INDIAN INSTITUTE OF MANAGEMENT LUCKNOW

Post Graduate Programme in Management

END TERM EXAM AY 2019-2020
Subject: STRATEGIC MANAGEMENT

(Part B)

Question Apply the VRIO Framework in the questions a to e. Will the actions
described be as source of competitive disadvantage (CD), parity (PA), temporary
advantage (TA), or sustained competitive advantage (SCA)? Answer stating your
assumption and rationale. No marks will be awarded if the assumption and rationale is not
mentioned.
The answer should only mention either of these: CD/PA/TA/SCA.
Assumption and Rationale should not be more than 25 words each.
(5 x 1 marks)

(a) Air India announces a 5% across-the-board reduction in airfares.

Answer TA
Assumption Competitive market
Rationale Competition is there in the market and it’s a tactical decision which is
easy to imitate. Other airlines will also reduce their prices in some
time.
(Valueable, not rare, easily imitable, substitutable)

(b) Microsoft makes it easier to transfer data and information from Microsoft Word to
Microsoft Excel.

Answer PA
Assumption Feature adds a small value, also there are plenty of software available
in the market
Rationale These two products are already used widely by their customers. Since,
it’s a small feature (valuable, not rare, easily, not imitable,
substitutable) which is making their work easy, it’ll work as a parity.

(c) Balmer Lawrie, a specialty chemical company, patents a new specialty chemical that
can enable development of a new product market.

Answer SCA
Assumption Specialty Chemicals like this one are very difficult to develop
Rationale New chemical can enable a new product mkt and having a patent of
that will add to the advantage of BL. (Valuable, rare, non-imitable,
non-substitutable)

1
(d) The Royal Challengers Bangalore IPL team signs a star batsman to a long-term
contract.

Answer SCA
Assumption There is fewer star batsman, and other teams aren’t hiring them for
long term
Rationale Signing a start batsman for long term will give RCS a sustainable CA
in IPL. (Valueable, rare, non-imitable, non-substitutable)

(e) GM Rao uses the money he has made from GMR Holdings to win the bid for Delhi
IPL cricket team.

Answer CD
Assumption Delhi has poor performance history
Rationale Money can be lost. Other teams have performed quite well in past in
comparison to Delhi. (not valueable, not rare, imitable, substitutable by
better teams)