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Sample Question Paper On Strategic Management

BHEL is India's largest engineering and manufacturing company focused on heavy electrical equipment. It has grown significantly in recent years through organic and inorganic strategies focused on its core power sector. However, BHEL faces challenges in fully meeting India's increasing power needs and competing against foreign companies. The case discusses BHEL's strategic initiatives and performance, and poses questions about whether it should broaden its strategies beyond concentration in power and what areas it could diversify into.

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921 views

Sample Question Paper On Strategic Management

BHEL is India's largest engineering and manufacturing company focused on heavy electrical equipment. It has grown significantly in recent years through organic and inorganic strategies focused on its core power sector. However, BHEL faces challenges in fully meeting India's increasing power needs and competing against foreign companies. The case discusses BHEL's strategic initiatives and performance, and poses questions about whether it should broaden its strategies beyond concentration in power and what areas it could diversify into.

Uploaded by

debasishrout
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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MBA (Rural Management)

STRATEGIC MANAGEMENT

Batch-(2012-14)
Course Code: MBA 301

Time: 3 hrs. Maximum Marks: 70

Section – A (30 marks)

Attempt any 5 questions

Each question carries 6 marks

1. Explain clearly the term ‘corporate restructuring’.


2. Why is strategic evaluation important to organization?
3. Explain briefly the four components of VRIO framework.
4. Explain the value chain analysis with examples.
5. There is an inherent strength in every product, company and individuals. Explain “core
competency.”
6. Differentiate between “red ocean strategy” and “blue ocean strategy?”

Section – B (20 marks)


(Attempt any 2 questions, each question carries 10 marks)
7. For each of these business strategies, describe how they are used, under which conditions
are they used and the associated benefits and risks: (a) cost leadership (b) differentiation.
8. Describe the BCG matrix technique used for analyzing corporate portfolio.
9. Classify the corporate and business strategy with hierarchies.

Section – C (20 marks)


(Case Study – Compulsory)
Bharat Heavy Electricals Limited (BHEL) is India’s largest engineering and manufacturing
enterprise, operating in the energy sector, employing more than 42000 people. Established in
1956, it has established its presence in the heavy electrical equipments industry nationally as
well as globally. BHEL is one of the navaratnas (lit. nine gems) among the public sector
enterprises in India. Its vision is to be ‘a world class enterprise committed to enhancing
stakeholder value’. Its mission statement is: ‘to be an Indian multinational engineering enterprise
providing total business solutions through quality products, systems, and services in the fields of
energy, industry, transportation, infrastructure, and other potential areas’.
BHEL is a huge organization, manufacturing over 180 products categorized into 30 major
product groups, catering to the core sectors of power generation and transmission, industry,
transportation, telecommunications and renewable energy. It has 14 manufacturing divisions,
four power sector regional centres, over 100 project sites, eight service centres and 18 regional
offices. It acquires technology from abroad and develops its own technology at its research and
development centres. The operations of BHEL are organized into three business sectors of
power, industry and overseas business. Besides the business sector departments, there are the
corporate functional departments of engineering and R&D, human resource development,
finance and corporate planning and development.
BHEL’s turnover hit an all-time high of Rs. 18,739 crore, registering a growth of 29 percent,
while net profit increased by 44 percent to touch Rs. 2,415 crore in 2006-08. The company has a
comfortable order book position of Rs. 55,000 crore for 2007-08 and beyond. The company
booked export orders worth Rs. 1,903 crore in 2006-07. It is looking forward to US$10 billion
exports by 2012 from the present US$ 4 billion. The capital investment plan of BHEL for the
11th National Plan period envisages an investment of Rs. 3,200 crore, mainly to enhance its
manufacturing capacity from 10000 MW to 15000 MW.
BHEL has formulated a five-year strategic plan with the aim of achieving a sustainable profitable
growth, targeting at a turnover of Rs. 45,000 crore by 2012. The strategy is driven by a
combination of organic and inorganic growth. Organic growth is planned through capacity and
capability enhancement, designed to leverage the company’s core areas of power, supported by
the industry, transmission, exports and spares and services businesses. For the purpose of
inorganic growth, BHEL plans to pursue mergers and acquisition and joint ventures and grow
operations both in domestic and export markets.
BHEL is involved in several strategic business initiatives at present for internationalization.
These include targeting the export markets, positioning itself as a reputed engineering,
procurement and construction (EPC) contractor globally, and looking for opportunities for
overseas joint ventures.
An example of a concentration strategy of BHEL in the power sector is the joint venture with
another public enterprise, National Thermal Power Corporation, to perform EPC activities in the
power sector. It is to be noted that NTPC as a power generation utility and BHEL as an EPC
contractor have worked together on several domestic projects earlier, but without a formal
partnership. BHEL also has joint ventures with GE of the US and Siemens AG Germany. Other
strategic initiatives include management contract for Bharat Pumps and Compressors Ltd. and a
proposed takeover of Bharat Heavy Plates and Vessels, both being sister public sector
enterprises.
Despite its impressive performance, BHEL is unable to fulfil the requirements for power
equipment in the country. The demand for power has been exceeding the growth and availability.
There are serious concerns about energy shortages owing to inadequate generation and
transmission, as well as inefficiencies in the power sector. Since this sector is a major part of the
national infrastructure, problems in the power sector affect the overall economic growth of the
country as well as its attractiveness as a destination for foreign investments. BHEL also faces
stiff competition from international players in the power equipment sector, mainly of Korean and
Chinese origin. There seems to be an undercurrent of conflict between the two governmental
ministries of power and heavy industries. BHEL operates administratively under the Ministry of
Heavy Industries, but supplies mainly to the power sector that is under the Ministry of Power.
There has been talk of establishing another power equipment company as a part of the NTPC for
some time, with the purpose of lessening the burden on BHEL.
QUESTIONS

1. BHEL is mainly formulating and implementing concentration strategies nationally as


well as globally, in the power equipment sector. Do you think it should broaden the scope
of its strategies to include integration or diversification? Why?
2. Suppose BHEL plans to diversify its business. What areas should it diversify into? Give
reasons to justify your choice.

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