MMPC-012 Solved Assignment

Question 1

As part of top management, what approach would you use to set objectives for your organisation?

As top management, I would treat objective-setting as a practical extension of the organisation’s strategic intent (vision, mission, business definition, and the results we want to achieve). Objectives convert the mission into measurable targets so that managers can track progress, make decisions, and align teams toward common outcomes.

A student-friendly, step-by-step method

Step 1: Confirm the strategic intent and direction

• Re-check the vision (future aspiration) and mission (what the organisation does and why it exists).
• Define the business boundaries clearly (customers, products/services, geography, and core value proposition).
• Ensure the objectives will directly support mission and vision rather than becoming disconnected “targets for the sake of targets.”

Step 2: Analyse constraints and context before deciding targets

• Scan external forces (market, competition, regulation, technology, economy) and internal realities (resources, capabilities, internal power structure).
• Consider leadership values and what worked or failed in past objective cycles, because unrealistic deviation from the past can create resistance and execution problems.

Step 3: Select “key result areas” where objectives must be set

• Market (market share, customer growth, retention)
• Innovation (new offerings, process improvements)
• Productivity and quality (cost per unit, turnaround time, defects)
• Financial health (profitability, cash cycle, working capital)
• People and culture (capability building, absenteeism, attrition)
• Social responsibility (community, sustainability initiatives)

These areas help ensure the organisation is not over-focused on only one dimension (such as profit) while ignoring drivers of long-term health.

Step 4: Write objectives in a measurable and time-bound format

• Make objectives specific and quantifiable wherever possible (so performance can be measured, compared, and corrected).
• Assign a clear time horizon (quarterly, annual, 3-year) and confirm feasibility given resources.
• Keep language simple and unambiguous to prevent misinterpretation across departments.

Step 5: Build a hierarchy and cascade objectives across levels

• Convert corporate objectives into SBU objectives and then into functional objectives (marketing, operations, HR, finance).
• Ensure vertical alignment (lower-level objectives must support higher-level ones) and horizontal alignment (functions should not work at cross purposes).

Step 6: Attach ownership, resources, and review rhythms

• Assign each objective to an accountable owner and define supporting teams.
• Allocate budgets, people, and systems required to execute.
• Decide review frequency (monthly dashboards, quarterly performance reviews) and define corrective-action rules.

Quality checklist for “good objectives”

• Hierarchy: objectives should flow from vision/mission down to operational targets.
• Time horizon: each objective should state “by when.”
• Measurability: quantification makes monitoring and control easier.
• Achievable but challenging: objectives should motivate rather than demoralise.
• Multiple objectives: balance financial, market, people, and process outcomes (avoid a single-objective trap).

Illustrative example (hypothetical organisation)

Assume a mid-sized online learning company expanding in India. A practical set of objectives could look like this:

• Market objective: Increase paid learner enrollments by 25% within 12 months.
• Customer objective: Improve course completion rate from 40% to 55% by year-end.
• Financial objective: Reduce average collection period to 30 days within 6 months (improves cash flow discipline).
• Product objective: Launch 3 job-linked certificate programs within 9 months.
• People objective: Reduce instructor churn to under 10% within 12 months through training and incentives.

After setting these, I would cascade them into departmental targets (marketing leads, platform uptime, content production schedules, and learner-support SLAs) and monitor them through periodic reviews and corrective actions.

Question 2

How does the Industrial Organization (I/O) model help in understanding strategy that leads to competitive advantage?

The Industrial Organization (I/O) model explains competitive advantage by starting from the outside: it assumes that industry structure and external conditions strongly shape what strategies can succeed. In this view, firms earn above-average returns mainly by choosing attractive industries/segments and aligning strategy to the competitive pressures present there.

Core idea of the I/O model

• External forces matter first: customer demand, competitor actions, entry barriers, regulation, and substitutes limit or enable strategic choices.
• Resource similarity and mobility: the model assumes many firms in an industry have comparable resources, and resources can move between firms, so sustained advantage is harder unless strategy fits the environment better than rivals.

How the model translates into a strategy process

• 1) Examine the external environment (general, industry, and competitive) to see which opportunities/threats shape strategic options.
• 2) Choose an industry or segment with strong profit potential (better structure, better demand, manageable rivalry).
• 3) Formulate strategy that matches the chosen industry’s success factors (cost position, differentiation, focus, partnerships, etc.).
• 4) Acquire/develop resources required to execute the strategy effectively (technology, talent, capital, capabilities).
• 5) Implement strategic actions that allow the organisation to use resources to meet external demands and outperform rivals.

Simple example

If a firm is considering entering the packaged health-food segment, the I/O logic is to first evaluate industry attractiveness (buyer power, supplier power, substitutes, entry barriers, rivalry). If the structure is favourable (for example, strong growth and differentiated demand), the firm then designs strategy around what the external environment rewards (brand trust, distribution reach, quality certification), and only then builds/obtains the capabilities required to win.

Question 3

What do you mean by the competitive environment? Choose an industry and discuss its external analysis framework.

Meaning of competitive environment

The competitive environment refers to the set of competitive pressures that shape how strongly firms compete and how profits are distributed in an industry. Practically, it is captured through forces such as rivalry among existing players, entry threats, substitute threats, and bargaining power of buyers and suppliers.

Industry chosen: Indian online food delivery platforms

External framework: Five forces analysis

• Rivalry among existing firms: High rivalry is visible through discounting, free-delivery offers, and competition on delivery speed and restaurant selection. High rivalry typically compresses margins.
• Threat of new entrants: Moderate. Technology access is easier than before, but scaling logistics, building restaurant partnerships, and funding promotions create barriers.
• Threat of substitutes: High. Substitutes include home cooking, dining out, direct restaurant delivery, and ready-to-eat meals. High substitutes increase price sensitivity.
• Bargaining power of buyers: High. Customers can switch apps quickly, compare prices instantly, and react strongly to service failures and delivery fees.
• Bargaining power of suppliers: Moderate to high. “Suppliers” here include restaurants (and delivery partners). Popular restaurant brands can negotiate better terms; delivery capacity constraints also affect service levels.

What this analysis implies strategically

• If rivalry and buyer power are strong, sustainable advantage often needs differentiation (reliability, selection, membership value, customer service) and cost discipline (route optimisation, delivery batching).
• Because substitutes are strong, platforms need retention levers (loyalty programs, predictable ETA, consistent quality) rather than relying only on discounts.
• Scenario planning can be useful when external conditions are uncertain (fuel costs, regulatory changes, platform-worker rules), so management can prepare multiple plausible futures.

Question 4

Explain fragmented industries. Choose one fragmented industry and explain how competitive advantage can be created in it.

Concept of fragmented industries

A fragmented industry is one where there is no single market leader with dominant share; instead, the industry contains many small and medium players, each holding limited market share, although collectively they influence the industry’s direction.

Chosen fragmented industry: Local beauty salons and personal grooming services

This industry is typically fragmented because services are local, customers value proximity and personal trust, entry barriers are low, and many salons operate as owner-managed units.

A practical route to competitive advantage in this fragmented setting

1) Apply a structured approach to compete in fragmentation

• Conduct industry and competitor analysis to map customer segments, pricing bands, and service expectations.
• Identify the causes of fragmentation (local preferences, low scale economies, informal operations) and test which causes can be reduced through innovation or strategy changes.
• Decide whether the industry may consolidate over time or will remain fragmented, and then choose the most suitable way to cope with it.

2) Build advantage through “chain-like” capabilities (even if you start small)

• Standardised service quality: create SOPs, training playbooks, hygiene standards, and consistent service bundles so customers know what to expect every time.
• Branding and trust: professional branding, transparent pricing, visible reviews, and consistent customer experience reduce perceived risk for customers.
• Technology-enabled convenience: online booking, reminder messages, membership packages, and digital payments improve repeat visits.
• Cost advantage via pooled procurement: negotiate better prices for consumables (shampoo, colour kits) across multiple outlets, improving margins without cutting service quality.
• Local focus: treat each outlet as locally responsive (offers and staffing adapted to neighbourhood demand) while still using central standards for training and quality.

3) Avoid common strategic traps in fragmented industries

• Avoid chasing “dominance” too early if it leads to over-expansion and weak controls.
• Maintain strategic discipline (do not copy every competitor offer impulsively).
• Avoid over-centralisation that kills local responsiveness, because many fragmented industries depend on personalised service and local contact.

Competitive advantage summary for this example

In a fragmented salon industry, a well-run small chain can outperform single-outlet competitors by combining consistent quality, brand trust, convenient booking, and procurement scale while still staying locally responsive. That combination creates a defendable advantage even when no firm “dominates” the market.

Question 5

If asked to formulate a turnaround strategy for a sick organisation, what turnaround process would you use?

A turnaround is typically required when an organisation experiences sustained performance decline serious enough to threaten survival. A sound process begins with diagnosing causes (internal and external), assessing severity, and then executing a two-stage recovery path: first stabilise and stop financial decline, then move toward recovery and growth once the organisation is safe.

Step 1: Diagnosis and “reality check”

• Identify external causes (competition increase, raw material shortages, margin pressure) and internal causes (operational inefficiencies, labour issues, excess capacity).
• Assess severity: liquidity position, covenant risks, ability to pay salaries and suppliers, and proximity to bankruptcy risk.
• Choose an initial response that matches the cause and severity (do not treat a structural demand collapse the same way as a temporary operational disruption).

Stage 1: Retrenchment for survival and positive cash flow

This stage focuses on stopping the “financial bleeding” through an emergency plan and a stabilisation plan that improves core operations. Typical actions include selective product elimination, downsizing, divestment, and other retrenchment moves to restore stability.

• Emergency cash actions: freeze discretionary spend, renegotiate payment terms, accelerate collections, prioritise cash-positive orders.
• Cost cutting: reduce overhead, optimise workforce, cut non-core projects.
• Restructuring: simplify structure, remove duplication, fix bottlenecks, reset KPIs, repair accountability.
• Asset/business decisions: divest chronically loss-making units; consider liquidation only as last resort if no viable future exists.

Stage 2: Recovery and return-to-growth

After stabilisation, the organisation chooses whether to remain in a reduced form or shift into growth. Recovery strategies may include new products, new markets, increased market penetration, and in some cases acquisitions—depending on what caused the decline and what capabilities remain strong.

• Rebuild the core: improve quality, delivery reliability, customer service, and competitive positioning.
• Growth options: selective expansion in profitable segments, refreshed product offerings, improved channels, partnerships, and targeted marketing.
• Capability strengthening: invest in the few capabilities that directly support the recovery strategy (sales excellence, operations, digital systems, talent).

Control and evaluation during turnaround (so the organisation does not relapse)

• Establish a tight monitoring system: standards, measurement, deviation identification, and corrective actions.
• Use a Balanced Score Card style view (not only financial numbers) to ensure recovery is real: cash flow and profitability, customer retention, internal process reliability, and learning/capability building.
• Keep evaluation economical and balanced—enough control to ensure discipline, without creating reporting overload.

Closing note

A turnaround works best when the organisation first becomes financially stable through retrenchment and operational stabilisation, and only then pursues a focused recovery strategy supported by continuous control and evaluation.