Strategic Management Model Test Paper - 4 (Answers) - CA Intermediate PDF Download

 Page 1


1. (A) (i) (b) (ii) (d) (iii) (c) (iv) (c) (v) (b) 
1. (B) (i) (c) (ii) (c) (iii) (c) 
PART II 
1. (a)  The HealthPlus brand of wellness supplements may have the following
vision and mission: 
Vision: Vision implies the blueprint of the company’s future position. It 
describes where the organization wants to land. Mr. Arun should aim to 
position “HealthPlus” as India’s leading wellness supplements brand. It 
may have the vision to be India’s largest wellness supplements company 
that enhances health, promotes extraordinary well-being, and brings 
happiness to people. 
Mission: Mission delineates the firm’s business, its goals, and ways to 
reach the goals. It explains the reason for the existence of the firm in 
society. It is designed to help potential shareholders and investors 
understand the purpose of the company. Mr. Arun may identify the 
mission in the following lines: 
? To be in the business of wellness supplements to enhance the lives
of people and give them the confidence to lead a healthy life.
? To protect health by providing supplements that counteract harmful
elements in the environment.
? To produce wellness supplements using natural ingredients in an
environmentally sustainable manner.
(b) GreenGardens should conduct a SWOT analysis to strategically plan for
future growth. This analysis will help them understand their internal
strengths and weaknesses, as well as external opportunities and threats.
SWOT Analysis Grid for GreenGardens:
Strengths Weaknesses 
High-quality, pesticide-free 
produce 
Limited distribution channels 
Strong brand reputation for 
organic products 
Small scale of operations 
Dedicated and knowledgeable 
workforce 
Limited marketing and sales reach 
Opportunities Threats 
Rising demand for organic 
products 
Unpredictable weather conditions 
Potential to expand into new 
markets 
Intense competition from larger 
farms 
ANSWERS OF MODEL TEST PAPER 4 
PAPER 6B: STRATEGIC MANAGEMENT 
PART I 
603
Page 2


1. (A) (i) (b) (ii) (d) (iii) (c) (iv) (c) (v) (b) 
1. (B) (i) (c) (ii) (c) (iii) (c) 
PART II 
1. (a)  The HealthPlus brand of wellness supplements may have the following
vision and mission: 
Vision: Vision implies the blueprint of the company’s future position. It 
describes where the organization wants to land. Mr. Arun should aim to 
position “HealthPlus” as India’s leading wellness supplements brand. It 
may have the vision to be India’s largest wellness supplements company 
that enhances health, promotes extraordinary well-being, and brings 
happiness to people. 
Mission: Mission delineates the firm’s business, its goals, and ways to 
reach the goals. It explains the reason for the existence of the firm in 
society. It is designed to help potential shareholders and investors 
understand the purpose of the company. Mr. Arun may identify the 
mission in the following lines: 
? To be in the business of wellness supplements to enhance the lives
of people and give them the confidence to lead a healthy life.
? To protect health by providing supplements that counteract harmful
elements in the environment.
? To produce wellness supplements using natural ingredients in an
environmentally sustainable manner.
(b) GreenGardens should conduct a SWOT analysis to strategically plan for
future growth. This analysis will help them understand their internal
strengths and weaknesses, as well as external opportunities and threats.
SWOT Analysis Grid for GreenGardens:
Strengths Weaknesses 
High-quality, pesticide-free 
produce 
Limited distribution channels 
Strong brand reputation for 
organic products 
Small scale of operations 
Dedicated and knowledgeable 
workforce 
Limited marketing and sales reach 
Opportunities Threats 
Rising demand for organic 
products 
Unpredictable weather conditions 
Potential to expand into new 
markets 
Intense competition from larger 
farms 
ANSWERS OF MODEL TEST PAPER 4 
PAPER 6B: STRATEGIC MANAGEMENT 
PART I 
603
Increased consumer 
awareness of health and 
sustainability 
Regulatory changes affecting 
organic farming 
By systematically evaluating these areas, GreenGardens can leverage 
its strengths, address its weaknesses, capitalize on opportunities, and 
mitigate threats. This strategic planning will guide them toward 
sustainable growth and success in the organic farming industry. 
(c) FreshDelight is employing a market development strategy to expand
its market presence. This approach involves introducing their existing
organic fruit juices to new markets, specifically targeting countries where
the demand for organic products is on the rise. To achieve this,
FreshDelight is launching targeted marketing campaigns and partnering
with local distributors to effectively introduce their products to these new
regions. Additionally, they are adapting their product packaging and
marketing messages to align with local preferences and regulations,
ensuring their offerings resonate with the new customer base. By
entering these emerging markets, FreshDelight aims to increase its
customer base and drive sales growth, leveraging the growing popularity
of organic products.
2. (a)  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.
(b) In matrix structure, functional and product forms are combined
simultaneously at the same level of the organization. Employees have
two superiors, a product / project manager and a functional manager.
604
Page 3


1. (A) (i) (b) (ii) (d) (iii) (c) (iv) (c) (v) (b) 
1. (B) (i) (c) (ii) (c) (iii) (c) 
PART II 
1. (a)  The HealthPlus brand of wellness supplements may have the following
vision and mission: 
Vision: Vision implies the blueprint of the company’s future position. It 
describes where the organization wants to land. Mr. Arun should aim to 
position “HealthPlus” as India’s leading wellness supplements brand. It 
may have the vision to be India’s largest wellness supplements company 
that enhances health, promotes extraordinary well-being, and brings 
happiness to people. 
Mission: Mission delineates the firm’s business, its goals, and ways to 
reach the goals. It explains the reason for the existence of the firm in 
society. It is designed to help potential shareholders and investors 
understand the purpose of the company. Mr. Arun may identify the 
mission in the following lines: 
? To be in the business of wellness supplements to enhance the lives
of people and give them the confidence to lead a healthy life.
? To protect health by providing supplements that counteract harmful
elements in the environment.
? To produce wellness supplements using natural ingredients in an
environmentally sustainable manner.
(b) GreenGardens should conduct a SWOT analysis to strategically plan for
future growth. This analysis will help them understand their internal
strengths and weaknesses, as well as external opportunities and threats.
SWOT Analysis Grid for GreenGardens:
Strengths Weaknesses 
High-quality, pesticide-free 
produce 
Limited distribution channels 
Strong brand reputation for 
organic products 
Small scale of operations 
Dedicated and knowledgeable 
workforce 
Limited marketing and sales reach 
Opportunities Threats 
Rising demand for organic 
products 
Unpredictable weather conditions 
Potential to expand into new 
markets 
Intense competition from larger 
farms 
ANSWERS OF MODEL TEST PAPER 4 
PAPER 6B: STRATEGIC MANAGEMENT 
PART I 
603
Increased consumer 
awareness of health and 
sustainability 
Regulatory changes affecting 
organic farming 
By systematically evaluating these areas, GreenGardens can leverage 
its strengths, address its weaknesses, capitalize on opportunities, and 
mitigate threats. This strategic planning will guide them toward 
sustainable growth and success in the organic farming industry. 
(c) FreshDelight is employing a market development strategy to expand
its market presence. This approach involves introducing their existing
organic fruit juices to new markets, specifically targeting countries where
the demand for organic products is on the rise. To achieve this,
FreshDelight is launching targeted marketing campaigns and partnering
with local distributors to effectively introduce their products to these new
regions. Additionally, they are adapting their product packaging and
marketing messages to align with local preferences and regulations,
ensuring their offerings resonate with the new customer base. By
entering these emerging markets, FreshDelight aims to increase its
customer base and drive sales growth, leveraging the growing popularity
of organic products.
2. (a)  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.
(b) In matrix structure, functional and product forms are combined
simultaneously at the same level of the organization. Employees have
two superiors, a product / project manager and a functional manager.
604
The “home” department - that is, engineering, manufacturing, or 
marketing - is usually functional and is reasonably permanent. People 
from these functional units are often assigned temporarily to one or more 
product units or projects.  
The product units / projects are usually temporary and act like divisions 
in that they are differentiated on a product-market basis. The matrix 
structure may be very appropriate when organizations conclude that 
neither functional nor divisional forms, even when combined with 
horizontal linking mechanisms like strategic business units, are right for 
the implementation of their strategies. Matrix structure was developed to 
combine the stability of the functional structure with flexibility of the 
product form. It is very useful when the external environment (especially 
its technological and market aspects) is very complex and changeable. 
A matrix structure is most complex of all designs because it depends 
upon both vertical and horizontal flows of authority and communication. 
It may result in higher overhead costs due to more management 
positions.  
The matrix structure is often found in an organization when the following 
three conditions exist:  
1. Ideas need to be cross-fertilized across projects or products;
2. Resources are scarce; and
3. Abilities to process information and to make decisions need to be
improved.
3. (a)  Competitive landscape is a business analysis which identifies
competitors, either direct or indirect. Competitive landscape is about 
identifying and understanding the competitors and at the same time, it 
permits the comprehension of their vision, mission, core values, niche 
market, strengths and weaknesses.  
An in-depth investigation and analysis of a firm’s competition allows it to 
assess the competitors’ strengths and weaknesses in the marketplace 
and helps it to choose and implement effective strategies that will 
improve its competitive advantage.    
Steps to understand the competitive landscape for building competitive 
advantage are:  
(i) Identify the competitor: The first step to understanding the
competitive landscape is to identify the competitors in the firm’s
industry and have actual data about their respective market share.
(ii) Understand the competitors: Once the competitors have been
identified, the strategist can use market research report, internet,
newspapers, social media, industry reports, and various other
sources to understand the products and services offered by them
in different markets.
605
Page 4


1. (A) (i) (b) (ii) (d) (iii) (c) (iv) (c) (v) (b) 
1. (B) (i) (c) (ii) (c) (iii) (c) 
PART II 
1. (a)  The HealthPlus brand of wellness supplements may have the following
vision and mission: 
Vision: Vision implies the blueprint of the company’s future position. It 
describes where the organization wants to land. Mr. Arun should aim to 
position “HealthPlus” as India’s leading wellness supplements brand. It 
may have the vision to be India’s largest wellness supplements company 
that enhances health, promotes extraordinary well-being, and brings 
happiness to people. 
Mission: Mission delineates the firm’s business, its goals, and ways to 
reach the goals. It explains the reason for the existence of the firm in 
society. It is designed to help potential shareholders and investors 
understand the purpose of the company. Mr. Arun may identify the 
mission in the following lines: 
? To be in the business of wellness supplements to enhance the lives
of people and give them the confidence to lead a healthy life.
? To protect health by providing supplements that counteract harmful
elements in the environment.
? To produce wellness supplements using natural ingredients in an
environmentally sustainable manner.
(b) GreenGardens should conduct a SWOT analysis to strategically plan for
future growth. This analysis will help them understand their internal
strengths and weaknesses, as well as external opportunities and threats.
SWOT Analysis Grid for GreenGardens:
Strengths Weaknesses 
High-quality, pesticide-free 
produce 
Limited distribution channels 
Strong brand reputation for 
organic products 
Small scale of operations 
Dedicated and knowledgeable 
workforce 
Limited marketing and sales reach 
Opportunities Threats 
Rising demand for organic 
products 
Unpredictable weather conditions 
Potential to expand into new 
markets 
Intense competition from larger 
farms 
ANSWERS OF MODEL TEST PAPER 4 
PAPER 6B: STRATEGIC MANAGEMENT 
PART I 
603
Increased consumer 
awareness of health and 
sustainability 
Regulatory changes affecting 
organic farming 
By systematically evaluating these areas, GreenGardens can leverage 
its strengths, address its weaknesses, capitalize on opportunities, and 
mitigate threats. This strategic planning will guide them toward 
sustainable growth and success in the organic farming industry. 
(c) FreshDelight is employing a market development strategy to expand
its market presence. This approach involves introducing their existing
organic fruit juices to new markets, specifically targeting countries where
the demand for organic products is on the rise. To achieve this,
FreshDelight is launching targeted marketing campaigns and partnering
with local distributors to effectively introduce their products to these new
regions. Additionally, they are adapting their product packaging and
marketing messages to align with local preferences and regulations,
ensuring their offerings resonate with the new customer base. By
entering these emerging markets, FreshDelight aims to increase its
customer base and drive sales growth, leveraging the growing popularity
of organic products.
2. (a)  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.
(b) In matrix structure, functional and product forms are combined
simultaneously at the same level of the organization. Employees have
two superiors, a product / project manager and a functional manager.
604
The “home” department - that is, engineering, manufacturing, or 
marketing - is usually functional and is reasonably permanent. People 
from these functional units are often assigned temporarily to one or more 
product units or projects.  
The product units / projects are usually temporary and act like divisions 
in that they are differentiated on a product-market basis. The matrix 
structure may be very appropriate when organizations conclude that 
neither functional nor divisional forms, even when combined with 
horizontal linking mechanisms like strategic business units, are right for 
the implementation of their strategies. Matrix structure was developed to 
combine the stability of the functional structure with flexibility of the 
product form. It is very useful when the external environment (especially 
its technological and market aspects) is very complex and changeable. 
A matrix structure is most complex of all designs because it depends 
upon both vertical and horizontal flows of authority and communication. 
It may result in higher overhead costs due to more management 
positions.  
The matrix structure is often found in an organization when the following 
three conditions exist:  
1. Ideas need to be cross-fertilized across projects or products;
2. Resources are scarce; and
3. Abilities to process information and to make decisions need to be
improved.
3. (a)  Competitive landscape is a business analysis which identifies
competitors, either direct or indirect. Competitive landscape is about 
identifying and understanding the competitors and at the same time, it 
permits the comprehension of their vision, mission, core values, niche 
market, strengths and weaknesses.  
An in-depth investigation and analysis of a firm’s competition allows it to 
assess the competitors’ strengths and weaknesses in the marketplace 
and helps it to choose and implement effective strategies that will 
improve its competitive advantage.    
Steps to understand the competitive landscape for building competitive 
advantage are:  
(i) Identify the competitor: The first step to understanding the
competitive landscape is to identify the competitors in the firm’s
industry and have actual data about their respective market share.
(ii) Understand the competitors: Once the competitors have been
identified, the strategist can use market research report, internet,
newspapers, social media, industry reports, and various other
sources to understand the products and services offered by them
in different markets.
605
(iii) Determine the strengths of the competitors: What are the
strengths of the competitors? What do they do well? Do they offer
great products? Do they utilize marketing in a way that
comparatively reaches out to more consumers? Why do customers
give them their business?
(iv) Determine the weaknesses of the competitors: Weaknesses
(and strengths) can be identified by going through consumer
reports and reviews appearing in various media. After all,
consumers are often willing to give their opinions, especially when
the products or services are either great or very poor.
(v) Put all of the information together: At this stage, the strategist
should put together all information about competitors and draw
inference about what they are not offering and what the firm can do
to fill in the gaps. The strategist can also know the areas which
need to be strengthened by the firm.
(b) The role of Chief Executive Officer pertains to corporate level.
The corporate level of management consists of the Chief Executive
Officer (CEO) and other top-level executives. These individuals occupy
the apex of decision making within the organization.
The role of Chief Executive Officer is to:
1. oversee the development of strategies for the whole organization;
2. defining the mission and goals of the organization;
3. determining what businesses, it should be in;
4. allocating resources among the different businesses;
5. formulating, and implementing strategies that span individual
businesses;
6. providing leadership for the organization;
7. ensuring that the corporate and business level strategies which
company pursues are consistent with maximizing shareholders
wealth; and
8. managing the divestment and acquisition process.
4. (a)  Buyers of an industry’s products or services can sometimes exert
considerable pressure on existing firms to secure lower prices or better 
services. This is evident in situations where buyers enjoy a superior 
position than the seller of the product. This leverage is particularly 
evident when:  
(i) Buyers have full knowledge of the sources of products and their
substitutes.
(ii) They spend a lot of money on the industry’s products, i.e., they are
big buyers.
606
Page 5


1. (A) (i) (b) (ii) (d) (iii) (c) (iv) (c) (v) (b) 
1. (B) (i) (c) (ii) (c) (iii) (c) 
PART II 
1. (a)  The HealthPlus brand of wellness supplements may have the following
vision and mission: 
Vision: Vision implies the blueprint of the company’s future position. It 
describes where the organization wants to land. Mr. Arun should aim to 
position “HealthPlus” as India’s leading wellness supplements brand. It 
may have the vision to be India’s largest wellness supplements company 
that enhances health, promotes extraordinary well-being, and brings 
happiness to people. 
Mission: Mission delineates the firm’s business, its goals, and ways to 
reach the goals. It explains the reason for the existence of the firm in 
society. It is designed to help potential shareholders and investors 
understand the purpose of the company. Mr. Arun may identify the 
mission in the following lines: 
? To be in the business of wellness supplements to enhance the lives
of people and give them the confidence to lead a healthy life.
? To protect health by providing supplements that counteract harmful
elements in the environment.
? To produce wellness supplements using natural ingredients in an
environmentally sustainable manner.
(b) GreenGardens should conduct a SWOT analysis to strategically plan for
future growth. This analysis will help them understand their internal
strengths and weaknesses, as well as external opportunities and threats.
SWOT Analysis Grid for GreenGardens:
Strengths Weaknesses 
High-quality, pesticide-free 
produce 
Limited distribution channels 
Strong brand reputation for 
organic products 
Small scale of operations 
Dedicated and knowledgeable 
workforce 
Limited marketing and sales reach 
Opportunities Threats 
Rising demand for organic 
products 
Unpredictable weather conditions 
Potential to expand into new 
markets 
Intense competition from larger 
farms 
ANSWERS OF MODEL TEST PAPER 4 
PAPER 6B: STRATEGIC MANAGEMENT 
PART I 
603
Increased consumer 
awareness of health and 
sustainability 
Regulatory changes affecting 
organic farming 
By systematically evaluating these areas, GreenGardens can leverage 
its strengths, address its weaknesses, capitalize on opportunities, and 
mitigate threats. This strategic planning will guide them toward 
sustainable growth and success in the organic farming industry. 
(c) FreshDelight is employing a market development strategy to expand
its market presence. This approach involves introducing their existing
organic fruit juices to new markets, specifically targeting countries where
the demand for organic products is on the rise. To achieve this,
FreshDelight is launching targeted marketing campaigns and partnering
with local distributors to effectively introduce their products to these new
regions. Additionally, they are adapting their product packaging and
marketing messages to align with local preferences and regulations,
ensuring their offerings resonate with the new customer base. By
entering these emerging markets, FreshDelight aims to increase its
customer base and drive sales growth, leveraging the growing popularity
of organic products.
2. (a)  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.
(b) In matrix structure, functional and product forms are combined
simultaneously at the same level of the organization. Employees have
two superiors, a product / project manager and a functional manager.
604
The “home” department - that is, engineering, manufacturing, or 
marketing - is usually functional and is reasonably permanent. People 
from these functional units are often assigned temporarily to one or more 
product units or projects.  
The product units / projects are usually temporary and act like divisions 
in that they are differentiated on a product-market basis. The matrix 
structure may be very appropriate when organizations conclude that 
neither functional nor divisional forms, even when combined with 
horizontal linking mechanisms like strategic business units, are right for 
the implementation of their strategies. Matrix structure was developed to 
combine the stability of the functional structure with flexibility of the 
product form. It is very useful when the external environment (especially 
its technological and market aspects) is very complex and changeable. 
A matrix structure is most complex of all designs because it depends 
upon both vertical and horizontal flows of authority and communication. 
It may result in higher overhead costs due to more management 
positions.  
The matrix structure is often found in an organization when the following 
three conditions exist:  
1. Ideas need to be cross-fertilized across projects or products;
2. Resources are scarce; and
3. Abilities to process information and to make decisions need to be
improved.
3. (a)  Competitive landscape is a business analysis which identifies
competitors, either direct or indirect. Competitive landscape is about 
identifying and understanding the competitors and at the same time, it 
permits the comprehension of their vision, mission, core values, niche 
market, strengths and weaknesses.  
An in-depth investigation and analysis of a firm’s competition allows it to 
assess the competitors’ strengths and weaknesses in the marketplace 
and helps it to choose and implement effective strategies that will 
improve its competitive advantage.    
Steps to understand the competitive landscape for building competitive 
advantage are:  
(i) Identify the competitor: The first step to understanding the
competitive landscape is to identify the competitors in the firm’s
industry and have actual data about their respective market share.
(ii) Understand the competitors: Once the competitors have been
identified, the strategist can use market research report, internet,
newspapers, social media, industry reports, and various other
sources to understand the products and services offered by them
in different markets.
605
(iii) Determine the strengths of the competitors: What are the
strengths of the competitors? What do they do well? Do they offer
great products? Do they utilize marketing in a way that
comparatively reaches out to more consumers? Why do customers
give them their business?
(iv) Determine the weaknesses of the competitors: Weaknesses
(and strengths) can be identified by going through consumer
reports and reviews appearing in various media. After all,
consumers are often willing to give their opinions, especially when
the products or services are either great or very poor.
(v) Put all of the information together: At this stage, the strategist
should put together all information about competitors and draw
inference about what they are not offering and what the firm can do
to fill in the gaps. The strategist can also know the areas which
need to be strengthened by the firm.
(b) The role of Chief Executive Officer pertains to corporate level.
The corporate level of management consists of the Chief Executive
Officer (CEO) and other top-level executives. These individuals occupy
the apex of decision making within the organization.
The role of Chief Executive Officer is to:
1. oversee the development of strategies for the whole organization;
2. defining the mission and goals of the organization;
3. determining what businesses, it should be in;
4. allocating resources among the different businesses;
5. formulating, and implementing strategies that span individual
businesses;
6. providing leadership for the organization;
7. ensuring that the corporate and business level strategies which
company pursues are consistent with maximizing shareholders
wealth; and
8. managing the divestment and acquisition process.
4. (a)  Buyers of an industry’s products or services can sometimes exert
considerable pressure on existing firms to secure lower prices or better 
services. This is evident in situations where buyers enjoy a superior 
position than the seller of the product. This leverage is particularly 
evident when:  
(i) Buyers have full knowledge of the sources of products and their
substitutes.
(ii) They spend a lot of money on the industry’s products, i.e., they are
big buyers.
606
(iii) The industry’s product is not perceived as critical to the buyer’s
needs and buyers are more concentrated than firms supplying the
product. They can easily switch to the substitutes available.
(b) According to C.K. Prahalad and Gary Hamel, major core competencies
are identified in three areas - competitor differentiation, customer value,
and application to other markets.
? Competitor differentiation: The company can consider having a
core competence if the competence is unique and it is difficult for
competitors to imitate. This can provide a company an edge
compared to competitors. It allows the company to provide better
products or services to market with no fear that competitors can
copy it.
? Customer value: When purchasing a product or service it has to 
deliver a fundamental benefit for the end customer in order to be a 
core competence. It will include all the skills needed to provide 
fundamental benefits. The service or the product has to have real 
impact on the customer as the reason to choose to purchase them. 
If customer has chosen the company without this impact, then 
competence is not a core competence.  
? Application of competencies to other markets: Core 
competence must be applicable to the whole organization; it cannot 
be only one particular skill or specified area of expertise. Therefore, 
although some special capability would be essential or crucial for 
the success of business activity, it will not be considered as core 
competence, if it is not fundamental from the whole organization’s 
point of view. Thus, a core competence is a unique set of skills and 
expertise, which will be used throughout the organisation to open 
up potential markets to be exploited.  
OR 
Organizations should consider the following factors when choosing 
strategic performance measures: 
1. Relevance: The measure should be relevant to the organization's
goals and objectives, providing actionable and meaningful
information. This ensures that the performance measures are
directly aligned with what the organization aims to achieve, and that
the information obtained can drive improvements and strategic
decisions.
2. Data Availability: The measure should be based on data that is
readily available and can be collected and analyzed in a timely
manner. This is important to ensure that the organization can
efficiently gather and utilize data without significant delays or
obstacles.
3. Data Quality: The measure should be based on high-quality data
that is accurate and reliable. Accurate and reliable data are crucial
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