized vendors. This reduces in-house functions and creates a “network organization. Also
addresses its advantages and disadvantages.

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Answer Gist: Definition/Features: Often called “non-structure” or “virtual organization”: many

in-house functions are outsourced. A small headquarters or “broker” coordinates external
teams/vendors in a web-like arrangement. Highly decentralized, well-suited to unstable or rapidly
changing environments. Circumstances to Use: When frequent adaptation, innovation, quick
response is crucial. When significant outsourcing is needed, or the organization’s resources are
limited. Advantages: High flexibility, concentration on core competencies, adaptability to rapid
shifts. Disadvantages: Potential loss of control, reliance on partners, duplication of resources,
coordination challenges.

5. Transformational vs. Transactional Leadership

Question Essence: • Emphasizes two leadership paradigms: transformational (charisma, vision)

and transactional (authority, rewards/penalties). • Asked why each is different or better in certain
circumstances.

Answer Gist: 1. Transformational Leadership o Inspires employees to exceed expectations. o

Encourages innovation, fosters a sense of mission. o Effective in turbulent environments or when
major change is needed. 2. Transactional Leadership o Based on formal authority and exchange
(reward or punishment). o Effective for stable, routine tasks. o Relies on well-defined
responsibilities and short-term goals.

6. Ram & Shyam (or Ramesh & Yashpal) – Transactional vs. Transformational

Question Essence: • Ram (Ramesh) uses authority, sets weekly targets, uses explicit
rewards/penalties. • Shyam (Yashpal) involves employees in decisions, fosters enthusiasm.

Answer Gist: • Ram/Ramesh = Transactional: o Focuses on performance targets, structured

approach, direct link of reward/punishment to outcomes. • Shyam/Yashpal = Transformational: o
Builds commitment by sharing a compelling vision, empowering staff, appealing to values. • Each
has distinct benefits: transactional suits stable tasks, transformational suits environment needing
innovation/change.

7. Steps for Initiating Strategic Change

Question Essence: • Organization modifies a major aspect (like structure, tech, workforce). • The
question references a generic 3-step or multi-step process to manage the transition.

Answer Gist: 1. Recognize/Diagnose the Need: Identify problems with the current approach,
highlight external triggers. 2. Create Shared Vision: Communicate reasons for change, address
concerns, gain buy-in from stakeholders. 3. Institutionalize: Implement and sustain new policies,
monitor effects, ensure the change endures. (For more detail on Lewin’s approach, see Q#25.)

8. Operational Control vs. Management Control

Question Essence: • Asks how operational control focuses on individual tasks while management
control deals with broader, aggregated concerns in an organization.

Answer Gist: • Operational Control o Day-to-day control of transactions, tasks, or workflows. o E.g.,
checking inventory reorder levels, daily shift productivity. • Management Control o Involves bigger-
picture coordination among departments, evaluating overall performance vs. objectives. o E.g.,
reviewing entire business unit performance, adjusting departmental budgets or policies.

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9. Hourglass Structure

Question Essence: • The question references a scenario where middle management is significantly
reduced, top and bottom remain robust. • Typically arises from technology automation or new
communications systems.

Answer Gist: • Characteristics: 1. Narrow middle layer, wide top and bottom layers. 2. IT tools or AI
often replace many middle-manager roles. 3. Allows direct, faster communication from top to
bottom. 4. Pros: Lower cost, fewer bureaucratic delays, quicker decisions. 5. Cons: Potential overload
on top managers, less “buffer” in the middle.

10. Implementation Control & Its Basic Forms

Question Essence: • Implementation control specifically checks whether the ongoing execution
activities align with strategic objectives.

Answer Gist: • Implementation Control: 1. Monitoring Strategic Thrusts: Checking specific

strategic projects or “thrusts” to confirm progress is correct. 2. Milestone Reviews: Setting critical
checkpoints (time-based or event-based) to evaluate whether the strategy is producing desired
results or needs modifications.

11. CEO Responsibilities (Case: KaAthens Ltd., ABC Inc.)

Question Essence: Addresses the responsibilities of a CEO (e.g., Aditya Bandopadhyay of

KaAthens Ltd.) as an effective strategic leader.

Answer Gist: 1. Making Key Strategic Decisions and ensuring alignment with vision/mission. 2.
Formulating Policies and action plans to drive strategy. 3. Communicating effectively across the
organization, clarifying roles and goals. 4. Managing Human Capital by hiring, training, and
motivating employees. 5. Driving Organizational Change: Shifting structure, culture, or processes
as needed. 6. Maintaining Ethical Standards and corporate citizenship.

12. SBU Structure for CDE/PQR (Multi-product Entities)

Question Essence: A large firm (CDE/PQR Ltd.) splits operations into multiple streams (FMCG/E-
commerce/Retail/R&D, or Manufacturing/Retail/Services/Technology) to operate as separate
businesses with delegated responsibility—identifying the new structure, its attributes, and
benefits.

Answer Gist: The structure is the SBU (Strategic Business Unit) structure. SBUs are separate
business groupings for planning and accountability. Each SBU has a distinct set of
competitors/strategies, its own manager, and a clear product-market focus, aiding in strategic
planning and effective resource allocation.

13. Leadership Role in Good Strategy Execution

Question Essence: Explains the leadership roles managers must play to ensure successful
strategy execution.

Answer Gist: Managers serve as visionary, strategist, administrator, culture-builder, etc.

Specifically, they (1) stay on top of what’s happening and address obstacles, (2) foster a high-
performance culture, (3) keep the firm responsive to change, (4) lead ethically, and (5) push
corrective actions where needed to improve execution and results.

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14. SBU: Meaning & Advantages

Question Essence: Defines a Strategic Business Unit (SBU) and states its advantages.

Answer Gist: An SBU is a part of an organization that’s treated separately for strategic
management, with its own profit responsibility. Advantages include clearer accountability, better
control of diverse businesses, focused strategic planning, easier allocation of resources, and a
more objective strategic review.

15. Sanya Pvt. Ltd. (Automobile) & Control Process Elements

Question Essence: • The company’s planning fails due to resource misuse and non-conformance.
They need a robust control system.

Answer Gist: • Control Process usually involves: 1. Setting Objectives/Standards (what’s

expected). 2. Measuring Actual Performance (collecting data). 3. Comparing results with standards
to find deviations. 4. Taking Corrective Actions: Adjust processes or targets as needed. • This helps
align day-to-day operations with strategic goals, preventing resource misuse.

16. Changing a Problem Culture: More Detailed Steps

Question Essence: How management can communicate it’s committed to creating a new,
healthier culture if the old one was problematic (or out of sync with the new strategy).

Answer Gist: 1. Diagnose: Identify the cultural facets that help or hinder strategy. 2. Confront
employees openly about the need to change norms/behaviors. 3. Demonstrate Seriousness:
Through visible leadership changes, new policies, reward/punishment aligned with desired
culture. 4. Embed the new culture through ongoing reinforcement, removing cultural “bad apples”
if needed.

17. Corporate Culture: Both Strength & Weakness

Question Essence: Explains corporate culture, and how it can be both a strength and a
weakness.

Answer Gist: • Culture as Strength: 1. Facilitates communication, better decision-making, fosters

loyalty. 2. Encourages consistent approach to tasks, synergy. • Culture as Weakness: 1. Resists
adaptation, especially if environment changes. 2. Inflexible traditions can hamper new strategies.

18. Major Stages in the Strategic Management Process

Question Essence: Summarizes the strategic management process framework in five stages.

Answer Gist: (1) Set Vision, Mission, Objectives, (2) Analyze Environment & Organization (SWOT),
(3) Formulate Strategy, (4) Implement Strategy (organizational change, resource alignment,
motivating staff), and (5) Evaluate & Control (assess progress, adapt if necessary). This cycle is
iterative, ensuring continuous alignment with goals and the external environment.

19. Transformational vs. Traditional Leadership

Question Essence: • Another angle on transformational leadership (change-oriented) vs.

traditional (hierarchical, bureaucratic, formal authority).

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Answer Gist: • Transformational: Flexible, future-oriented, often arises in dynamic or crisis-laden

scenarios. • Traditional: Structured, stable environment, focus on following established rules. •
Transformational fosters new cultures, whereas traditional leadership maintains status quo
effectively if environment is stable.

20. SBU Ideas Benefit a Firm: Why?

Question Essence: Explains how adopting a Strategic Business Unit (SBU) structure or
approach benefits a firm by improving accountability, resource monitoring, and responding more
effectively to market changes.

Answer Gist: Key Benefits: Synergy within each SBU-units producing similar products or using
similar technologies are grouped for optimal coordination. Quicker Response to environmental
shifts-each SBU is a profit center responsible for its own strategy and outcomes. Focus at
Headquarters-corporate leaders can concentrate on broad strategic planning, while SBUs handle
operational decisions. Accountability- each SBU’s performance is transparent, making it easier to
evaluate and improve. Simplified Control-monitoring and controlling separate SBUs is more
accurate, avoiding confusion over performance among diverse product lines.

21. Matrix Structure & Davis/Lawrence 3 Phases

Question Essence: • Detailing how organizations gradually shift to a true matrix over time from
temporary cross-functional teams to permanent product managers to full dual authority.

Answer Gist: 1. Cross-Functional Task Forces: Initially formed for specific projects. 2.
Product/Brand Management: Becomes a more permanent arrangement. 3. Mature Matrix:
Functional + product managers share authority. • Each phase demands increased cooperation and
complexity but offers more flexibility and responsiveness.

22. Importance of Corporate Culture

Question Essence: • Emphasizes how culture (values, norms) strongly impacts daily operations,
synergy, and strategic success.

Answer Gist: • A robust, strategy-aligned culture: 1. Motivates employees to act in strategy-

supportive ways. 2. Creates informal rules/peer pressure for high performance. 3. Encourages a
positive environment, better acceptance of the firm’s vision and goals.

23. Functional Structure: Meaning

Question Essence: Explains how the functional structure organizes a firm’s tasks and people by
major business functions (e.g., Production, Accounting, Marketing, etc.) and highlights its features
and drawbacks.

Answer Gist: Definition: A functional structure is headed by a CEO/MD and supported by

corporate staff, with line managers overseeing core functions (production, marketing, finance,
etc.). Reasons for Popularity: Simplicity and relatively low operational cost. Organization by
Function: Groups tasks according to specialized functions, ensuring focus and expertise within
each area. Drawbacks: Concentrates accountability at the top, may limit cross-functional career
growth, reduces collaboration across different functions.

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24. Backward/Forward Linkages: Strategy Formulation ↔ Implementation

Question Essence: • Explains that formulating strategy (choosing it) and implementing it
(executing it) have mutual feedback loops.

Answer Gist: • Forward Linkage: o Formulation → Implementation. o A new strategy demands

new structure, policies, resources. • Backward Linkage: o Implementation → Formulation. o
Results or unforeseen issues feed back into adjusting or even redesigning the strategy. • Example:
If a company hires top designers for a new product strategy but discovers their actual skills differ,
it must revise the strategy to match real resources.

25. Strategic Change & Lewin’s 3-Stage Model (Unfreezing, Changing, Refreezing)

Question Essence: • Summarizes how organizations handle major internal changes (like new
products, new ways of business) using Kurt Lewin’s approach.

Answer Gist: 1. Unfreezing: Create dissatisfaction with the status quo, build awareness that
change is necessary. 2. Changing: Transition to new behaviors/structures, train employees,
manage resistance. 3. Refreezing: Lock in the new methods, reward desired behaviors, ensure they
become the new norm.

26. SBU Manager’s Leadership Role in in Strategy Execution (e.g., Suresh Sinha)

Question Essence: Advises Suresh Sinha, newly appointed head of an SBU, on the essential
leadership responsibilities for effective strategy execution.

Answer Gist: 1. Monitor Progress & Resolve Obstacles: Stay informed about ongoing initiatives,
address issues that hinder execution. 2. Foster a High-Performance Culture: Promote teamwork
and esprit de corps, energizing staff to implement the strategy effectively. 3. Remain Adaptive &
Innovative: Encourage responsiveness to changes, spotting new opportunities and nurturing
competencies to outpace competitors. 4. Practice Ethical Leadership: Uphold high ethical
standards, ensuring business behaves as a responsible corporate citizen. 5. Drive Corrective
Actions: Push corrective measures if performance deviates from targets

27. Lewin’s Three-Stage Change for Structure/Tech/People

Question Essence: • Reiterates how to adopt changes in organizational structure, technology, or

staffing. • Typically, the question cites a 3-stage approach to reduce resistance and secure
commitment.

Answer Gist: 1. Unfreezing: Communicate necessity for new design/technology to break old
routines. 2. Change: Implementation of new structure, providing training/support. 3. Refreezing:
Sustain the changes through continuous monitoring and positive reinforcement.

28. Corporate Strategy Ensures Growth

Question Essence: • Argues that a well-crafted corporate strategy is fundamental for an

organization to expand and adapt, e.g., ABC Ltd.

Answer Gist: • Why Corporate Strategy Is Vital: 1. Lays out long-term vision and resource
directions. 2. Aligns the firm’s capabilities with environmental opportunities. 3. Minimizes risks
by systematically analyzing external threats. 4. Creates synergy among different business units.

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29. Jupiter Electronics Culture: “Work Hard Play Hard”

Question Essence: • The question describes a relaxed yet deadline-driven environment,

employees exhibit confidentiality and synergy. • They are proud of innovations, do not revert to a
formal hierarchical set-up.

Answer Gist: • This scenario exemplifies a strong, supportive corporate culture: 1. Encourages
collaboration and autonomy. 2. Maintains strict adherence to deadlines (performance norm). 3.
Aligns employees’ personal satisfaction with organizational goals. • Culture fosters consistent,
high-level performance and creativity.

30. Strategic vs. Operational Planning

Question Essence: • Asks for a detailed difference, referencing scope, time horizon, and
managerial level.

Answer Gist: • Strategic Planning: o High-level, long-term (3–5 years+). o Focus on shaping
organization’s future direction. o Led by top management. • Operational Planning: o Near-term,
day-to-day or monthly/quarterly. o Focus on immediate resource deployment, routine tasks. o
Middle/lower managers handle it.

31. Matrix Structure: Definition & Key Points

Question Essence: • Summarizes how a matrix merges functional and product dimensions, often
used by global or project-based organizations. • Mentions employees having two bosses.

Answer Gist: • Matrix: 1. Combines functional specialization with product or project focus. 2.
Enhances cross-functional communication but can create role conflict if managers disagree. 3.
Often found in consultancies, R&D labs, large engineering firms, or those needing fast cross-
functional collaboration.

32. Strategy-Supportive Culture & Execution

Question Essence: • Explains how if the culture is well-aligned with the strategic vision, it pushes
employees to execute tasks more effectively.

Answer Gist: • Culture’s Positive Force: 1. Provides informal rules and norms aligned with strategic
goals. 2. Fosters cooperation, a shared sense of purpose, and enthusiasm for meeting performance
targets. • If well-crafted, employees “buy in” wholeheartedly.

33. BOYA Ltd. & McKinsey 7S Model for Organizational Alignment

Question Essence: BOYA Ltd. (or York Investors) wants to align its internal “hard” and “soft”
elements—strategy, structure, systems, shared values, style, staff, skills—to adapt to a changing
environment. Also discusses limitations of the model.

Answer Gist: McKinsey 7S Model: A strategic tool that groups organizational elements into hard
(strategy, structure, systems) and soft (shared values, style, staff, skills). Key Point: Changing one
element can ripple across others; If the company changes, say, structure or staff competencies, it
must adjust systems, style of leadership, etc. The model ensures comprehensive alignment.
Limitations: Ignores external environment, can be too static, and doesn’t fully address
organizational effectiveness or real gaps in strategy execution.

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34. Managing Strategic Uncertainties in Rapidly Changing Environments

Question Essence: Explains how firms cope with unpredictability (market shifts, technology,
competition).

Answer Gist: Strategies: 1. Flexibility: Built into strategies and operations to pivot quickly. 2.
Diversification: Spreading risks across products/markets. 3. Monitoring & Scenario Planning:
Continual scanning, “what-if” analyses. 4. Building Resilience: Strengthening internal processes,
financial flexibility, risk management. 5. Collaboration/Partnerships: Sharing risk/resources,
tapping broader knowledge.

35. Importance of Strategic Performance Measures (SPM)

Question Essence: Why organizations need SPM to track how effectively their strategies meet
goals.

Answer Gist: 1. Goal Alignment: Ensures day-to-day activities match strategic objectives. 2.
Resource Allocation: Data-driven decisions on where to invest effort/capital. 3. Continuous
Improvement: Regular performance metrics reveal where adjustments are needed. 4. External
Accountability: Transparency for stakeholders (investors, customers, regulators).

36. Types of Strategic Performance Measures

Question Essence: Defines SPM and outlines various categories (financial, customer, market,
employee, innovation, environmental).

Answer Gist: SPM: Metrics for evaluating strategic objectives, ensuring alignment with overall
goals, tracks if strategy is working, identifies improvement areas, ensures accountability.
Types/Categories: 1. Financial (ROI, margins) 2. Customer (satisfaction, retention). 3. Market
(market share, referrals). 4. Employee (engagement, turnover). 5. Innovation (R&D spend,
product launches) 6. Environmental (energy usage, waste reduction).

37. H.C. Kellman’s Three Methods of Behavior Change

Question Essence: • An approach explaining how individuals can adopt new behaviors in an
organization undergoing change (compliance, identification, internalization).

Answer Gist: 1. Compliance: People do new behaviors mainly to get rewards/avoid punishment.
2. Identification: Adopting behaviors of role models/peer influence. 3. Internalization:
Transforming personal values and accepting new behaviors as one’s own.

38. Divisional Structure (Diagram & Pros/Cons)

Question Essence: Shows how a firm can be organized by product/service, region, or process
under a divisional setup, including pros and cons.

Answer Gist: Divisional Structure- Organization groups units based on products, services, or
geography—leading to self-contained divisions. Each division is a semi-autonomous entity with
its own functions. Advantages: Clear accountability, fosters healthy internal competition, better
career growth paths, local control over decisions. Disadvantages: Can be costly (duplicate
resources), potential rivalry among divisions, heavier HQ-driven control systems.

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39. Strategic Management Process Model

Question Essence: • Summarizes the standard 5-step cycle in a diagrammatic form, highlighting
the iterative nature of forming, implementing, and controlling strategy.

Answer Gist: 1. Set Vision, Mission, Objectives. 2 Analyze (External Opportunities/Threats,

Internal Strengths/Weaknesses) 3. Formulate Strategy 4. Implement (organize, motivate,
allocate resources) 5. Evaluate & Control (monitor performance, adapt strategy as needed).
Because strategy is dynamic, any change in one component often triggers modifications in others.
Many organizations hold periodic (e.g., semi-annual) reviews to update each step. Effective
communication, creativity, and feedback throughout all levels of the organization are vital for
success.

40. Strategic Planning: Meaning & Characteristics

Question Essence: Explains strategic planning’s role within strategic management and key
characteristics.

Answer Gist: Strategic Planning: Involves setting objectives, deploying resources, and
establishing policies for long-term direction. Characteristics: 1. Shapes organization/resources
2. Considers external environment 3. Holistic/overall perspective 4. Concerned with long-term
success 5. Driven by senior management. 6. Develops overarching objectives/strategies for the
entire entity.

41. Coordinating Complex Functions: From Simple → Functional

Question Essence: • Addresses a statement: as companies grow more complex, they abandon the
simple structure to adopt a functional structure.

Answer Gist: • Simple Structure works fine for a small firm or start-up. • Functional Structure
becomes essential when tasks multiply, requiring specialized departments for finance, marketing,
etc. • A functional structure helps handle complexity but can create departmental silos if not well-
managed.

42. Why a Divisional Structure Can Be Costly

Question Essence: • The question specifically wants to highlight reasons behind higher expenses
in a divisional approach.

Answer Gist: 1. Each division may replicate functions (HR, accounting). 2. Complex overhead from
coordinating multiple profit centers. 3. Requires strong managerial talent at the division level
(higher salaries). 4. Possibly higher administrative costs from elaborate HQ-driven systems.

43. SBU Characteristics

Question Essence: Discusses how an SBU is defined and what sets it apart within a larger
corporate structure.

Answer Gist: An SBU is essentially a profit center focusing on a particular product/market

segment, operating somewhat independently within a larger corporate structure. Key
Characteristics: 1. It can be one distinct business or a collection of closely related product lines.

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2. It faces a unique set of competitors separate from the rest of the parent organization’s portfolio.
3. An SBU is led by a manager responsible for strategic planning and profit performance

44. Culture’s Impact on Organization

Question Essence: • Expands on how corporate culture shapes employee behavior, synergy, and
overall strategic performance.

Answer Gist: • Corporate Culture: The unwritten rules, beliefs, and norms. • If aligned with the
firm’s strategy, it: 1. Encourages staff to do “the right thing” automatically. 2. Enhances motivation
and synergy. • If misaligned, it can stall or sabotage strategic initiatives.

45. Impact of Corporate Culture on an Organization

Question Essence: Explains how corporate culture (“how things are done here”) affects
employees’ behavior, motivation, and alignment with organizational goals.

Answer Gist: Corporate culture is the organization’s “personality,” comprising shared values,
beliefs, and behavioral norms that guide how employees interact with each other and external
stakeholders. Impact: 1. Provides an informal system of rules for day-to-day behavior. 2. Shapes
workforce mood, motivation, and cooperation, influencing operating practices and customer
treatment. 3. Motivates people to execute strategies effectively. 4. Strengthens employee
identification with company’s vision and performance targets. 5. Creates a positive environment
that enhances job satisfaction.

46. Steps to Change a Company’s Problem Culture

Question Essence: Outlines the actions necessary to address and shift elements of an existing
culture that hinder strategy execution or overall organizational health.

Answer Gist: 1. Recognize Need for Change: Diagnose which cultural aspects are supportive of
the strategy and which are not. 2. Create a Shared Vision: Align individual and organizational
objectives; ensure stakeholders understand and commit to new cultural values. 3. Institutionalize
Change: Implement change strategies, reinforce desired behaviors, and prevent going back to old
habits.

47. Delta or Samar Electronics → Hourglass

Question Essence: • References the introduction of AI or advanced IT that replaces a large chunk
of middle managers, bridging top and bottom directly.

Answer Gist: • Hourglass: 1. Middle layer shrinks drastically. 2. Speedy communication, cost
reduction, but more responsibilities for fewer managers. 3. Works well in a technology-driven
context with direct link from top decision-makers to frontline staff.

48. Corporate Culture: Concept and Problems with Changing Environments

Question Essence: Explores the concept of corporate culture (values, beliefs, principles, norms)
and the problems businesses face when changing culture in response to a globally shifting
scenario.

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Answer Gist: Corporate Culture: Refers to an organization’s “personality”—its operating norms,

shared values, and traditions. Problems in Cultural Change: 1. Changing deeply embedded
values/habits is complex. 2. Must identify supportive vs. non-supportive cultural elements. 3.
Openly communicate reasons/benefits of change. Organizational behavior must adapt
significantly when culture changes, necessitating candid discussions and clarity on advantages.

49. Manoj’s Telecom Start-Up Grows to 50 Staff → Functional Structure

Question Essence: • As the business expands with distinct operational segments (accounts,
admin, sales, service), Manoj must adopt a functional structure to keep tasks organized.

Answer Gist: • Functional Structure: Each function (accounts, administration, marketing,

operations) forms a department. Specialization ensures clearer roles/responsibilities, suitable for
a ~50-person team. If the firm keeps expanding, it might later shift to divisional or SBU if
complexity grows further.

50. SBU Structure Is Imperative for Large, Diverse Firms

Question Essence: Explains why a Strategic Business Unit (SBU) structure becomes necessary as
a firm’s divisions grow in number, size, and diversity.

Answer Gist: SBU Structure: Treats each major product/business line as a separate unit with its
own competitors, strategy, and profit accountability. Benefits: Facilitates coordination among
similar divisions, clarifies accountability, enables more effective strategic planning at relevant
business levels, and simplifies resource allocation.

51. The Multidivisional (M-Form) Structure for Bunch Pvt. Ltd.

Question Essence: Bunch Pvt. Ltd. struggles with coordination/control for multiple
products/markets (electronics, FMCG). Which structure resolves these difficulties?

Answer Gist: Multidivisional (M-Form) Structure: Each division is run as a separate business,
managed by division heads. Corporate HQ focuses on overall strategic direction, using strategic
and financial controls. Suited to large multi-product firms to address coordination and
performance measurement issues.

52. Suitability of SBU Structure for Moonlight Pvt. Ltd.

Question Essence: Moonlight deals in multiple products/businesses, each with unique

competitors. Which structure and why?

Answer Gist: SBU Structure: Groups products/businesses into distinct SBUs for dedicated
strategic management. Benefits: Strategic focus, coordination among related units, easier
accountability and control, improves resource allocation, and more effective top-level reviews.

53. Interrelationship of Strategy Formulation and Implementation

Question Essence: Emphasizes that both formulation and implementation must be robust for
success; a good plan alone isn’t sufficient without proper execution.

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Answer Gist: Formulation: Decides what the firm should do (effectiveness). Implementation:
Translates plans into actions (efficiency). Only when both are strong (sound formulation +
excellent execution) does the firm realize success (Square B in the matrix).

54. Difference Between Unfreezing and Refreezing (Lewin)

Question Essence: • Pinpoints the first and last stages in Lewin’s model: o Unfreezing: readies
people for change. o Refreezing: solidifies new ways into daily practice.

Answer Gist: • Unfreezing: 1. “Breaking” old habits or norms. 2. Conveying why the status quo is
no longer viable. • Refreezing: 1. Reinforcing new routines, ensuring they stick. 2. Rewarding
desired behaviors, institutionalizing them.

55. “Premise Control Is a Tool for Systematic, Continuous Monitoring”

Question Essence: • Explains that premise control checks assumptions on which the strategy is
built—like demographic trends, tech cost, regulatory environment.

Answer Gist: • Premise Control: 1. Regularly examines whether external/internal assumptions

remain valid. 2. Especially critical if environment changes fast. 3. If assumptions fail, strategy must
be revisited or adjusted.

56. Glassware Moving from Decentralized to Centralized: “Unfreezing” Stage

Question Essence: • Management just held a staff briefing, explaining that centralization is
needed to face future challenges. This is them “unfreezing” staff attitudes before the actual shift.

Answer Gist: • Unfreezing: 1. Communicates reasons for structural change (reducing duplication,
cost savings). 2. Prepares employees mentally, mitigating resistance. 3. Next step is the “changing”
phase (implementing the centralization).

57. Transactional vs. Transformational Leadership (Ramesh vs. Suresh)

Question Essence: Contrasting Ramesh’s strict, rules-based reward/penalty system with Suresh’s
empowering, visionary approach.

Answer Gist: Ramesh = Transactional: Structured, target-based, uses formal authority and
material rewards/punishments. Effective in stable/mature settings for efficiency. Suresh =
Transformational: Inspires, aligns personal goals with group vision, fosters innovation/change.
Suited to dynamic contexts needing major shifts.

58. Key strategies/pointers to navigate change effectively (Change Management in Digital

Transformations)

Question Essence: Why it is crucial and best strategies to manage change effectively during a
digital transformation.

Answer Gist: Ensures employees/stakeholders understand and adopt new tech/processes. Key
strategies: 1. Clearly specify aims & objectives. 2. Communicate openly. 3. Be ready for
resistance. 4. Gradual implementation. 5. Provide assistance & training.

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59. Best Practices for navigating digital transformation for SME (Small and mid-sized enterprises)

Question Essence: Recommends how a small manufacturing company can effectively

handle/navigate digital transformation.

Answer Gist: Key Strategies :1. Begin at top: Unified vision, lead by example. 2. Ensure change
is necessary and desired: Justify the need, assess current state, involve employees for buy-in. 3.
Minimize Disruption: Communicate early, train staff, roll out gradually. 4. Encourage
Communication: Create feedback channels, collaboration between departments. 5. Recognize
that change is the norm: Recognize digital transformation is ongoing, not a one-off event.

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