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Bmgt 413:Strategic Management March 2010 Question Paper
Bmgt 413:Strategic Management March 2010
Course:Bachelor Of Commerce
Institution: Kabarak University question papers
Exam Year:2010
KABARAK UNIVERSITY
UNIVERSITY EXAMINATIONS
2009/2010 ACADEMIC YEAR
FOR THE DEGREE OF BACHELOR OF
COMMERCE
COURSE CODE: BMGT 413
INSTRUCTIONS:
1. Answer question ONE and ANY OTHER TWO questions.
QUESTION 1
Read the case “AFRICA” and answer the questions that follow.
The rest of Africa produced another year of strong earning growth. Our two largest operations,
Tanzania and Botswana, have contributed the bulk of our profits in Africa for some time and
both again did well-exceptionally so in the case of Tanzania. Among our smaller business,
Mozambique excelled and Angola continued its strong growth in soft drinks.
Prospects in Africa are generally hopeful with increasing economic stability. As incomes rise,
we’re seeing the same trading up among beer drinkers that are evident in South Africa. The
challenge is to make sure our products are readily available, particularly in rural areas. We’re
also working hard to improve productivity, recognizing that there’s some way to go to match the
standards we’ve achieved in South Africa.
Europe produced another tremendous performance with particularly good results sin Russia,
Poland and Romania. In Europe generally, we’re emerging from a period of acquisition,
turnaround and consolidation. The priority now is to capitalize on the positions we’ve gained and
to keep building our brands. We’re looking to increase volumes ahead of the market and so gain
market share. One feature of these markets is that many mainstreamers are trading either up or
down to premium or economy brands. In response, we’re rejuvenating our mainstream brands
while also developing our higher-level brands, both local and international. It’s also crucial to
keep innovating and the year has been a number of new products and formats.
Central America had a good year financially with profits up as costs were reduced, despite
operating in an extremely competitive market. El Salvador has been particularly tough and the
team there has re-engineered the business for what is bound to be a challenging year ahead.
Medium –term growth
In North America, we acquire Miller in 2002 and after an intense period of analysis and
planning, the Miller executive team announces its three-year recovery programme in May 2003.
Two years into the programme, we’re pleased to report that miller’s US sales volumes have
started to lift for the first time in six years. While the most eye-catching success has been the
resurgence of Millers Lite, the trends in our other brands are beginning to improve.
As mentioned last year, the turnaround plan has four components-building brands and shaping
the portfolio; getting sales and distribution right; cutting costs and raising productivity; and
mobilizing and invigorating the organization and its people. There’s been good progress in each
aspect. Miller has staked out strong positions for most of its important brands, some linked to the
qualities of the product. It has split the US into distinct market areas and is working to local
marketing plans with the enthusiastic support of its distributors. Among its cost-saving measures,
it has rationalized the corporate centre and sharpened its approach to procurement. To help
establish a performance culture, it has restructured the organization with new performance
management processes, clearer goals and better training and development of its people.
Miller is now the recognized challenger to the long-established market leader, Anheuser-Busch.
It uses the phrase “able challenger” to describe the required competence and capacity in shaking
up the market, challenging the status quo and presenting itself as a strong alternative. This
positioning will be important as the US market becomes more competitive.
Although Italy is not an easy market at present, we’re starting to see some progress with Peroni.
A new managing director was appointed in February 2005 to accelerate the pace change as the
turnaround programme moves from planning to implementation.
Long-term growth
Through our Chinese associate, CR Snow (previously CRB), we’ve been operating in China for
11 years. During that time, the business has grown both organically and by acquisition to become
one of the largest beer business in the world’s largest market. Volumes have continued to
increase and after stagnating for many years, Chinese beer prices are starting to lift as outdated
breweries are taken out of service and cost pressures in commodities such as glass and gain are
passed on in price increases. As we build brand equities, we see opportunities for premium
brands commanding premium prices.
India also offers good long-term prospects. Following the transaction in May 2005, the business
is now wholly-owned and is India’s second largest brewer and expanding ahead of the industry
with double-digit volume growth in the past year. Although beer consumption is low, the
country’s economic growth and the trend form spirits to beer promise well for the future. The
main impediment is a complex regulatory system that limit economies of scale an may take some
time to be liberalized.
The final element in our long-term growth strategy consists of our international premium
brands. Among the year’s successes, Miller genuine Draft did well in South Africa and grew by
43% in Russia. The newly packaged Peroni Nastro Azzurro was launched in the USA, the UK
and Romania, while Pilsner Urquell continued to grow worldwide and Castle increased its sales
in Zambia and Tanzania.
QUESTION 1
a) (i) Select as many types of strategies exercised in this case, and give their meaning and
applications. (10 marks)
(ii) ‘Growth’ has been discussed at length in the case which other corporate strategies
exist? (10 marks)
(iii) What would you call the strategy in India? (2 marks)
(iv) Discuss at least four (4) international strategies (8 marks)
QUESTION 2
a) Having clearly studied the PMT case amongst others, explain the rationale behind choice
of strategy. (10 marks)
b) Would there be a difference between choosing strategy at corporate or business levels?
(10 marks)
QUESTION 3
a) Discuss the three generic strategies and show clearly how they can be applied
to any business. (18 marks)
b) Why are they called generic? (2 marks)
QUESTION 4
a) Mickensy discusses Seven (7) ‘Ss’ required to institutionalize strategy. Your classmates
said five (5) can do, and that bothering about the seven (7) would be wasting time.
Discuss. (14 marks)
b) Assuming you prevailed over your classmates, advice them on the possible process and
reasons for establishing performance standards for strategy. (6 marks)
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