Model paper

Dean's Office Official Model Question Paper

MGT 240 · Strategic Management

examination paper loaded.
Programme
BBM
Academic year
Semester 8
Paper type
Official Model Question
Sitting
Dean's Office Blueprint
Full marks
60
Duration
180 minutes

Tribhuvan University

Faculty of Management

Office of the Dean

Official Model Question Paper / Dean's Office Blueprint

Course: MGT 240 · Strategic Management

Level: Bachelor of Business Management (BBM) · Semester 8

Full Marks: 60

Time: 3 hrs.

Candidates are required to give their answers in their own words as far as practicable. The figures in the margin indicate full marks.

Group A

Brief Answer Questions. Attempt ALL questions.

[5 × 2 = 10]

  1. Define Strategy according to Henry Mintzberg’s 5 Ps framework.

    [2]
    View model solution

    Answer: Henry Mintzberg defined strategy through the 5 Ps Framework:

    1. Plan: A consciously intended course of action.
    2. Pattern: Consistency in behavior over time.
    3. Position: Locating particular products in particular markets.
    4. Perspective: An organization’s fundamental way of viewing the world.
    5. Ploy: A specific tactical maneuver to outwit a competitor.

  2. What is Strategic Intent? State its three hierarchy elements.

    [2]
    View model solution

    Answer: Strategic Intent: An organization’s high-level ambition, driving vision, and enduring commitment to achieve leadership in its industry by stretching beyond current resources. Three Elements:

    1. Vision Statement
    2. Mission Statement
    3. Strategic Objectives and Goals

  3. What does the VRIO Framework evaluate in internal resource analysis?

    [2]
    View model solution

    Answer: Developed by Jay Barney, the VRIO Framework evaluates an internal resource or capability to determine whether it confers a sustained competitive advantage based on four questions:

    • V: Is it Valuable?
    • R: Is it Rare?
    • I: Is it costly or difficult to Imitate?
    • O: Is the firm Organized to capture value?

  4. Distinguish between Merger and Acquisition.

    [2]
    View model solution

    Answer:

    • Merger: A mutual, friendly consolidation of two commercial entities of roughly similar scale into a single combined legal entity on equal terms.
    • Acquisition (Takeover): One firm (the acquirer) purchases and assumes controlling ownership of another target firm, often absorbing it into the acquiring corporate structure.

  5. Define Balanced Scorecard (BSC) and list its four performance perspectives.

    [2]
    View model solution

    Answer: Balanced Scorecard (Kaplan & Norton): A strategic management performance metric used to align business activities to corporate vision and strategy across four balanced perspectives:

    1. Financial Perspective
    2. Customer Perspective
    3. Internal Business Processes Perspective
    4. Learning and Growth (Organizational Capital) Perspective

Group B

Descriptive Answer Questions. Attempt any THREE questions.

[3 × 10 = 30]

  1. Explain Michael Porter’s Generic Competitive Strategies. What strategic risks are associated with pursuing a Cost Leadership strategy versus a Differentiation strategy?

    [10]
    View model solution

    1. Porter’s Generic Competitive Strategies Matrix

                          STRATEGIC ADVANTAGE
                  Low Cost           Differentiation (Uniqueness)
           +-----------------------+-----------------------------+
   Broad   |   Cost Leadership     |       Differentiation       |
STRATEGIC  +-----------------------+-----------------------------+
   SCOPE   |                       |                             |
  Narrow   |      Cost Focus       |     Differentiation Focus   |
           +-----------------------+-----------------------------+

    2. Strategic Risks Comparison

    Generic Strategy Primary Mechanisms Inherent Strategic Risks
    Cost Leadership - Economies of scale<br>- Lean overheads<br>- State-of-the-art automated equipment - Competitors easily copy low-cost technology.<br>- Cost inflation erodes margin advantage.<br>- Relentless focus on cost blinds management to shifts in consumer taste or design quality.
    Differentiation - Unique brand prestige<br>- Superior engineering/R&D<br>- Exceptional customer service - Cost differential between low-cost rivals and differentiated brand becomes too large for buyers to justify.<br>- Imitators and counterfeiters dilute perceived uniqueness.<br>- Customer preferences evolve away from the differentiated attribute.
    Stuck in the Middle Failing to achieve either cost leadership or meaningful differentiation. Results in below-average industry profitability and competitive vulnerability.

  2. What is Corporate Portfolio Analysis? Explain the quadrants of the Boston Consulting Group (BCG) Growth-Share Matrix and discuss its strategic limitations.

    [10]
    View model solution

    1. The BCG Growth-Share Matrix

                  Relative Market Share (Business Unit Strength)
                   HIGH                   LOW
           +----------------------+----------------------+
      H    |                      |                      |
      I    |       STARS          |   QUESTION MARKS     |
      G    |  (High Growth,       |  (High Growth,       |
      H    |   High Share)        |   Low Share)         |
Market     +----------------------+----------------------+
Growth     |                      |                      |
Rate  L    |     CASH COWS        |        DOGS          |
      O    |  (Low Growth,        |  (Low Growth,        |
      W    |   High Share)        |   Low Share)         |
           +----------------------+----------------------+
    • Stars: High growth, high market share. Require heavy capital reinvestment to maintain dominance; mature into Cash Cows.
    • Cash Cows: Low growth, high market share. Generate surplus cash flows with minimal maintenance capital; funds used to nourish Stars and promising Question Marks.
    • Question Marks: High growth, low share. Highly cash-consumptive; requires strategic decision: build aggressively or divest.
    • Dogs: Low growth, low share. Stagnant units tying up capital; candidates for liquidation or divestment.

    2. Strategic Limitations of the BCG Matrix

    1. Oversimplified 2-Dimensional View: Ignores other critical dimensions of market attractiveness (regulatory barriers, technological innovation) and firm strength (patents, brand equity).
    2. Assumption of Link between Share and Profitability: High market share does not automatically guarantee high profitability, especially in low-margin commodity price wars.
    3. Internal Synergies Ignored: A "Dog" business unit may provide critical shared distribution or brand halo benefits to a "Star" unit; divesting it blindly damages the core business.

  3. Examine the McKinsey 7S Framework for strategy implementation. How does misalignment between the ‘Hard Ss’ and ‘Soft Ss’ cause strategy execution failure?

    [10]
    View model solution

    1. The McKinsey 7S Model

    Formulated by Waterman, Peters, and Phillips, the 7S Framework asserts that effective strategy execution requires harmonious alignment across seven interdependent internal organizational elements:

        Hard Elements (Formal & Tangible)      Soft Elements (Cultural & Behavioral)
    - Strategy                             - Shared Values (Core culture)
    - Structure                            - Style (Leadership behavior)
    - Systems (Processes & IT)             - Staff (People & demographics)
                                           - Skills (Institutional capabilities)

    2. Causes of Execution Failure via Misalignment

    • The "Hard S" Bias: Executive leadership frequently commits the mistake of restructuring the formal hierarchy (Structure) and issuing strategic memos (Strategy) while completely ignoring employee competencies (Skills) and organizational culture (Shared Values).
    • Illustrative Banking Misalignment: If a commercial bank in Nepal announces a strategic pivot to digital-first mobile banking (Strategy) but maintains an outdated 1990s legacy core-banking database (Systems), branch tellers lack digital skills (Skills), and leadership penalizes technical errors rather than rewarding innovation (Style), the digital transformation collapses completely.
    • Holistic Execution: Strategy succeeds only when all seven elements point in the identical directional vector.

  4. What is Strategic Control? Compare Premise Control, Implementation Control, Strategic Surveillance, and Special Alert Control.

    [10]
    View model solution

    1. Concept of Strategic Control

    Strategic Control is the continuous process of monitoring and evaluating the execution of a strategy to ensure that strategic premises remain valid, implementation is on course, and corrective adaptations are instituted in response to unexpected environmental disruptions.

    2. The Four Types of Strategic Control

                            The Four Types of Strategic Control
                                         |
     +-----------------+-----------------+-----------------+-----------------+
     |                 |                                   |                 |
Premise Control   Implementation Control              Strategic        Special Alert Control
(Assumptions)     (Milestone monitoring)             Surveillance      (Crisis response)
    1. Premise Control: Systematically checks whether the fundamental assumptions (premises) regarding economic growth, inflation, and competitor reactions upon which the strategy was built remain valid over time.
    2. Implementation Control: Assesses whether the overall strategy should be modified in light of incremental milestone achievements (e.g., assessing an acquisition project after 6 months).
    3. Strategic Surveillance: Broad, unfocused environmental scanning designed to monitor a wide range of external events (technological, legal, geopolitical) to detect unforeseen opportunities or threats.
    4. Special Alert Control: Rapid, thorough reassessment of the firm’s strategy in response to sudden, unexpected dramatic events (e.g., massive earthquake, sudden regulatory ban on an industry, pandemic lockdowns).

Group C

Comprehensive Answer / Case Analysis Question.

[1 × 20 = 20]

  1. Read the corporate strategy case and answer all questions:

    Case Scenario: Buddha Air vs. High-Speed Highway Connectivity Buddha Air, established in 1997, is Nepal’s dominant domestic airline, operating an extensive fleet of ATR-72 and ATR-42 aircraft commanding over 60% market share on primary domestic trunk routes (Kathmandu to Pokhara, Biratnagar, Bhairahawa, Nepalgunj, and Dhangadhi). The airline built an enviable reputation for on-time performance, meticulous aircraft maintenance, and high passenger safety.

    However, the airline faces profound strategic disruptions:

    1. High-Speed Expressway Infrastructure: The Government of Nepal is rapidly completing the Kathmandu-Tarai Fast Track expressway (reducing travel time to 1 hour) and modernizing the Narayangadh-Butwal highway corridor. Ground travel times to major southern cities will be slashed dramatically, threatening air passenger demand.
    2. Aviation Turbine Fuel (ATF) Volatility: Nepal Oil Corporation (NOC) charges among the highest jet fuel prices in South Asia, severely squeezing airline operating profit margins.
    3. New International Airports Underutilization: The newly constructed Pokhara International Airport (PIA) and Gautam Buddha International Airport (GBIA) in Bhairahawa carry high airport landing and navigation fees without generating anticipated international scheduled passenger traffic.
    4. Dollar Currency Mismatch: Aircraft leases, spare engine overhauls, and international insurance are denominated in US Dollars, while 85% of passenger ticketing revenues are earned in depreciating Nepalese Rupees.

    Required: (a) Conduct a comprehensive SWOT Analysis for Buddha Air in light of the emerging infrastructural landscape. (6 Marks) (b) Develop a structured TOWS Strategic Matrix, formulating at least two actionable strategies under each of the SO, ST, WO, and WT quadrants. (8 Marks) (c) Recommend an actionable Corporate Growth and Diversification Strategy for Buddha Air to sustain revenue leadership over the coming decade. (6 Marks)

    [20]
    View model solution

    Case Solution: Buddha Air

    Part (a): Comprehensive SWOT Analysis (6 Marks)

    Category Strategic Internal & External Factors
    Strengths (S) - 60% domestic trunk route market share.<br>- Modern, fuel-efficient, standardized fleet of ATR-72/42 aircraft.<br>- Exceptional passenger trust, safety record, and dedicated maintenance hangar in Kathmandu.<br>- Strong operational cash flows and experienced flight crew.
    Weaknesses (W) - Revenue-currency mismatch (US dollar operating expenses vs Nepalese rupee ticket sales).<br>- Limited international route network outside regional flights to Varanasi/Kolkata.<br>- High fixed overheads and capital commitments tied to aircraft lease repayments.
    Opportunities (O) - Expanding cross-border regional tourism connections linking Pokhara/Bhairahawa directly with Indian tier-2 cities (Lucknow, Gorakhpur, Patna, Varanasi).<br>- High-end mountain flight tourism and regional charter operations.<br>- Establishing an internationally certified third-party MRO (Maintenance, Repair, and Overhaul) service hub for South Asian ATR operators.
    Threats (T) - Completion of the Kathmandu-Tarai Fast Track expressway diverting price-sensitive short-haul passengers to 1-hour highway coaches.<br>- Volatile aviation turbine fuel (ATF) price shocks by NOC.<br>- Severe foreign exchange depreciation eroding operating margins.

    Part (b): TOWS Strategic Matrix (8 Marks)

    Factors Strengths (S) Weaknesses (W)
    Opportunities (O) SO Strategies (Maxi-Maxi):<br>- SO-1: Utilize fleet capacity to launch direct cross-border regional flights connecting Bhairahawa/Pokhara to major North Indian pilgrimage cities (Varanasi, Ayodhya, Lucknow).<br>- SO-2: Leverage certified hangar facilities to establish a commercial MRO division servicing regional ATR airlines in South Asia. WO Strategies (Mini-Maxi):<br>- WO-1: Expand international regional flights to earn US dollar ticket revenues, directly hedging foreign exchange currency exposure.<br>- WO-2: Form strategic codeshare partnerships with international long-haul carriers landing in Kathmandu to feed incoming foreign tourists into domestic tourist circuits.
    Threats (T) ST Strategies (Maxi-Mini):<br>- ST-1: Realign domestic schedules toward long-haul routes (Nepalgunj, Dhangadhi, Bhadrapur, mountain airfields) where highway expressways cannot compete with 50-minute flights.<br>- ST-2: Introduce tiered dynamic pricing and express business commuter flights with dedicated fast-track airport check-in to retain time-sensitive executive travelers. WT Strategies (Mini-Mini):<br>- WT-1 (Cost Retrenchment): Phase out older ATR-42 aircraft to standardize exclusively on ATR-72-500s, slashing inventory parts inventory costs and fuel consumption.<br>- WT-2: Diversify into non-aviation hospitality assets (boutique transit resorts, airport lounge services) to hedge against aviation margin shocks.

    Part (c): Actionable Corporate Growth and Diversification Strategy (6 Marks)

    1. Route Rebalancing (Long-Haul & Cross-Border Focus): Shift domestic capacity away from vulnerable short routes (Kathmandu-Simara) toward long-haul western corridors (Kathmandu-Nepalgunj, Kathmandu-Dhangadhi) and regional cross-border flights connecting Pokhara and Bhairahawa to Indian metropolitan centers.
    2. Commercial MRO (Maintenance, Repair & Overhaul) Hub: Capitalize on its DGCA-certified engineering hangar at Tribhuvan International Airport to offer contract maintenance and engine overhauls to regional turboprop operators across South and Southeast Asia, generating steady foreign currency revenues.
    3. Integrated Tourism Packages (Hospitality Forward Integration): Partner with luxury resorts in Pokhara, Chitwan, and Bardia to sell bundled high-margin air-and-resort experiential packages ("Fly-and-Stay"), insulating the company from standalone airfare price competition.