MBA 600 Strategic Management

Midterm Exam Summer 2020 Marks: 40

Name: Maria Binte Islam Ria

ID: 182051031

S tart answering just after the question in this script.

1. Compare Coca-Cola’s Mission Statement to Pepsi Co.’s Mission Statement. 5 marks

C oca-Cola’s Mission Statement

Our mission is to refresh the world in mind, body, and spirit; to inspire everyone with optimism and
happiness through our brands and actions, and to make a positive difference in people’s lives.

P epsi Co.’s Mission Statement

Our mission as one of the largest food and beverage companies in the world is to provide consumers
globally with delicious, affordable, and convenient foods and beverages from wholesome breakfasts to
healthy snacks and beverages and treats. We are committed to investing in our employees and the
communities where we operate to help position PepsiCo for long-term, sustainable growth.

Just write if the component is included or not included in each of the Mission Statement.

Components Coca-Cola Pepsi Co.

Customers
Products
Markets
Technology
Survival/Growth
Philosophy
Distinctive Competence
Public Image
Employees

2. In your opinion, what are the three most important components that should be included when
writing a mission statement? Why? 5 marks (150 words)

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 3. You have BDT 1 crore to invest. You need to choose among industry A, B or C. Please
consider the following factors and decide on the industry you should invest in. Justify your
answer. 10 marks (250 words)

Industry Competitive Threat of new Bargaining Bargaining Threat of

rivalry entrants power of power of substitute

consumers suppliers

Industry A HIGH MEDIUM LOW MEDIUM LOW

Industry B MEDIUM LOW HIGH LOW HIGH

Industry C LOW HIGH LOW HIGH LOW

4. Develop an EFE Matrix for Crimson Cup Coffee. 10 marks

5. Explain how Facebook, Twitter, and Instagram can represent a major threat or opportunity for a
company. 5 marks (100 words)
6. Identify a recent economic, social, political, environmental and technological (one for each factor)
trend that significantly affects the local super shop. 5 marks

Answer to Question No.1

Components Coca-Cola Pepsi Company

Customers Included Included
`Products Not included Included
Markets Included Included
Technology Not included Not included
Survival/Growth Not included Included
Philosophy Included Included
Distinctive Competence Included Included
Public Image Included Included
Employees Not included Included

Answer to Question No.2

There are three most important components that should be included when writing a mission
statement. And these components are the customers, products or services, and philosophy. Because a
company firstly thinks about customer and based on customer choose they make products/services
and after that philosophies come. The main view of a business is the customer itself. Without them,
the organization is nothing. If the public and potential customers know what products and services are
offered, they can grow quite much idea what the organization has to offer. Once you attract the public
and potential customers and let them know what products and services you will render, the
philosophy of the organization ties it all together by giving the public and potential customers an idea
of the organization's morals, values, and ethics.

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 Answer to Question No.3

Industry Competitive Threat of Bargaining Bargaining Threat of

rivalry new power of power of substitute
entrants consumers suppliers
Industry A HIGH MEDIUM LOW MEDIUM LOW

Industry B MEDIUM LOW HIGH LOW HIGH

Industry C LOW HIGH LOW HIGH LOW

I choose Industry C because of industry has low competitive rivalry where that business in this
industry will have higher chance to capture the market share. In contrast, the other industry’s rivalry
competition is high and medium when competition is strong, advertisement and price competition
arises, which can harm the profit margins of a company. I cannot choose Industry A & B because of
high & medium competitive rivalry where that business in this industry will have low chance to capture
the market share. The threat of new entrance is high in this industry, which means that it is so difficult
for competitors to join the market. So, I'm taking it as an advantage to secure my investment in the
future. Other Industry A & B has Medium and Low Threats of New entrains. Suppliers 'bargaining
power high means how much control they have over the capacity to raise their prices, which, in effect,
decreases the competitiveness of a company. Nonetheless, this risk can be tackled by taking few
precautions like purchase bulk amount raw material when the market price is lower. The risks in
industry "C" are low where customers can not easily switch from the product or service of a business
to a competitor. Though in industry 'A' has the same investment potential but I think that amount of
investment isn’t enough for the competition because it has competitive rivalry which increases the risk
of investment. So far I can choose Industry C because it is potential rather than Industry A &B.

Answer to Question No.4

External Factor Evaluation (EFE) Matrix is a strategy tool used to examine company’s external
environment and to identify the available opportunities and threats. EFE matrix can be defined as the
strategic tool to evaluate external environment or macro environment of the firm include economic,
social, technological, government, political, legal and competitive information.

Crimson Cup Coffee developing the EFE matrix:

External Factor Evaluation (EFE) Matrix

Key External Factors Weight Rating Weight Score
Opportunities
Lunch items 0.1 4 0.4
Expansion in abroad 0.1 3 0.3
Lounging area opening 0.2 4 0.8
Diversification of Product mix 0.2 2 0.4
Partnership with other firms 0.1 4 0.4
Product innovation 0.2 1 0.2
Potential higher sales 0.1 4 0.4
Total 1 2.9
Threats
Competition of from low cost 0.2 3 0.6
Specific market 0.2 2 0.4
Increased shipping cost 0.1 4 0.4

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Risk of franchising 0.1 4 0.4
Limitation of products 0.1 3 0.3
Decrease I supply I coffee beans 0.1 1 0.1
Price increase of coffee beans 0.2 2 0.4
Total 1 2.6

The EFE matrix in shows the weight that the opportunities and threats has on Crimson Cup Coffee and
then is rated to obtain each factor’s weighted score. Each weighted score is then added together to
obtain a weighted score, in which Crimson Cup Coffee scored 2.9 and 2.6, which shows how effective
Crimson Cup Coffee is able to respond to their external factors.

Answer to Question No.5

In the era of globalization and trade-friendly policies being implemented across the globe, businesses
are expanding their markets and reaching out to new customers. Technology is also supporting such
expansions with increased number of people using online social platforms and thus businesses too.
However, such advancements have both pros and cons. Social networking sites such as Facebook,
Twitter, and Instagram provide opportunities for many companies in terms of expand to a wider
market like improves user engagement, Social customer service is the new marketing, can be a driving
force of growth tools, allows collecting first hand customer feedback, creates word of mouth, New
dimension to channel customer service of company. Besides border free advertising, low cost for
promoting, making a good user review and many more things exists in the social marketing fields. But
overlooking these technological trends or waiting too long to act on them may represent a threat to a
company’s survival. Bad news can spread very fast on social network sites, representing a major threat
to firms. Good news can also spread very fast, representing a major opportunity to firms.

Answer to Question No.6

Due to Covid 19, recent economic, social, political, environmental and technological trend that significantly
affects the local super shops which are followings:

a) Economic Trend: Due to the COVID-19 Crisis in 2020, Income level of the peoples has decreased
compared to the before pandemic time. So far, people will buy less from anywhere as well as
local super shops also.
b) Social Trend: The trend to move to healthier foods/Products and essential products due to COVID
19 and would reduce the consumption of Luxury products/ other products at local Super shops.
c) Political Trend: Due to Govt. order, People stay home as much as possible. People try to obey
the Govt. order and maintaining social distance, so number of Customers is decreased in local
super shops.
d) Environmental Trend: People are concerned about their health issues because of COVID-19.
Recently customers want to buy health and hygienic products. This can be affected to the local
super shops, because they are selling health and hygienic products.
e) Technological Trend: The current crisis has been regarded as the biggest opening yet for online
grocers. Customers are getting used to online shopping, which can reduce the number of
customers in local super shops physically. But if local super shops cope with selling by online, can
increase customers by online.