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Assign No. Code. SUBJECT.

SET 1. MB0036 Strategic manGT. & BusiNESS policy


MBA 4th Fin. 17.04.10 Pankaj 4m smu

Q.1 What are the 4 four main areas of Strategic Alliances among two or more Companies? Explaining the purpose/s of each, briefly. ANS:Strategic Alliances Strategic alliances constitute another viable alternative. Companies can develop alliances with the members of the strategic group and perform more effectively. These alliances may take any of the following forms: a) Product and/or service alliance: Two or more companies may get together to synergise their operations, seeking alliance for their products and/or services. The product or service alliance may take any of the following forms: A manufacturing company may grant license to another company to produce its products. The necessary market and product support, including technical know-how, is provided as part of the alliance. Coca-cola initially provided such support to Thums Up. Two companies may jointly market their products which are complementary in nature. Chocolate companies more often tie up with toy companies. TV Channels tie-up with Cricket boards to telecast entire series of cricket matches live. Two companies, who come together in such an alliance, may produce a new product altogether. Sony Music created a retail corner for itself in the ice-cream parlours of Baskin-Robbins. b) Promotional alliance: Two or more companies may come together to promote their products and services. A company may agree to carry out a promotion campaign during a given period for the products and/or services of another company. The Cricket Board may permit Coke’s products to be displayed during the cricket matches for a period of one year. c) Logistic alliance: Here the focus is on developing or extending logistics support. One company extends logistics support for another company’s products and services. For example, the outlets of Pizza Hut, Kolkata entered into a logistic alliance with TDK Logistics Ltd., Hyderabad, to outsource the requirements of these outlets from more than 30 vendors all over India – for instance, meat and eggs from Hyderabad etc. d) Pricing collaborations: Companies may join together for special pricing collaborations. It is customary to find that hardware and software companies in information technology sector offer each other price discounts. Companies should be very careful in selecting strategic partners. The strategy should be to select such a partner who has complementary strengths and who can offset the present weaknesses. The acid test of an alliance is greater sales at lesser cost. It is a common practice to develop organisational structures or modify them, if necessary, to support the alliances and make them successful.

2.You have taken over as CEO of a Company and have formulated a Strategy document to improve its share value by 50% in 3 years. What steps would you follow in the implementation of the Strategy? Strategy Formulation and Implementation It is the crux of the strategic management process. Strategy refers to the course of action desired to achieve the objectives of the enterprise. Formulation, together with its implementation, constitutes an integral part of the management activity. Managers use strategies for different purposes such as to overcome competition, to increase sales, to increase production, to motivate the employees to provide their best, and so on. Implementation of a strategy is a crucial task as the formulation of it. There may be a lot of resistance during the implementation process. It is necessary for the manager to be very tactful to involve the members of his group in the formulation of strategy to facilitate the implementation process. 1.5.1 Stages in Strategy Formulation and Implementation a) Identification of mission and objectives b) Environment scanning c) Generic strategy alternatives d) Strategy variations e) Strategic choice f) Allocation of resources and formulation of organisational structure g) Formulation of plans, policies, programmes and administration h) Evaluation and control

Q.3 Explain the main features of a Business Plan for a Company with production and marketing operations.

Production Description Describe the steps for creating your product, from the raw material or initial stage to the finished product, packaged and ready for distribution and sale. If you plan to provide a service, describe the process of service deliver (such as the initial interview, for instance, if you are offering consulting services), assessment, research and design, and final presentation. Provide a description of any sub-contractors or external services you plan to use in the production process. The reader of the plan may be unfamiliar with the industry, so avoid using industry jargon to describe the production process. Staffing Describe the staff required to operate your business: discuss how many people you will need; describe the tasks they will carry out; and the skills they will need. Prepare a chart outlining the salaries and benefits you will provide to your workforce. Provide information on how you will recruit staff and provide initial and ongoing training of employees.

Marketing operations:In this section of your business plan, describe the senior managers responsible for overseeing the start-up and operation of your business, their background and their responsibilities in the business. Be sure to highlight your management team’s experience in managing the production, marketing and administration of similar businesses or within the selected industry and attach the resumes of each member to the plan. Be sure to provide a complete job description of any vacancies in your management team. Describe the responsibilities, the skills, the background required and the steps you plan to take to fill that key position.

4. What are the three types of capital needed for a start-up Company?

ANS:Capital Requirements Describe the amount and type of financing you is seeking for your business. Are you looking for debt from a lender or equity from an investor? Refer to your start up budget and cash flow statement presented earlier. Discuss how and when you will draw on these funds and how they will affect the bottom line. Also describe any commitments or investments that you may have already secured. If you are seeking investors, such as venture capitalists, describe what they will receive in return for their capital. What is the repayment period and the expected return on investment? Also discuss the nature of their ownership share and how it may change with future investments. Equity investors are looking for rates of return higher than rates offered by banks or other business lenders. The level of risk in your business and industry will help to determine the actual market rate, as will the availability of equity dollars. Check with other businesses (although not direct competitors) to see what return on investment their investors demanded. Be prepared to negotiate. And make sure you research the investment market carefully; several socially minded investment pools exist and more are in development. or lenders, describe the type of financing you are seeking: · Seed Capital – Short-term financing to cover start-up costs. · Fixed Asset Financing – Longer-term financing for property, building improvements, equipment or vehicles. The asset being purchased is usually pledged as security for the loan. · Working Capital – Short-term financing to cover operating expenses and to bridge gaps in cash flow.

5. You are the Marketing Head of a multi product marketing company for consumer goods in South India. Explain the method and elements of a Sales projection for the following budget year ANS:5

Sales forecasts Projection of sales is an important part of the plan. Part of the sales projection work is planning for a better performance in the future and correcting past performance with which you are not satisfied. You do this by finding out what profit contribution each sales representative makes. One goal of measuring a sales representative's performance is improvement assistance. This is done in the marketing personnel section of the marketing plan. Talk to your sales managers and get their agreement about goals to attain for the next year. You can agree on total profit contribution in currency, in numbers and a number of other variable parameters. You should include these expectations for each major product line, for each major market (industry, geography, demography, etc.) or even for each major account. Reach an agreement on the expenses as well. This is handled in the marketing budget section. Think of total sales budget in currency for travel, cars, customer entertainment (lunches, dinners), telephone and other expenses. In the Budgeting and Control section you can include measurement of the projected sales figures, costs and other parameters included. Have regular meetings with your sales staff, your sales management, marketing management and other personnel responsible for your sales. Additional costs such as price cuts, non-reimbursed overtime, claims or credits due to errors, and their expenses reduce the sales force's profit contribution. Consider all these variables when projecting your sales for the next three or five years. Be as specific as possible. We've found that doing two forecasts is best, a very optimistic one and a worst case scenario. Then try to average between the two. We've been successfully using this for years. Use the Estimate Sales tables to help you calculate the total sales and the cost of goods sold for each product each year. Enter the units to be sold and the sales price per unit. Enter the cost of goods sold per unit. The actual sales and cost of goods total are automatically calculated.


Estimate Sales

The cost of goods per product unit are calculated in a separate table to the right (see below), and are automatically added to the Estimate Sales table in the column 'Cost of goods per units'.

The above information is automatically inserted into the Sales Projection worksheet. Enter the sales per month by taking the total yearly amount from the Estimate Sales and divide it using a weighing percentage for each month. All other data is automatically calculated from the

information entered.

Sales projections worksheet



6. A Business Continuity Plan is a Disaster Management Plan. Discuss this statement, explaining how such a plan could be useful for a business affected by recession. ANS:-



Business continuity planning life cycle Business continuity planning (BCP) is the creation and validation of a practiced logistical plan for how an organization will recover and restore partially or completely interrupted critical (urgent) functions within a predetermined time after a disaster or extended disruption. The logistical plan is called a business continuity plan. In plain language, BCP is working out how to stay in business in the event of disaster. Incidents include local incidents like building fires, regional incidents like earthquakes, or national incidents like pandemic illnesses. BCP may be a part of an organizational learning effort that helps reduce operational risk associated with lax information management controls. This process may be integrated with improving information security and corporate reputation risk management practices. In December 2006, the British Standards Institution (BSI) released a new independent standard for BCP — BS 25999-1. Prior to the introduction of BS 25999, BCP professionals relied on BSI information security standard BS 7799, which only peripherally addressed BCP to improve an organization's information security compliance. BS 25999's applicability extends to organizations of all types, sizes, and missions whether governmental or private, profit or non-profit, large or small, or industry sector. In 2007, the BSI published the second part, BS 25999-2 "Specification for Business Continuity Management", that specifies requirements for implementing, operating and improving a documented Business Continuity Management System (BCMS).

In 2004, the United Kingdom enacted the Civil Contingencies Act 2004, a statute that instructs all emergency services and local authorities to actively prepare and plan for emergencies. Local authorities also have the legal obligation under this act to actively lead promotion of business continuity practices in their respective geographical areas. INTRODUCTION A completed BCP cycle results in a formal printed manual available for reference before, during, and after disruptions. Its purpose is to reduce adverse stakeholder impacts determined by both the disruption's scope (who and what it affects to what extent) and duration (e.g., hours, days, months). Measurable business impact analysis (BIA) "zones" -- areas in which hazards and threats reside -- include civil, economic, natural, technical, secondary and subsequent. For the purposes of this article, the term disaster will be used to represent natural disaster, human-made disaster, and disruptions. Before January 1, 2000, governments anticipated computer failures, called the Y2k problem, in important public utility infrastructures like banking, power, telecommunication, health and financial industries. Since 1983, regulatory agencies like the American Bankers Association and Banking Administration Institute (BAI) required their supporting members to exercise operational continuity practices (later supported by more formal BCP manuals) that protect the public interest. Newer regulations were often based on formalized standards defined under ISO/IEC 17799 or BS 7799. Both regulatory and global business focus on BCP arguably waned after the problem-free Y2K rollover. Some believe this lax attitude ended September 11th 2001, when simultaneous terrorist attacks devastated downtown New York City and changed the 'worst case scenario' paradigm for business continuity planning.[1] BCP methodology is scalable for an organization of any size and complexity. Even though the methodology has roots in regulated industries, any type of organization may create a BCP manual, and arguably every organization should have one in order to ensure the organization's longevity. Evidence that firms do not invest enough time and resources into BCP preparations are evident in disaster survival statistics. Fires permanently close 44% of the business affected.[2] In the 1993 World Trade Center bombing, 150 businesses out of 350 affected failed to survive the event. Conversely, the firms affected by the September 11 attacks with well-developed and tested BCP manuals were back in business within days.[3] A BCP manual for a small organization may be simply a printed manual stored safely away from the primary work location, containing the names, addresses, and phone numbers for crisis management staff, general staff members, clients, and vendors along with the location of the offsite data backup storage media, copies of insurance contracts, and other critical materials necessary for organizational survival. At its most complex, a BCP manual may outline a secondary work site, technical requirements and readiness, regulatory reporting requirements, work recovery measures, the means to reestablish physical records, the means to establish a new supply chain, or the means to establish new production centers. Firms should ensure that their

BCP manual is realistic and easy to use during a crisis. As such, BCP sits alongside crisis management and disaster recovery planning and is a part of an organization's overall risk management. The development of a BCP manual can have five main phases: 1. Analysis 2. Solution design 3. Implementation 4. Testing and organization acceptance 5. Maintenance. The above list is not exhaustive. There are a number of other considerations that could be included in your own plan / manual: - Risk Identification Matrix - Roles and Responsibilities (ensuring names are left out but titles are included, e.g. HR Manager) - Identification of top risks and mitigating strategies. - Considerations for resource reallocation e.g. skills matrix for larger organizations. Much of the BCP material on the internet is sponsored by consultancies who offer fee-based services for BCP solution development, however basic tutorials are freely available on the Internet for properly motivated organizations.[4] ANALYSIS The analysis phase in the development of a BCP manual consists of an impact analysis, threat analysis, and impact scenarios with the resulting BCP plan requirement documentation. IMPACT ANALYSIS (BUSINESS IMPACT ANALYSIS, BIA) An impact analysis results in the differentiation between critical (urgent) and non-critical (nonurgent) organization functions/ activities. A function may be considered critical if the implications for stakeholders of damage to the organization resulting are regarded as unacceptable. Perceptions of the acceptability of disruption may be modified by the cost of establishing and maintaining appropriate business or technical recovery solutions. A function may also be considered critical if dictated by law. For each critical (in scope) function, two values are then assigned:

• •

Recovery Point Objective (RPO) - the acceptable latency of data that will be recovered Recovery Time Objective (RTO) - the acceptable amount of time to restore the function

The Recovery Point Objective must ensure that the Maximum Tolerable Data Loss for each activity is not exceeded. The Recovery Time Objective must ensure that the Maximum Tolerable Period of Disruption (MTPD) for each activity is not exceeded.


Next, the impact analysis results in the recovery requirements for each critical function. Recovery requirements consist of the following information:
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The business requirements for recovery of the critical function, and/or The technical requirements for recovery of the critical function

THREAT ANALYSIS The coronavirus suggested as a causative agent for the SARS outbreak in 2002 After defining recovery requirements, documenting potential threats is recommended to detail a specific disaster’s unique recovery steps. Some common threats include the following:
• • • • • • • • •

Disease Earthquake Fire Flood Cyber attack Sabotage Hurricane Utility outage Terrorism

All threats in the examples above share a common impact: the potential of damage to organizational infrastructure - except one (disease). The impact of diseases can be regarded as purely human, and may be alleviated with technical and business solutions. However, if the humans behind these recovery plans are also affected by the disease, then the process can fall down. During the 2002-2003 SARS outbreak, some organizations grouped staff into separate teams, and rotated the teams between the primary and secondary work sites, with a rotation frequency equal to the incubation period of the disease. The organizations also banned face-toface contact between opposing team members during business and non-business hours. With such a split, organizations increased their resiliency against the threat of government-ordered quarantine measures if one person in a team contracted or was exposed to the disease. Damage from flooding also has a unique characteristic. If an office environment is flooded with nonsalinated and contamination-free water (e.g., in the event of a pipe burst), equipment can be thoroughly dried and may still be functional. Definition of impact scenarios After defining potential threats, documenting the impact scenarios that form the basis of the business recovery plan is recommended. In general, planning for the most wide-reaching disaster or disturbance is preferable to planning for a smaller scale problem, as almost all smaller scale problems are partial elements of larger disasters. A typical impact scenario like 'Building Loss' will most likely encompass all critical business functions, and the worst potential outcome from any potential threat. A business continuity plan may also document additional impact scenarios if an organization has more than one building. Other more specific impact scenarios - for example a scenario for the temporary or permanent loss of a specific floor in a building - may also be

documented. Organizations sometimes underestimate the space necessary to make a move from one venue to another. It is imperative that organizations consider this in the planning phase so they do not have a problem when making the move. RECOVERY REQUIREMENT DOCUMENTATION After the completion of the analysis phase, the business and technical plan requirements are documented in order to commence the implementation phase. A good asset management program can be of great assistance here and allow for quick identification of available and re-allocateable resources. For an office-based, IT intensive business, the plan requirements may cover the following elements which may be classed as ICE (In Case of Emergency) Data:
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The numbers and types of desks, whether dedicated or shared, required outside of the primary business location in the secondary location The individuals involved in the recovery effort along with their contact and technical details The applications and application data required from the secondary location desks for critical business functions The manual workaround solutions The maximum outage allowed for the applications The peripheral requirements like printers, copier, fax machine, calculators, paper, pens etc.

Other business environments, such as production, distribution, warehousing etc will need to cover these elements, but are likely to have additional issues to manage following a disruptive event. SOLUTION DESIGN The goal of the solution design phase is to identify the most cost effective disaster recovery solution that meets two main requirements from the impact analysis stage. For IT applications, this is commonly expressed as: 1. The minimum application and application data requirements 2. The time frame in which the minimum application and application data must be available Disaster recovery plans may also be required outside the IT applications domain, for example in preservation of information in hard copy format, loss of skill staff management, or restoration of embedded technology in process plant. This BCP phase overlaps with Disaster recovery planning methodology. The solution phase determines:
• • • • • •

the crisis management command structure the location of a secondary work site (where necessary) telecommunication architecture between primary and secondary work sites data replication methodology between primary and secondary work sites the application and software required at the secondary work site, and the type of physical data requirements at the secondary work site.