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Introduction To Business Strategy Question Paper
Introduction To Business Strategy
Course:Bachelor Of Commerce
Institution: Kca University question papers
Exam Year:2010
UNIVERSITY EXAMINATIONS: 2009/2010
SECOND YEAR EXAMINATION FOR THE DEGREE OF BACHELOR OF
COMMERCE
CAM 202: INTRODUCTION TO BUSINESS STRATEGY (SATURDAY)
DATE: AUGUST 2010 TIME: 2 HOURS
INSTRUCTIONS: Answer question ONE and any other TWO questions
QUESTION ONE
Read the case below and answer the questions that follow
CASE: PENTON LTD
Penton is a medium sized company which manufactures and markets a range of DIY products under
the Easi-way brand name. Its performance over the past ten years, a period which the market for DIY
products has grown rapidly, has been viewed by those within the industry as steady but generally
unimpressive. In particular, its critics have pointed to performance levels that are below the industry
norm, a reliance upon its long established and now old fashioned distribution networks, low levels of
advertising spent, a failure to exploit the potential strength of the brand name and a poor profit
performance.
Toward the end of 1994, the company was the subject of a takeover bid from a smaller but more
aggressive and successful competitor. Although Penton’s board managed to fight off the bid, the
sudden awareness of the company’s vulnerability to further bids headed to a re-assessment of its entire
manufacturing and marketing strategy.
2
The problems being faced by the company were exacerbated by the downturn in retail sales which
began to affect the economy at the end of the 1980s. Faced with what was proving to be a static sales
curve and a reducing profit margin, the decision was taken to bring in a firm of consultants to conduct
a detailed audit of the company and make recommendations for future strategy. The consultants’ initial
report highlighted a number of areas of concern which, they suggested, should be the focus of
attention.
1. The company’s strong production orientation and lack of marketing representation at a broad level.
2. A largely reactive managerial philosophy.
3. Little long-term product or market planning.
4. An over-reliance upon a small number of ageing products.
5. A poorly structured new product planning process.
6. A failure to exploit the potential strengths of a brand name.
7. Increasing pressures upon margins.
The environmental analysis proved to be more encouraging, with the consultants giving prominence to
the size and long term growth potential of the DIY market and the major profit opportunities offered
by the new products.
They also pointed to the high level of retail concentration in the market, the need for organizations in
this sector to be proactive in their new product development and for new products to be supported by a
strong promotional campaign.
The evaluation of the company’s manufacturing capabilities suggested that there is a need for
investment in new plant. With regard to the research and development area, the conclusion was that
‘while’ the area has potential and the R and D staff are enthusiastic and highly qualified, the activity
has suffered from a lack of direction. As a result, the majority of new products have not been related
sufficiently directly to market demands.
Against the backgrounds of these findings, the board has attempted to identify the areas of great
priority and has decided to focus on upon the three areas which it believes require the most immediate
attention. These are the development of:
• A growth strategy
• A far stronger and more effective portfolio strategy
3
• A structured and productive parenting strategy
Questions
a) As a member of the team of consultants, you have the responsibility for making
recommendations as to how the company might most effectively achieve this. You are
therefore required to prepare a report showing how this might be done. (20 Marks)
b) Using the information available, conduct a SWOT analysis for PENTON LTD
(10 Marks)
QUESTION TWO
a) You have just been appointed as the receivership manager of Nambale textiles ltd. Discuss the
retrenchment strategies you may employ. [8 Marks]
b) Portfolio matrix models can be useful in reexamining a company''s present portfolio. Briefly
discuss the general electric screen model. [ 12 Marks]
QUESTION THREE
The development and management of strategy can be viewed through three-perspectives or lenses. The
experience lens views strategy development as the outcome of collective experience of individuals.
a) Describe FOUR factors that influence this perception. [8 Marks]
b) Describe at least SIX conditions which foster diversity, imperfect copying, change and
therefore innovation. [12 Marks]
QUESTION FOUR
a) In the real world, strategic management takes place in different contexts. Elucidate the
uniqueness of strategic management decisions in the following contexts;
• Small business context
• Multinational Corporation
• Professional Service Organizations
• Not-For-Profit Organizations [ 12 Marks]
b) Give the assumptions underpinning a design approach to strategy development. [8 Marks]
QUESTION FIVE
a) Discuss Milton Friedman’s perspective to corporate social responsibility. [ 8 Marks]
b) Describe four Initiatives of corporate level strategy. [ 12 Marks]
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