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  • 7114afe S2 16 WK9 Sem Q Sample Ans

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    Frasat Iqbal
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    Given the competitive market conditions, HMV should adopt both short-term and long-term strategies. In the short-term, HMV can focus on cost leadership by producing existing high-quality products at low costs to offer competitive prices. In the long-term, HMV can pursue product differentiation by developing new smaller, safer and more fuel efficient cars through customer research and investment in technologies like hybrid and electric vehicles. To achieve both cost-consciousness and customer focus, HMV can utilize target costing, tight budgeting and performance management focused on financial and customer metrics for existing products, and target costing, less tight budgeting and subjective performance metrics focused more on customers for new products.

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    Given the competitive market conditions, HMV should adopt both short-term and long-term strategies. In the short-term, HMV can focus on cost leadership by producing existing high-quality products at low costs to offer competitive prices. In the long-term, HMV can pursue product differentiation by developing new smaller, safer and more fuel efficient cars through customer research and investment in technologies like hybrid and electric vehicles. To achieve both cost-consciousness and customer focus, HMV can utilize target costing, tight budgeting and performance management focused on financial and customer metrics for existing products, and target costing, less tight budgeting and subjective performance metrics focused more on customers for new products.

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    7 views1 page

    7114afe S2 16 WK9 Sem Q Sample Ans

    Uploaded by

    Frasat Iqbal
    Given the competitive market conditions, HMV should adopt both short-term and long-term strategies. In the short-term, HMV can focus on cost leadership by producing existing high-quality products at low costs to offer competitive prices. In the long-term, HMV can pursue product differentiation by developing new smaller, safer and more fuel efficient cars through customer research and investment in technologies like hybrid and electric vehicles. To achieve both cost-consciousness and customer focus, HMV can utilize target costing, tight budgeting and performance management focused on financial and customer metrics for existing products, and target costing, less tight budgeting and subjective performance metrics focused more on customers for new products.

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    © All Rights Reserved
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    Sample Answer to WK9 Sem Qs

    Requirement A. Given HMVs market is highly competitive, many overseas competitors


    supplying small and medium size cars, high fuel price and tight economic conditions, it could
    adopt (i) strategy with relatively short-term (2-3 years) objective, and (ii) also long-term (3 to
    7 years) objective.

    Under (i), HMV could adopt cost leadership/defender/harvest/hold strategy for its existing
    products. Under this strategy, HMV could keep on producing existing product with high
    quality but at lowest possible cost, therefore offer relatively low (lowest) price to compensate
    customers for bigger-sized cars having relatively high fuel consumption. This strategy might
    make its customers feel that they are getting very good value for money which takes care of
    high fuel consumption but offering better safety because of the products size and quality
    (Students could expand on this).

    Under (ii), could adopt differentiation/prospector/build strategy to achieve its long-term


    objective which may be to develop new (modified) products to cater for customer changing
    interest for relatively small quality and safe cars with low fuel consumption. HMV could
    undertake carefully designed customer survey to identify customer tastes and preferences, use
    its R&D to develop new or modify existing product. It could also invest in new technology
    to produce hybrid cars and or electric cars of small to medium size with high quality and
    safety. This would allow HMV to effectively compete in the market.

    Requirement B

    Students could argue that under both (i) and (ii) above, HMV could be both cost conscious
    and customer focussed. To achieve its cost conscious goal, HMV could utilise target costing
    along with ABC and tight budgeting especially for its existing products as well as for the
    modified products. Performance management and reward system could emphasize as listed
    (in order of importance) financial, customer, internal business process and learning growth.
    However, for new product, HMV could utilise target costing along with not so tight
    budgeting as many activities/ costs will be estimated and keep on evolving for some times.
    Performance management and reward system could be subjective and emphasize as listed (in
    order of importance) customer, internal business process, learning growth, and financial.

    Requirement C

    Requirement D

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