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COMSATS University Islamabad, Wah Campus

Mock Examination-1 Fall 2020
Department of: MANAGEMENT SCIENCES

Program/Class: BBA Date: 24th Nov, 2020

Subject: Strategic Management Instructor: Dr. Faheem A Khan
Total Time Allowed: Maximum Marks: 25

INSTRUCTIONS (READ VERY CAREFULLY)

This paper is meant to check your understanding of the area. Give to the point & precise answers of the following questions. Marks
are based on the content and quality of the answers not over length.
Attempt All questions
Strictly Roots Natural Hair Care Salon
Mission Statement
Strictly Roots’ approach to hair care is an integrated balance between the body, mind, and spirit. The services provided are gentle,
wholesome, corrective, and nurturing to the entire body. Environmentally safe products (nontoxic) are a part of the service.
Products made of plants, fruits, vegetables, herbs, or essential oils are used during these therapeutic services.
Goal
To increase revenue and profits by 25% and to retain market position by this Year
Competitive Profile Matrix
Strictly Roots Avon Conserve
Critical Success Weight Rating Weighted Rating Weighted Rating Weighted Score
Factors Score Score
Market Share 0.30 2 0.60 4 1.20 1 0.30
Price 0.20 2 0.40 1 0.40 2 0.40
Financial Position 0.10 1 0.10 3 0.30 1 0.10
Product Quality 0.20 4 0.80 4 0.80 3 0.60
Customer Loyalty 0.20 3 0.60 4 0.80 3 0.60
Total 1.00 3.50 2.50 2.00

EFE Matrix
Key External Factors Weight Rating Weighted Score
Opportunities
1. Strictly Roots’ current location has high people traffic 0.08 4 0.32
2. The North Houston area and the Reliant Astrodome area are attractive to 0.20 2 0.40
locate a second store
3. More and more people use the Internet daily 0.10 3 0.30
4. Government funding is available to support minority small businesses 0.07 3 0.21
5. There are many African-American students at Houston area high schools and 0.10 3 0.30
colleges such as Texas Southern University and the University of Houston
Threats
1. The image of individuals with a braided natural hair sculptures and matted 0.10 2 0.20
looking dread-locks is not considered appropriate for African-American men and
women in corporate environments
2. There is a risk that some independent hair care companies may begin 0.12 2 0.24
producing similar/substitute hair care products like Bolade’s Strictly Roots
Anointing Oil
3. The national economy seems to be moving toward an extended slowdown that 0.06 2 0.12
may result in a lack of expendable income
4. Rising cost in utilities cut into Strictly Roots profits 0.04 3 0.12
5. Soul Scissors and Back To Natural, both natural hair care salons that are 0.13 3 0.39
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owned and operated by former Bolade independent stylist, are only two blocks
away from Strictly Roots current location
Total 1.00 3.34

IFE MATRIX
Key Internal Factors Weight Rating Weighted Score
Strengths
1. Stylist encouraged to use native African names while sculpturing hair at Strictly 0.06 4 0.24
Roots
2. Markets Strictly Roots Anointion Oil, Bolade’s own natural hair care product 0.15 4 0.60
3. Excellent location near downtown Houston, Texas Southern University, and 0.10 4 0.40
University of Houston
4. Net revenues and income both up 30% over previous year 0.20 4 0.80
5. Strictly Roots well designed website allows consumers to view style gallery 0.10 4 0.40
and place orders
Weaknesses
1. Lack of a reliable administrative assistant will remain problematic 0.10 1 0.10
2. No production staff to produce anointing oil 0.10 1 0.10
3. Other than salon flyers, Strictly Roots has very little advertising 0.10 1 0.10
4. Finance and accounting procedures are under development and need to be 0.06 2 0.12
properly maintained
5. Loss of competitive edge if vendor begins to mass produce oil 0.03 2 0.06
TOTAL 1.00 2.92

SPACE Matrix Inputs

Y axis
Financial strength +3.75 +1 worst to + 6 best Y axis: 3.75 + (-3.33) = 0.42
Environmental stability -3.33 -1 best to –6 worst

X axis
Industry strength 3.70 1 worst to 6 best X axis: 3.70 + (-1.30) = 2.40
Competitive advantage -1.30 -1 best to -6 worst

Marks
Q1 Given the information above regarding Strictly Roots Natural Hair Care Salon develop a strategy 15
through using (TOWS Matrix, Space Matrix, IE Matrix and Grand Strategy Matrix) and finally
select a strategy
** (Consider rapid market growth & strong competitive position).
Important: Give your strong rationale and justification for selected strategy/strategies

Q2 Give answers of the following 5

a) What types of strategies would you recommend for an organization that achieves total
weighted scores of 3.6 on the IFE and 1.2 on the EFE Matrix? Through IE- Matrix
b) Given the following information, develop a SPACE Matrix for the XYZ Corporation:
FS = +2; ES = -6; CA = -2; IS = +4.
c) Give examples of each (market penetration, market development, and product development)?
In Pakistani context Note: (Name firms not products in examples)
d) Give examples of each (concentric diversification, horizontal diversification, and conglomerate
diversification In Pakistani context Note: (Name firms not products in examples)
e) Synergy is the 2 + 2 = 4 effect (Shortly discuss the concept)
Q3 A company manufacturing certain well-known brands of malted food, chocolates and biscuits for 5
more than a decade ventured into manufacture of apple juice in 20015, but had to sell off the
plant in 2019. During the year 2018, the company's sales were higher by 20% over the previous
year despite new competition. Production of chocolates increased by 14 % and of malted food by
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22%. The sale of biscuits was also higher although these were processed by third parties and
sold under popular brand names of the company Having satisfactory financial results in 2018, the
company decided to diversify into computer software business.
a) Was it the right strategic decision?
b) What could be the possible reasons business? underlying the company's decision to
diversify into software

THE END

ANSWER 2

a) Hold-and-maintain-type methods are applicable for a company that scores 3.6 on the IFE
Matrix and 1.2 on the EFE Matrix. The placement is that the left bottom quadrant.

b) The directional vector of the SPACE Matrix lies within the lower right quadrant, indicating
that competitive-type ways square measure most acceptable.

1. Financial Position: 2

2. Competitive Position: -2

3. Stability Position: -6

4. Industry Position: 4

Directional Vector Coordinates: x-axis: -2 + 4 = 2; y-axis: 2 + -6 = -4 = (+2, -4)

c) Example of market penetration

Zong is that the best example, as they entered the market with low costs and most of the days,
they provide discount.

Example of market development

Pakistan State Oil (PSO) is an example of product development. PSO is a new market by
exporting its products and oil to Asian nation.

Example of product development

e) This action happens once the combined result of 2 or additional chemicals is up to the
total of the result of every agents given alone (they don't act in a very direct way); for
example:

2+2=4
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