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

MS-91

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.

MS-9I

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

MS-91 1 0

"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

MS-95

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