Strategic Management Model Test Paper - 1 (Answers) - CA Intermediate PDF Download

 Page 1


ANSWERS OF MODEL TEST PAPER 1  
PAPER 6B: STRATEGIC MANAGEMENT 
PART I 
1. (A) (i) (a) (ii) (b) (iii) (c) (iv) (b) (v) (c)
(B) (i) (c) (ii) (b) (iii) (b)
PART II 
1. (a)  Swati operates at the functional level of management, specifically as the
marketing manager at a software company. Functional managers like 
Swati oversee specific departments or functions within an organization, 
such as marketing, finance, or operations. Their primary responsibilities 
include implementing corporate strategies and policies within their area 
of expertise and ensuring that daily operations are conducted efficiently 
and effectively. 
In Swati's case, as a marketing manager, her role involves developing 
and executing marketing strategies for the company's products. This 
includes leading a team of marketing professionals, collaborating with 
product development and sales teams, and analyzing market trends and 
customer feedback to refine strategies. By working closely with these 
teams, Swati ensures that the company's products are effectively 
promoted in the market and that marketing efforts align with overall 
business goals. 
Functional managers like Swati play a critical role in the organization by 
bridging the gap between corporate strategy and daily operations. They 
are responsible for translating high-level strategic goals into actionable 
plans for their departments and ensuring that these plans are executed 
effectively. Additionally, they are often key decision-makers within their 
areas of responsibility, making strategic choices that impact on the 
company's success. Overall, Swati's role as a marketing manager 
exemplifies the importance of functional managers in driving the success 
of their organizations. 
(b) The PESTLE framework can help ABC Corp assess the external factors
affecting its decision to expand into a new country by considering the
following aspects:
• Political Factors: These include the stability of the government,
government policies on foreign investment, trade agreements, and
regulatory frameworks. By analyzing these factors, ABC Corp can
assess the political risks associated with entering the new market.
• Economic Factors: Economic factors such as GDP growth rate,
inflation rate, exchange rates, and economic stability can impact ABC
Corp's decision. By analyzing these factors, the company can
583
Page 2


ANSWERS OF MODEL TEST PAPER 1  
PAPER 6B: STRATEGIC MANAGEMENT 
PART I 
1. (A) (i) (a) (ii) (b) (iii) (c) (iv) (b) (v) (c)
(B) (i) (c) (ii) (b) (iii) (b)
PART II 
1. (a)  Swati operates at the functional level of management, specifically as the
marketing manager at a software company. Functional managers like 
Swati oversee specific departments or functions within an organization, 
such as marketing, finance, or operations. Their primary responsibilities 
include implementing corporate strategies and policies within their area 
of expertise and ensuring that daily operations are conducted efficiently 
and effectively. 
In Swati's case, as a marketing manager, her role involves developing 
and executing marketing strategies for the company's products. This 
includes leading a team of marketing professionals, collaborating with 
product development and sales teams, and analyzing market trends and 
customer feedback to refine strategies. By working closely with these 
teams, Swati ensures that the company's products are effectively 
promoted in the market and that marketing efforts align with overall 
business goals. 
Functional managers like Swati play a critical role in the organization by 
bridging the gap between corporate strategy and daily operations. They 
are responsible for translating high-level strategic goals into actionable 
plans for their departments and ensuring that these plans are executed 
effectively. Additionally, they are often key decision-makers within their 
areas of responsibility, making strategic choices that impact on the 
company's success. Overall, Swati's role as a marketing manager 
exemplifies the importance of functional managers in driving the success 
of their organizations. 
(b) The PESTLE framework can help ABC Corp assess the external factors
affecting its decision to expand into a new country by considering the
following aspects:
• Political Factors: These include the stability of the government,
government policies on foreign investment, trade agreements, and
regulatory frameworks. By analyzing these factors, ABC Corp can
assess the political risks associated with entering the new market.
• Economic Factors: Economic factors such as GDP growth rate,
inflation rate, exchange rates, and economic stability can impact ABC
Corp's decision. By analyzing these factors, the company can
583
understand the economic environment of the new market and its 
potential impact on business operations. 
• Social Factors: Social factors such as cultural norms,
demographics, and lifestyle trends can influence consumer behavior
and demand for ABC Corp's products. Understanding these factors
can help the company tailor its marketing strategies to the new
market.
• Technological Factors: Technological factors such as
infrastructure, technological advancements, and the level of
technology adoption in the new market can impact ABC Corp's
operations. By assessing these factors, the company can determine
the technological requirements for entering the new market.
• Legal Factors: Legal factors such as laws and regulations related to
foreign investment, intellectual property rights, and labor laws can
impact ABC Corp's decision. By analyzing these factors, the company
can ensure compliance with legal requirements in the new market.
• Environmental Factors: Environmental factors such as climate
change, environmental regulations, and sustainability practices can
impact ABC Corp's operations and reputation. By considering these
factors, the company can assess the environmental risks and
opportunities in the new market.
Overall, the PESTLE framework can provide ABC Corp with a 
comprehensive analysis of the external factors that could impact its 
decision to expand into a new country, helping the company make 
informed and strategic decisions. 
(c) To help the small manufacturing company navigate its digital
transformation successfully, we would recommend the following
strategy:
1. Begin at the top: The leadership team should be united and
committed to the digital transformation. They should communicate a
clear vision for the future of the company and lead by example.
2. Ensure that the change is necessary and desired: Before
implementing any changes, the company should assess its current
state and identify areas where digital transformation can add value.
It's important to involve employees in this process to ensure their buy-
in.
3. Reduce disruption: Employee perceptions of change can vary, so
it's important to minimize disruption. This can be done by
communicating early and often about the changes, providing training
and support for employees, and empowering change agents within
the organization.
584
Page 3


ANSWERS OF MODEL TEST PAPER 1  
PAPER 6B: STRATEGIC MANAGEMENT 
PART I 
1. (A) (i) (a) (ii) (b) (iii) (c) (iv) (b) (v) (c)
(B) (i) (c) (ii) (b) (iii) (b)
PART II 
1. (a)  Swati operates at the functional level of management, specifically as the
marketing manager at a software company. Functional managers like 
Swati oversee specific departments or functions within an organization, 
such as marketing, finance, or operations. Their primary responsibilities 
include implementing corporate strategies and policies within their area 
of expertise and ensuring that daily operations are conducted efficiently 
and effectively. 
In Swati's case, as a marketing manager, her role involves developing 
and executing marketing strategies for the company's products. This 
includes leading a team of marketing professionals, collaborating with 
product development and sales teams, and analyzing market trends and 
customer feedback to refine strategies. By working closely with these 
teams, Swati ensures that the company's products are effectively 
promoted in the market and that marketing efforts align with overall 
business goals. 
Functional managers like Swati play a critical role in the organization by 
bridging the gap between corporate strategy and daily operations. They 
are responsible for translating high-level strategic goals into actionable 
plans for their departments and ensuring that these plans are executed 
effectively. Additionally, they are often key decision-makers within their 
areas of responsibility, making strategic choices that impact on the 
company's success. Overall, Swati's role as a marketing manager 
exemplifies the importance of functional managers in driving the success 
of their organizations. 
(b) The PESTLE framework can help ABC Corp assess the external factors
affecting its decision to expand into a new country by considering the
following aspects:
• Political Factors: These include the stability of the government,
government policies on foreign investment, trade agreements, and
regulatory frameworks. By analyzing these factors, ABC Corp can
assess the political risks associated with entering the new market.
• Economic Factors: Economic factors such as GDP growth rate,
inflation rate, exchange rates, and economic stability can impact ABC
Corp's decision. By analyzing these factors, the company can
583
understand the economic environment of the new market and its 
potential impact on business operations. 
• Social Factors: Social factors such as cultural norms,
demographics, and lifestyle trends can influence consumer behavior
and demand for ABC Corp's products. Understanding these factors
can help the company tailor its marketing strategies to the new
market.
• Technological Factors: Technological factors such as
infrastructure, technological advancements, and the level of
technology adoption in the new market can impact ABC Corp's
operations. By assessing these factors, the company can determine
the technological requirements for entering the new market.
• Legal Factors: Legal factors such as laws and regulations related to
foreign investment, intellectual property rights, and labor laws can
impact ABC Corp's decision. By analyzing these factors, the company
can ensure compliance with legal requirements in the new market.
• Environmental Factors: Environmental factors such as climate
change, environmental regulations, and sustainability practices can
impact ABC Corp's operations and reputation. By considering these
factors, the company can assess the environmental risks and
opportunities in the new market.
Overall, the PESTLE framework can provide ABC Corp with a 
comprehensive analysis of the external factors that could impact its 
decision to expand into a new country, helping the company make 
informed and strategic decisions. 
(c) To help the small manufacturing company navigate its digital
transformation successfully, we would recommend the following
strategy:
1. Begin at the top: The leadership team should be united and
committed to the digital transformation. They should communicate a
clear vision for the future of the company and lead by example.
2. Ensure that the change is necessary and desired: Before
implementing any changes, the company should assess its current
state and identify areas where digital transformation can add value.
It's important to involve employees in this process to ensure their buy-
in.
3. Reduce disruption: Employee perceptions of change can vary, so
it's important to minimize disruption. This can be done by
communicating early and often about the changes, providing training
and support for employees, and empowering change agents within
the organization.
584
4. Encourage communication: Create channels for employees to ask
questions and provide feedback. Encourage collaboration between
departments to share ideas and innovations. Effective communication
can help alleviate fears and keep everyone aligned.
5. Recognize that change is the norm: Digital transformation is not a
one-time project but an ongoing process. The company should be
prepared to adapt to new technologies and market conditions
continuously.
By following these best practices, the small manufacturing company can 
successfully navigate its digital transformation and position itself for 
future growth and success. 
2. (a)  The retail company can develop a strategic approach that is both
proactive and reactive to address the challenge of increasing 
competition from online retailers. To achieve this, the company can:   
• Proactive Strategy: The company can proactively analyze market
trends and customer preferences to identify opportunities for growth.
For example, it can invest in market research to understand what
customers value in a retail experience and tailor its offerings to meet
those needs. This proactive approach can help the company stay
ahead of competitors and attract new customers.
• Reactive Strategy: In addition to proactive measures, the company
should also be prepared to react to changes in the market
environment. For example, if a competitor launches a new online
shopping platform, the company should quickly assess the impact on
its business and develop a response. This reactive strategy can help
the company adapt to changing market conditions and maintain its
competitiveness.
By combining proactive and reactive strategies, the retail company can 
develop a comprehensive approach to addressing the challenge of 
increasing competition from online retailers. This approach will allow the 
company to capitalize on opportunities for growth while also mitigating 
risks and responding to threats in the market. 
(b) To target tech-savvy consumers for the new smartphone model, the tech
company can develop a marketing strategy based on customer behavior.
Consumer behaviour may be influenced by a number of things. These
elements can be categorised into the following conceptual domains:
• External Influences: Utilize online platforms and tech forums to
generate buzz around the new smartphone. Partner with tech
influencers and bloggers to review the product and create awareness
among tech-savvy consumers.
• Internal Influences: Appeal to the desire for innovation and
advanced features among tech-savvy consumers. Highlight the
585
Page 4


ANSWERS OF MODEL TEST PAPER 1  
PAPER 6B: STRATEGIC MANAGEMENT 
PART I 
1. (A) (i) (a) (ii) (b) (iii) (c) (iv) (b) (v) (c)
(B) (i) (c) (ii) (b) (iii) (b)
PART II 
1. (a)  Swati operates at the functional level of management, specifically as the
marketing manager at a software company. Functional managers like 
Swati oversee specific departments or functions within an organization, 
such as marketing, finance, or operations. Their primary responsibilities 
include implementing corporate strategies and policies within their area 
of expertise and ensuring that daily operations are conducted efficiently 
and effectively. 
In Swati's case, as a marketing manager, her role involves developing 
and executing marketing strategies for the company's products. This 
includes leading a team of marketing professionals, collaborating with 
product development and sales teams, and analyzing market trends and 
customer feedback to refine strategies. By working closely with these 
teams, Swati ensures that the company's products are effectively 
promoted in the market and that marketing efforts align with overall 
business goals. 
Functional managers like Swati play a critical role in the organization by 
bridging the gap between corporate strategy and daily operations. They 
are responsible for translating high-level strategic goals into actionable 
plans for their departments and ensuring that these plans are executed 
effectively. Additionally, they are often key decision-makers within their 
areas of responsibility, making strategic choices that impact on the 
company's success. Overall, Swati's role as a marketing manager 
exemplifies the importance of functional managers in driving the success 
of their organizations. 
(b) The PESTLE framework can help ABC Corp assess the external factors
affecting its decision to expand into a new country by considering the
following aspects:
• Political Factors: These include the stability of the government,
government policies on foreign investment, trade agreements, and
regulatory frameworks. By analyzing these factors, ABC Corp can
assess the political risks associated with entering the new market.
• Economic Factors: Economic factors such as GDP growth rate,
inflation rate, exchange rates, and economic stability can impact ABC
Corp's decision. By analyzing these factors, the company can
583
understand the economic environment of the new market and its 
potential impact on business operations. 
• Social Factors: Social factors such as cultural norms,
demographics, and lifestyle trends can influence consumer behavior
and demand for ABC Corp's products. Understanding these factors
can help the company tailor its marketing strategies to the new
market.
• Technological Factors: Technological factors such as
infrastructure, technological advancements, and the level of
technology adoption in the new market can impact ABC Corp's
operations. By assessing these factors, the company can determine
the technological requirements for entering the new market.
• Legal Factors: Legal factors such as laws and regulations related to
foreign investment, intellectual property rights, and labor laws can
impact ABC Corp's decision. By analyzing these factors, the company
can ensure compliance with legal requirements in the new market.
• Environmental Factors: Environmental factors such as climate
change, environmental regulations, and sustainability practices can
impact ABC Corp's operations and reputation. By considering these
factors, the company can assess the environmental risks and
opportunities in the new market.
Overall, the PESTLE framework can provide ABC Corp with a 
comprehensive analysis of the external factors that could impact its 
decision to expand into a new country, helping the company make 
informed and strategic decisions. 
(c) To help the small manufacturing company navigate its digital
transformation successfully, we would recommend the following
strategy:
1. Begin at the top: The leadership team should be united and
committed to the digital transformation. They should communicate a
clear vision for the future of the company and lead by example.
2. Ensure that the change is necessary and desired: Before
implementing any changes, the company should assess its current
state and identify areas where digital transformation can add value.
It's important to involve employees in this process to ensure their buy-
in.
3. Reduce disruption: Employee perceptions of change can vary, so
it's important to minimize disruption. This can be done by
communicating early and often about the changes, providing training
and support for employees, and empowering change agents within
the organization.
584
4. Encourage communication: Create channels for employees to ask
questions and provide feedback. Encourage collaboration between
departments to share ideas and innovations. Effective communication
can help alleviate fears and keep everyone aligned.
5. Recognize that change is the norm: Digital transformation is not a
one-time project but an ongoing process. The company should be
prepared to adapt to new technologies and market conditions
continuously.
By following these best practices, the small manufacturing company can 
successfully navigate its digital transformation and position itself for 
future growth and success. 
2. (a)  The retail company can develop a strategic approach that is both
proactive and reactive to address the challenge of increasing 
competition from online retailers. To achieve this, the company can:   
• Proactive Strategy: The company can proactively analyze market
trends and customer preferences to identify opportunities for growth.
For example, it can invest in market research to understand what
customers value in a retail experience and tailor its offerings to meet
those needs. This proactive approach can help the company stay
ahead of competitors and attract new customers.
• Reactive Strategy: In addition to proactive measures, the company
should also be prepared to react to changes in the market
environment. For example, if a competitor launches a new online
shopping platform, the company should quickly assess the impact on
its business and develop a response. This reactive strategy can help
the company adapt to changing market conditions and maintain its
competitiveness.
By combining proactive and reactive strategies, the retail company can 
develop a comprehensive approach to addressing the challenge of 
increasing competition from online retailers. This approach will allow the 
company to capitalize on opportunities for growth while also mitigating 
risks and responding to threats in the market. 
(b) To target tech-savvy consumers for the new smartphone model, the tech
company can develop a marketing strategy based on customer behavior.
Consumer behaviour may be influenced by a number of things. These
elements can be categorised into the following conceptual domains:
• External Influences: Utilize online platforms and tech forums to
generate buzz around the new smartphone. Partner with tech
influencers and bloggers to review the product and create awareness
among tech-savvy consumers.
• Internal Influences: Appeal to the desire for innovation and
advanced features among tech-savvy consumers. Highlight the
585
unique selling points of the new smartphone, such as its cutting-edge 
technology, performance, and design. 
• Decision Making: Recognize that tech-savvy consumers are early
adopters who value functionality and performance. Provide detailed
specifications and comparisons with other smartphones to help them
make an informed decision.
• Post-decision Processes: Offer excellent customer service and
support to address any technical issues or concerns. Encourage
customers to provide feedback and reviews to build credibility and
trust among tech-savvy consumers.
Figure: Process of consumer behaviour 
By understanding the behavior of tech-savvy consumers and aligning the 
marketing strategy with their preferences, the tech company can 
effectively promote the new smartphone and attract this demographic. 
3. (a)  To study the market position of rival companies in the energy drink
segment, the strategic manager can use strategic group mapping. This 
tool helps identify strategic groups, which consist of rival firms with 
similar competitive approaches and positions in the market. The 
procedure for implementing strategic group mapping effectively is as 
follows: 
1. Identify the competitive characteristics that differentiate firms in
the industry typical variables that are price/quality range (high,
medium, low); geographic coverage (local, regional, national,
global); degree of vertical integration (none, partial, full); product-
line breadth (wide, narrow); use of distribution channels (one,
some, all); and degree of service offered (no-frills, limited, full).
2. Plot the firms on a two-variable map using pairs of these
differentiating characteristics.
Purchase and 
Post Purchase 
Actions 
External Factors 
Market Stimuli 
Environmental 
Factors 
Internal Factors 
Decision 
Making 
586
Page 5


ANSWERS OF MODEL TEST PAPER 1  
PAPER 6B: STRATEGIC MANAGEMENT 
PART I 
1. (A) (i) (a) (ii) (b) (iii) (c) (iv) (b) (v) (c)
(B) (i) (c) (ii) (b) (iii) (b)
PART II 
1. (a)  Swati operates at the functional level of management, specifically as the
marketing manager at a software company. Functional managers like 
Swati oversee specific departments or functions within an organization, 
such as marketing, finance, or operations. Their primary responsibilities 
include implementing corporate strategies and policies within their area 
of expertise and ensuring that daily operations are conducted efficiently 
and effectively. 
In Swati's case, as a marketing manager, her role involves developing 
and executing marketing strategies for the company's products. This 
includes leading a team of marketing professionals, collaborating with 
product development and sales teams, and analyzing market trends and 
customer feedback to refine strategies. By working closely with these 
teams, Swati ensures that the company's products are effectively 
promoted in the market and that marketing efforts align with overall 
business goals. 
Functional managers like Swati play a critical role in the organization by 
bridging the gap between corporate strategy and daily operations. They 
are responsible for translating high-level strategic goals into actionable 
plans for their departments and ensuring that these plans are executed 
effectively. Additionally, they are often key decision-makers within their 
areas of responsibility, making strategic choices that impact on the 
company's success. Overall, Swati's role as a marketing manager 
exemplifies the importance of functional managers in driving the success 
of their organizations. 
(b) The PESTLE framework can help ABC Corp assess the external factors
affecting its decision to expand into a new country by considering the
following aspects:
• Political Factors: These include the stability of the government,
government policies on foreign investment, trade agreements, and
regulatory frameworks. By analyzing these factors, ABC Corp can
assess the political risks associated with entering the new market.
• Economic Factors: Economic factors such as GDP growth rate,
inflation rate, exchange rates, and economic stability can impact ABC
Corp's decision. By analyzing these factors, the company can
583
understand the economic environment of the new market and its 
potential impact on business operations. 
• Social Factors: Social factors such as cultural norms,
demographics, and lifestyle trends can influence consumer behavior
and demand for ABC Corp's products. Understanding these factors
can help the company tailor its marketing strategies to the new
market.
• Technological Factors: Technological factors such as
infrastructure, technological advancements, and the level of
technology adoption in the new market can impact ABC Corp's
operations. By assessing these factors, the company can determine
the technological requirements for entering the new market.
• Legal Factors: Legal factors such as laws and regulations related to
foreign investment, intellectual property rights, and labor laws can
impact ABC Corp's decision. By analyzing these factors, the company
can ensure compliance with legal requirements in the new market.
• Environmental Factors: Environmental factors such as climate
change, environmental regulations, and sustainability practices can
impact ABC Corp's operations and reputation. By considering these
factors, the company can assess the environmental risks and
opportunities in the new market.
Overall, the PESTLE framework can provide ABC Corp with a 
comprehensive analysis of the external factors that could impact its 
decision to expand into a new country, helping the company make 
informed and strategic decisions. 
(c) To help the small manufacturing company navigate its digital
transformation successfully, we would recommend the following
strategy:
1. Begin at the top: The leadership team should be united and
committed to the digital transformation. They should communicate a
clear vision for the future of the company and lead by example.
2. Ensure that the change is necessary and desired: Before
implementing any changes, the company should assess its current
state and identify areas where digital transformation can add value.
It's important to involve employees in this process to ensure their buy-
in.
3. Reduce disruption: Employee perceptions of change can vary, so
it's important to minimize disruption. This can be done by
communicating early and often about the changes, providing training
and support for employees, and empowering change agents within
the organization.
584
4. Encourage communication: Create channels for employees to ask
questions and provide feedback. Encourage collaboration between
departments to share ideas and innovations. Effective communication
can help alleviate fears and keep everyone aligned.
5. Recognize that change is the norm: Digital transformation is not a
one-time project but an ongoing process. The company should be
prepared to adapt to new technologies and market conditions
continuously.
By following these best practices, the small manufacturing company can 
successfully navigate its digital transformation and position itself for 
future growth and success. 
2. (a)  The retail company can develop a strategic approach that is both
proactive and reactive to address the challenge of increasing 
competition from online retailers. To achieve this, the company can:   
• Proactive Strategy: The company can proactively analyze market
trends and customer preferences to identify opportunities for growth.
For example, it can invest in market research to understand what
customers value in a retail experience and tailor its offerings to meet
those needs. This proactive approach can help the company stay
ahead of competitors and attract new customers.
• Reactive Strategy: In addition to proactive measures, the company
should also be prepared to react to changes in the market
environment. For example, if a competitor launches a new online
shopping platform, the company should quickly assess the impact on
its business and develop a response. This reactive strategy can help
the company adapt to changing market conditions and maintain its
competitiveness.
By combining proactive and reactive strategies, the retail company can 
develop a comprehensive approach to addressing the challenge of 
increasing competition from online retailers. This approach will allow the 
company to capitalize on opportunities for growth while also mitigating 
risks and responding to threats in the market. 
(b) To target tech-savvy consumers for the new smartphone model, the tech
company can develop a marketing strategy based on customer behavior.
Consumer behaviour may be influenced by a number of things. These
elements can be categorised into the following conceptual domains:
• External Influences: Utilize online platforms and tech forums to
generate buzz around the new smartphone. Partner with tech
influencers and bloggers to review the product and create awareness
among tech-savvy consumers.
• Internal Influences: Appeal to the desire for innovation and
advanced features among tech-savvy consumers. Highlight the
585
unique selling points of the new smartphone, such as its cutting-edge 
technology, performance, and design. 
• Decision Making: Recognize that tech-savvy consumers are early
adopters who value functionality and performance. Provide detailed
specifications and comparisons with other smartphones to help them
make an informed decision.
• Post-decision Processes: Offer excellent customer service and
support to address any technical issues or concerns. Encourage
customers to provide feedback and reviews to build credibility and
trust among tech-savvy consumers.
Figure: Process of consumer behaviour 
By understanding the behavior of tech-savvy consumers and aligning the 
marketing strategy with their preferences, the tech company can 
effectively promote the new smartphone and attract this demographic. 
3. (a)  To study the market position of rival companies in the energy drink
segment, the strategic manager can use strategic group mapping. This 
tool helps identify strategic groups, which consist of rival firms with 
similar competitive approaches and positions in the market. The 
procedure for implementing strategic group mapping effectively is as 
follows: 
1. Identify the competitive characteristics that differentiate firms in
the industry typical variables that are price/quality range (high,
medium, low); geographic coverage (local, regional, national,
global); degree of vertical integration (none, partial, full); product-
line breadth (wide, narrow); use of distribution channels (one,
some, all); and degree of service offered (no-frills, limited, full).
2. Plot the firms on a two-variable map using pairs of these
differentiating characteristics.
Purchase and 
Post Purchase 
Actions 
External Factors 
Market Stimuli 
Environmental 
Factors 
Internal Factors 
Decision 
Making 
586
3. Assign firms that fall in about the same strategy space to the
same strategic group.
4. Draw circles around each strategic group making the circles
proportional to the size of the group's respective share of total
industry sales revenues.
By following these steps, the strategic manager can gain valuable 
insights into the competitive landscape of the energy drink segment and 
identify potential positioning strategies for the new line of energy drinks 
targeted at health-conscious consumers. 
(b) A workable action plan for turnaround of the textile mill would involve:
• Stage One – Assessment of current problems: In the first step,
assess the current problems and get to the root causes and the
extent of damage.
• Stage Two – Analyze the situation and develop a strategic
plan: Identify major problems and opportunities, develop a
strategic plan with specific goals and detailed functional actions
after analyzing strengths and weaknesses in the areas of
competitive position.
• Stage Three – Implementing an emergency action plan: If the
organization is in a critical stage, an appropriate action plan must
be developed to stop the bleeding and enable the organization to
survive.
• Stage Four – Restructuring the business: If the core business is
irreparably damaged, then the outlook for the entire organization
may be bleak. Efforts to be made to position the organization for
rapid improvement.
• Stage Five – Returning to normal: In the final stage of turnaround
strategy process, the organization should begin to show signs of
profitability, return on investments and enhancing economic value-
added.
4. (a)  Strategic performance measures are essential for organizations for
several reasons: 
? Goal Alignment: Strategic performance measures help 
organizations align their strategies with their goals and objectives, 
ensuring that they are on track to achieve their desired outcomes. 
? Resource Allocation: Strategic performance measures provide
organizations with the information they need to make informed
decisions about resource allocation, enabling them to prioritize their
587