MMPC 12 Free Solved Assignment
MMPC 12 Free Solved Assignment July & Jan 2022
Q1 – Discuss the various strategic decisions involved at different levels of strategy. Illustrate your answer with the help of examples?
Ans- Various strategic decisions involved at different levels of strategy – Strategic decisions are the decisions that are concerned with whole environment in which the firm operates,
the entire resources and the people who form the company and the interface between the two.
There are many benefits of strategic management and they include identification, prioritization, and exploration of opportunities.
For instance, newer products, newer markets, and newer forays into business lines are only possible if firms indulge in strategic planning.
Next, strategic management allows firms to take an objective view of the activities being done by it and do a cost benefit analysis as to whether the firm is profitable.
We now know that strategy is a series of steps based on an organization’s vision, mission, goals and objectives.
Strategic Management is concerned with the effective deployment of business strategies for the achievement of the organizational objectives for the purpose of reaching the desired goal.
Strategic management involves making strategic decisions at various levels of the organization. MMPC 12 Free Solved Assignment
However, strategic decisions are taken at the top level of management and then transferred to lower level management.
These decisions are related to moving from the present state of an organization to a future state.
It basically develops a framework within which an organization functions.
In other words, strategic management defines organizational capability, forms of value addition and the purpose of the existence of an organization.
LEVELS OF STRATEGY
It is believed that strategic decision making is the responsibility of top management.
However, it is considered useful to distinguish between the levels of operation of the strategy. Strategy operates at different levels. These are:
• Corporate Level
• Business Level
• Functional Level
There are basically two categories of organizations- one, which have different businesses organized at different directions or product groups known as profit centres or strategic business units (SBUS) and other,
which consists of organizations which are single product organizations.
The example of first category can be that of an organization which is a highly integrated producing textile, yarn, and a variety of petro chemical products and the example of the second category could be an organization which is engaged in the manufacturing and selling of heavy commercial vehicles.
The SBU concept was introduced by General Electric Organization (GEC) of USA to manage product business.
The fundamental concept in the SBU is the identification of discrete independent product/ market segments served by the organization. The three levels are explained below.MMPC 12 Free Solved Assignment
Corporate level strategy
At the corporate level, strategies are formulated as per the policies of the organization. Characteristics
• At such a level, strategy is a comprehensive plan providing objectives for SBUS, allocation of resources among functional areas and coordination between them for achievement of corporate corporate level objectives.
• These strategies operate within the overall organizational strategies i.e. within the broad constraints and polices and long term objectives set by the corporate strategy.
• The SBU managers are involved in this level of strategy.
• The strategies are related with a unit within the organization.
• The SBU operates within the defined scope of operations by the corporate level strategy and is limited by the assignment of resources by the corporate level.
• Business strategy relates with the “how” and the corporate strategy relates with the “what”.
• Business strategy defines the choice of product or service and market of individual businesses within the organization. The corporate strategy has impact on business strategy.
Functional level strategy This strategy relates to a single functional operation and the activities involved therein. This level is at the operating end of the organization.
Characteristics MMPC 12 Free Solved Assignment
• The decisions at this level within the organization are described as tactical.
The strategies are concerned with how different functions of the enterprise like marketing, finance, manufacturing etc. contribute to the strategy of other levels.
• Functional strategy deals with a relatively restricted plan providing objectives for specific function, allocation of resources among different operations within the functional area and coordination between them for the achievement of SBU and corporate level objectives.
Sometimes a fourth level of strategy also exists. This level is known as the operating level.
It comes below the functional level strategy and involves actions relating to various sub functions of the major function.
For example, the functional level strategy of marketing function is divided into operating levels such as marketing research, sales promotion etc. Three levels of strategies have different characteristics
EXAMPLE- Let’s use Samsung as an example. Samsung is a conglomerate consisting of multiple strategic business units (SBU’s) with a diverse set of products.
Samsung sells smartphones, cameras, TVs, microwaves, refrigerators, laundry machines, and even chemicals and insurances.
Each product or strategic business unit needs a business strategy in order to compete successfully within its own industry.
However, at the corporate level Samsung has to decide on more fundamental questions like: MMPC 12 Free Solved Assignment
“Are we going to pursue the camera business in the first place?” or “Is it perhaps better to invest more into the smartphone business or should we focus on the television screen business instead?”.
The BCG Matrix or the GE McKinsey Matrix are both portfolio analysis frameworks and can be used as a tool.
The most common level of strategy is Business strategy and exist within strategic business units with as goal to gain competitive advantage in a certain market.
If a company has multiple SBU’s, there needs to be an overarching Corporate strategy that ties all SBU’s together through corporate configuration.
Here, top management must decide on resource allocation and where to invest and where to divest. MMPC 12 Free Solved Assignment
Lastly, Functional strategy exist within departments such as Marketing, HR and Production.
Ideally, we should refer to tactics instead of strategies because of the operational nature of the decisions made within these departments.
Q2- How do the environmental factors affect the organization? Explain with respect to the PESTLE framework?
Ans-Environmental factors affect the organization – Understanding the environment that surrounds an organization is important to the executives in charge of the organizations.
There are several reasons for this. First, the environment provides resources that an organization needs in order to create goods and services.
The external forces can be classified into six broad categories: Political, Economic, Social, Technological, Environmental and Legal Forces.
Changes in these external forces affect the changes in consumer demand for both industrial and consumer products and services.
These external forces affect the types of products produced, the nature of positioning, market segmentation strategies, the types of services offered, and choice of business. Therefore, it becomes important for the
organizations to identify and evaluate external opportunities and threats so as to develop a clear mission, design strategies to achieve long-term objectives and develop policies to achieve short term goals.
Here, we will discuss all the six forces individually and then try to come to the conclusion regarding environmental analysis.
A careful analysis of the above factors will help in identifying major trends for different industries. MMPC 12 Free Solved Assignment
Environmental factors affect the organization IN PESTLE
Environment conservation and protection is an issue, which has gained prominence because of deteriorating environmental balance which is threatening the sustainability of life and nature.
Largely, businesses are also held responsible for such situations as emissions from industries polluting the air, excessive chemical effluents drained out in water making it poisonous and unfit for use,
usage of bio non-degradable resources affecting the bio-chain adversely and exposure of employees to hazardous radiations bring their life in danger.
All these have been taken very seriously by different stakeholders in the society including the government and legislations and movements are creating pressure for an environment friendly business.
These have far reaching implications for businesses ranging from the kind of business, the product being manufactured, how it is manufactured and how friendly it is for mankind and nature.
Many multinationals that come under the purview of the society regarding the environmental hazards have started using more sustainable methods to survive in the business.
The businesses all over are now concentrating more on preserving the nature than harming it. MMPC 12 Free Solved Assignment
The competitive environment refers to the situation which organization’s face within its specific area of operation, and this can be understood at an industry level or with respect to smaller groups called Strategic groups.
Generally understood, an industry in the economy is recognized as a group of organizations producing the same principal product or more broadly
the group of organizations producing products that are close substitutes for each other and in a given industry different organizations have different intermediate basis of understanding its relative position with respect to other organizations in the industry.
Organizations within an industry with similar strategic characteristics, following similar strategies or competing on similar bases are called strategic groups.
These characteristics for a particular group will be different from those in other strategic groups in the same industry or sector.
There may be many different characteristics, which distinguish between strategic groups.
For example size, breadth of product range, geographical coverage, quality or service levels or marketing spend.
The concept of strategic groups when used helps in understanding who is the direct competitor of any given organization and on what basis competitive rivalry is likely to take place within each strategic group.
There are competitive forces beyond direct rivals which shape up the competitive environment that can be better understood with the five forces framework.
the general environment in which an organization operates is the foremost prerequisite towards strategy formulation.MMPC 12 Free Solved Assignment
The six broad dimensions which this PESTLE framework provides the environment-political, economic, socio-cultural, technological, legal and environmental are capable of giving a comprehensive overview of how things may be unfolding.
The objective of the analysis of this framework however should not only restrict to the present and past but the real focus should be on projecting the trends into future in order to get the real feel of the environment.
This shall enable the organizations to proactively strategize for future considering the general environment.EFE matrix is used to assess these factors.
Environmental factors include all those relating to the physical environment and to general environmental protection requirements.
While the environment is more important to some industries, such as tourism, agriculture or food production, these factors may influence a range of different industries and are worth being aware of.
Environmental factors include:
• Geographical location
• Stakeholder and consumer values
• Environmental offsets
• Global climate change
Q3- What do you understand by scenario planning? illustrate in a stepwise manner?
Ans- People are confronted with various events on a daily basis. These events include predictable as well as unpredictable matters. Organizations have to contend with these events too. MMPC 12 Free Solved Assignment
Some events may dramatically affect the short-term as well as the long-term day-to-day management of an organization.
Therefore it is a good thing that organizations are somewhat prepared for future events. Scenario planning focuses on an outlook for the future.
It is a method with which organizations can form an idea of possible future scenarios and how these may affect their strategic objectives.
However, making predictions about the future is very difficult and this is why organizations create a variety of possible future scenarios. This is exactly what Scenario Planning focuses on.
It enables organizations to develop their strategies, products and services and adapt these where necessary in an ever changing world.
Scenario Planning is about making different scenarios for different future landscapes. Using these scenarios, an organization will be able to make better decisions when problems or changes occur.
An organization knows what it needs to be aware of and which decisions will work to its advantage.
SCENARIO PLANNING– Scenarios are tools for ordering one’s perceptions about alternative future environments in which today’s decisions might be framed.
In practice, scenarios resemble a set of stories, written or spoken, built around carefully constructed plots. MMPC 12 Free Solved Assignment
These stories can express multiple perspectives on complex events; scenarios give meaning to these events.
Scenarios are powerful planning tools precisely because the future is unpredictable.
Unlike traditional forecasting or market research, scenarios present alternative images instead of extrapolating current trends from the present.
Scenarios also embrace qualitative perspectives and the potential for sharp discontinuities that econometric models exclude.
Consequently, creating scenarios requires decision-makers to question their broadest assumptions about the way the world works so they can foresee decisions that might be missed or denied.
Within an organization, scenarios provide a common vocabulary and an effective basis for communicating complex – sometimes paradoxical – conditions and options.
Good scenarios are plausible and surprising, they have the power to break old stereotypes, and their creators assume ownership and put them to work.
Using scenarios is rehearsing the future.
By recognizing the warning signals, the threats and opportunities that is unfolding, one can avoid surprises, adapt, and act effectively.
Decisions which have been pre-tested against a range of what may offer are more likely to stand the test of time, produce robust and resilient strategies, and create distinct competitive advantage.MMPC 12 Free Solved Assignment
Ultimately, the result of scenario planning is not a more accurate picture of tomorrow but better thinking and an ongoing strategic conversation about the future.
Example of Scenario planning in an Energy Producing Business organization Understanding the business of an energy producing business organization and the environment it faces, Scenario planning can be found useful in the following ways:
• Creating alignment between energy situation and business organization’s vision and purpose. (“What is our 21st century business idea?”).
• Sparking innovation and new forms of value creation (“What new products and services might replace the traditional one?”).
• It will involve many people with ability-to-perceive and/or ability-toact as effective participants in the process.
• It will provide space for multiple interpretations to make sense of what is happening.
• By including people from a broad spectrum of backgrounds, scenario planning will be capable of creating early breakthroughs in perception and understanding, allowing the business organization to get grip of the new environment it can’t escape from.
Stepwise manner of scenario planning
Implementation of Scenario Planning: A company-wide involvement in Scenario Planning leads to better result in a business organization.
A cross-functional team is instituted for the identification and monitoring of issues. Employees are encouraged to participate on an incentive based process.
The onus of refining and final implementation of the suggestions then lies on the cross functional team. MMPC 12 Free Solved Assignment
With the following steps indicated, you will be getting a better understanding of the whole process:
STEP 1: Identification of the Issues Understand the effects of external factors on business and these factors can be:
• Technology-driven (new product, IT based integration)
• Political (deregulation, instability)
• Economic (sudden downturns, boom)
• Competitive positioning (moves from competitors) Participants need not limit themselves to above mentioned factors only; any factor that may have an impact on the company is acceptable.
STEP 2: Classification of the Issues
• Support the issue identified with reports/propositions/any other method.
• Determine the uncertainty and kind of impact of the issue.
STEP 3: Analyzing and Problem Solving Based on above classification a display board of the issues as per their classification can be used to communicate the issue to all and the following sequence can be taken for analysis and finding the solution to the problem.
D category: High impact-low uncertainty: These are highest priority issues which need to be addressed immediately and more cautiously. All employees must first focus on these issues.
C category: Low impact-low uncertainty: These issues can be used for long term planning.MMPC 12 Free Solved Assignment
A category: High uncertainty-low impact: Because of low impact to the organization and high degree of uncertainty involve, these issues can be altogether discarded.
The analysis and problem solution proposition part can be done on an individual or team basis depending upon the interest of the participant(s).
All ideas/reports should then be submitted to the cross functional team for further analysis and implementation.
Scenario planning is making assumptions on what the future is going to be and how your business environment will change overtime in light of that future.
More precisely, Scenario planning is identifying a specific set of uncertainties, different “realities” of what might happen in the future of your business.
It sounds simple, and possibly not worth the trouble or specific effort, however, building this set of assumptions is probably the best thing you can ever do to help guide your organization in the long term.
For example, Farmers use scenarios to predict whether the harvest will be good or bad, depending on the weather. It helps them forecast their sales but also their future investments.
Military institutions use scenario planning in their operations to cope with any unlikely situations, anticipating the consequences of every event.
In this case, scenario planning can mean the difference between life and death.
Q4- What is ‘differentiation’? How does ‘differentiation’ help the organization to develop the competitive edge? Explain with suitable examples?
Ans- DIFFERENTIATION- Differentiation strategy is more of a positioning strategy whereby the organization tries to be unique in its industry by positioning itself along certain dimensions. MMPC 12 Free Solved Assignment
The degree of differentiation varies with different strategies. Differentiation is industry-wide whereas focus strategy is based on a segment or group of segments in the industry.
There are two variants of focus strategy, which are cost focus and differentiation focus.
Every individual customer is unique in itself so is his/her preferences regarding tastes, preferences, attitudes, etc.
These needs of the customers are fulfilled by the organizations by producing differentiated products.
In our day-to-day life we see many such examples of differentiated products. Most of the fast moving consumer goods like biscuits, soaps, toothpastes, oils, etc. come under the category of differentiated products.
To satisfy the diverse needs of the customers, it becomes essential for the organizations to adopt a differentiation strategy.
To make this strategy successful, it is necessary for the organizations to do extensive research to study the different needs of the customers.
An organization is able to differentiate from its competitors if it is able to position itself uniquely at something that is valuable to buyers.
Differentiation can lead to differential advantage in which the organization gets the premium in the market, which is more than the cost of providing differentiation.
The extent to which the differentiation occurs depends on the overall strategy of the organization. MMPC 12 Free Solved Assignment
Previously differentiation was viewed narrowly by the organizations, but in the present scenario it has become one of the essential components of the organization’s strategy
When we talk of differentiation, it can be said that virtually any product can be differentiated.
The greatest potential of differentiation lies in products, which are of complex nature but do not have to adhere to strict regulatory standards,
but the success of a differentiation strategy depends on the organization’s commitment towards customers and the understanding of customer needs as differentiation is all about perceiving on the part of the customer of something unique.
Differentiation can be said to have more competitive advantage than the cost advantage as it is quite difficult to imitate the differentiated products.
Even if the initiation is done in terms of concept, then also a particular product remains unique regarding its value, style, packaging, etc.
Therefore, when we talk about differentiation, it is important to understand the demand of the customers and fulfilling this demand keeping in mind the differentiation advantage. MMPC 12 Free Solved Assignment
In this case, one thing the organizations should concentrate on is creativity and innovativeness than on market research.
We have discussed about the concept of differentiation as a whole but we need to know the why aspect of differentiation, i.e., why do the organizations need differentiation?
How does ‘differentiation’ help the organization to develop the competitive edge There are a number of reasons depending on the nature of organization to adopt a differentiation strategy.
It is not necessary that the organization should and must go for differentiation strategy if it does not require one. The requirement is need based and depends on the organization’s position in the market.
There are a number of factors which result in differentiation. Some of them are as follows:To compete against the rivals;
• To create entry barriers for newcomers by building a unique product;
• To reduce the threats arising from the substitutes;
• To develop a differentiation advantage.
Looking at these reasons, one can say that differentiation indeed helps the organizations to get a competitive advantage over its rival organizations.
When products are differentiated and turned into higher-quality products, it offers more opportunity for larger profit margins. MMPC 12 Free Solved Assignment
For example, if your target market is willing to pay a higher price for top quality or better value, you may generate more revenue with fewer sales.
• Premium price for the organization;
• Increase in number of units sold;
• Increase in brand loyalty by the customers;
• Sustaining competitive advantage.
Premium price for the organization: When the organization is able to exploit all sources of differentiation that are less costly or are not costly, then the organization can differentiate from its rival organizations.
There can be many examples like changing the mix of product features than adding more features, which are less costly but differentiate the product giving a competitive advantage, i.e., the price premium to the organization.
Increase in number of units sold: If the product is unique then the demand for it increases, henceforth increasing the number of units sold.
A very good example is of a Noodle Company, which has competition from the big companies, but is still considered to be different from its rivals.
Here, the number of customers is won by smart differentiating strategy, thereby increasing the number of units sold.
Increase in brand loyalty by the customers: A well-positioned and differentiated product gains the brand loyalty of the customers. For example, a large coffee brand has developed a brand loyalty amongst coffee lovers.
First, it came in powdered form, but it differentiated itself by coming in granular form then it moved to decaf version and the pre-mix in different flavours, maintaining the quality. MMPC 12 Free Solved Assignment
Once experienced, the brand loyalty or customer loyalty for a particular brand is developed.
Sustaining competitive advantage: Last, but not the least, this is the crux of the differentiation. This can be achieved by optimizing cost and increasing profits.
It is more often known as low-cost differentiation strategy. It is the combination of all three advantages discussed above.
Looking at these advantages, one can say that capitalizing the buyer/customer value is the most important.
The organizations must concentrate on those activities which affect the customer value than the ones which do not.
The concept of low cost competitive strategy known as cost leadership and how it helps the organizations to defend themselves against the five competitive forces.
The three business/generic strategies, viz. overall cost leadership, differentiation and focus, play an important role in the success of a business.
All the three strategies can be used individually or in combination to create a sustainable competitive advantage.
Porter has specifically suggested that these strategies can be used to defend against the competitive forces. MMPC 12 Free Solved Assignment
An effort has been made to develop an understanding of differentiation and focus and how the two can be brought into practice.
In differentiation, the organization tries to be unique in the industry whereas in focus, the organization tries to concentrate on a specific segment or a niche market.
Q5- Why is corporate governance necessary for business organizations? Elucidate with examples?
Ans- Corporate governance is the combination of rules, processes or laws by which businesses are operated, regulated or controlled.
The term encompasses the internal and external factors that affect the interests of a company’s stakeholders, including shareholders, customers, suppliers, government regulators and management.
The board of directors is responsible for creating the framework for corporate governance that best aligns business conduct with objectives.
Corporate governance is the system by which companies are directed and controlled. Boards of directors are responsible for the governance of their companies.
The shareholders’ role in governance is to appoint the directors and the auditors and to satisfy themselves that an appropriate governance structure is in place.
The responsibilities of the board include setting the company’s strategic aims, providing the leadership to put them into effect, supervising the management of the business and reporting to shareholders on their stewardship.
Corporate governance is therefore about what the board of a company does and how it sets the values of the company, and it is to be distinguished from the day to day operational management of the company by full-time executives.
The concept of corporate governance. Corporate governance has become an integral part of business life so as to achieve the objectives and to protect the organizations from failure in future. MMPC 12 Free Solved Assignment
There are two aspects which are important to understand the corporate governance:
a) the internal structure which includes the management, board structure etc. and
b) the external structure which includes shareholders and other stakeholders.
This helps in ensuring an efficient internal control, robust management structure, appropriate performance measures and effective succession plans.
At the domestic as well as international fronts, the organizations have been applying corporate governance as codes of best practices and have set examples for others.
Corporate governance necessary for business organizations
Now we know that corporate governance is all about direction, management and control of an organization.
However, there are many issues and challenges organizations face due to the uncertain situations.
Pandemic has caused the organizations to slow down, which have created a kind of unrest in the organization.
The issues and challenges of corporate governance can be listed as follows though this cannot be termed as exhaustive list:
(1– Board appointments: This is the major issue as due to issues like pressure from promoters etc. the appointments of the board may be biased.
The organizations need to be very careful while appointing the board as this may become a hindrance in the success of the organizations.
(2– Performance evaluation of Directors: this is another challenge in implementing the corporate governance as there may be cases where the evaluation of the performance of the directors may not be allowed.
(3– Appointment of Independent Directors: As per the code it is mandatory to appoint an Independent director but this appointment may be biased in many cases as the promoters/investors may pressurize the organization to appoint their own person.
This unethical practice may act as a bottleneck for the success of the organization.
(4– Removal of Independent Directors: The law says that the Independent directors can be removed anytime. This law at times may become a challenge for the organizations.
In this case also the promoters/investors may put pressure to remove an independent director who does not take decisions in their favour.
(5– Accountability towards stakeholders: This is a major challenge on part of the organizations. There may be various reasons where the organizations overlook the welfare of the stakeholders. MMPC 12 Free Solved Assignment
There are number of examples globally where organizations have adopted unethical practices to make more profits.
(6–Role of promoters: The role of promoters is very important for organizations. As discussed earlier, if the promoters look after their own interests only then it become a major challenge for the organizations.
(7-Transparency issues: Many organizations get stuck into the quagmire of unethical practices which leads to transparency issues.
(8- Conflict in organization: The conflict inside the organization creates a major challenge. If the conflict is not resolved then it is presumed that the organization may not succeed and will lead to ill practices like bribe etc.
(9–Level of mistrust: If the organization loses its credibility then it is very difficult to build it again.
Regaining the trust of stakeholders and shareholders becomes a major challenge It is any very difficult to control the external environment but strong core values of organization can help it in overcoming such challenges.
Corporate governance is important because it creates a system of rules and practices that determine how a company operates and how it aligns the interest of all its stakeholders.
Good corporate governance leads to ethical business practices, which leads to financial viability. MMPC 12 Free Solved Assignment
Corporate governance consists of the guiding principles that a company puts in place to direct all of its operations, from compensation to risk management to employee treatment to reporting unfair practices to its impact on the climate, and more.
A strong, transparent corporate governance leads a company to make ethical decisions that benefit all of its stakeholders, allowing the company to place itself as an attractive option to investors if its financials are also healthy.
Bad corporate governance leads to a breakdown of a company, often resulting in scandals and bankruptcy.
In India, Corporate governance is set on policy, internal controls and procedures which form the plan of dealing stakeholders and company operations such as management, employees, customers, industry bodies and government.
The structure of such policies should be such as to uphold the principles of transparency, accountability, fairness, and responsibility.
The main intention of its to have sound management to take out economic efficiency in an organization.
Sound corporate governance in an organization can achieve the goal of profit maximization and shareholder welfare.
Corporate governance is important as it enables organisations to achieve their goals, make formal decisions, control risks and assuring compliance.
Good corporate governance incorporates a set of rules that define the relationship between stakeholders, management and the board of directors of a company and influence how the company is operating. MMPC 12 Free Solved Assignment
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