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MANAGEMEM PROGRAMME
Term-End Examination
June,2005
MS-52 : PROJECT MANAGEMENT
Time: 3 hours Moxjmun Ma*s: 100
(Weightage 70Vo)
(i) Attempt onv thfee questions from Section A, eachcarrying 20 marks.
(ii) Section B is compulsory and caties 40 morks.
SECTION A
1- Detailed Project Report (DPR) Iorms the foundation onwhich the entire supershucture of the poect is built - "tfit is weak, poect cannot weather turbul€nt times ahead."Brjng oul tb€ do's and don'ts of a good DPR.
2. Explain the {ollowing methods of forecasting demand I
la) ExponentialSmoothing
{b) AdapliveExpon€ntialsmooihing
(c) Exponential Smoothrng wirh rrend and seasonal daia
(d) Double Exponential Smoothing
MS-52 P.T.O .
3.
4.
Why do we need dillereni typ€s ol cost estimates in
projects ? Discuss five such estimates- On what factors is
their level or degree of accuracy dep€ndent ?
Why is a Proiect Managem€nt lnformaiion System of
immense importance in a project ? Disctlss the objectives
of Project Management Infgrmation System. In designing a
Project Management Information System what param€t€rs
are to be spelt out clearly ?
Explain the importance of "Project Re!,rew" in the context
of control of a project. Whai are ihe elements of controls
in projects ? How are cabem€tics concepts applied tonr^i,.r m:n:dah?nr ?
MS-52
SECTION B
The activities, duration and direct achvity costs ar€ givenbelow. The indireci cost is Rs. 3000 p€r week. Startingfrom the nohal duration obtain the crash cost andduration of the project.
Time in Weeks Cost Cost toExpedite
(Cost slope)Normal Normal Crash
1 - 2 2 2 3000 3000
3 4000 5000 1000
8 8 6000 6000
3 - 4 3 2 2000 3500 1500
2 2 2000 20004 - 6 4 3 4000 5000 to005 - 6 3 3 4000 4000
8 5 8000 12000 1333
MS.52 3,000
MANAGEMENT PROGRAMME
Term-End Examination
June,2OO5
MS-53 : PRODUGTION/OPERATIONSMANAGEMENT
Time : 3 hours Moximum Marks : 1,00
Not€ : S€ciion A has JiDe questians carrying 20 morkseach. Attempt any three questions fromSection A. Section B is compulsory ond carries40 narks.
SECTION A
l. (a) Explain what you {rndersiand by the tenn "Total
Quality Management", paying particular attention tothe following terms r
quality, supplier-custom€r interfaces, and process.
(b) Define Pioductivity. Lisl some facto$ that can aflectproductivity and some ways in which productivity canbe impro\r€d.
2. (a) Give t',rro examples (with supporting details) of theimpact of iechnology jn product and service d€sign,in the conte* of service and manufacturinq firms.
MS-53 ' P.T.O
(b) A firm us€s simple exponential smoothing with([ = 0.1 to lorecast demand. The forecast for the
first week of February was 500 units, whereas actualdemand tumed out to be 450 units.
(i) Forecast the demand for the second week of
February.
(ii) Assume that the actual demand dlring the
second week of February tumed out io be
505 unifs. Forecast lhe demand for the third
week of February.
3. (a) Bloomsday Outfitters produces T-shiris for road races.
Tbey need to acquire some new stamping machines
to produce 30,000 good T-shirts per month. Their
plant operates 200 hours per month, bd the new
machines wiu be used lor T-shirts only 60 percent of
the time and the output usu.ally includes 5 percent
that are "seconds" and unusabl€. The stampirg
olt€ration takes 1 minute per T-shirt, and the
stamping machines are expecied to have 90 perc€nt
elfidency considetjng adjustmenls, changeover of
patiems, and unavoidable downtime. How many
stamping machines are required ?
(b) Give an example of a business that would use a push
and one that would use a pull operations control
system. Explain gour choice and briefly describe how
the sgstem works.
MS-53
4. (a)
5. (a)
(b)
(b)
What lactors should be iaken inio account wh€n
taking make-or-buy decisions ? lllustrate your answ€r
wiih examples from both a manufactrfng and
s€rvice organisation.
Whai are the hro major uncertainties encounterecl in
managing inv€ntories and what is usually done to
compebsate for those unceJtainiies ?
What ar€ the various methods of judgemental
forecasting ? Comment on possible errors that are
assocjated wiih judgemental Iorecasting.
A time study of a restaumnt activiry yielded a cycle
time of 2.00 minutes, and the waitress was rat€d
at PR = 96 percent. The restaurant chain has a
20 percent allowance factor, Find the standard iime.
MS-53 P.T.O.
SECNON B
6. (a) What are the advantages of having a company-widedata-bank ? Show how dilfer€nt lunctions e.g. costaccounting, sales, inventory, manufacturing can beintegrated with a data-bank.
{b) A conlrdcror has to supnlv 10.000 bearings per dayto an automobile manufacturer. He finds that, whenhe starts a production run, he can produce 25,000bearings per day. The cosi of holding a bearing instock {or one year is Rs. 2 and the s€t-up cos-t of aproduction run is Rs. 1,800. How frequently shouldproduciion runs be made ? (Assume 300 workingdays in a gear)
7. Wriie short notes on any tiu€ of the lollowing i
(a) Ceilularmanufachning
(b) rso 9000(cJ Fish-bon€ DiagEm
(d) AGVS
(e) Cross lmpact Matrix
(I) Benchmarking
(d crM(h) Job Enlargement
MS-53 3,000
MANAGEMENT PROGRAMME
Term-End Examination
June, 2O05
MS-s/l : MANAGEMENT TNFORMATTONSYSTEMS
Tine : 3 hours Maximum Marks : 100(Weishtoge 70%)
Note t Attempt any thtee questions lrom Section A.Each question corries 20 marks. Section B iscornputaory ond conies 40 marks.
SECTION A
l. (a) Discuss aboui Rational Individual models of decisionmaking and Organisational models for decisionmaking. Whai are their implicaiions lor InformationSystem Design ?
(b) What is Nolan's Six Stage Growth model ? Discussdifferent stages in the model.
2. (a) Describe ih€ major steps in implementation of MISdesign. Are they ov€rlapping or exdusive ? Explain.
MS-54 P.T.O.
3. (a)
System development is an iterative process and iiconsists ol many identifiable stages. What stagesdetine "th€ way things are" and "the way thingsshould be". Describ€ these stages.
What is a multiplexer ? What is it's main job ?Discuss Frequency Division Multiplexing (FDM),
Time Division Muliiplexing GDM) and StatisticalTime Division Multiplexing (STDM).
ln DBMS literature, syslems are olien classifled
according to the logical structutes of the underlying
data 'model'. Discuss the taxonomy oI data
siructures by naming and briefly describing various
types of shllctures.
4. la) Discuss the beneficial and harmful effects of
compuiers on
(i) Organisations
(ii) The Society, and
{iji) The Int€rnational Scen€
(b) What is a "tortious llability" ? Discuss about the
tortious liabilities in use of computers ?
5. Write short notes on :
(a) Transaction Processing Systems OPS)
(b) B€nefits of Expert Systems
(c) Organisational Reststance to DBMS toolg
(d) Trojan Horse
(b)
{b)
MS-54
SECTION B
6. Read the case study given below and answer the questlons
at the end of the case.
General Electrtc's SCISOR analyz* ttnandal news
General Electric's Research and Development Cent€r
has developed a natural language system called SCISOR
(System for Conceptual Information Summarization,
Organization, and R€trieval) that p€rforms text analgsis
and question-ans\rering in a limited, predefined subject
area (called a constroined domoin). One application of
this syst€m deals with analyzing linancial news. For
example, SCISOR aLrtomaiicalb setects and analyz€s
stories about corpomte mergers and acquisitions from
the online financial senrice of Dow Jones. Ii is able to
process news in less than 10 seconds per story. Erst, it
determines whether the siory is about a corporate merger
or acquisition. Then, it selects infomation such as the
iarget, suitor, and pdce per share. Th€ syst€m ailows the
user to brcwse and ask qu€stions such as, "What price
was oftered lor Polaroid ?" or "How much was Bruck
Plastics sold for ?"
The system's e{{ectileness was demonstrated in
testing, when it proved to be 100 percent accurate in
identifuing all 31 mergers and acquisitions stories that
were included in a universe ol 731 finandal news rel€ases
from the news:wire seruice,
MSS4 P.T;O.
A similar application is a Web-based personattzed
news system thai was developed in Singapore to trackbusiness news available in English, Chinese, and Malay,summarize it, and extract desired perconalized news inany of these languages.
@u€stions r
(a) What are the benefits of anallzing financial n€ws viaa machine ?
(b) What other applications might be developed with thistlpe of system ?
(c) How coLrld such a system be combin€d with anInternet news diss€minaiion portal such asmoney.cnn,com ?
(d) Dtscuss lhe reliability facror of such a system.
MS-54 3,000
Buses are often the most fleible form oI publiciransport, with the time for a journey consisting of four
F,arts :
I ioining time, which is the time needed to get to abus stop
r u,aiting time, until the bus ar-rives
i journey time, to acnrallg do the travelling
r leaving time, to get from the bus to the finaldestination.
Transport policies can reduce these times by acombination of frequent s€rvices, well-ptanned routes, andbus priortty schemes, Then convenient journegs andsubsidised travel make buses an attractive altemative,
One problem, howe\,€r, is thai people have to changebus€s, or transfer behrreen buses and other types oftransport, including cars, planes, trains, fefttes and trams.Then there are additional times for moving b€tureen onetltpe of transport and the next, and waiting for the nextpart oI the service. These can.be minimised by anintegrated transport system with frequent, connectingsewic€s at passenger interchanges',
Passenger interchanges seem a good idea, but theyare not universally popular. Most people prefer astraight'through journey behreen two points, even il this
M955
t ;
is less frequent than an integrated service with
interchanges. The reason is probably because there ate
more oppottunitres for things to go wrong, and
experience srrggests that ev€n. starting a joumey does notguarantee that it will succ€ssfully finish.
In practice, most maiot cities such as London and
Paris have successful int€rcbanges, and they are spr€ading
into smaller to\ rns, such as Montpelliet in France. For the
ten years up to 2001, tbe popdation ol Montpelliet grew
by more than 8 4 per cent. and it moved from being tbe
22nd largest town in France to the eighth largest. lt hasgood hansport links with th€ pofi of Sate, an airport,
inland watenralrs, main road netfiorks and a fast rail link
to Paris. In 2001., public tnnsport was enhanc€d with a
15 kllometre trarilin€ connectlng maior sltes In the town
cenhe with other trdnsport linl.,s. At th€ same time, buses
wer€ rerouted to connect io the ttam, cycling was
encouraged for short distances, park-and_ride services
w€re imprcved, and ioumeys wete generally made easier,
As a regult, there lns been an inctease in use of publlc
transport, a reductlon i$ the number of cars in the t€tt n
cenhe, and lmprov€d alr quali&. When the tmm opened
in 2000, a third of the population tried it in the fir$t
weekend, and it carried a million p€ople within seven
weels of opening. In 2005, a second tramline wltl add
19 kilometres to the routes.
P.T.O.
Ques,ions :
(a) Are the problems of moving people signlficanily
different ftom the problems oI moving goods or
SeIviCeS ?
(b) What aye the benefits of public transport over private
transport ? Should public transport be encourag€d
and, if so, how ?
(c) What are ihe benefiis of iniegrated plrblic transport
syslems ?
MS-55 3,000
Describe the salient feahrres of technolog policy in the
following countries :
(i) Japan
(it usA
5. What are Patents and Patentatiltty ? Highlight somelmporianf f€atures ot palents and the proc€dure for awardof patents.
OR
What is GATS ? Ho'r can it facilitate access totechnology and iechnical information for developingcormtdes ?
MS-58 3,000
MANAGEMENT PROGRAMME
Term-End Examination
June, 2OO5
MS-61 : CONSUMER BEHAVIOUR
Time : 3 hours Maximum Morks : 700
(Weishtase 70%o)
t .
Nol€ i ?his poper consists ol ttno sections A ond B.
Attempt ony three questians Jrom Section A.
Sect'ion B is compursory. All questions cany
equal morks.
SECTION A
You are the brand manager of a new line ol light w€ight
autofocus, economically priced digital cam€ras. Describe
how an rmdeIstanding of consumer b€haviour will help yotr
in your segmentation strat€g9 and promotion strategy.
What are the consumer b€haviour variables thai are crucial
to your understanding of this market ?
Gillette, an ertablished market leader in shaung products,
is planning a foray into skin care products for men. How
can the company use stimulus generalisation to rnarket
these producls ? Can instrumental cohditioning also be
applied in this marketing situation ? How ?
2.
M5-61 P.T.O.
4 .
Which o{ the stages of the family life cycle would constitute
the most lucmiive segment/segments for the followingnr^arrtc and coR'l.r< 2
(a) Domino's pizza
(b) Mobile telephones
(c) Mutual funds
Justi{y your answer.
Whai do you ulrderstand by extenslve problem soMng,
limited probleni solving and routinised response
behaviour ? What kind of decision process can you elpect
in ihe lollowing cases and why ?
(a) Purchase of a greeting card for a close friend.
(b) Purchase of an after shave lotion/moisturiser.
Write short notes on any t rree ol the following :
{a) Factors likely to increase prepurchase search for
(b) Economic model of buyer behaviour
(c) Howard Sheth Model
(d) Post purchase dissonance
(e) Trajt theory of p€rsonality
M3-6i
SECTION B
6. Read the case study gi@n b€low and answ€r the questjon
ai the end of the case.
A PBODUCT FATLURE AT SATUNN
Satutn is att€mpbng to create committ€d customers.
Satum, a division of Gsnerai Mofors, advertises around
lhe theme :
A dtffefent kind of company.
A dlllercnt kind o! car.
Thought Satum cars cost onlg $10,000 to $16,000,
the firm attempts to provide its customers the same level
of service and consideration typically associated with
€xpenstve luxury cars. Its stated objective i5 to be "the
friendliest, best-liked car company in the world " The
"We're goihg to do more ihan what ih€ customer
expects, and in the long run, I think it will enharrce our
lmagP.
Saturn's attempt to build an imag€ of a high{uality
car built by skilled, caring workers and sold in helpfin,
nonpressure dealerships, had r€ceived iwo small tests in
its lirst t\ro years. In one, it had to recall and replace
M5-61 P.T.O.
1,836 cars thai had rec€ived improper coolant. Inanother, it had to repait 1,480 cars with fauity seat-backrecliners. In th€ s€cond case, ihe firm made a TVcommercial showing a Saturn representative flying tolocaiion to Iix the car of a resident who had purchased itin the first year of its launch.
How€ver, in 1993 Saturn began receiving reports ofa wire shorfcircuiting and causing'a fire. Thirty,four lires(no injudes) were reporied. Saiurn faced a dilemma. Arecall would involve 350.000 cars and a direct expens€of as much as $ 35 million. Any negative publicjtydssociated wirh rhe recall could senously depress sales.Saturn had yet to break even and Geneml Motors wasunder s€rious financial pressure.
Saturn manage$ decided to deal \rrith the problem ina manner consistent with its company objective describedearly. lt quickly notified all purchasers of the affected cars
'and asked them to contact their dealers to have the
defective wire replaced at no charg€- The dealerships€xtended their operating hours, hired extra personnel.
arranged door-to door pickup and delivery, provided fre€car wathes, and often provided barbecues or ornerfestivities. All th€ repaired cars had a courtesy card plac€d
inside that said :
MS-61
"We'd like to thank you for allowing us to mak€ thisconection today. We know an event like this will test ourreldtionship, so we u,ant to repeai to you our oasrcpromise - that everyone at Sahln is fuily committed tomaking you as happy a Saturn owner as we can."
According io Steve Shannon, Saturn's director ofconsumer marketing, the decision to handle the recall inthis manner was simple :
"The measure of whether we are a dilferent kind ofcompany is how we handle ihe bad times as well as thegood. We're trying io minimiz€ the inconvenience andshow that we stand bebind the cars, so that our ownersdon't lose faith in us or the cars."
How have consumers responded to ih€ recall ?Mrs. K, a customer, learned of the recall from fuiendswho had heard of it on news reports before she receivedher l€tter from Saturn. She took her car to the d€alerwho served her coffee and doughnuts dunng the24-minute repair. Her resporse :
"l exp€cted this would b€ my first bad €xperiencewith Saturn. But ii was so positive, I trust rhem evenmore than when I purchas€d ihe car."
MSSl P-T.O,
Qu€stionr :
(a) Describe th€ €valuative process Iollowed by theconsumers and outcome that Mrs, K, went through.
(b) Erraluate the manner in which Saturn handled therecall. Whai options did iL have ?
(c) How will publicity about the recall affect Satum'simag€ among non-owners ?
M5-61 3,000
fMS6rl
MANAGEMENT PROGRAMME
Term-End Examination
June, 2005
MS-62 : SALES
Time : 3 hours
MANAGEMENT
Moximum Marks : 100(Weightage 70%o)
Not€ : This poper consisfs oJ two Sections A ond B.
Attempt an? three questions lrcn Section A.
S€ction B is compulsory. AII questions corrg
equal morks.
SECTION A
1. Discuss any one theory of s€lling in detail. Also explain ihe
stages or components of such a theory taking the example
of door-toJoor selling :
(a) Eureka Forbes vacuum cleaner
(b) lndustr ialchemicals
2. (a) What inter-personal communication skills are needed
in a sales professional ? Discuss by taking specific
examples.
P.T.O.
3.
(b) What is th€ conc€pt ol "Transaction Analysis" andhow is it useful to a sal€sperson ?
(a) What is "Sales Job Analysis" ? Briefly describe eachof the $rb.heads, in which it is b€ing carried out.
(b) What are th€ extemal and internal sources ofrecruitment ? lf you have to recruit salesprofessionals for a highly technical product, whatsources would yori consider and why ?
What ar€ the various steps of Tenitory Plannjng ? Dothese st€ps remain the same irrespective of theproduct/market ? Explain by taking the example of :
(a) Soft ddnl.s
(b) Industriallubricants
Write shoft notes on any lfrree of the follor,rang :
(a) Significance o{ Personal Selling
(b) PsychologicalTestlng
(c) Sales Quota
(d) Sales Audit
4.
M5-62
SECTION B
Read the following case and answer the questions given in
the end :
In a bid to expand the market and boost sales, LG
Electronics Ltd. identified institutional sales as a focus
area in the calendar year 1999. Ii plans to triple the
target tumover to Rs. 150 crores from institutional sales.
LG has honed its inshiutional sales sirategy by identifing
and proactively targeting five differ€nt segments to push
the LG range , brand promotions; the welfare segment(faciory workers and office staf0; government s€ctor;
direct users (hospitals, hoiels); and the canteen stores
departments (CSD) ol the armed forc€s.
A distinct strategy has been tailored for each of the
five segments. In bmnd promotions for example, the
p€rceived value of the products given as gifts is
important, wh€reas for the wellare segment aspiratlonal
vahP, convenience and easy financlng arc ptime fadors.
Meanwhile, hotels represent a pric€ sensitiv€ segment
requiring specially customized products.
Welfare : lri this segmeni, LG is targ€ting aconsumer base - the aspirational consumer, mostlyfactory stafl - that most companies ignore, but whichhas considerable clout in terms of generdting volumes.Thls segmeht is being targeted on the conv€nlence aod
MS€2 P.T.O.
€asy finance platform. LG has jusi tied up with Birla
Global Finance Ltd., part ol the Aditya Birla Group, for
the purpose. Under th€ tie-up, LG will tmit_wise cover all
the Birla companies. This amounts to over t'ro lakh
employees.
This is a lucraiive segment. claims LG, because ol the
high hit-rate; out of a potential base of 1,000 factQry
workers, there is an assured sale of at least 10 to 20 per
Hotel Segment : In this segment, LG is targeting
the five star and middlelevel hotels (50 - 110 rooms) by
offering customized products. For example, LG offers a
special 'hot€l.mode TV' model with an auto volume
leveler, which ensures that other guests are not distutb€d
Another attraction lor hot€ls is the cricket game TV
model ihai would also prove to be popular and an
interactive option with lnternet, videolaudio or room
sen/ice menu facilities. LG claims to have sent out mailers
to 1,200 hotels - and bagged at least 100 orders,
besides the 'Palace on Wheels' lwury irain, fot providing
TV sets in its 52 cabins. Now, LG is readlng a range
of interactive televisions for this segmenl, offering
. remoie-controfled features like : the hotel rnenu, local'
facilities, billtng,room seNice, videa on demand, intemet,
multilingual options.
M562
Cant€ens and the Governrnsnt Scctor : ,'We arcperhaps the oniy compang oflering ou, entire range ofproddcts in CSD cante€ns," Ieels lhe product naDage, otLG. lD the goverDmeDt sector, which operates throughtenders, signi{icant orders so far included an order Ior200 TVs for Himaclral Tourism bungalows in the Stateand over 2,000 TVs lor pdrDary schools in 'llral arcas inMaharashtra.
The company has a five-rnerDber lDstjtutional Sal€sDMslon, with €ach devoted exclusively to one segment. lthas 50 ihstitutional sales dealers and a ring ol salesrepr€sentativ€s who int€ract with the dealers and conductdernonstrations iuher, needed_ lts iDfrasttucture conslsts ol20 mobile vans urith glass windows to display the productrange. These yans cover at least 500 km ewry month inboth ru|al and urban mdrkets.
Qresttors t
t),0 you thtnk such a field sal€s force ts adequare roharness t}e harkel poteDtjal jn the lnstitdionalmarket ?
Wotrld 1ou recommend focBing on one or hrosegm€r s out ot the giwn five ? Justity your an$rer.
(a)
o)
MS62 3.000
The previous year, the company had launch€d itsthree-and fourioor refrigerators. lt followed ihat up witha 7 5 kg fully automatic washing machine, Erso, \ Jhichalso carried a pr2mium pdce tag. This, jn fact, wasElectra's strategy- il prelerred io ent€r with its premiumrange rather than follow wiih mass. market rout€, CEORaja wanted to build brands first. Volumes would be anatural consequence, he said.
Bui Tahll had his doubts wh€ther Eva would cutmuch ice with th€ customer. In a market which wasskewed in favour oI the lraluejor-money double-doorrefrigerator, the rnuhidoor re{rigerator seemed very
. ambitioug to him. lt was unlikely to build much saliency forElectra, he ielt.
To begin wiih, the very idea of a large sizedrefrigeraror seemed irrelevant rn Lhe Indan context. ln Lh€West, convenlence stores were last being replac€d bysupermarket chains. As a parallel behaviour pattern,consumefs there were using refdgerator not just forpreserving foodstuffs, but also lor long-term storage.
In India, however, the neighboLrhood grocer hadgained in stlength and supermarkets had not L€come thenorm yet. For the same reason, the Westem pattem oflong-term storage couid not b€ replicated here. "India is airopical country and there are lots of v€ndors for frcshv€geiables and fruii. So, who ne€ds vast storage facilitiesin lndia ?" he asked.
M5-63
Raja was convinced that there was a clear consumer!s
segmenl which coughr premium and .uper premiumproducts. "There are 3 8 million households jn ihe A1and A2 socio-economic classes. It's not the 1sO-millionmiddle class bui this super premium, super label conscioussegment that I want to iarget. The self-employed andhigh-salaried people in this segment are vi(uallyindifferent to high pric€s," said Raja.
Tahil would not buy ihe argument. "The so,calledhigh-incorne group that you refer to comprises largelynucleat families. That means that these families consumeless food than joint families do. There may be 3 8 millionsuch families, but they are dispersed all over ihe country.A rjch farmer from Gurgaon, who has a high disposableagricultural income and heads a familg of 14, is the onewho achd)y needs this produci. Bui you have no m€ans
of getiing your product to him."
An enky through a pr€mium segment would entail
lower disttibution costs, but only il a mass product already
eisted. "lf you hav€ a mass product, you could piggyback
on its distribution network and get your premium product
to ihe rich farmer r'n Curgaon,".said Tahil. "ln its
abs€nce, r€aching out to the dispersed consumer will beprohibitively costly. Also, it will be difficult to get the
requjr€d volum€s,"
M5-63 P.T.O
Raja had other plans. He wanted to enter the superpremjum s€gment so that E,a coud be Electra's image
leader. "Why did Titan launch Taniehq ? Certainlt not for
volumes." he argued. "The pr€mium range has a positive
ruuoff on the m€dium range. If a com.pany launches a
super premium product, its image becomes so
overwhelming that the consumer does not quesiion theprice or the quality of iis other product." he said.
"That 'image lead€r' angle is a double-edged sword,"
countered Tahil. "lf ihe super premium product fails to
make a mark in thre€ years' time, its image as well as the
company's image will take a beating."
Raja cit€d the s\ample of BPL. "When it eniered the
relrigerator market, BPL was aware it was taking on the
might of Vid€ocon, a sturdy, reliabl€, home grown brand.
To gain a quantum leap over Videcon's image percephon,
BPL first launched the thr€e door relrigerator. Its launch
stoked the interest of consum€rs, who gushed and gawked
and w€nt home and told their neighbours about it. So, the
next time someone wanted to buy a basic 165litre
retrigerator, he {irst checked out a BPL {ridge. Soon after
that, BPL launched its home entedainment system,
anoth€r super premium product. No one questioned the
price or whether the product would be successful because
they all knew thai ihete were buy€rs lor ihe quality thai
BPL had to ofler. Thereafter, every offering from BPL
was viewed with respect," he said.
M5-63
Brand building, Tahil felt, worked when it ran parallelto volume building. "The middle class is very aware and iscontinuously upgrading its informahon. It wjll want toknow how many Indians are buying Electra and we needfo answer that wjth some volumes," he said.
In such a scenario, ihe launch of Eva appeared to bea wasteful exercise. "The premium you can charge on aproduct must have a meaningful price io qualiiy,/valueratio," argued Talil. "Price is no longer the decidingIactor, it is value inst€ad. As we go along you'll findconsum€rs are less likely lo compare prices than they didin the past," declared Raja.
Tahil disagr€ed with Raja on the sign'ficance of prica.. "Price will always be a k€y factor in the purchase decision.
The people you are targeting for Eva watch the market,evaluat€ products and are very aware. Theg may buy apair of Reebok shoes for Rs. 2,000, but a relrigerator forRs. 1 lakh ? That's going too far," he said.
Raja lefi after coff€€, bui Tahil carried hisdisagreemmt to the squash court. "Raja is trapped in amlthical view of the Indian middle class," he said to Sarin."All around us lie the debris ol companies which
overestimated the middle class' willingness to pay forglobal brands. Yet he believes thai Eva has pot€ntial," he
said.
Sarin lelt Tahil was underestimating the market. "ln
the w?ke of liberalizaiion, there was a lot oI brouhaha -
over the rel€vance of some ol the producis entering lndia.
M5'63 P.T.O.
People asked, 'Who needs KFC ? Who needs Re€bok ?'But we must r;aliz€ that the consumers aspired toran!'thing global. Now they are asking for particularfearures and design improvement, he said
"Who are these consumers ?" asked Tahil. "Theglorious middle class ?"
"Tahil, in durables you have to benchmarkdifferently. When gou are selling potato chips or cornflakes, yor.r are looking at one set of consumer behaviourpatterns- But in durables, which can replace manual tasks,the consumer is seeking higher \ralue d€livery. Wiihin this,there is also a segment which is indifferent to high prices
the self-employed and the high{lyjng executive. Theyhdve access ro soft loans and hefty perk. lvoney is noobject for thern. They are eating out twice a week, buyingsho€s worth Rs. 2,000 and paying Rs. 1 lakh for healthclub memberships.
Questions :
(a) Cniically e\,"luate the price band being suggested forEva. Do you agree with Rajan's ass€ssment of thetarg€t€d consumer or with Tahil's ? Justily you
(b) What in gour view are the target customers for thiskind of product ? What is the brand positioning thatyou would suggest for Eva in view of th€ targetmarket identified by you ?
M563 3,000
MANAGEMENT PROGRAMME
Term-End Examination
[ll-6al
June, 2OO5
MS-64 : INTERNATIONAL MARKETING
Time : 3 hours Maximum Marks : 100(Weightoge 704/o)
Note. Attempt any thrce questions Jrom Section A.Eoch question corries 20 morks. Section B tscompulsory ond cafties 40 marks,
SECTION A
1, (a) Explain the concept of EPRG model in the evolution
of global marketing Mth the help of suitable
examples.
lb) Id€ntif9 th€ major consirains in India's exlrortsgro'.dh. Suggest suiiable measures which can bei$tegrated in stralegy to promote exports.
2. la) One of your lriends is willing to export read!'rnadegarments. txplain lo him in detail about rhe aciiviires
of organisations he should get in touch with.
M364 P.T.O.
3. (a)
Explain various elements of cost used in pr€paring
an export pricing quotation.
Discuss the. produci/market condibons whereproduct standardisation is a more effective strategythan product adoption, illusirating your ansirer with
suitabl€ examples.
Explain the modus operandi of a leiter of credit in
intemational tmnsaction,
4. Write short notes on any tl,o ol the following :
(a) Mehtods of indirect exports to foreign markets
(b) Intemaiional Bank for Reconstruciion and
Developmenr ( IBRD)
(c) Procedure lor conduciing int€maiional marketingres€arch
M5,64
i
SECTION B
5. Read the following case and answer the questions given at, ihe end :
Indian Otl Corporation's InternationalisationStrat€gY
Indian Oil Corporation (lOC) is the largest commercialundertaking in India and th€ only lndian company inForiune's "GlobaL 500 Listing". As a part oI theinternationalization strategy ol IOC, it has entered into thelorcign matket usirg tbe lolloi{,ing entry methods i
7- Exporttng t
IOC has already been exponing its producis such asSetvo Lubricant and other peholeum producis to anumber of overseas markeis including Banglad€shand Sri Lanka.
2. Tutnkey Projects:
For consiructing port oil terminal on tumkey basis atMer Rouge, since October 2002, IOC has got awholly owned subsidiary - M/s lndian Oil TankingLtd., Mauritius.
3. strotegic Arri.Ince :
For providing aviation fu€l and refuelling facility atSSR inlemational airport in Mauritius, lndian OilMauritius Ltd. (IOML) has formed a strategicalliance with existing players such as Shell, Caltexand ESSO.
M5-64 P.T.O.
Joint Venturc :
IOC is also negotiating wiih Caltex to put up a joint
venture for installing a boitling plant and mafketing
LPG under a common brand name "Mauri Gas" in
Mauritius,'
Wholry Ouned Subsidiarles :
IOC has formed a wholly owned 5ubsidiary in
Mauritius - Indian Oil Mauriiius Ltd. (IOML) with a
huge projected investment. The company is setting
up a giate otthe-a4 bulk storage terminal at Mer
Rouge to stock 24 thousand Metric tonnes of vital
p€troleum products, auxiliary and bunlering tacility
and 25 modern petrdl (and Gas) stations. IOML js
aiso in the process ol building inftasirucluYe lor
storage, bottling and distribution of lndane, LPG
and ma*et servo lubricants ln Mauritiug.
Besides, IOC has also lormed a uholly-c'voned
subsidiary in Sri L-anka - knor-r,n as Lanka IOC Pv't
Ltd. (LIOC). LIOC iook over 100 retail outl€ts
owned by C€ylon Petroleum Corporation in
February 2003- .lt is the only private owned
company besides the State-owned Ceylon Peholeum
Corporation (CPC) that operat€s retail petrol
stations in Sri Lanka. Building and operating storage
facilities at Trincomal€e tank farm, LIOC is involved
in bulk supply io indr.Etrial consumers. /
M5-64
ln order to lacilitaie operations ol lanka Indian Oil
Corporation R/t. Ltd. (LIOC), the Govetnment of
Srj LaDka bas extended the followj;rg concessjons i
a. A tripallite agreement signed betr,een the Sri
Lankan Government, CPC and LIOC
guaraniees that only three retail players
(including CPC and LIOCJ will operate in the
Sri Lankan market for the next live y€ars.
b. LIOC has also been allowed income tax
€xemption lor 10 years from the date ol
commencement of operations and a
concessional tax of 15% therealter against the
pre',ailing rate of 359o.
c. The lndian Oil subsidiary has also L€en
gmnted customs dutv €xemption for impott
of project-related plant, machinery and
equipment during project implementation p€riocl
of 5 years, besides fuee transfer of
dMdend/income to lndia.
As a strat€gic persp€ctive, Indian Oil Corporation is
moving lowards gjobalizing rts markets
Questlons ;
(a) IOC has adopted a mix of entry modes for
approaching iniernational marl€ts. Cntically evaluate
the factors aflecting IOC'S seleciion ol these entry
. modes.
(b) In view of the em€rging economic political scenario,
evaluate IOC'S €ntnl inlo Sri LaDka as a Wholly
Owned Subsidiary.
M5-64 3.000
MANAGEMENT PROGRAMME
Term-End Examlnation
June,2OO5
MS-65 : MARKETTNG OF SERVTCES
Time : 3 hor.rrs Maxirnum Mdrks , 1OO(tjJeightoge 7U/o)
Note j This poper consists of three Sections A, B ond C.Section A is to be attempted b9 sfudentsregistered lor MS-65 lor July, 2004 or January,2005 semesters. Section B is to be ottempted bystudents registered lor this course t'or Julg, 2003or Jonuary, 2004 semesters. Section C ts to beattempted by oll the students. Ail guest,ons cqrryequol morks.
SECTION A
Attempt ony three questio^s.
l, (a) In what r'ays is distribution of seMces dit{ereot from
Soods ? Id€ntify a lew sewices which can bedistributed €lectronicallg and discuss the challengesinvolved in it.
(b) Dffereniiate behreen core, facilitating, andsupporting seruices, giving suitable examples.
M5-65 P,T,O.
2. lal
(b)
3. (a)
What are the benefits derived by a service firm in
of{e{ng a sewice $rarantee ?
Dscuss the characteristlcs of a good sewice
guarantee. E@luate the following sen'rce guarantee
offered by a restaurant for iis home delivery se^'ces,
on the basis of ihe characterisiics discussed by you.
..30 MINUTES GUARANTEE.
10Yo DISCOUNT ON DELAYED DELIVERY
ORDERS''Discounts not applicable lor orders over Rs 500"
How important is it for a hotel locat€d at a hill
siation to use promotions during off season ? Also
identifu the possible saies promotion schemes it caa
of{et.
Discuss the impottanc€ of word of mouth
communication for health care sen/ices.(b)
4. Write short not€s on any thrce of tha following I
(a) Role of service secto! in Iodian economy
(b) Gronroos Model ot Service Quallty
(c) Pricing of, educational seFnceg
{d) Yield Management
(e) Role of PhYsical evidence
MS{5
6 .
SECTION BAttempt ony thrce questions.
What are the uafous levels at which a seNice product hasto be conc€ptuajis€d ? Taking the example of a movjelheatle or a health cJub, explatn the concephralsabon ofthe service product.
(a) What are the advantages that accrue from brandingof linancial servic€s ? lllustraie with the hellJ ofexamples, some of the pitfalls associated withumbrella brdnding.
(b) Whai are the factors goveming demand for thetourism product ?
{a) What is the signiticance ol th€ place decision inmarketing of social h€alth servic€s like familyplanning ? What considerations should be kept inmind while choosing ihe locafion for such a service ?
{b) What are th€ various positioning alternativesavailable to adv€rtising agencies ?
Distinguish behreen.the following gMng suitable examples(Attempt an9 toud
{i) Technical qualily and Functional qualiiy
(ii) Internal and External marheting
(iii) Service characteristics of Inseparability and
. Heterogeneity
(iv) Periph€ral evidence and Es,sential evideoce
(v) The cycle oJ success and The cycJe of fajlure
(vi) Facilitating and Supporting services
E.
MS€5 P.T.O.
SECTION C
9. Study the case given below and answer the questions givenat the end.
Marketing of H€ahh Services
Pulin Kayastha was simply amazed. He had seen allfofms oI hostjlity and marketing warfare in the cone$ergoods industry, but to see similar warfare in the healthindustry fascinated him. Clearly, he told himself, dociorshad {ound consumers in their pati€nts. Ai least, that'swhat the concept note sent by Dr. AJit Varman, couniry
manager of Recovery Clinics & Hospitals, seem€d to
indicate. Varman and seven other s€nior doctors had lelt
Karuna Nursing Home and Hospiial to set up Recovery,
which, as the note sajd. ".... would be entircly devoted
and dedicated to customer responsiveness."
Puiin was a manag€ment consultant and was
recommended to Recovery by the marketing director ofRegrow Pharma, a large pharmaceuticals company in
Mumbai. In fact, the suggestion to set up Recovery came
from a non-resident patieni, Dinesh Shah, who was
undergoing tr€atment at Karuna's large speciaii& hospitalin C€ntral India. It was in the course of his interaction
with the doctors that Shai s€nsed their unhappiness withthe system. This prompted him to suggest the idea of
Recoverv. Varman had joined Karuoa 10 years ago,assured of a challenging career in a hospital that was
MS$5
promising to be different. But over time, disillusionment
set in as Kanma's image and response to the
environment diluted its equity.
"Now that we have decided to do this, we do not
want to repeat old mistakes," Varman had told Pulin
duing their lirst meeting. "Having worked at Karuna, we
can see its weakness€s and why it's losing saliency. Ten
years ago, when it was established, we b€lieved ii was
going to add qalue to our careers, We became a part ol
it because we were told that we are specialists who would
bring exclusMiy to the hospital- But soon, the focus
shifted to fetching busin€ss and revenues. The
management started hiring specialists and pdr,?te
practitioners, oltering them cabins and consritancy
arrangements at Karuna. The strategy was that these
doctors would bring in their patients and use the
infrastructure so that the hospital would stari earning
The Karuna management wanted to de^e shott-tem
benefits, than gradually build up clientele. But the
strategy, it appeared, did not pay off. As Varman said:
"Because there were many doctors and ih€ business was
not large enough in the lirst few monihs. ConseqlLently,
competition for business became cut-throat betreen
P.T.O.
Who buys the Product, How and When ?
Sal.tces follow two purchase pattems, In rcgular saucehouseholds, it is purchas€d at the beginning of everypurchase cacle when monthly nondwable items are
bought. The second group is of those households where
sauce has an occasional use, it is usually an impulsepuchase, from the local retailers and the main purchaser
is the housewife with key influencers being children.
The users can be further subdivided belween TomatoKetchup and specialit sauces such as Hot and Swe€t.Tomato K€tchup is for all m€mbers of the family (MHI :
Rs. 2500+) wjth the larger part of the consumption comingfrom children. The purchaser is however the hous€wife.
Hot and Sweet is targeted at the young adult, modern,
with MHI : Bs. 2500+. The purchaser could be the
housewife or the malelfemale 'aduli'.
Users attitude to category^rand
Tomato Ketchup is generally seen as fun to €at, adds
flavour to all kinds of food, and is convenient to use. Usersshow low involvement, low brand loyalty, are very sensitive
to price, appreciate 'premium' quality of Maggi, but are
unwiling to pay very large price pr€m:um. On the otherhand for Hot and Sweet, the frequency oI con$rmption is
lower with high band loyalty, gr€ater involvement, lesspnce sensitivity and the user appreciates the rmique tasfe
and fun image of Maggi Hot and Sweet.
MS€B
-
I '
I THE CTJBBENT SCENARIO
The grou,th o{ Hot and Sweet has s)owed down and it can
no longer offset lower groMh on 4009 Ketchup. On the
other hand "Kissan" in the post Unilever takeover was
able to increase its clout 'n the market-place through
aggressile trade/consumer promotion inputs, new
packaging - umbrella design across ranges. Wih th€
introduction o[ Heinz, there was a creative-shift from'Naiural goodness' to the thjck tasty ketchup. Besides, all
players introduced Hot and S'r€et !,,,ith 'me too'
positioning, a serious thteat to Maggi Tomaio Ketchup.
Quesriors ;
(a) Would you r€commend ihat Hot and Sweet
adv€rtising should continue to support Maggi's entire
farge, in view of increased comPetition ?
(b) Il you have to d€velop new Tomato k€tchup
advertisements r,,riihin the Hot and Stteei persDnality
framework or develop a new Tomato Ketchup
adveftising on an entirely new platform, how would
you go about it ? Kindly illustrate the st€p by step
approach you would {ollow, in any one category of
your choice.
M5,68 3,000
SECTION B
6. Read the lollowing case and answer the questions given at
the end.
ITC E-CHOUPATS
Tobacco to hoiels giant ITC Ltd. has been tying to
Iind a solution to an old problem for years. The company
used to buy soya bean for export. Like everyone else, the
corporation had no option but io source its supplies from
the tocal mandis. This created i'ro problems. One, quality
was not guaranteed, and hvo, since supplies were sourced
through middlemen, the company had no contact with
the growers which is a crucial precondition lor orders to
many European countries. Direct contaci with farmers
was ail bui impossible given the faci that they li.ed in
far{lung villages in Madhya Prddesh. lTC s problem was
that it did not have a mechanism to approach them
directly - and, as importanily, cost effeciively.
The company look€d for the solution in inJormation
technology, through a projeci called e-choupal, launched
one-and-a half years ago- A classic click-and-mortar
busin€ss, the idea behind e-choupal was to offer an
altemative distrjbution and supply chain sysiem to the
rural market. How does it work ? Soya bean farmers in
MS611 P.T,O,
Madhya Pmdesh can now come to ihe echoupal, which
is nothing but an Internet kiosk s€t up usually in the
hotrse of an influential man (usually the headman) in the
vlllage. The village official is appointed by the company
and is known as the sanchalak. The site provides farmers
with real-time information on the latest weather repod,
prices in Erious malrdis, world prices and even best
farming practices.
More importantly, it oflers a prj€e at which ITC is
wi ing to buy the soya from them directb through the
sanchalak. Says S Sivakumar chi€f executive of ITC'S
int€rnational business division : "Th€ biggest probiem fot
farmers is that middl€men have blocked information flow.
Now the price discovery is met through the kiosk aod it
is transparent." The farmers have the choice of selling
their product in the mandi or to lTC. lf a farmer accepts
the company price, the order is confirmed prornptly by
the sanchalak on the net. But the e-choupal is not mer€ly
an inslrument for €ffective supply chain management for
lTC. By uslng th€ power of information technology, the
company has converted th€ computer into the popular
US concepi oI a "m€ta market", or a one-stop shop right
in the viltage, where farmers can s€ll their produce, buy
products (from farming inputs to dailg iiems for hous€hold
MS,611
use), teceive all the inlormation needed to improv€ th€ir
i€lds and even get a betier price for iheir produc€.
For ITC, it opens up n€w windo\ts of opportunities.
It allo\r,s it to souce more products directly from farmers
tlrrough a more efficient pric€ discovery m€chanism. It
also provides a plaiform for it to sell its products directly
to the customer. Tbis, in turn, provides the company \^rith
some direct information on consum€r needs in the
booming rural markets and r€duces d€p€ndence on
wholesalers. Explaining the logic behind the mov€,
Sivakumar says : "Whai siarted as a cost-effective
alternativ€ supply chain system to deal directly with the
larmer to buy products for exports is slowly going to
expand into an altemative dishibution mechanism for
rural India."
The tobacco giant has already set up over 700
choupals covering 3,800 villages in four staies - Madhya
Pndesh, Dttat Prade-"h, Xamaiaka and Andhra Pradesh
- dealing with soya bean, coffee, acquaculture products
and \rheat. last year it transact€d business of over Rs. 80
crore through the e'choupals all across ihe country. The
bigger plan is to spend some Rs. 150 crore to expand
the number of kiosks so thai the company is able to
M S - 6 1 1 P.T.O,
reach over 1,00.000 villages and cover 10 million
famers in 14 states in five years.
Is ihe business big enough to justify this lev€l ol
spending and planning ? To understand that, consid€r
why a farm€r would opt for the €-choupal over the
regular mandi. Farmers who sirike deals on the intemet
kiosk with ITC have a choice. They can either bring their
produce to the ITC warehouse or factory and get
reimburs€d for the transportation cost or they could give
their suppli€s to on€ of the collection centres that have
been set up by ihe company for a clust€r of villages or
s/en deliv€r ii io the sanchalak. Both ITC and the
farmers make a neat saving by bypassing the middleman
in the mandi. For instance, the farmer saves as much as
Rs. 250 per tonne on soya bean because he does not
incur costs such as bagging, iransporiation, loading and
unloading. lo haul his goods to the mandi.
The company, on ihe other hand, saves over Rs.
200 a tonn€ by avoiding bansporting the produc€ lrom
rhe mandi lo tfi€ company outlel even afler reimbursing
the farmer lor transport. And the sanchalak, the
locai'level €ntrepreneur, also makes money b9 getting a
0 5 per cent commisslon on the total transaction made
MS-611
Ii
through his kiosk. But the kiosk can be used for reverse
trading also - for companies to s€ll products and services
need€d by farmers directly. And ITC is already putting
together a strategy to leverage the infrastructure to
market and distribute goods and seNices ihat farmers
require. The facility will be availabl€ for selling both ITC
products as well as those ol other companies - of
cource, at a price. The company has taken some initial
steps to g€t agricultural inprrt companies io sell their
products direcily to farmers through e-choupals.
Ii has already roped in US seeds giani Monsanto,
fertiliser companies like BASF and Nagarjuna Fertilis€rs
and stat€-owned MP State Seeds Corporaiion to take
orders and market their products through the sife. These
companies can display their products on the net, trajn
farmers on how to lrse them, offer speclal prices, book
orders from {armers and - through the sanchalak -
deliver it at the village. Of course, ITC does not provid€
the semice fuee. Companies have to pay a 10 per c€nt
fee on the face !,?lue of the transaction and the tobacco
company pays the sanchalak 5 per cent of the sales as
commission for any producl sold on bis kiosk.
MS-611 P.T.O.
But companies polnt out that the expedenca has
paid rich dividends. Says a spokesperson for Monsanto :''The model offers us an opportunity to work closely with
farmers and promote our ofierings. Additionatly, our cost
of reach is also reduced." Monsanto also makes the point
that the company s corporate reputation and brand imag€
has be€n greatly enhanced as a result of its association
with the model. "Close association with the farmers,
through ihis model, encourages ihem to se€ us as a t'rst
preferenc€." he says. ITC is also exp€rimenting with
using the kiosk to sell fast movjng consumer goods
(FMCG). As the firsi step, it is selling gas lantems and
packaged vegetable oil. At ihe mom€nt th€se are being
manufactured by thild parties on behalf of ITC.
Orders by farmers are being booked by the
sanchalak who also arranges to have them delivered to
th€ farmer's doorstep. If the idea clicks, the platform
would be available for other companies too, which could
help ITC generate healthy revenues. More impofantly,
the new distribution system could be an effectiv€ tool for
the company which is planning a major foray in the foods
busin€ss. Says Arun Sharma, a rural marketing expert in
th€ advertising agency Bates India : "For its foods foray,
M S S 1 l
ITC canrrot depend on cigarctte distributors who are
alreadg overloaded to penetrate rural markets. The
e-choupal could provide an €lfeciive alternative."
The third initiative is to l€v€rage the e choupal to s€ll
services. Talk are akeadg on with various insurance
companies Ior using the e choupal as a medium for both
educating and selling insurance products to the famer -
in which the sanchalak becomes the insurance agent. If
this exp€riment is successJul, ITC ollicials say ther€ is no
reason why the array ol servic€s being oflered to farmers
cannot be extended. Says a senior ITC axecutive, "There
is no reason why banks providing rnicro-credit to farmers,
health services companies and educational servic€s
companies cannot leverag€ the power of the meta
mafue|" 1I all this sounds like a ruft) markete!'s dream,
consider the possible drawbacks. Says Pradeep Kashyap,
president of Marketing and Research Team, a rural
marketing consultancy outfit in Delhi | "As a coll€ction
c€ntr€ lor agricultural goods, it is a cost-€ffeciive way. But
I don'i think the availability of FMCG products at his
doorstep for th€ larmer is an issue or a particularly high
priority since he visiis the local town oiten and picks up
MS611 P.T.O.
There is also the additional problem of the role of the
sanchdak u,ilo could we)l replace the despised middleman
in the chain oJ things. Says Arun Sharma of Bates,
"There is too much dependence on the sancbalak who
virtually becomes the new, powerlul middleman replacing
the old one. Also, to develop such a distribuiion system
is very €xpeosive and might not be cost e{{€ctiv€ after all,
€v€n though one can reach new markets." Preet Bedi, a
director in the advertising agency Lowe-Lintas, expects
that it will take at least five to seven years for a
distdbtrtion platform ot this nahle to develop, "But it is
a good way to understand the need of the rural
consumer". ITC is conscious of the infrastructure
consrraints in expanding the e-choupal. For one. many
villages aren't electri{ied, so how do you run a
computer ? For another, connectivity to the web is
unreliable and could be pretty expensive, a sih€tion that
has been made more complicated by the sheer dispersion
of villages ln the colniry. Kumar says that the other
challenge is to build personalized content catering to
individuals across a wide range of income levels. No doubt
the path towards a much-vaunted rural distribution El
Dorado will be paved with problems. But with the
corporation trying to reduce its dependence on tobacco
and find more stabl€ lncome streams, e choupal might be
its best bet yet.
MS-611 1 0
I
Questions ;
{a) Will e-choupals work as a new distribution strategy
for ITC which believes in a t\ro way flow (urban to
rurali rural to urban). If yes, why; and il no, wh9
not ?
(b) Is it a right move for ITC, which already has apresence in Indian villages with special tie ups wjthIarmers for tobacco culiivation, to enter into
e-ventures ? Will this model run successtully in thelong run ? What can ITC derive out of e-choupals ?
(c) Will a company, which thinks of social marketing asits objectiver for rural development, really succeed in
winning the hearts of rural Indians ? Is ITC going
the right way in this initiative, accolding to you ?
I
MS$11 '| 3,000
I
MANAGEMENT PROGRAMME
Term-End Examination
June,2OO5
MS-91 : STRATEGIC MANAGEMENT
Time : 3 hours Maximum Morks ' 100
lWeightase 70o/a)
(i) Therc arc two sections : Section A o:nd Section B.
(ii) Attempt onv three questions from Section A. Eoch
question corries 20 motks.
(iii) Section B is compursory ond carries 40 morks.
SECTION A
l. (a) Whai are some of the basic questions that have to
be answered betore the management decides about
the structure suiiable for the strategy chosen ?
(b) Much of the business environment today is dynamic
in nature. What does it mean for organizational
management and how can the laiter go about
scanning the environment ?
MS-91 P.T.O.
2. {al The Universal Inner Structure proposition tall.6
about Selflessness as one of the characteristics ofeffectivelsuccesslul leaders. But some really wonderhow can lhere be selfless leaders when all around
in society there is an environment of selfishness,greed and avarice ? Citically examine tbe
statem€nt.
(b) Based on the extremes of "Use of Authoriiy by the
Leader" and "Area of Freedom for Subordinates",
present in a chart the spectrum of leadership
styles. Dscuss the attributes of successful leaders.
3. Discuss the dynamics ol buyer-seller relationship in
technology transactions. As a buyer of iechnology, what
care would 9ou take to see that the transaction is to your
aduantag€ ?
4. (a) A Ford Foundation study lound thai a majority of
institutional investors took social considerations into
account ln the selection of investments. In the light
ol this, why should iie Iirms undertake Social
Audit ? What benefits can a firm exp€ct to g€t
Irom social audii ?
(b) Enumeraie the various hameworks of social audii
that have been developed and explain any one of
them.
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1 .5. Wriie short notes on an9 three of the lollowing :
(i) Benefits of Strategic Management
(ii) Porter's perspective on Straiegg and Siructure
(iii) Structure for development programmes
(iv) Organrsational Cnvironmenr
lv) Technology Transfer and Absorption
)MS.91 P.T.O.
SECTION B
6. Read the folowing case carefullg and answer the questions
given at lhe ?nd.
CASE STTJDY
Peekay St€els
Pravin Kumar flicked the TV off as he saw, for the
nth tjrne ihai night, the s€cond tower of the World Trade
C€nire in N€w York come crashrng down. "What kind of
people would Dlot so meticulously to take ihousands of
innocent lives ?" he wondered, as a chill went down his
spine- "lt hasn't been a good day for me and lots ol
others in the US," Kumar muttered, switching on a lamp
next to his king-sized chair, and pulling out a file ftom his
expensive Piene Cardin portfofio.
A felu bourc earlier, the 48-year-oid CEO oI Peekay
Steels, which had lour other subsidiaries dealing in
aluminir.m, power, oil exploration, and telecom, had
emerged lrom a gruelling lour-hour session with Dalal
Street analysts. It seemed the analysts thought there was
nothing right with his diversified group. Tbe hundreds of
crores of rupees that the flagship had mised to fund
forays into new grourth sectors were proving be a mill
round Peekay's n€ck. The bottornline was bleeding noi
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tl
because the siielmaker was ineflicienti rather, the culprit
was the stagg€ring interest Peekay had to pay month
after month-
Kumar flipp€d a few pages of his file and got to a
s€ction tiiled 'Competitive Analysis'. He put a linger on
the column that read production cost and traced it down
to the row wher€ Peekay's prices were given | $260 pey
tonn€. Moving his gaze further down, he look€d at the
global benchmark , $280 per tonne. Feeling bitter, he
picked up a pen and circl€d the number under th€
financial charges column. "We are paying $81 as interest
chaEe for every ionne of ste€l that we make," he said it
aloud for the words to sink in. "So, by ihe time my steel
leaves lhe faclory ir cosls $341 per lonne.--
ln another few hours, Kumar knew he would be
seated in the back of his black Mercedes Benz along with
three of his key elecutives, on a four-hour drive outside
the city to P€ekay's steel plant. But before hitting the
sack {or a lew winks, Kumar decided to call Anirudh
Desai, Peekay's director of finance. Desai was watching
CNN too when Kumar caued him on his mobile. "Do
you think our US exports are going to b€ affected if
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there's a war ?" Kumar ask€d Desai wiihout bothering to
say hello or expressing his shock over the attacp,s.
"li could go either way," replied Desai. "lf there's a
war, the US may siep up imports. But if the business
sentiment worsens, purchases may actually fall.,
"Let's talk about it later today," said Kumar. "But,
Ani, the reason I called was to find out something
specific. Can we lower our interest costs withoit losing
control of any of our subsidiaries ?"
"l think so," replied Desai. "But given the
complicated shareholding patiern within the group,
individual spin-offs might be tricky. The joint venture
route is an option we could look for all our non-steel
businesses. Even if we were to forfeit the controiiing
stak€, we could still retain a major holding in each
subsidiary. I have done some scenario building, but I don't
ihink I can take you through that over the phone. May
be I could do that on our way to the plant tomorrow ?"
"l guess you could," said Kumar, wishing Desai good
night, and putting the cordless phone back into jts cladle.
MS.91
Kumar had slept for all of an hour when the
electronic clock on th€ iable by his bedside beeped. By
quaIl€r to sev€n, Desai and two other senior ex€cs were
at Kumar's house, waiting for Kumar to join them for a
quick breakfasi before s€tiing out on the ride- "What s
the updat€ on the attacks ?" Kumar asked no one in
particular, but Desai replied. "No news yet on how many
dead, but it seems the fatalit could run into a few
thousands." Over lhe nexi 15 minutes, the terrorist attack
dominated the conversation at the breaklast table.
Getting into the car, Kumar switched to the buslness
ai hand. "We simply have to get our financial costs
down," he said, tuming to Desai. 'Yes, but the question
is how ?" couniered Desai. "ln the past, we have us€d
ihe llagship as an investment v€hicle for setting up
projects in power, oil, aluminium, and telecom. Not only
are these business€s capital intensiv€, bui th€9 hav€ been
hit by time and cost over'runs. That has sent our interest
costs into a spiral.
''But aren't we trying to $rap expensive debt with
cheaper funds from abroad ? ' questioned Kurnar.
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"Yes, but this may not be the best oI time to do
that," said Desai. "Besides, Iet's face it, our track record
at repaying loans isn't exactly blemisliess. More than
once we've had our loans rescheduled."
"But can't we convert our inter corporate
borrowings into convertible debentures ?" said Kumar.
"l'm noi confident of this happening," Venkatesh
Krishnan, a nominee on Peekay's board, butied in "For
one, youl stock price has taken a sever€ beating on Dalal
Street, and investors are aware of the financial p.oblems
you are facing. Also, where ;s the market for lPOs ?"
"So, what is the solution ? Should we, like the
analrsts want, spin oft our low prolects into companies
and offload the bonowings from our boots ?" Kumar
asked. "This would sharpen Peekay's business focus
What do our institutional shareholders think about this ?"
continued Kumar, loohng to Krishnan.
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i
Mulling Over The Break-Up
Sharpens business focus to just steel-making
Rids the balance-sheet ot expensive borrowings
Helps leverage cost leadership in steel manufacture
Raises investor inter€st and, hence, shareholder value
Lowers the promoters stake precariously
Throws the company open io takeovers
Reduces asset strength in the balance-sheet
Limits grov"th opportuniiies for individual managers
"The consortium does not favour a break-up," ih€
nominee-director replied. All your lenders see merii in a
Iarge balance sheet that comes with a diversilied portfolio.
Bui, frankly, my own view is different. True, your
operational efficjenca in steel is comparable to the best in
ihe world. But the profitability - and indeed the survival
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- of the group is at stake because of its conglomerate
nahre. And the only option is for you to stick to what
you are good at and divest ar€as that are marginal to
your core business of steel-"
"But a break-up has its flipside," argued Kumar. "A
single business company could attract the atteniion of
predators with an €ye on sgnergy and cost savings. OUY
power unit, lor instance, which has a capacity to produce
1,000 MW of power might interest a larger power unit-
A pure play is more likely to invit€ a take'over bid which
may be good for shareholders - sinca such acquisitions
occur at a substaniial premium io the market price - but
bad for the incumbent management, because it reflects
poorly on thdr past performance.
"lf we break up," Desai added, "the group would
shrink in size. The grounh opportunities for indivjdual
managers would be reduced. But the overriding rationale
against a br€ak'up is that we need balance in our
portfolio. We are good at steel, but the Iuture lies in
emerging areas like telecom. So, we should be in
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"And let us not forget,' pointed out Kumar, ':thai
our shar€holders invested in us because we ar€ a
diversilied company. I don't think we should be concemed
about focus because that is not the reason why investors
came to us in the first place." As the sprawling steel plant
loomed into sight, Kumar knew thai answers would be
hard ro find. Just Lhe same. hp had ro find them quickJy.
Q estlons :
(a) What strategic alternatives, you think, ar€ a\,"ilableto Peekay Steel and which alternative would yourecommend and why ?
{b) Is it possible lor Peekay to low€r inierest costswithout losing conkol of any of its subsidiaries ? Ifyes, how ? lf no, why ?
MS-91 1 1 7,OO0
MANAGEMENT PROGRAIt'flt{E
Term-End Examination
June, 20O5
MS-95 : RESEARCH METHODOLOGY FORMANAGEMENT DECISIONS
Time : 3 hours Maximum Marks : 100(Weightoge 70o/o)
Note :
(i) This poper contains two sections, Section A ondB. Section A contoins t'iue questions. Attempt ony
fo||r questions lrcm this section. Section B iscompulsor.g.
Stotisticdl fdbles moy be prouided.
Use ol oan non-progrommable calculator is
SECTION A
1- What points must be kept in mind while defining aresearch problem ? Briefly mention the ad\antages ofconsid€ring these points while d€fining a research problem. 15
(ii)
(iii)
MS-95 P.T.O.
2. Briefly descnb€ the following attitude measurement
The Guttman Scale
The Semantic Differ€ntial Scale
Thurstone's equal-appearing inie^El scale
3. A professor is interested in l.Jlowing whether the "good"
students finish the test earli€r or later than the others in the
class. He observes a pafiicular test and gets the (ollowing
data (given on page 3). .15
If 'good' students are thos€ who get 90 and above, can
the prolessor conclude that good students tinish the tert
randomly (use a 'Va level ol significance) ?
ta/
{b)
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g
6
:
s
5
I I
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4. What are the seven el€ments of communication dimension,which are rele\rant for maljng a presentation ? Discuss.
Wrile shorl noLes on any three of lhe totlowing :
(a) Decision Making Unit (DMU)
(b) The Q-Sort Technique
(c) Ordinal Scale
(d) Diagrams and Graphs
(e) Types of Bibliographies
1 5
MS.95