1. What do you mean by Strategy?

Strategy is a long-term plan of action designed by an organization to achieve its vision, goals, and
objectives, while gaining a sustainable competitive advantage in its industry or market. It answers
critical questions such as where to compete, how to compete, and what resources to allocate.

 Purpose: Strategy provides a roadmap for decision-making that aligns all efforts toward a
common goal.

 Levels of Strategy:

o Corporate-level: Overall scope and direction (e.g., diversification into new

industries).

o Business-level: How to compete in a particular market (e.g., cost leadership or

differentiation).

o Functional-level: Day-to-day tactics and operations that support the business

strategy.

 Characteristics:

o Involves a thorough analysis of internal strengths and weaknesses (internal

environment) and external opportunities and threats (external environment) —
often done through SWOT analysis.

o Strategy must be flexible to adapt to changes in market conditions.

o It is forward-looking and proactive rather than reactive.

 Example:
Netflix’s strategy evolved from DVD rental to streaming, focusing on original content
production to dominate the digital entertainment space globally.

2. What is Six Sigma?

Six Sigma is a disciplined, data-driven methodology for eliminating defects and improving quality in
any process, from manufacturing to services. It aims to reduce variability and defects to achieve near
perfection.

 Origin: Developed by Motorola in the 1980s, popularized by General Electric under Jack
Welch.

 Meaning:

o The term “Six Sigma” refers to a statistical concept where a process produces only
3.4 defects per million opportunities, representing extremely high quality.

 Methodology:

o The DMAIC cycle is central to Six Sigma:

 Define: Identify the problem and project goals.

 Measure: Collect data on current performance.

 Analyze: Determine root causes of defects.

 Improve: Implement solutions to fix root causes.

  Control: Maintain improvements over time.

 Tools Used: Statistical process control, cause-and-effect diagrams, control charts, hypothesis
testing.

 Benefits:

o Reduces costs by eliminating waste and defects.

o Improves customer satisfaction by delivering consistent quality.

o Increases operational efficiency.

 Example:
Ford Motor Company used Six Sigma to improve manufacturing processes, leading to a
significant reduction in production defects and improved customer satisfaction.

3. What do you mean by Process Innovation?

Process Innovation refers to the introduction of new or significantly improved methods of

production or delivery of goods and services. It focuses on how work is done and aims at increasing
efficiency, reducing costs, improving quality, or speeding up delivery.

 Difference from Product Innovation:

o Product innovation focuses on what is produced (new products/services).

o Process innovation focuses on how products/services are created or delivered.

 Types of Process Innovations:

o Adoption of new technologies (e.g., automation, AI).

o Redesigning workflows or business processes.

o Implementing new software systems or logistics solutions.

 Impact:

o Can lead to reduced production costs and faster turnaround times.

o Helps companies respond quickly to market changes and customer demands.

 Example:
Toyota’s implementation of Just-In-Time (JIT) production is a classic example of process
innovation, minimizing inventory and reducing waste.

4. What is Innovation?

Innovation is the process of creating and implementing new ideas, products, services, or processes
that add value or solve problems in novel ways. It is a critical driver of economic growth and
competitive advantage.

 Types of Innovation:

o Incremental innovation: Small improvements or upgrades to existing products or

processes.
 o Radical (or disruptive) innovation: Breakthroughs that fundamentally change
markets or industries.

 Phases of Innovation:

o Idea generation

o Concept development

o Prototyping/testing

o Commercialization and diffusion

 Sources: Innovation can come from technology advancements, customer feedback, market
research, or even serendipity.

 Benefits:

o Creates new market opportunities.

o Enhances customer satisfaction.

o Drives profitability and growth.

 Example:
The launch of the iPhone by Apple was a radical innovation that redefined the smartphone
market and user experience globally.

5. Define Strategic Business Unit (SBU).

A Strategic Business Unit (SBU) is a semi-autonomous unit within a large corporation, responsible for
its own strategy, resources, and performance. It operates as a distinct entity focusing on a specific
product line or market segment.

 Characteristics:

o Has its own vision and mission aligned with the parent company’s objectives.

o Controls its own profit and loss (P&L).

o Can formulate its own competitive strategy.

 Why SBUs are important:

o Helps large diversified firms manage complexity.

o Facilitates better focus on market needs and competition.

o Allows for clearer accountability and performance measurement.

 Example:
Samsung Electronics is divided into SBUs like mobile devices, consumer electronics, and
semiconductor business, each with tailored strategies.

6. What do you understand by the term Strategic Alliance?

A Strategic Alliance is a cooperative agreement between two or more companies to pursue a set of
agreed-upon objectives while remaining independent organizations. It is less binding than a merger
but allows sharing of resources, expertise, or markets.

 Purpose:

o To leverage complementary strengths.

o To enter new markets.

o To share risks and costs, especially in R&D or market expansion.

 Forms of Strategic Alliances:

o Joint ventures (creating a new entity).

o Licensing agreements.

o Co-marketing or distribution partnerships.

 Advantages:

o Access to new technologies and skills.

o Faster entry into foreign markets.

o Reduced costs and risks.

 Challenges:

o Potential conflicts of interest.

o Issues with trust and control.

 Example:
The alliance between Spotify and Uber, allowing users to control music during their rides,
benefits both companies by enhancing customer experience.

7. What do you mean by Environmental Scanning?

Environmental Scanning is the process of systematically collecting and analyzing information about
external and internal environments to identify trends, opportunities, and threats that could impact
an organization's strategy.

 Components:

o External Environment: Economic trends, technological advancements, political/legal

factors, social and cultural shifts, competitors.

o Internal Environment: Company’s resources, culture, strengths, weaknesses.

 Purpose:

o To anticipate changes.

o To adapt strategies proactively.

o To minimize risks and capitalize on opportunities.

 Tools: PESTEL analysis (Political, Economic, Social, Technological, Environmental, Legal),

SWOT analysis, competitor analysis.
  Example:
A telecom company scanning regulations, emerging 5G technology, and customer
preferences to adjust its product and marketing strategies.

8. What are Core Competencies?

Core Competencies are the unique bundles of skills, knowledge, technologies, and processes that
differentiate a company from its competitors and create value for customers. They form the
foundation of a firm's competitive advantage.

 Characteristics:

o Provide access to a wide variety of markets.

o Contribute significantly to customer benefits.

o Difficult for competitors to imitate.

 How to identify:

o Analyze what your company does best.

o Look for capabilities that competitors cannot easily copy.

o Link them to customer value creation.

 Benefits:

o Enables sustainable competitive advantage.

o Facilitates innovation and growth.

o Guides resource allocation and strategic focus.

 Example:
Google’s core competency lies in its search algorithm and data processing capabilities, which
powers its dominance in online search and advertising.

9. Explain the various phases of Strategy Formulation with an illustration.

Strategy formulation is the process of developing the organization’s mission, objectives, and detailed
strategies to achieve competitive advantage.

Phases of Strategy Formulation:

1. Setting Objectives:
Define the organization's vision, mission, and long-term objectives that provide direction.

2. Environmental Analysis:
Conduct internal analysis (strengths and weaknesses) and external analysis (opportunities
and threats) using tools like SWOT, PESTEL, and competitor analysis.

3. Strategy Development:
Based on analysis, develop corporate-level, business-level, and functional-level strategies.
 4. Strategy Evaluation and Choice:
Evaluate alternative strategies for feasibility, acceptability, and suitability, then select the
best strategy.

Illustration:
Imagine a company, “EcoClean,” which makes eco-friendly cleaning products.

 Objective: Become the market leader in green cleaning solutions by 2028.

 Environmental Analysis: Finds growing demand for sustainable products but also sees rising
competition.

 Strategy Development: Decides to focus on product innovation and expanding distribution

channels.

 Strategy Evaluation: Chooses to invest in R&D and partner with eco-conscious retailers.

10. What is Corporate Governance? State the concept, need, and principles of corporate
governance.

Corporate Governance is the system of rules, practices, and processes by which a company is
directed and controlled. It balances the interests of stakeholders like shareholders, management,
customers, suppliers, financiers, government, and the community.

 Concept:
Governance ensures accountability, fairness, and transparency in a company’s relationship
with stakeholders.

 Need:

o Protect shareholders’ rights.

o Ensure ethical management and prevent fraud.

o Enhance investor confidence.

o Improve company performance and sustainability.

 Principles:

1. Transparency: Clear disclosure of all material matters.

2. Accountability: Board and management are responsible for their actions.

3. Fairness: Treat all shareholders and stakeholders equitably.

4. Responsibility: Compliance with laws and ethical standards.

5. Independence: The board must be free from undue influence.

11. Describe the Strategic Issues for Non-Profit Organizations. Suggest suitable measures to resolve
such issues.

Strategic Issues for NPOs:

 Limited financial resources.

 Balancing mission with operational sustainability.

  Measuring impact and effectiveness.

 Competition for donors and volunteers.

 Managing stakeholder expectations.

 Keeping up with regulatory compliance.

Measures to Resolve:

 Diversify funding sources (grants, donations, social enterprise).

 Use performance measurement tools like Logic Models.

 Build strong partnerships and alliances.

 Invest in capacity building and staff training.

 Use strategic planning and regular environmental scanning.

12. Discuss the significance of Internet Economy in the context of current demonetization
scenarios.

Internet Economy refers to economic activities conducted via digital networks and the internet. It
includes e-commerce, online banking, digital payments, and virtual services.

 Significance in Demonetization:

o Facilitates cashless transactions, reducing dependency on physical currency.

o Enhances transparency and reduces black money circulation.

o Enables quick financial inclusion via mobile wallets and UPI systems.

o Promotes business continuity in cash shortages.

o Encourages innovation in fintech and digital services.

Example: During demonetization in India (2016), digital payment platforms like Paytm and Google
Pay saw massive growth.

13. Enumerate Porter’s Five Forces Model. Give an example.

Porter’s Five Forces analyze the competitive forces shaping industry profitability:

1. Threat of New Entrants: How easily new competitors can enter the market.

2. Bargaining Power of Suppliers: How much power suppliers have to raise prices.

3. Bargaining Power of Buyers: How much customers can demand lower prices or better
quality.

4. Threat of Substitute Products or Services: Availability of alternatives that customers can

switch to.

5. Industry Rivalry: Intensity of competition among existing players.

Example:
In the smartphone industry:
  New entrants face high barriers due to technology and brand loyalty.

 Suppliers like chip manufacturers have moderate power.

 Buyers have high power due to many choices.

 Substitute threats from tablets or laptops exist but limited.

 Rivalry is intense among Apple, Samsung, Xiaomi, etc.

14. Discuss the importance of SWOT Analysis and ETOP.

 SWOT Analysis:

o Evaluates Strengths, Weaknesses (internal factors), Opportunities, and Threats

(external factors).

o Helps in understanding where the organization stands and formulating strategies

accordingly.

o Guides decision-making to leverage strengths and opportunities while addressing

weaknesses and threats.

 ETOP (Environmental Threats and Opportunities Profile):

o Focuses on external environment, identifying and ranking opportunities and threats

that affect the business.

o Provides detailed insight into market trends, competitor activities, regulations, and
other external forces.

o Assists in prioritizing strategic responses.

Both tools are vital for environmental scanning and strategy formulation.

15. Discuss about GAP Analysis.

GAP Analysis is a tool that compares an organization's current performance or position with its
desired performance or goals to identify gaps.

 Purpose: To identify what needs to be done to close the gap between where the
organization is and where it wants to be.

 Steps:

o Define current state.

o Define desired future state.

o Identify gaps.

o Develop action plans to bridge the gaps.

Example: A retail chain wants to increase online sales by 50%, but current online sales are low; gap
analysis reveals gaps in e-commerce technology and digital marketing, guiding investments in those
areas.
16. Explain the process of Strategic Implementation and Evaluation.

Strategic Implementation:
Turning strategies into action through effective allocation of resources and management.

 Steps:

1. Communicate strategy across the organization.

2. Develop detailed action plans.

3. Allocate resources (budget, personnel, technology).

4. Assign responsibilities and timelines.

5. Build capabilities and infrastructure.

6. Manage change and overcome resistance.

Strategic Evaluation:
Assessing the effectiveness of the strategy and making necessary adjustments.

 Steps:

1. Set performance standards and benchmarks.

2. Measure actual performance.

3. Compare results with standards.

4. Identify deviations and analyze causes.

5. Take corrective actions to realign strategy.

Example:
A telecom company implementing a new pricing strategy regularly reviews subscriber growth and
revenue to evaluate success and tweak marketing campaigns accordingly.

CASE STUDY
(a) What rational attributes do you look for in a fast-food restaurant?

Rational attributes are objective, logical, and practical factors that influence a customer’s decision.
For a fast-food restaurant, these might include:

1. Quality of Food: Freshness, taste, and consistency.

2. Price: Affordable and reasonable pricing for the portion and quality offered.

3. Speed of Service: Fast and efficient order processing and delivery.

4. Cleanliness and Hygiene: Clean environment, kitchen hygiene, and food safety standards.

5. Menu Variety: Options catering to different tastes and dietary preferences.

6. Convenience: Location accessibility, ease of ordering (online or offline), parking.

7. Nutritional Information: Availability of calorie counts or healthier options.

 8. Reliability: Consistent quality and service regardless of location or time.

(b) What emotional attributes do you look for in a fast-food restaurant?

Emotional attributes relate to the feelings, experiences, and personal connections customers
associate with the restaurant:

1. Comfort and Familiarity: Feeling at home or connected with the brand.

2. Brand Loyalty: Trust and preference built over repeated positive experiences.

3. Customer Service: Friendly, courteous, and attentive staff creating a welcoming atmosphere.

4. Cultural Relevance: Food and ambience that reflect or respect local tastes and traditions.

5. Happiness and Enjoyment: Positive mood or pleasure associated with eating there.

6. Status or Identity: Feeling part of a community or trend by choosing a particular brand.

7. Nostalgia: Reminders of family, childhood, or special memories connected to the food.

(c) Do these attributes fit your favourite food establishment in your country?

For example, if Jollibee is your favorite (assuming you're in the Philippines or familiar with it), it fits
many of these attributes:

 Rationally:

o Offers affordable and tasty Filipino-style fast food with variety (burgers, chicken,
pizza, Chinese food).

o Known for quick service and widespread outlets.

o Clean and family-friendly environment.

 Emotionally:

o Strong emotional connection with Filipinos due to its homegrown identity.

o Creates a sense of pride as a local brand beating global giants.

o Friendly, warm customer service.

o Nostalgic menu items that remind people of home-cooked meals or family

gatherings.

If your favorite fast-food brand is different, you can evaluate it based on these rational and emotional
attributes to see how well it fits.