Mid Term Exam Summer-2021 Department of Business Administration
Mid Term Exam Summer-2021 Department of Business Administration
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examine, explain, modify or develop concepts discussed in class.
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Q.No. 1 Answer the following question as per the given scenario App 250 Max Marks 15
to 300 words
Read the following case study and give your analysis on the stated questions.
Kenneth Lai is a copycat. He makes money by aping world’s most famous fashion
designers and selling this apparel to the middle class segment throughout Hong
Kong and he is quite successful in what he does. He comes from a poor family and
dropped out of high school. He set out on his own in 1980 with $30,000 in borrowed
cash. He launched the first of his retail stores that year. He has now 53 stores in
Hong Kong, 9 in Singapore, 16 in Taiwan and 2 each in Malaysia and Indonesia.
About the half firm’s turnover comes from the clothing business, rest from an
assortment of other enterprises. About 90% of clothes are produced in China. He has
currently employed nearly 30,000 workers.
Mr. Lai has found the formula of copycat success by closely following industry trends
and mass producing in China. He has 3 types of stores, THEME, THEME PLUS &
BODY GLOVE. Theme store targets young professional office going women and offer
them a value for money approach. Theme has become a recognizable brand name
and its line is narrow but selective. THEME-PLUS offers party wear for the trendy
women at moderate price. BODY GLOVE is a trendy US label that began as a swim
wear for women. Mr. Lai spotted the potential for BODY GLOVE and has exclusive
rights for the Middle East market.
Kenneth Lai has 3 advantages over other manufacturers and retailers that have
enabled him to thrive when others cannot: total vertical integration (every activity
done in house), a skilled design team that imitates the product but save on the costs
and his own gift for picking up the fashion trends. Recently he copied LA Gear
Gimmick of flashing and taillights on the back of the sneakers. Now some of Body
Glove’s sneakers also have the lights. Mr. Lai thinks this will pay off big.
“I have a commercial eye. It’s either in you or it’s not. You don’t learn it at school. We
have a whole team of designers but we don’t create original designs. We travel the
world and find samples from different brand names and then we copy the designs.
Every one copies but I am the only one being honest about it”. Mr. Lai concludes.
1- What resources do Lai and his organization possess that give him a
competitive edge? Is this advantage sustainable? How can he protect
it? Which elements cannot be protected in the long run? App 150 words
(7 marks).
2- According to Porter’s generic strategies what is the competitive scope
and competitive advantage of Kenneth Lai? App 50 to 60 words (3
marks)
3- What other areas of business would you recommend to Lai that he
might be successful in? In other words, what resources are
transferable to other situations? App 100 words (5 marks)
Q.No. 2 Answer the following question App 100 words Max Marks 5
Discuss the structural requirements needed in an organization pursuing the strategy of low
cost leadership. In such an organization you would seek efficiency and tight controls or you
would be focusing on creative flair? Which is more important and why? Elaborate with
solid reasoning and appropriate examples.
Q.No. 3 Answer the following question App 100 words Max Marks 5
National Foods and Shan Foods are undoubtedly market leaders in the food industry of
Pakistan. In context of Miles and Snow’s typology where would you place each brand as
either being Prospector, Analyzer, Defender or Rector? Give reasons to justify your choice.