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Strategic Management
Section A: Objective Type & Short Questions (30 marks)
 This section consists of multiple choice & Short Notes type questions.
 Answer all the questions.
 Part one questions carry 1 mark each & Part two questions carry 5 marks each.
Part One:
Multiple choices:
1. A plan of action designed to achieve a particular goal is:
a. Tactic
b. Strategy
c. Financial benefits
d. None of the above
2. It is important to develop mission statement for:
a. Allocating organizational resources
b. Provide useful criteria
c. Company creed
d. Customer orientation
3. The five forces model was developed by :
a. Airbus
b. Karin Larsson
c. Michael E.Porter
d. Boeing
4. How many elements are involve in developing in an organizational strategy:
a. Six
b. Two
c. Four
d. Nine
5. The three important steps in SWOT analysis are:
a. Identification, Conclusion, Translation
b. Opportunities, Threats, Strengths
c. People, Corporate cultures, Labour
d. Power, Role, Task
6. GE matrix consists of how many cells?
a. Nine cells
b. Six cells
Examination Paper of Strategic Management
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IIBM Institute of Business Management
c. Eight cells
d. Three cells
7. Which of these is the type of Games:
a. Simultaneous Games
b. Sequential Games
c. Repeated Games
d. All of the above
8. SBU stands fora.
Simple Basic Unit
b. Strategic Basic Unit
c. Strategic Business Unit
d. Speed Business Unit
9. The BCG matrix is known as:
a. Growth share matrix
b. Directional policy matrix
c. GE nine-cell matrix
d. Space matrix
10. ______________ specifies sales revenues and selling distribution and marketing costs.
a. Financial budget
b. Sales budget
c. Operating budget
d. Expenses budget
Part Two:
Q. 1 What are the dimensions of Strategic management?
Q. 2 Critically analyze the concept of BCG Matrix.
Q. 3 What is SWOT analysis?
Q. 4 What are the characteristics of Short-term Objectives?
END OF SECTION A
Examination Paper of Strategic Management
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IIBM Institute of Business Management
Section B: Caselets (40 marks)
 This section consists of Caselets.
 Answer all the questions.
 Each Caselet carries 20 marks.
 Detailed information should form the part of your answer (Word limit 150 to 200 words).
Caselet 1
National Competitive Advantage of IKEA Group, a Swedish company founded in 1943 with its
headquarters in Denmark, is a multinational operator of a chain of stores for home furnishing and
furniture. It is the world‟s largest retailer, which specializes, in stylish but inexpensive Scandinavian
designed furniture. At the end of 2005 the IKEA Group of Companies had a total of 175 stores in 31
countries. In addition there are 19 IKEA stores owned and run by franchisees, outside the IKEA store
around the world.
In Sweden, nature and a home both play a big part in people‟s life. In fact one of the best ways to describe
the Swedish home furnishing style is to describe nature-full of light and fresh air, yet restrained and
unpretentious.
To match up the artist Carl and Karin Larsson combined classical influences with warmer Swedish folk
styles .They created a model of Swedish home furnishing design that today enjoys world-wide renown. In
the 1950s the styles of modernism and functionalism developed at the same time as Sweden established a
society founded on social equality .The IKEA product range –The IKEA product range- modern but not
trendy, functional yet attractive, human-centered and child friendly – carries on these various Swedish
home furnishing traditions.
The IKEA Concept, like lots founder, was born in Samaland. This is a part of Southern Sweden where the
soil is thin and poor. The people are famous for working hard, living on small means and using their
heads to make the best possible use of the limited resources they have. This way of doing things is at the
heart of the IKEA approach to keeping prices low.
IKEA was founded when Sweden was fast becoming an example of the caring society, where rich and
poor alike were well looked after. This is also a theme that fits well with the IKEA vision. In order to give
the many people a better everyday life, IKEA asks the customer to work as a partner. The product range is
child-friendly and covers the need of the whole family, young and old. So together we can a better
everyday life for everyone.
In addition to working about around 1,800 different suppliers across the world, IKEA produces many of
its own products through sawmills and factories in the IKEA industrial group, Swedwood.
Swedwood also has a duty to transfer knowledge to other suppliers, for example by educating them in
issues such as efficiency, quality and environmental work.
Swedwood has 35 industrial units in 11 countries.
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Purchasing: IKEA has 42 Trading Service Offices (TSO‟s) in 33 countries. Proximity to their suppliers
is the key to rational, long term cooperation. That‟s why TSO co-workers visit suppliers regularly to
monitor production, test new ideas, negotiate prices and carry out quality audits and inspection.
Distribution: The route from supplier to customer must be as direct, cost- effective and environmentally
friendly as possible. Flat packs are important aspects of this work: eliminating wasted space means we
can transport and store goods more efficiently. Since efficient distribution plays a key role in the work of
creating the low price, goods routing and logistics are a focus for constant development.
The business Idea: The IKEA business idea is to offer a wide range of home furnishings with good design
and function at prices so low that as many people as possible will be able to afford them. And still have
many left! The company targets the customer who is looking for value and is willing to do a little bit of
work serving themselves, transporting the items home and assembling the furniture for a better price. The
typical IKEA customer is young low to middle income family.
The Competition Advantage: The competition advantage strategy of IKEA‟s product is reflected through
IKEA‟s success in the real industry. It can be attributed to its vast experience in the retail market, product
differentiation, and cost leadership.
IKEA Product Differentiation: A wide product range The IKEA product range is wide and versatile in
several ways. First, it‟s versatile in function. Because IKEA think customer, shouldn‟t have to run from
one small specialty shop to another to furnish their home, IKEA gather plants, living room furnishings,
toys , frying pans, whole kitchens i.e.; everything which in a functional way helps to build a home – in
one place , at IKEA stores.
Second, it‟s wide in style. The romantic at heart will find choices just as many as the minimalist at IKEA.
But There is only one thing IKEA don‟t have, and that is, the far- out or the over-decorated. They only
have what helps build a home that has room for good living.
Third, by being coordinated, the range is wide in function and style at the same time. No matter which
style you prefer, there‟s an armchair that goes with the bookcase that goes with the new extending table
that goes with the armchair. So their range is wide in a variety of ways.
Cost Leadership: A wide range with good form and function is only half the story. Affordability has a part
to play – the largest part. A wide range with good form and function is only half the story. Affordability
has a part to play- the largest part. And the joy of being able to own it without having to forsake
everything else. And the customers help, too, by choosing the furniture, getting it at the warehouse,
transporting it home and assembling it themselves , to keep the price low.
Questions
1. Do you think that IKEA has been successful to utilize Porter‟s Five force analysis? Give
reasons.
2. Where do you think can IKEA improve?
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Caselet 2
For ITC Ltd., 2007-2008 continued to be year of quiet growth. Just more launches in its relatively new
segment of non-cigarettes fast moving consumer goods, and solid growth. As in the past few years, ITC‟s
non-cigarettes businesses continued to grow at a scorching pace, accounting for a bigger share of overall
revenues. “The non-cigarette portfolio grew by 37.6% during 2006-2007 and accounted during that year
for 52.3% of the company‟s net turnover.” An ITC spokesman said. In fact, over the first three quarters of
2007-08, ITC‟s non-cigarette FMCG businesses have grown by 48% on the same period last year,
“Indicating that its plans for increasing market share and standing are succeeding.”
The branded packaged foods business continued to expand rapidly, with the focus on snacks range Bingo.
The biscuit category continued its growth momentum with the „Sun feast‟ range of biscuits launching
„Coconut‟ and „Nice‟ variants and the addition of „ Sunfeast BenneVita Flaxseed‟ biscuits. Aashirwad atta
and kitchen ingredients retained their top slots at the national level, with the spices category adding an
organic range. In the confectionery category which grew by 38% in the third quarter, ITC cited AC
Nielsen data it claims market leader status in throat lozenges. Instant mixes and pasta powdered the sales
of its ready to eat foods under the kitchens of India and Aashirwad brands.
In Lifestyle apparel, ITC launched Miss Players fashion wear for young women to compliment its range
for men.
Overall, the biscuit category grew by 58% during the last quarter, ready to eat foods under the kitchens of
India and Aashirwad brands by 63% and the lifestyle business by 26%.
For the Industry, the most significant initiative to watch the ITC foray into premium personal care
products with its Fiama Di Wills range of shampoos , conditioners, shower gels, and soaps. In the popular
segment, ITC has launched a range of soaps and shampoos under the brand name Superia.
Ravi Naware, Chief executive of ITC‟s food business was quoted recently as saying that the business will
make a positive contribution to ITC‟s bottom line in the next two to three years.
In hotels, ITC‟s Fortune Park brand was making the news during the year, with a rapid rollout of first
class business hotels.
In the agri-business segment, the e-choupal network is trying out a pilot in retailing fresh fruits and
vegetables. The e-choupals have already specialized in feeding ITC high quality wheat and potato, among
other commodities grown by farmers with help from e-choupal.
Questions:
Q1. Do you think the progress of ITC Ltd. is realistic?
Q2. After analyzing the above case, do you think every company should aim at cost leadership with high
quality product?
END OF SECTION B
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Section C: Applied Theory (30 marks)
 This section consists of Applied Theory Questions.
 Answer all the questions.
 Each question carries 15 marks.
 Detailed information should form the part of your answer (Word limit 200 to 250 words).
Q.1. What are the basic principles of Organizational structure? What are the different types of
Organizational structures?
Q.2. What do you understand by SBU? Explain various models of business level strategies
END OF SECTION C
S-2-250613

Examination Paper of Business Communication
1
IIBM Institute of Business Management
IIBM Institute of Business Management
Examination Paper MM.100
Subject Code-B-109 Business Communication
Section A: Objective Type & Short Questions (30 marks)
 This section consists of multiple choices and Short Notes type questions.
 Answer all the questions.
 Part one questions carry 1 mark each & Part Two questions carry 4 marks each.
Part one:
Multiple choice:
1. __________is an essential function of Business Organizations:
a. Information
b. Communication
c. Power
d. None of the above
2. Physiological Barriers of listening are:
a. Hearing impairment
b. Physical conditions
c. Prejudices
d. All of the above
3. Which presentation tend to make you speak more quickly than usual:
a. Electronic
b. Oral
c. Both „a‟ and „b‟
d. None of the above
4. What is the main function of Business Communication:
a. Sincerity
b. Positive language
c. Persuasion
d. Ethical standard
5. The responsibilities of the office manager in a firm that produces electronics spares is:
a. Everything in the office runs efficiently
b. Furniture and other equipment in the office is adequate
c. Processing all the incoming official mail and responding to some
d. All of the above
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6. Labov‟s Storytelling Model based on:
a. Communication through speech
b. Language learning
c. Group Discussions
d. None of the above
7. Diagonal Communication is basically the:
a. Communication across boundaries
b. Communication between the CEO and the managers
c. Communication through body language
d. Communication within a department
8. How to make Oral Communication Effective?
a. By Clarity
b. By Brevity
c. By Right words
d. All of the above
9. Direct Eye contact of more than 10 seconds can create:
a. Discomfort & Anxiety
b. Emotional relationship between listeners and speakers
c. Excitement
d. None of the above
10. Encoding means:
a. Transmission
b. Perception
c. Ideation
d. None of the above
Part Two:
1. Define 7C‟s of effective communication.
2. Explain „Space Language‟.
3. Differentiate between good listeners and bad listeners.
4. List the different types of business report.
5. Define „Kinesics‟.
END OF SECTION A
Examination Paper of Business Communication
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IIBM Institute of Business Management
Section B: Caselets (40 marks)
 This section consists of Caselets.
 Answer all the questions.
 Each Caselet carries 20 marks.
 Detailed information should form the part of your answer (Word limit 150 to 200
words).
Caselet 1
Mr. and Mrs. Sharma went to Woodlands Apparel to buy a shirt. Mr. Sharma did not read the
price tag on the piece selected by him. At the counter, while making the payment he asked for
the price. Rs. 950 was the answer.
Meanwhile, Mrs. Sharma, who was still shopping came back and joined her husband. She was
glad that he had selected a nice black shirt for himself. She pointed out that there was a 25%
discount on that item. The counter person nodded in agreement.
Mr. Sharma was thrilled to hear that “It means the price of this shirt is just Rs. 712. That‟s
fantastic”, said Mr. Sharma.
He decided to buy one more shirt in blue color.
In no time, he returned with the second shirt and asked them to be packed. When he received the
cash memo for payment, he was astonished to find that he had to pay Rs. 1,900 and Rs. 1,424.
Mr. Sharma could hardly reconcile himself to the fact that the counter person had quoted the
discounted price which was Rs. 950. The original price printed on the price tag was Rs. 1,266.
Questions
1. What should Mr. Sharma have done to avoid the misunderstanding?
2. Discuss the main features involved in this case.
Caselet 2
I don‟t want to speak to you. Connect me to your boss in the US,” hissed the American on the
phone. The young girl at a Bangalore call centre tried to be as polite as she could. At another call
centre, another day, another young girl had a Londoner unleashing himself on her, “Young lady,
do you know that because of you Indians we are losing jobs?”
The outsourcing backlash is getting ugly. Handling irate callers is the new brief for the young
men and women taking calls at these outsourced job centres. Supervisors tell them to be „cool‟.
Avinash Vashistha, managing partner of NEOIT, a leading US-based consultancy firm says,
“Companies involved in outsourcing both in the US and India are already getting a lot of hate
mail against outsourcing and it is hardly surprising that some people should behave like this on
the telephone.” Vashistha says Indian call centre‟s should train their operators how to handle
such calls. Indeed, the furor raised by the Western media over job losses because of outsourcing
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IIBM Institute of Business Management
has made ordinary citizens there sensitive to the fact that their calls are being taken not from
their midst, but in countries such as India and the Philippines.
The angry outbursts the operators face border on the racist and sexist, says the manager of a call
centre in Hyderabad. But operators and senior executives of call centres refuse to go on record
for fear of kicking up a controversy that might result in their companies‟ losing clients overseas.
“It‟s happening often enough and so let‟s face it,” says a senior executive of a Gurgaon call
centre, adding, “This doesn‟t have any impact on business.”
Questions
1. Suppose you are working as an operator in a call centre in India and receiving calls
from Americans and Londoners. How would you handle such calls?
2. Do you agree with the view such abusive happenings on the telephone do not have any
impact on business?
END OF SECTION B
Section C: Applied Theory (30 marks)
 This section consists of Applied Theory Questions.
 Answer all the questions.
 Each question carries 15 marks.
 Detailed information should form the part of your answer (Word limit 200 to 250
words).
`
1. What do you by Communication Barriers? How and why do they occur? What can be
done to overcome the Barriers to Communication?
2. Define and explain the term Negotiation and also briefly explain the phases of
Negotiation.
END OF SECTION C
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Examination Paper of Financial Management
1
IIBM Institute of Business Management
IIBM Institute of Business Management
Examination Paper MM.100
Financial Management
Subject Code-B-103
Section A: Objective Type & Short Questions (30 marks)
 This section consists of multiple choice & Short Notes.
 Answer all the questions.
 Part One carries 1 mark each & Part two carries 5 marks each.
Part one:
Multiple choices:
1. The approach focused mainly on the financial problems of corporate enterprise.
a. Ignored non-corporate enterprise
b. Ignored working capital financing
c. External approach
d. Ignored routine problems
2. These are those shares, which can be redeemed or repaid to the holders after a lapse of the
stipulated period.
a. Cumulative preference shares
b. Non-cumulative preference shares
c. Redeemable preference shares
d. Perpetual shares
3. This type of risk arises from changes in environmental regulations, zoning requirements, fees,
licenses and most frequently taxes.
a. Political risk
b. Domestic risk
c. International risk
d. Industry risk
4. It is the cost of capital that is expected to raise funds to finance a capital budget or investment
proposal.
a. Future cost
b. Specific cost
c. Spot cost
d. Book cost
5. This concept is helpful in formulating a sound & economical capital structure for a firm.
a. Financial performance appraisal
b. Investment evaluation
c. Designing optimal corporate capital structure
d. None of the above
Examination Paper of Financial Management
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IIBM Institute of Business Management
6. It is the minimum required rate of return needed to justify the use of capital.
a. From investors
b. Firms point
c. Capital expenditure point
d. Cost of capital
7. It arises when there is a conflict of interest among owners, debenture holders and the
management.
a. Seasonal variation
b. Degree of competition
c. Industry life cycle
d. Agency costs
8. Some guidelines on shares & debentures issued by the government that are very important for the
constitution of the capital structure are:
a. Legal requirement
b. Purpose of finance
c. Period of finance
d. Requirement of investors
9. It is that portion of an investments total risk that results from change in the financial integrity of
the investment.
a. Bull- bear market risk
b. Default risk
c. International risk
d. Liquidity risk
10. _____________ measure the systematic risk of a security that cannot be avoided through
diversification.
a. Beta
b. Gamma
c. Probability distribution
d. Alpha
Part Two:
1. What do you understand by wealth maximization?
2. Discuss the concept of factoring.
3. Define Annuity.
4. What is the Difference between NPV and IRR?
END OF SECTION A
Section B: Case lets (40 marks)
Examination Paper of Financial Management
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IIBM Institute of Business Management
 This section consists of Case lets.
 Answer all the questions.
 Each Case let carries 20 marks.
 Detailed information should form the part of your answer (Word limit 150 to 200 words).
Caselet 1
Case1: Credit Decision - Agarwal Case
On August 30, 2006, Agarwal Cast Company Inc., applied for a $200,000 loan from the main office of
the National bank of New York. The application was forwarded to the bank's commercial loan
department. Gupta, the President and Principal Stockholder of Agarwal cast, applied for the loan in
person. He told the loan officer that he had been in business since February 1976, but that he had
considerable prior experience in flooring and carpets since he had worked as an individual contractor for
the past 20 year. Most of this time, he had worked in Frankfert and Michigan. He finally decided to
"work for himself" and he formed the company with Berry Hook, a former co-worker. This information
seemed to be consistent with the Dun and Bradstreet report obtained by the bank According to Gupta, the
purpose of the loan was to assist him in carrying his receivables until they could be collected. He
explained that the flooring business required him to spend considerable cash to purchase materials but his
customers would not pay until the job was done. Since he was relatively new in the business, he did not
feel that he could compete if he had to require a sizeable deposit or payment in advance. Instead, he could
quote for higher profits, if he were willing to wait until completion of the job for payment. To show that
his operation was sound, he included a list of customers and projects with his loan application. He also
included a list of current receivables.
Gupta told the loan officer that he had monitored his firm's financial status closely and that he had
financial reports prepared every six months. He said that the would send a copy to the bank. In addition,
he was willing to file a personal financial statement with the bank.
Question:
1. Prepare your recommendation on Agarwal Cast Company
Caselet 2
This case has been framed in order to test the skills in evaluating a credit request and reaching a correct
decision. Perluence International is large manufacturer of petroleum and rubber-based products used in a
variety of commercial applications in the fields of transportation, electronics, and heavy manufacturing.
In the northwestern United States, many of the Perluence products are marketed by a wholly-owned
subsidiary, Bajaj Electronics Company. Operating from a headquarters and warehouse facility in San
Antonio, Strand Electronics has 950 employees and handles a volume of $85 million in sales annually.
About $6 million of the sales represents items manufactured by Perluence. Gupta is the credit manager at
Bajaj electronics. He supervises five employees who handle credit application and collections on 4,600
accounts. The accounts range in size from $120 to $85,000. The firm sells on varied terms, with 2/10, net
30 mostly. Sales fluctuate seasonally and the average collection period tends to run 40 days. Bad-debt
losses are less than 0.6 per cent of sales. Gupta is evaluating a credit application from Booth Plastics, Inc.,
a wholesale supply dealer serving the oil industry. The company was founded in 1977 by Neck A. Booth
and has grown steadily since that time. Bajaj Electronics is not selling any products to Booth Plastics and
had no previous contact with Neck Booth. Bajaj Electronics purchased goods from Perluence.
Examination Paper of Financial Management
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IIBM Institute of Business Management
International under the same terms and conditions as Perluence used when it sold to independent
customers. Although Bajaj Electronics generally followed Perluence in setting its prices, the subsidiary
operated independently and could adjust price levels to meet its own marketing strategies. The Perluence's
cost-accounting department estimated a 24 per cent markup as the average for items sold to Pucca
Electronics. Bajaj Electronics, in turn, resold the items to yield a 17 per cent markup. It appeared that
these percentages would hold on any sales to Booth Plastics. Bajaj Electronics incurred out-of pocket
expenses that were not considered in calculating the 17 per cent markup on its items. For example, the
contact with Booth Plastics had been made by James, the salesman who handled the Glaveston area.
James would receive a 3 per cent commission on all sales made Booth Plastics, a commission that would
be paid whether or not the receivable was collected. James would, of course, be willing to assist in
collecting any accounts that he had sold. In addition to the sales commission, the company would incur
variable costs as a result of handling the merchandise for the new account. As a general guideline,
warehousing and other administrative variable costs would run 3 per cent sales. Gupta Holmstead
approached all credit decisions in basically the same manner. First of all, he considered the potential
profit from the account. James had estimated first-year sales to Booth Plastics of $65,000. Assuming that
Neck Booth took the, 3 per cent discount. Bajaj Electronics would realize a 17 per cent markup on these
sales since the average markup was calculated on the basis of the customer taking the discount. If Neck
Booth did not take the discount, the markup would be slightly higher, as would the cost of financing the
receivable for the additional period of time. In addition to the potential profit from the account, Gupta was
concerned about his company's exposure. He knew that weak customers could become bad debts at any
time and therefore, required a vigorous collection effort whenever their accounts were overdue. His
department probably spent three times as much money and effort managing a marginal account as
compared to a strong account. He also figured that overdue and uncollected funds had to be financed by
Bajaj Electronics at a rate of 18 per cent. All in all, slow - paying or marginal accounts were very costly
to Bajaj Electronics. With these considerations in mind, Gupta began to review the credit application for
Booth Plastics.
Questions:
1. How would you judge the potential profit of Bajaj Electronics on the first year of sales to Booth
Plastics and give your views to increase the profit?
2. Suggestion regarding Credit limit. Should it be approved or not, what should be the amount of
credit limit that electronics give to Booth Plastics.
END OF SECTION B
Section C: Applied Theory (30 marks)
 This section consists of Applied Theory Questions.
 Answer all the questions.
 Each question carries 15 marks.
 Detailed information should form the part of your answer (Word limit 200-250 words).
Examination Paper of Financial Management
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IIBM Institute of Business Management
1. Define Capital Structure. Discuss the important factors that should be considered while
determining Capital Structure.
2. What is the concept of working capital? Discuss the dangers of inadequate as well as excessive
working capital.
END OF SECTION C
S-2-250613

Examination Paper of Marketing Management
1
IIBM Institute of Business Management
IIBM Institute of Business Management
Examination Paper
MM.100
Subject Code- B104 Marketing Management Section A: Objective Type & Short Questions (30 marks)
 This section consists of multiple choices & short answer type questions. 

 Answer all the questions. 

 Part One carries I mark each & Part II carries 5 marks each.
Part One Multiple Choices:
1. It is a concept where goods are produced without taking into consideration the choices or tastes of customers.
a. Marketing mix
b. Production concept
c. Marketing concept
d. Relationship marketing
2. It involves individuals who buys products or services for personal use and not for manufacture or resale.
a. Environment analysis
b. Macro environment
c. Micro environment
d. Consumer
3. It is the groups of people who interact formally or informally influencing each other‟s attitudes& behavior.
a. Consumer behavior
b. Culture
c. Reference groups
d. Primary groups
4. The concept of the product that passes through various changes in its total life known as: a. Product life cycle
b. Line stretching
c. Consumer adoption
d. Product
5. It refers to unique set of brand associations that brand strategist aspires to create or maintain:
a. Branding
b. Packaging
c. Brand identity
d. Brand image
Examination Paper of Marketing Management
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IIBM Institute of Business Management
6. It involves a pricing strategy that charges customers different prices for the same product or service.
a. Promotional pricing
b. Price discrimination
c. Non price competition
d. None of the above
7. It refers to an arrangement where another company through its own marketing channel sells the products of one producers.
a. End customer
b. Wholesaler
c. Retailing
d. Strategic channel alliance
8. It involves facility consisting of the means & equipments necessary for the movement of passengers of goods.
a. Logistics
b. Warehousing
c. Transportation
d. None of the above
9. The advertising which is used to inform consumers about a new product or feature & to build primary demands is known as:
a. Advertising
b. Informative advertising
c. Persuasive advertising
d. Advertising strategy
10. An art that predicts the likelihood of economic activity on the basis of certain assumptions:
a. Compensation
b. Sales forecasting
c. Sales budgeting
d. Selling policy
Part Two:
1. Define Marketing Mix.
2. Discuss the concept of Benchmarking.
3. Write a short note on Target Marketing.
4. What do you understand by Pricing Strategy?
END OF SECTION A
Section B: Caselets (40 marks)
Examination Paper of Marketing Management
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IIBM Institute of Business Management
 This section consists of Caselets. 

 Answer all the questions. 
 Each Caselet carries 20 marks. 
 Detailed information should form the part of your answer (Word limit 150 to 200 words). 
Caselet 1 Ask the company top brass what „almost there‟ means. The answer: a premier Indian retail company that has come to be known as a specialty chain of apparel and accessories. With 52 product categories under one roof, Shoppers‟ Stop has a line-up of 350 brands. Set up and headed by former Corona employee, B. S. Nagesh, Shoppers‟ Stop is India‟s answer to Selfridges and Printemps. As it proudly announces, „We don‟t sell, we help you buy.‟ Back in 1991, there was the question of what to retail. Should it be a supermarket or a departmental store? Even an electronics store was considered. Finally, common sense and understanding won out. The safest bet, for the all-male team was to retail men‟s wear. They knew the male psyche and felt that they had discerning taste in men‟s clothing. The concept would be that of a lifestyle store in a luxurious space, which would make for a great shopping experience. The first Shoppers‟ Stop store took shape in Andheri, Mumbai, in October 1991, with an investment of nearly Rs. 20 lakh. The original concept that formed the basis of a successful marketing campaign for seven years is here to stay. And the result is an annual turnover of Rs. 160 crores and five stores, nine years later. Everything went right from the beginning, except for one strange happening. More than 60 per cent of the customers who walked into Shoppers‟ Stop in Mumbai were women. This gave rise to ideas. Soon, the store set up its women‟s section. Later, it expanded to include children‟s wear and then, household accessories. The second store in Bangalore came in 1995. The store at Hyderabad followed in 1998 with the largest area of 60,000 sq. ft. The New Delhi and Jaipur stores were inaugurated in 1999. All this while, the product range kept increasing to suit customer needs. The most recent experiment was home furnishings. Secure in the knowledge that organized retailing in global brands was still in its infancy in India, Shoppers‟ Stop laid the ground rules which the competition followed. The biggest advantage for Shoppers‟ Stop is that it knows how the Indian consumer thinks and feels while shopping. Yes, feeling – for in India, shopping remains an outing. And how does it compare itself to foreign stores? While it is not modeled on any one foreign retailer, the „basic construct‟ is taken from the experience of a number of successfully managed retail companies. It has leveraged expertise for a critical component like technology from all over the world, going as far as hiring expatriates from Littlewoods and using state-of-the-art ERP models. Shoppers‟ Stop went a step further by even integrating its financial system with the ERP model.
Expertise was imported wherever it felt that expertise available in-house was inadequate. But the store felt there was one acute problem. A shortage of the most important resource of them all was trained humans. Since Indian business institutes did not have professional courses in retail management, people were hired from different walks of life and the training programme was internalized. By 1994, the senior executives at Shoppers‟ Stop were taking lectures at management institutes in Mumbai. The Narsee Monjee Institute of Management Studies (NMIMS) even restructured its course to include retail management as a subject. Getting the company access to the latest global retail trends and exchange of information with business greats was an exclusive membership to the Intercontinental Group of Department Stores (IGDS). It allows membership by invitation to one company from a country and Shoppers‟ Stop rubs shoulders with 29 of the hottest names in retailing – Selfridges from the UK, C.K. Tang from Singapore, Lamcy Plaza from Dubai and the like. With logistics I in place, the accent moved to the customer. Shoppers‟ Stop conducted surveys with ORG-MARG and Indian Market Research Bureau (IMRB) and undertook in-house wardrobe audits. The studies confirmed what it already knew. The Indian customer is still evolving and is very different from, say, a European customer, who knows exactly what he wants to purchase, walks up to a shelf, picks up the merchandise, pays and walks out. In India, customers like to touch and feel the merchandise, and scout for options. Also, the majority of
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Indian shoppers still prefer to pay in cash. So, transactions must be in cash as against plastic money used the world over. Additionally, the Indian customer likes being served – whether it is food, or otherwise. The company‟s customer profile includes people who want the same salesperson each time they came to the store to walk them through the shop floors and assist in the purchase. Others came with families, kids and maids in tow and expected to be suitably attended to. Still others wanted someone to carry the bags. So, the shops have self-help counters, with an assistant at hand for queries or help. The in-house wardrobe audit also helped with another facet of the business. It enabled Shoppers‟ Stop to work out which brands to stock, based on customer preferences. In fact, the USP of Shoppers‟ Stop lies in judiciously selected global brands, displayed alongside an in-house range of affordable designer wear. The line-up includes Levi‟s, Louis Philippe, Allen Solly, Walt Disney, Ray Ban and Reebok, besides in-house labels STOP and I. Brand selection is the same across the five locations, though the product mix may be somewhat city-based to accommodate cuts and styles in women‟s wear, as well as allowing for seasonal variations (winter in Delhi, for instance, is a case in point). Stocking of brands is based on popular demand – recently, Provogue, MTV Style, and Benetton have been added. In-house labels are available at competitive prices and target the value-for-money customer and make up around 12 per cent of Shoppers‟ Stop‟s business. Sometimes in-house brands plug the price gap in certain product categories. To cash in on this, the company has big plans for its in-house brands: from re-branding to repositioning, to homing in on product categories where existing brands are not strong. Competition between brands is not an issue, because being a trading house, all brands get equal emphasis. The in-house brand shopper is one who places immense trust in the company and the quality of its goods and returns for repeat buys. And the company reposed its faith in regular customers by including them in a concept called the First Citizen‟s Club (FCC). With 60,000 odd members, FCC customers account for 10 per cent of entries and for 34 per cent of the turnover. It was the sheer appeal of the experience that kept pulling these people back. Not one to let such an opportunity pass, the company ran a successful ad campaign (that talks about just this factor) in print for more than eight years. The theme is still the same. In 1999, a TV spot, which liked the shopping experience to the slowing down of one‟s internal clock and the beauty of the whole experience, was aired. More recently, ads that spell out the store‟s benefits (in a highly oblique manner) are being aired. The campaign is based on entries entered in the Visitors‟ Book. None of the ads has a visual or text – or any heavy handedly direct reference to the store or the merchandise. The ads only show shoppers having the time of their lives in calm and serene locales, or elements that make shopping at the store a pleasure – quite the perfect getaway for a cosmopolitan shopper aged between 25 and 45. The brief to the agency, Contract, ensured that brand recall came in terms of the shopping experience, not the product. And it has worked wonders. Value-addition at each store also comes in the form of special care with car parks, power backup, customer paging, alteration service and gift-wrapping. To top it all, cafes and coffee bars make sure that the customer does not step out of the store. In Hyderabad, it has even created a Food Court. Although the food counter was not planned, it came about as there was extra space of 67,000 sq. ft. Carrying the perfect experience to the shop floor is an attempt to stack goods in vast open spaces neatly. Every store has a generic structure, though regional customer variances are accounted for. Each store is on lease, and this is clearly Shoppers‟ Stop‟s most expensive resource proposition – renting huge spaces in prime properties across metros, so far totaling 210,000 sq. ft of retail space. Getting that space was easy enough for Shoppers‟ Stop, since its promoter is the Mumbai-based Raheja Group, which also owns 62 per cent of the share capital. Questions:
1. What are the significant factors that have led to the success of Shoppers‟ Stop?
2. How should Shoppers‟ Stop develop its demand forecasts?
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Caselet 2 The rise of personal computers in the mid 1980s spurred interest in computer games. This caused a crash in home Video game market. Interest in Video games was rekindled when a number of different companies developed hardware consoles that provided graphics superior to the capabilities of computer games. By 1990, the Nintendo Entertainment System dominated the product category. Sega surpassed Nintendo when it introduced its Genesis System. By 1993, Sega commanded almost 60 per cent of Video game market and was one of the most recognized brand names among the children. Sega‟s success was short lived. In 1995, Saturn (a division of General Motors) launched a new 32-bit system. The product was a miserable failure for a number of reasons. Sega was the primary software developer for Saturn and it did not support efforts by outside game developers to design compatible games. In addition, Sega‟s games were often delivered quite late to retailers. Finally, the price of the Saturn system was greater than other comparable game consoles. This situation of Saturn‟s misstep benefited Nintendo and Sony greatly. Sony‟s Play Station was unveiled in 1994 and was available in 70 million homes worldwide by the end of 1999. Its “Open design” encouraged the efforts of outside developers, resulting in almost 3,000 different games that were compatible with the PlayStation. It too featured 32-bit graphics that appealed to older audience. As a result, at one time, more than 30 per cent of PlayStation owners were over 30 years old. Nintendo 64 was introduced in 1996 and had eye-popping 64-bit graphics and entered in more than 28 million homes by 1999. Its primary users were between the age of 6 and 13 as a result of Nintendo‟s efforts to limit the amount of violent and adult-oriented material featured on games that can be played on its systems. Because the company exercised considerable control over software development, Nintendo 64 had only one-tenth the number of compatible games as Sony‟s PlayStation did. By 1999, Sony had captured 56 per cent of the video game market, followed by Nintendo with 42 per cent. Sega‟s share had fallen to a low of 1%. Hence, Sega had two options, either to concede defeat or introduce an innovative video machine that would bring in huge sales. And Sega had to do so before either Nintendo or Sony could bring their next-generation console to market. The Sega Dreamcast arrived in stores in September 1999 with an initial price tag of $199. Anxious gamers placed 300,000 advance orders, and initial sales were quite encouraging. A total of 1.5 million Dreamcast machines were bought within the first four months, and initial reviews were positive. The 128-bit system was capable of generating 3-D visuals, and 40 different games were available within three months of Dream cast‟s introduction. By the end of the year, Sega had captured a market share to 15 per cent. But the Dreamcast could not sustain its momentum. Although its game capabilities were impressive, the system did not deliver all the functionality Sega had promised. A 56K modem (which used a home phone line) and a Web browser were meant to allow access to the Internet so that gamers could play each other online, surf the Web, and visit the Dreamcast Network for product information and playing tips. Unfortunately, these features either were not immediately available or were disappointing in their execution. Sega was not the only one in having the strategy of adding functionality beyond games. Sony and Nintendo followed the same approach for their machines introduced in 1999. Both Nintendo‟s Neptune and Sony‟s PlayStation 2 (PS2) were built on a DVD platform and featured a 128-bit processor. Analysts applauded the move to DVD because it is less expensive to produce and allows more storage than CDs. It also gives buyers the ability to use the machine as CD music player and DVD movie player.
As Sony marketing director commented, “The full entertainment offering from Play Station 2 finitely appeals to a much broader audience. I have friends in their 30s who bought it not only because it‟s a gaming system for their kids, but also a DVD for them.” In addition, PlayStation 2 is able to play games developed for its earlier model that was CD-based. This gives the PS2 an enormous advantage in the number of compatible game titles that were immediately available to gamers. Further enhancing the PS2‟s appeal is its high-speed modem and allows the user‟s easy access to the Internet through digital cable as well as over telephone lines. This gives Sony the ability to distribute movies, music, and games directly to PS2 consoles. “We are positioning this as an all-round entertainment player,” commented Ken Kutaragi, the head of Sony Computer Entertainment. However, some prospective customers were put off by the console‟s initial price of $360. Shortly after the introduction of Neptune, Nintendo changed its strategies and announced the impending release of its newest game console, The GameCube. However, unlike the Neptune, the GameCube would not run
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on a DVD platform and also would not initially offer any online capabilities. It would be more attractively priced at $199. A marketing vice president for Nintendo explained the company‟s change in direction, “We are the only competitor whose business is video games. We want to create the best gaming system.” Nintendo also made the GameCube friendly for outside developers and started adding games that included sports titles to attract an older audience. Best known for its extra ordinary successes with games aimed at the younger set, such as Donkey Kong, Super Mario Bros, and Pokemon, Nintendo sought to attract older users, especially because the average video game player is 28. Youthful Nintendo users were particularly pleased to hear that they could use their handheld Game Boy Advance systems as controllers for the GameCube. Nintendo scrambled to ensure there would be an adequate supply of Game Cubes on the date in November 2001, when they were scheduled to be available to customers. It also budgeted $450 million to market its new product, as it anticipated stiff competition during the holiday shopping season. With more than 20 million PlayStation 2 sold worldwide, the GameCube as a new entry in the video game market would make the battle for market share even more intense. For almost a decade, the video game industry had only Sega, Nintendo, and Sony; just three players. Because of strong brand loyalty and high product development costs, newcomers faced a daunting task in entering this race and being competitive. In November 2001, Microsoft began selling its new Xbox, just three days before the GameCube made its debut. Some observers felt the Xbox was aimed to rival PlayStation 2, which has similar functions that rival Microsoft‟s Web TV system and even some lower level PCs. Like the Sony‟s PlayStation 2, Xbox was also built using a DVD platform, but it used an Intel processor in its construction. This open design allowed Microsoft to develop the Xbox in just two years, and gave developers the option of using standard PC tool for creating compatible games. In addition, Microsoft also sought the advice of successful game developers and even incorporated some of their feedback into the design of the console and its controllers. As a result of developers‟ efforts, Microsoft had about 20 games ready when the Xbox became available. By contrast, the GameCube had only eight games available. Microsoft online strategy was another feature that differentiated of the Xbox from the GameCube. Whereas Nintendo had no immediate plans for Web-based play, the Xbox came equipped with an Ethernet port for broadband access to Internet. Microsoft also announced its own Web-based network on which gamers can come together for online head-to head play and for organized online matches and tournaments. Subscribers to this service were to pay a small monthly fee and must have high-speed access to the Internet. This is a potential drawback considering that a very low percentage of households world over currently have broadband connections. By contrast Sony promoted an open network, which allows software developers to manage their own games, including associated fees charged to users. However, interested players must purchase a network adapter for an additional $39.99. Although game companies are not keen on the prospect of submitting to the control of a Microsoft-controlled network, it would require a significant investment for them to manage their own service on the Sony-based network. Initially the price of Microsoft‟s Xbox was $299. Prior to the introduction of Xbox, in a competitive move Sony dropped the price of the PlayStation 2 to $299. Nintendo‟s GameCube already enjoyed a significant price advantage, as it was selling for $100 less than either Microsoft or Sony products. Gamers eagerly snapped up the new consoles and made 2001 the best year ever for video game sales. For the first time, consumers spent $9.4 billion on video game equipment, which was more than they did at the box office. By the end of 2001 holiday season, 6.6 million PlayStation 2 consoles had been sold in North America alone, followed by 1.5 million Xbox units and 1.2 million Game Cubes. What ensued was an all out price war. This started when Sony decided to put even more pressure on the Microsoft‟s Xbox by cutting the PlayStation 2 price to $199. Microsoft quickly matched that price.
Wanting to maintain its low-price status, Nintendo in turn responded by reducing the price of its the GameCube by $50, to $149. By mid 2002, Microsoft Xbox had sold between 3.5 and 4 million units worldwide. However, Nintendo had surpassed Xbox sales by selling 4.5 million Game Cubes. Sony had the benefit of healthy head start, and had shipped 32 million PlayStation 2s. However, seven years after the introduction of original PlayStation, it was being sold in retail outlets for a mere $49. It had a significant lead in terms of numbers of units in homes around the world with a 43 per cent share. Nintendo 64 was second with 30 per cent, followed by Sony PlayStation 2 with 14 per cent. The Xbox and GameCube each claimed about 3 per cent of the market, with Sega Dreamcast comprising the last and least market share of 4.7 per cent. Sega, once an industry leader, announced in 2001 that it had decided to stop producing the Dreamcast and other video game hardware components. The company said it would develop games for its competitors‟ consoles. Thus Sega
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slashed the price of the Dreamcast to just $99 in an effort to liquidate its piled up inventory of more than 2 million units and immediately began developing 11 new games for the Xbox, four for PlayStation 2, and three for Nintendo‟s Game Boy Advance. As the prices of video game consoles have dropped, consoles and games have become the equivalent of razors and blades. This means the consoles generate little if any profit, but the games are a highly profitable proposition. The profit margins on games are highly attractive, affected to some degree by whether the content is developed by the console maker (such as Sony) or by an independent game publisher (such as Electronic Arts). Thus, the competition to develop appealing, or perhaps even addictive, games may be even more intense than the battle among players to produce the best console. In particular, Nintendo, Sony, and Microsoft want games that are exclusive to their own systems. With that in mind, they not only rely on large in-house staffs that design games but they also pay added fees to independent publishers for exclusive rights to new games. The sales of video games in 2001 rose to 43 per cent, compared to just 4 per cent increase for computer-based games. But computer game players are believed to be a loyal bunch, as they see many advantages in playing games on their computers rather than consoles. For one thing, they have a big advantage of having access to a mouse and a keyboard that allow them to play far more sophisticated games. In addition, they have been utilizing the Internet for years to receive game updates and modifications and to play each other over the Web. Sony and Microsoft are intent on capturing a portion of the online gaming opportunity. Even Nintendo has decided to make available a modem that will allow GameCube users to play online. As prices continue to fall and technology becomes increasingly more sophisticated, it remains to be seen whether these three companies can keep their names on the industry‟s list of “high scorers”. Questions:
1. Considering the concept of product life cycle, where would you put video games in their life cycle?
2. Should video game companies continue to alter their products to include other functions, such as email?
END OF SECTION B
Section C: Applied Theory (30 marks)
 This section consists of Applied Theory Questions. 

 Answer all the questions. 
 Each question carries 15 marks. 
 Detailed information should form the part of your answer (Word limit 200-250 words). 

1. What do you understand by product life cycle? Discuss implications and limitations of product life cycle concept.
2. Describe role of marketing channels. List the different types of marketing channels.
END OF SECTION C
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Examination Paper of Production and Operations Management
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IIBM Institute of Business Management
IIBM Institute of Business Management
Examination Paper
Production and Operations Management MM.100
Subject Code-B107 Section A: Objective Type & Short Questions (30 marks)
 This section consists of multiple choice & Short Notes type questions.
 Answer all the questions.
 Part one questions carry 1 mark each & Part two questions carry 5 marks each.
Part One:
Multiple choices:
1. Production and Operations Management concerns itself with the conversion of:
a. Outputs in to inputs
b. Inputs in to outputs
c. Outputs in to outputs
d. None of the above
2. Continuous Production is
a. The last operation to the finished product
b. The first operation to the finished product
c. The mid operation to the finished product
d. None of the above
3. Independent demand is
a. Demand that is controlled by the company
b. Demand that is controlled by the customer
c. Demand that is not controlled by the company
d. All of the above
4. Enterprise Resource Planning (ERP) has been defined as a
a. Complete Enterprise wide business solution
b. Complete Enterprise narrow business solution
c. a & b
d. None of the above
5. CAD stands for
a. Computer Architecture Design
b. Computer Aided Design
c. Computer Aided Drafting
d. All of the above
6. Delphi method is the most widely used and accurate method of
a. Demand forecasts
b. Exponential forecasts
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c. Technological forecasts
d. All of the above
7. JIT/Kanban systems help eliminate __________
a. Increase the number of products
b. Increase the amount of raw materials
c. Increase the amount of energy
d. All of the above
8. PPSCS stands for
a. Project Planning Scheduling & Control System
b. Project Planning Sequencing & Control System
c. Production Planning Scheduling & Control System
d. None of the above
9. Process layout is also known as.
a. Group layout
b. Line layout
c. Product layout
d. Functional layout
10. Time study is a ______ technique for recording the times and rate of working
a. Standard times
b. Work measurement
c. Allowances
d. None of the above
Part Two:
1. Define Job Shop Production.
2. What do you understand by „Quality Control‟?
3. What do you mean by materiel handling?
4. Define ABC analysis.
END OF SECTION A
Section B: Caselets (40 marks)
 This section consists of Caselets.
 Answer all the questions.
 Each Caselet carries 20 marks.
 Detailed information should form the part of your answer (Word limit 150 to 200 words).
Examination Paper of Production and Operations Management
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Caselet 1
Company Background
The Bronson Insurance Group was originally founded in 1900 in Auxvasse, Missouri, by James Bronson.
The Bronson Group owns a variety of companies that underwrite personal and commercial insurance
policies. Annual sales of the Bronson Group are $100 million. In recent years, the company has suffered
operating losses. In 1990, the company was heavily invested in computer hardware and software. One of
the problems the Bronson Group faced (as well as many insurance companies) was a conflict between
established manual procedures and the relatively recent (within the past 20 years) introduction of
computer equipment. This conflict was illustrated by the fact that much information was captured on
computer but paper files were still kept for practical and legal reasons.
File Clerks
The file department employed 20 file clerks who pulled files from stacks, refilled used files, and delivered
files to various departments including commercial lines, personal lines, and claims. Once a file clerk
received the file. Clerks delivered files to underwriters on an hourly basis throughout the day. The average
file clerk was paid $8,300 per year. One special file clerk was used full time to search for requested files
that another file clerk had not been able to find in the expected place. It was estimated that 40 percent of
the requested files were these “no hit” files requiring a search. Often these “no hit” files were eventually
found stacked in the requester‟s office. The primary “customers” of the file clerks were underwriters and
claims attorneys.
Underwriting
Company management and operations analysts were consistently told that the greatest problem in the
company was the inability of file clerks to supply files in a speedy fashion. The entire company from top to
bottom viewed the productivity and effectiveness of the department as unacceptable. An underwriter used
20-50 files per day. Because of their distrust of the files department, underwriters tended to hoard often
used files. A count by operations analysts found that each underwriter kept from 100-200 files in his or her
office at any one time. An underwriter would request a file by computer and work on other business until
the file was received. Benson employed 25 underwriters.
Management Information System
Upper management was deeply concerned about this problem. The MIS department had suggested using
video disks as a possible solution. A video disk system was found that would be sufficient for the
companies needs at a cost of about $12 million. It was estimated that the system would take two years to
install and make compatible with existing information systems. Another, less attractive was using
microfilm. A microfilm system would require underwriters to go to a single keyboard to request paper
copies of files. The cost of a microfilm system was $5 million.
Questions:
1. What do you recommend? Should the company implement one of the new technologies, if yes,
why?
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2. An operations analyst suggested that company employees shared a “dump on the clerks”
mentality. Explain.
Caselet 2
Harrison T. Wenk III is 43, married, and has two children, ages 10 and 14. He has a master‟s degree
in education and teachers junior high school music in a small town in Ohio. Harrison‟s father passed
away two months ago, leaving his only child an unusual business opportunity. According to his
father‟s will, Harrison has 12 months to become active in the family food-catering business, Kare-
Full Katering, Inc., or it will be sold to two key employees for a reasonable and fair price. If Harrison
becomes involved, the two employees have the option to purchase a significant, but less than
majority, interest in the firm. Harrison‟s only involvement with this business, which his grandfather
established, was as an hourly employee during high school and college summers. He is confident that
he could learn and perhaps enjoy the marketing side of the business, and that he could retain the longtime
head of accounting/finance. But he would never really enjoy day-to-day operations. In fact, he
doesn‟t understand what operations management really involves. In 1991 Kare-Full Katering, Inc. had
$3.75 million in sales in central Ohio. Net profit after taxes was $ 105,000, the eleventh consecutive
year of profitable operations and the seventeenth in the last 20 years. There are 210 employees in this
labor-intense business. Institutional contracts account for over 70 percent of sales and include partial
food services for three colleges, six commercial establishments) primarily manufacturing plants and
banks), two long -term care facilities, and five grade schools. Some customer location employs a
permanent operations manager; others are served from the main kitchens of Kare-Full Katering.
Harrison believes that if he becomes active in the business, one of the two key employees, the vice
president of operations, will leave the firm. Harrison has decided to complete the final two months of
this school year and then spend the summer around Kare-Full Katering – as well as institutions with
their own food services – to assess whether he wants to become involved in the business. He is
particularly interested in finding out as much as possible about operations. Harrison believes he owes
it to his wife and children to fairly evaluate this opportunity.
Questions:
1. Prepare a worksheet of operations activities that Harrison should inquire about this summer.
2. If you were Harrison, what would you do? Why?
END OF SECTION B
Section C: Applied Theory (30 marks)
 This Section Consists of Applied Theory Questions.
 Answer all the questions.
 Each question carries 15 marks.
 Detailed information should form the part of your answer (Word limit 200 to 250 words).
Examination Paper of Production and Operations Management
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IIBM Institute of Business Management
1. What do you mean by Tactical Planning? What are the mathematical approaches to aggregate
planning?
2. What is the concept of forecasting in operation? List the different types of forecasting methods.
END OF SECTION C
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