MMPC-012 Solved Question Paper

Q1 (Rewritten): Meaning of strategy, and the key features of a good strategy (with examples)

What “strategy” means

In strategic management, strategy is the overall plan of action that helps an organization achieve long-term objectives by choosing a direction and allocating resources accordingly. It is also understood as a consistent pattern of decisions and actions that helps the organization respond to environmental challenges and build advantage over time.

Key features of strategy (student-friendly)

• It sets direction: strategy clarifies “where we are going” and “what we will prioritize” so teams do not act randomly.
• It focuses effort: because resources are limited, strategy helps concentrate money, people, and time on a few high-impact choices (not everything at once).
• It defines the organization’s position: strategy helps decide how the organization wants to compete (for example, a low-cost value option vs. a premium differentiated option).
• It provides consistency over time: good strategy is not a daily mood swing; it creates stability in decisions (even when tactics change).
• It links with the environment: strategy is shaped by opportunities and threats outside, and by strengths/weaknesses inside, so it remains realistic.

Easy examples (illustrations)

• “Plan” example: a coaching institute plans to shift 60% of teaching to blended learning to scale faster; this is an intended direction and resource commitment (platform + training).
• “Position” example: a local food brand chooses “healthy & affordable” rather than “luxury,” so it designs products, packaging, and pricing around value.
• “Pattern” example: a retailer repeatedly prioritizes quick delivery and limited assortment—this consistent behavior becomes its realized strategy over time.

Q2 (Rewritten): Short notes on (I) Core values and (II) Strategic intent

(I) Core values

Core values are the organization’s enduring beliefs and principles—its “non-negotiables.” They guide employee behavior and decision-making, especially when policies do not cover a situation. In practical terms, core values act like a “decision filter” (what we accept and what we reject).

• Why they matter: they build consistency in culture and help align teams across functions and locations.
• Example: if “customer trust” is a core value, managers prefer transparent communication and ethical selling even if it reduces short-term sales.

(II) Strategic intent

Strategic intent describes what the organization stands for and the direction it chooses to achieve expected outcomes. It provides the basic input for the strategic management process and typically includes vision, mission, goals, and objectives arranged as a hierarchy.

• Vision: future aspiration—what the organization wants to become in the long run.
• Mission: the organization’s social reasoning and external purpose—how it connects with society.
• Objectives: specific ends that clarify how goals should be achieved.

Q3 (Rewritten): Explain major modes of entering global markets (with examples)

Organizations select an international entry mode based on a trade-off between risk, investment, and control. A common path is to start with lower-risk modes and move toward higher-commitment modes as confidence and market knowledge grow.

• Exporting: selling domestically produced goods in foreign markets; generally low investment because production remains at home (mainly marketing and distribution costs).
  Example: an Indian FMCG firm sells packaged snacks through distributors in the Gulf.
• Licensing: allowing a foreign firm to use intangible property (brand, patents, processes) for a fee; low investment but lower control and risk of knowledge leakage.
  Example: a learning-content company licenses its assessment engine to a local publisher abroad.
• Franchising: deeper market involvement than licensing; the franchisor shares the business model and brand while the franchisee invests locally.
  Example: a food chain expands via franchise outlets in multiple countries.
• Strategic alliance / partnership: collaboration to share resources (distribution, technology, market access) without forming a new company.
  Example: a hospital-tech company partners with a local diagnostics chain to access patients and data channels.
• Joint venture: a shared ownership arrangement (often used for market entry, risk-sharing, technology sharing, and regulatory compliance); can create coordination and control challenges.
  Example: a foreign manufacturer forms a JV with a domestic firm to meet local ownership rules.
• Direct investment (acquisition or new subsidiary): highest control and commitment; also higher risk and resource requirement.
  Example: acquiring an existing local company to gain facilities and customer access quickly.

Q4 (Rewritten): General environment and why it matters for business

General environment (macro environment) refers to broad external factors that shape industries and firms—political, economic, socio-cultural, technological, legal, and environmental forces (often analyzed using PESTLE).

Why it is relevant

• Creates opportunities and threats: macro changes can open new markets or make existing models risky (for example, regulatory shifts can change cost structures).
• Impacts industries differently: the same trend (like demographic change) can help one sector and hurt another, so managers must assess industry-specific impact.
• Guides strategy and positioning: scanning helps managers pick strategic alternatives aligned with future conditions, not just current conditions.

Practical way to use it (PESTLE-based)

• Step 1: Identify relevant factors (not everything matters equally).
• Step 2: Collect reliable information (policies, market reports, competitor moves, technology trends).
• Step 3: Analyze and conclude how these factors may influence demand, costs, and competitiveness.

Q5 (Rewritten): Resource Based View (RBV) and the link between resources, capabilities, and competitive advantage

RBV meaning

The Resource Based View explains competitive advantage primarily through an organization’s internal strengths—its resources and capabilities—rather than only through external industry conditions. RBV emphasizes building and using unique resources (including tacit knowledge) to earn above-average returns.

Resources, capabilities, and competitive advantage (relationship)

• Resources: what the organization owns, can access, or can develop (tangible assets, intangible assets, know-how, processes, brand, etc.).
• Capabilities: the organization’s skills to utilize resources effectively; two firms may have similar assets but different outcomes because they use them differently.
• Competencies / core competencies: bundles of skills and processes that underpin competitive advantage and are difficult to imitate.

How RBV tests “strategic” resources (VRIO)

To become a sustainable source of advantage, a resource should be Valuable, Rare, Inimitable, and supported by the organization’s ability to Organize and exploit it properly.

Illustration

• A trusted brand (intangible) plus a strong distribution network (tangible) is not enough; the firm also needs the capability to run supply operations and marketing execution better than rivals.

Q6 (Rewritten): Role of cost in business growth, and Porter’s cost leadership strategy

Role of cost in business growth

Cost matters because business survival requires profits and cash flow to sustain the operating cycle, repay borrowings, and deliver returns to shareholders. The cost structure (fixed and variable costs) shapes pricing flexibility, margins, and ability to invest in growth.

• Fixed costs and scale: when output volume is low, fixed costs per unit become high; higher volume typically reduces cost per unit.
• Experience curve effect: over time, learning and higher cumulative volume can reduce variable costs and improve efficiency.
• Buyer’s market vs. seller’s market: cost control is crucial when customers have many choices (buyer’s market). When demand is strong and sellers can pass costs to buyers, cost pressure may feel lower—but this is risky if the market shifts.

Porter’s cost leadership (generic strategy)

Cost leadership aims to produce and deliver products/services at a lower cost than competitors while maintaining acceptable quality, enabling competitive pricing and stronger defense against competitive forces.

Key prerequisites (as presented in the course)

• Aggressive construction of efficient scale facilities
• Strong pursuit of cost reduction from experience
• Tight control of costs and overheads
• Avoiding marginal customer accounts that add cost but little value
• Cost minimization across relevant activities

Simple illustration

• An FMCG firm can win on cost by controlling three big cost pools—production, distribution, and promotion—so it can offer “value for money” pricing without destroying margins.

Q7 (Rewritten): Meaning of competitive strategy and the key dimensions used to formulate it (with examples)

What competitive strategy means

Competitive strategy is the organization’s approach to compete successfully in a particular business or industry. It can be explicit (designed through a planning process considering external environment) or implicit (emerging from actions of functional units). In practice, many firms use a mix of both.

How strategy gets shaped (goals and policies)

A practical way to view competitive strategy is: the goals (ends) define what the business wants to achieve, and the policies (means) across functions define how it will be achieved (marketing, operations, finance, R&D, etc.).

Major dimensions used to differentiate competitive strategies

• Specialization: focus on specific product lines, market segments, or niches.
• Branding: building strong brand identification through promotion and positioning.
• Push vs Pull: whether the firm pushes product through channels or pulls customers through demand creation.
• Distribution channel choice: company-owned outlets, retail partners, online platforms, specialty channels, etc.
• Product quality: quality level, features, specifications, and reliability choices.
• Technological leadership: leading via innovation versus following/imitating.
• Vertical integration: extent of forward/backward integration across the value chain.

Quick illustrations

• Specialization: a hospital chain focuses only on day-care surgeries in metros to standardize processes and reduce cost.
• Push vs Pull: a D2C brand uses pull through content and influencer marketing; a pharma firm may push through medical representatives and channel incentives.
• Vertical integration: a food company integrates backward into key raw materials to stabilize input quality and cost.

Q8 (Rewritten): Diversification strategy and the alternative routes to diversification

Diversification meaning

Diversification is a corporate-level growth route where an organization moves into new lines of business—often by developing new products for new markets—especially when growth in the current industry becomes limited or risky.

Why organizations diversify (common logic)

• Growth beyond current limits: when existing products/markets cannot deliver the desired growth rate.
• Risk spreading: reducing dependence on one product-market domain (similar to spreading investment risk).
• Synergy (economies of scale/scope): shared resources, capabilities, brand, channels, or technology can make “the whole greater than the sum of parts.”

Main forms of diversification

• Related (concentric) diversification: entering a new business that is related through technology, customers, distribution, manufacturing similarities, or other commonalities—aiming for synergy.
• Unrelated (conglomerate) diversification: entering completely unrelated products and markets—often used when the current industry is unattractive and related opportunities are weak.

Alternative routes (how diversification can be pursued)

• Intensification route (Ansoff logic): diversification is one option in the product-market grid where the firm moves to new products and new markets.
• Inorganic route: entering new businesses through mergers/acquisitions (often faster because resources and capabilities come immediately).
• Strategic alliances / joint ventures: partnering to enter a new area while sharing risk and learning before full-scale commitment (commonly used when uncertainty is high).

Simple examples

• Concentric: a dairy company enters flavored yogurt using related processing know-how and the same distribution network.
• Conglomerate: a mature manufacturing group acquires an IT services firm to reduce dependence on cyclical demand in its core sector.