Q1. Mr. Gupta is supply chain manager at Mega Mart one of the leading retail organization.

In
the initial days of COVID 19 situation there was sudden rise in demand of FMCG products.
It was different kind of the disruption for the retail industry. In that scenario every
business required some competitive edge to sustain in market. Discuss different supply
chain drivers with Mr. Gupta that ultimately helps Mega Mart to enables entire supply
chain.

ANSWER 1:

INTRODUCTION

A successful supply chain consists of certain drivers that govern the responsiveness and
competitiveness of an organisation with regard to its supply chain network. In an
organisation, these drivers serve as metrics that measure the performance of its supply
chain network.

There are six main supply chain drivers. While three of them are logistical drivers, the rest
are cross-functional drivers. Logistical drivers are involved in the movement of products from
a supply centre or anorganisation to a demand centre or end users. On the other hand,
cross-functional drivers help in making a supply chain effective by aligning it with other
organisational functions, suchas marketing, sales and manufacturing. Logistical drivers
include facilities, inventory and transportation, while cross-functional drivers include
information, sourcing and pricing.

CONCEPT

A supply chain driver is a factor that enables a supply chain to operate efficiently and
responsively. There are six key supply chain drivers, as listed below:

FACILITIES:

Facilities are physical locations in a supply chain network that are used for manufacturing,
storing and transporting products. There aredifferent types of facilities in a supply chain,
such as:

 Plant sites
 Factories
 Warehouses
 Distribution centers

The efficiency and responsiveness of a supply chain depend on the capacity, location and
flexibility of facilities. For example, a distributor who wants to respond quickly to customers
should choose a facility that is located near the consumption centre. An organisation
usually makes long-term decisions related to facilities in its supply chain.

Therefore, it considers various factors before deciding on facilities,including.

  Transportation costs
 Production capacity
 Customer demand
 Market uncertainties
 Customer demand
 Market uncertainties

INVENTORY:
Inventory refers to the stock of materials or goods owned by a business with an aim of production
and sale. It includes the following:

 Raw materials that are used to manufacture products

 Work-in-progress or goods at the semi-finished stage
 Finished goods or final output

It is essential to maintain an appropriate level of inventory in an organisation to meet the

increasing demands of customers and avoid under-stocking or over-stocking of products.
Based on their role in the entire process of customer satisfaction, there are five main types
of inventories held by an organisation.

Cycle inventory: This type of inventory is available or is plannedto be made available to

meet the normal demand of customers during a given period. If supply lead times and
customer demands are known, the cycle inventory is only required to meet the regular
demand.
Transit inventory: This refers to the inventory that is dispatched by the seller, but is still not
received by the respective purchaser. Its level depends on the distance between the
manufacturing facility and consumption centres. If the distance is large, then the transit
inventory level increases.

Safety inventory: This refers to the extra inventory stored by an organisation to deal with
any unintended and unanticipated situations, such as stock-outs. The level of safety
inventory is higher than that of the regular cycle inventory because it helps the organisation
to deal with uncertainties in product demand or supply.
Seasonal inventory: This inventory is held by an organisation tomeet its seasonal demand.
For example, the demand for raincoats and umbrellas increases during the rainy season.
Seasonal inventory helps an organisation to meet fluctuations in demand causedby unstable
production during a specific season.

Obsolete inventory: This inventory includes only non-moving items, which are expected to
have low demand in future.
An organisation can make its supply chain more efficient and responsive by managing its
inventories effectively. For example, if a large amount of inventory is stocked near
consumption centres, it will helpthe organisation to meet customer demand on time.

Transportation:

Transportation refers to the movement of products from one locationto another, such as
from a supplier to a manufacturer. It directly im- pacts the product delivery schedules of an
organisation. Therefore, itplays a crucial role in ensuring the effectiveness and
responsiveness of a supply chain.

A supply chain becomes more responsive with faster transportation means. For example, 7-Eleven is
a world-renowned supply chain based in Japan. To move its products across various geographical
stores, it uses a responsive transportation system to refill its stocks several times a day. This
transportation system has also reduced transportation costs of the company.

An organisation needs to take various strategic decisions to make its transportation responsive and
cost effective. These decisions are de- scribed as follows:

 Long-term decisions: These decisions determine the availability and appropriateness of

various transportation modes to be used for a long duration. The organisation selects a
primary mode of transportation for appropriate inbound or outbound movement of
inventory among various facilities. It also needs to decide the lev-el of outsourcing
required for the chosen mode of transportation.For example, an organization can use
contractual transporters to move products from centralized stock locations to regional
cross- dock facilities for packaging, sorting and delivering small batches to customers.
 Lane operation decisions: These decisions determine daily operational freight transactions.
The organization uses real-time in- formation to coordinate the movement of products along
inbound and outbound shipping lanes among facilities to meet customer demands. Lane
operation decisions include the following areas for consideration:
  Temporal consolidation
 Inbound/outbound consolidation
 Carrier consolidation
 Vehicle consolidation

Transportation mode decisions: These decisions are related to thecarrier and mode for the
movement of goods in a specific freight transaction. For example

 Rail container services can be used for long distances in an economical way.
 Truck load carriers are used for overnight freight movements to deliver within 24 hours at
reasonable rates.

Information:

Information refers to the consolidated data associated with various facets of a supply chain, such as
transportation, facilities, prices, costs, customers and suppliers. The efficiency and responsiveness of
a sup- ply chain depend on timely and accurate information. If suitable in- formation is not provided,
various supply chain activities may suffer, including:

 Warehouse management
 Inventory control
 Transportation planning
 Development of customer service standards
 Design procurement
 Operation of supply and distribution systems

Information also impacts other supply chain drivers. For example, a pharmaceutical company can
produce suitable quantities of a product using demand forecasting techniques, provided it has
adequate information about customer demand patterns. Information determines all decisions
related to supply chain activities. If information is correct, it improves coordination among
various units of the supply chain and thus maximises total profitability.

Sourcing

Sourcing is an array of business processes used to purchase and deliver products and services. It
includes the selection of suppliers for various supply chain activities, such as production, storage,
information management and transportation. It determines whether a particular supply chain
activity should be performed in-house or outsourced. These decisions impact the efficiency and
responsiveness of a supply chain considerably. For example, efficiency of Motorola improved
considerably when it outsourced a major part of its production to China. However, its
responsiveness suffered because of increased transportation costs and delivery schedules.
While designing the sourcing process, an organisation should consider the following steps:

1. Decide which tasks should be outsourced.

2. Decide whether to source these tasks from one supplier or multiple suppliers.
3. In case of multiple suppliers, create a portfolio that defines the role of each supplier.
4. Define appropriate criteria for the selection and measurement of the performance of
suppliers.
5. Choose suitable suppliers based on the criteria.
6. Negotiate contracts with the selected suppliers.

This sourcing process may help the organisation to maintain a consistent and accurate information
flow across the various stages of a supply chain and improve its performance.

Pricing

Pricing is a process that is used to determine the amount charged by an organisation for making its
products and services available to customers. This process impacts the purchase decisions of
customers to a large extent. It also plays a critical role in matching the supply and demand of
products in the market. For example, an organisation can offer short-term discounts to customers to
reduce excess supply.

Consider an example to understand the significance of pricing in a supply chain. Costco Wholesale
Corporation is a membership-based warehouse company located in the US. It follows a policy for
maintaining stable but low prices for its products. Due to stable prices, its products have a consistent
demand as customers are ready to wait for products. As a result, Costco can target a broad
range of customers, while maintaining its existing customer base. It has reshaped its sup-ply
chain according to its pricing policies and customer demands.

CONCLUSION:

In the modern era of technology firms whether manufacturing or service they are looking forward to
increasing their efficiencies and performances. Supply Chain Management is one of the major tools
that play a vital role in enhancing organizational efficiency in this world of new technology. Supply
chain management is focusing on management of activities from raw material to final product and
end user. It includes the suppliers of raw material, transformational process, final product and the
activities of how deliver final product or service to end user.

Therefore, there are six drivers of supply chain performance that need to be managed to enhance
organizational performance and output. These drivers are Facilities, Inventory, Transportation,
Information, Sourcing and pricing. These drivers are closely related with each other and have a
greater impact on organizational performance. Organizations need to find a situation where both
efficiency and responsiveness in supply chain practices are at a level to enhance organizational
performance and output. This level can only be achieved through better management of drivers of
supply chain performance.
 Q2. Mr. Bansal was working with reputed tuition classes and having rich experience in
teaching. One-day innovative idea came to his mind to start online classes. This
idea will give Mr. Bansal more students and better geographic reach. Suddenly he
left the job and started his online classes business. He struggles a lot in initial days
of business but later he manages his business in break even. Explain existing
situation of online learning classes with respected to industry life cycle.

ANSWER 2:

INTRODUCTION:

The industry life cycle theory suggests that every industry passesthrough different stages
in its entire life cycle. There are four stages in the life cycle of an industry: embryonic stage,
growth stage, maturity stage and decline stage. Below figure shows four stages of the
industry life cycle:

CONCEPT:

Business-level strategies adopted in these stages are as follows:

Embryonic stage:

Embryonic stage is the starting stage or take-off stage of an industry’s life cycle. For example, the
industry of manufacturing solar devices is in the embryonic stage. An industry is considered to be in
an embryonic stage if it:
  gives low returns but its need for investment and capital are high.
 uses a technology that is not standardized.
 fails to provide enough information to customers; therefore, unable to establish demand.
 suffers from high business risk.

In the embryonic stage, business-level strategies aim at developing competency and building market
share. The possibility of gaining the market share is easy for the first movers. However, if an
organisation fails to attract capital and acquire customers, it is better that it should exit the industry
in the embryonic stage itself.

Growth stage:

It refers to the stage in which an industry strives to expand. The growth stage involves technological
developments, product developments and high demand for the product. For example, the retail
industry is in its growth stage. An industry is said to be in growth stage, if it:

 gives practical shape to its business models.

 increases its market share.
 establishes demand by providing product information to customers

In the growth stage, the industry adopts low cost and differentiation strategies. The experience of
the industry leads to addition in the learning curve of the associated organisations and helps in
establishing low cost positions. This is a good stage for the entry of late movers, as they can imitate
strategies and technologies of market leaders.

Maturity stage:

It refers to the stage in which an industry becomes fully developed. For example, in India, steel,
textiles and oil and gas industries have attained maturity. The intensity of competition in these
industries is very large. An industry is said to be in the maturity stage, if it:

 provides stable returns and decreases investments.

 uses established business models.
 enjoys stable market share
 characterises stable and satisfactory demand.

Industries in the maturity stage use cost leadership, differentiation and focus strategies. The
demand in the industry first increases and then falls when more organisations enter the
industry.

Decline stage:

It refers to the stage in which the industry’s performance starts declining. For example, in
India, mining industries are in their decline stage. An industry is said to be in decline stage,
if organisations under the industry:
  suffer from the declining market share.
 provide low returns because of falling demand.
 lose brand identity for its products.
 wish to exit the industry.

In the decline stage, the low cost business strategy is adopted to gain the market share. The
understanding of these stages helps organisations to survive in the competitive business
era.

CONCLUSION:

India’s edtech industry is in the Growth Stage as it is establishing demand by continuously

improvising its product and shaping the business models to increase the market share. It is
poised to become $30 billion in size in the next 10 years, according to a report released by
transaction advisory firm RBSA Advisors. The current market size is about $700-800 million.
The industry has attracted private equity investments of $4 billion in the last five years,
leading to the emergence of global edtech leaders like Byju’s which now commands a
valuation of $15 billion, it said.

Online education offerings for classes 1 to 12 are projected to increase 6.3X by 2022 from
the base of 2019 as per RSA Advisors. The post K-12 market is expected to grow 3.7X to
touch $1.8 billion. The massive adoption in the K-12 segment is being driven by access to
smartphones. Live interactive classes, which are crucial to K-12 learning, have become
accessible. A large chunk of students now have access to good quality internet. Two years
ago, people were operating on 2G or 3G networks where it was difficult to have an
interactive experience in live classes. 4G has solved that to a large extent. Offerings on K-12
platforms have become more affordable. Traditionally the spend by parents and students
on K-12 supplementary education has been low compared to post K-12. But now
affordability has increased, and people are spending more than they used to.
Except for BYJU’S, which earned INR 1306 Cr in FY19-20 at a loss of INR 8.80 Cr, most
edtech startups are currently grappling with massive losses and are burning cash at a fast
pace. According to DataLabs By Inc42, between January 2014 and September 2019, BYJU’S
alone attracted 65% of the total funding in edtech startups. While many startups are still
following the four key revenue models — freemium, pay-as-you-go, enterprise sales and
subscription, other models are emerging such as success-based pricing and income-sharing
agreements, which are seeing adoption in K-12, test preparation and skilling startups.
According to DataLabs, the edtech sector is primarily divided into five categories: test
preparation, online certification, skill development, online discovery, and STEAM kit and
enterprise solutions.
The test preparation and K-12 segments have high traction but a weak turnaround to paid
consumers. Most players are either providing a lot of free material, which they don’t know
how to monetise, while those providing high-value courses, have to spend a lot to get the
desired user base. In general, B2C (content products sold to the learner directly) and
platform models (connecting teachers & students) scale faster compared to B2B, which
requires more effort in building sustainable revenue channels.

On the flipside, despite low traction, the segments of online certification and skill
development have maximum paid users. This is because these segments are led by working
IT professionals keen to enhance their key skills without committing to specific learning
hours.

Q3. XYZ Ltd Tourism Company running business from last 10 years and have many good
customer base. Company also operated offices in multiple cities. But due to COVID 19
company faced a lots of challenges. Because of such pandemic situation people were not
traveling and not using any of company’s service. At the same time company was not able
to generate revenue and not able provide salaries to employees.

A. You are appointed as business consultant in the organization. Suggest some

corporate level strategies that ultimately helps them

ANSWER 3A:

INTRODUCTION:
 A corporate-level strategy is often referred to as a corporate strategy or a corporate
business strategy. It encompasses the strategic scope of the entire organization. For
most organizations, a corporate-level strategy is the only strategic plan required.
Corporate strategy refers to a set of decisions that determine an organization’s
objectives, goals and purpose. It also comprises of the principal policies and plans to
achieve those objectives. In short, corporate-level strategies are formulated to fulfil
the corporate objectives of the organization.
The corporate-level strategy sets the range of business activities of the organization
and the kind of economic and non-economic role it in- tends to play to the
organisation, shareholders, employees, customers and communities. Thus, the
strategy, being comprehensive in nature, defines the business in which the
organisation plans to operate. Cor- poratelevel strategies are basically formulated to
achieve the long- term organisational objectives. Therefore, these strategies are also
known as grand strategies or master strategies.
Usually, the top management of an organisation formulate corporate-level strategies.
These strategies are mainly concerned with decisions regarding the product or service
to produce and the geo- graphical location to target. Corporate-level strategies give
a direction to an organisation to achieve its objectives. In addition, these strategies
determine resource allocation, such as how to allocate cash and equipment among
various departments. Decisions regarding expansion policies or addition of new
products also fall within the area of corporate-level strategies. Corporate-level
strategies also involve decisions regarding establishing relationships with other
organisations and competing with rival organisations.

CONCEPT:

Corporate-level strategies deal with the following major issues:

 Defining the type of business that an organisation should venture into
 Dividing the resources among different operations of the organisation
 Transmitting and transferring resources from one set of businesses to another
 Selecting and managing the investment portfolio of an organisation
 Deciding the nature and level of diversity required to exist in a particular business.
 Determining the boundaries of the organisation, and how these boundaries
should put impact on relationships among various parts of the business and other
interest groups.
 Determining on which basis the organisation should function. Should it be
cooperative basis, mutually beneficial relationships or business?
There are four types of generic corporate-level strategies at the disposal of an organisation:

Expansion Strategies

Stability Strategies

Corporate-level Strategy

Retrenchment Strategies

Combination Strategies

 Expansion means increasing the extent, the volume or the scope of operations.
 Expansion strategies are the most common and popular strategies adopted to
accelerate the pace of growth of an organisation.
 Expansion strategies can be further divided into various sub-strategies, which are:
 Expansion through concentration
 Expansion through integration
 Expansion through diversification
 Expansion through cooperation
 Expansion through internationalisation
 Expansion through digitalisation
 Expansion through concentration involves attaining expansion by combining the
resources in one or more area of the organisation’s business.
 Expansion through integration is performed by combining activities or functions
of the business with no change in the customer groups.
 Expansion through diversification involves an extensive change in the business of
an organisation in terms of customer functions, customer groups, or alternative
technologies.
 Expansion through cooperation refers to the mutual cooperation between
organisations belonging to the same industry to achieve a shared objective. The
cooperation strategies available to organisations are:
 Mergers and acquisitions
 Joint Ventures (JVs)
  Strategic alliance
 Expansion through internationalisation refers to an expansion strategy that helps
organisations to perform their operations internationally.
 Digitalisation refers to digital coding of information.
 Stability strategies are followed by an organisation in situation where the
organisation does not venture into new markets or launch new products.
 Stability strategies are of three types, which are:
 Small exploration strategy
 No change strategy
 Profit strategy
 A small exploration strategy, also known as a pause/proceed with the caution
strategy, is a tactic employed by organisations to test the grounds before moving
ahead with a full-fledged corporate strategy.
 A no change strategy involves a strategy followed by organisations to continue
with the present position of growth.
 A profit strategy is usually followed when a few changes in the current strategy
become necessary
 Retrenchment strategy is a corporate-level strategy that aims toreduce the size or
diversity of organisational operations.
 There are three types of retrenchment strategies, which are:
 Turnaround strategies
 Divestment strategy
 Liquidation strategies
 Turnaround strategies are defined as set of strategies that help in managing,
establishing, funding and fixing a distressed organisation.
 Divestment strategy is another form of retrenchment strategy and is used to
downsize the scope of a business in terms of selling or liquidating a portion of the
business.
 Liquidation strategies are the most unattractive and severe retrenchment
strategies, as the strategies involve closing down an organisation and selling its
assets.
 Combination strategies are a mixture of stability, expansion or retrenchment
strategies. They are also called mixed or hybrid strategies.

CONCLUSION:

Therefore, as a business consultant, I would advise XYZ Ltd Tourism Company to adopt the
Turnaround Retrenchment Strategy as it will help the company in managing, establishing,
funding and fixing the current distress caused by the pandemic. To achieve this they need to
reduce staffing to the bear minimum requirement given that the company is not currently in
business. It should also close operations and services which were not contributing significantly to it’s
revenue. The company also needs to focus on short-term and long-term financing needs by
exploring opportunities to get funded. They need to analyse their product offering and it’s
market fitment

The company needs to set targets that help they in the recovery effort. They also need to
ensure good implementation of the plans to achieve these targets, work on feedback from
their large consumer base and devise a remedial action plan.

B. Should company use retrenchment strategy or not? Discuss.

ANSWER 3B:

INTRODUCTION:

Yes, XYZ Ltd Tourism Company should use the retrenchment strategy.

CONCEPT:

A retrenchment strategy is a corporate-level strategy that aims to reduce the size or

diversity of organisational operations. At times, it also becomes a means to ensure an
organisation’s financial stability. This is done by reducing the expenditure. A
retrenchment strategy is de- signed to fortify an organisation’s basic distinctive
competence.

In simple terms, a retrenchment strategy involves abandonment operations that are no

longer profitable for the organisation. It also includes withdrawal of the business from
markets where even sustenance is difficult. For example, a corporate hospital that
generates highest revenue from the cardiology department and very less revenue from
the neurosurgery department, may decide to focus only on cardiology and eventually
shut down the neurosurgery department to maximise the revenue.

Besides, a retrenchment strategy also results in reduction of the number of employees,

and sale of assets associated with discontinued product or service line. At other times, it
involves restructuring of debt through bankruptcy proceedings; and in most extreme
cases, liquidation of the organisation.

A retrenchment strategy aims at the contraction of an organisation’s activities to

improve performance. It is implemented to find out the problem areas and the steps to
resolve them. This strategy is adopted when an organisation suffers continuous losses.
Organisations follow a retrenchment strategy for various reasons. Basically,
retrenchment strategies are a response to decline in industries and markets. Most of
the external factors that lead to such decline are as follows:

 New dominant technologies

 New business models
  Adverse government rules and regulations
 Changing customer needs and preferences
 Emergence of substitute products
 Demand saturation

Apart from the external factors, there are several internal factors thatmay cause decline in
industries and markets. Some of the major internal factors leading to decline are as follows:

 Ineffective top management

 Inappropriate strategies
 Excess liabilities
 High costs
 Ineffective sales and marketing
 Poor quality of functional management
 Wrong organisational design

The consequences of decline are often seen in several problems facedby an

organisation. The major consequences of decline are:
 Falling sales
 Increasing debt
 Diminishing profitability
 Shrinking market share
 Loosing goodwill and credibility
 Declining cash flow

These consequences may give rise to the following situations:

 Non-recoverable situation: It refers to a situation where there are no
chances of recovery for the organisation. In this, there is no scope of
improvement as costs are increasing and the demand of products is
declining.
 Temporary recovery situation: It involves a recovery for a minor period. In this situation,
repositioning of the product, cost reduction and revenue generation is possible.
 Sustained survival situation: It implies a situation where a little potential for growth
is possible. The industry may be on the verge of slow decline.
 Sustained recovery situation: It means a situation where long- term recovery is
possible as decline is caused by the internal factors rather than external factors. It is
normally implemented through new product development or market repositioning.

CONCLUSION:
XYZ Ltd Tourism Company is suffering through most of the conditions that warrant adoption of a
Retrenchment Strategy.
In the pandemic affected world, adverse travel restrictions imposed by several governments and
lengthy period for economic recovery make recovery harder for the company as well. Decline in
demand and excess overheads like salary costs and falling sales will further impact cash flow and
profitability, shrink the company’s market share causing huge debts and liabilities thereby causing
loss of credibility. Hence adopting Retrenchment Strategy may offer a chance for survival and retain
credibility.