Model paper

Dean's Office Official Model Question Paper

MGT 312 · Strategic Management

Programme
BHM
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 312 · Strategic Management

Level: Bachelor of Hotel Management (BHM) · Semester 8

Full Marks: 60

Time: 3 hrs.

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

Group A

Brief Answer Questions. Attempt ALL questions. (5 × 2 = 10)

[5*2=10]

  1. What is Formality in Strategic Management?

    [2]
    View model solution

    Formality in Strategic Management

    The degree to which strategic planning activities, roles, schedules, and decision-making processes are formally documented, structured, and systematically followed throughout an organization.

  2. Define a Strategic Business Unit (SBU).

    [2]
    View model solution

    Strategic Business Unit (SBU)

    An autonomous operational division or product-market segment within a large diversified enterprise that has its own distinct mission, identifiable competitors, and dedicated executive management with full profit-and-loss accountability.

  3. What is the BCG Growth-Share Matrix? Name its four quadrants.

    [2]
    View model solution

    BCG Growth-Share Matrix

    A portfolio analysis tool evaluating business units based on Market Growth Rate and Relative Market Share: 1. Stars, 2. Cash Cows, 3. Question Marks, 4. Dogs.

  4. Differentiate between cost leadership and differentiation strategies.

    [2]
    View model solution

    Cost Leadership vs. Differentiation

    • Cost Leadership: Competing by driving operational costs to the absolute industry minimum to offer low prices.
    • Differentiation: Competing by offering unique, superior product attributes for which customers willingly pay a price premium.

  5. What is a Turnaround Strategy?

    [2]
    View model solution

    Turnaround Strategy

    A retrenchment strategy adopted by an underperforming or financially distressed firm focused on aggressive cost-cutting, asset divestment, and restructuring to halt decline and return to profitability.

Group B

Descriptive Answer Questions. Attempt any THREE questions. (3 × 10 = 30)

[3*10=30]

  1. Explain the Strategic Management Model. Detail the interplay between environmental scanning, strategy formulation, strategy implementation, and strategic evaluation.

    [10]
    View model solution

    The Comprehensive Strategic Management Model

    1. Environmental Scanning (SWOT / PESTLE): Monitoring external macroeconomic, technological, and competitive forces alongside internal resource strengths and weaknesses.
    2. Strategy Formulation: Establishing long-term organizational vision, setting quantitative objectives, and formulating corporate, business, and functional strategies.
    3. Strategy Implementation: Translating strategic plans into organizational reality by aligning organizational structure, allocating capital budgets, and leading cultural change.
    4. Strategic Evaluation and Control: Measuring actual performance against benchmarks, evaluating variances via the Balanced Scorecard, and initiating corrective actions.

  2. Explain the BCG Matrix and GE/McKinsey Nine-Cell Matrix as portfolio planning models for a diversified hotel and leisure corporation.

    [10]
    View model solution

    Portfolio Planning Matrices in Hospitality

    1. BCG Growth-Share Matrix:

    • Cash Cows (Low Growth, High Share): Core city business hotels generating high steady cash flows; used to fund emerging ventures.
    • Stars (High Growth, High Share): Luxury adventure eco-resorts in booming destinations; require capital reinvestment to defend leadership.
    • Question Marks (High Growth, Low Share): New virtual cloud kitchen startups; require capital injection to become stars or should be divested.
    • Dogs (Low Growth, Low Share): Outdated highway motels; candidates for liquidation.

    2. GE/McKinsey 9-Cell Matrix:

    Evaluates business units across Industry Attractiveness (market size, growth rate, margins) and Business Unit Competitive Strength (brand equity, technological capabilities, location advantage), categorized into: Invest/Grow, Selectivity/Hold, or Harvest/Divest.

  3. Discuss the strategic challenges of Strategy Implementation. Why do up to 70% of formulated strategies fail during execution in the service industry?

    [10]
    View model solution

    Strategy Implementation Failures in Hospitality

    1. Organizational Resistance to Change: Frontline staff and supervisors cling to entrenched operating habits due to fear of unfamiliar systems.
    2. Misaligned Organizational Structure: Attempting to execute an agile digital guest strategy within a rigid, bureaucratic hierarchy.
    3. Resource Starvation: Inadequate allocation of capital budgets and training hours to support strategic imperatives.
    4. Poor Internal Communication: Failure of senior leadership to cascade the strategic vision down to shift workers.
    5. Lack of Performance Alignment: Incentivizing managers purely on short-term quarterly profits rather than long-term strategic execution milestones.

  4. Explain Strategic Alliances and Joint Ventures in global hotel brand expansion. Compare management contracts with franchise agreements.

    [10]
    View model solution

    Strategic Alliances and Hotel Expansion Models

    1. Hotel Management Contract:
      • Mechanism: Property owner retains real estate ownership and operational financial risk, while an international hotel chain (e.g., Marriott, Hyatt) operates the hotel using its brand, systems, and personnel in exchange for a base management fee (2–4% of revenue) plus an incentive fee (8–10% of gross operating profit).
    2. Franchise Agreement:
      • Mechanism: The owner operates the property independently while licensing the brand name and reservation distribution network, paying a royalty fee (4–6% of sales).
    3. Joint Ventures:
      • Two corporations create a shared legal entity to share equity capital, localized political knowledge, and brand technology (e.g., local developer partnering 50/50 with an international hotel chain).

Group C

Comprehensive Answer / Case Analysis Question. (1 × 20 = 20)

[1*20=20]

  1. Case Study: Strategic Acquisition & Portfolio Diversification at Annapurna Hospitality Group

    Annapurna Hospitality Group (AHG), a leading Nepalese hotel conglomerate operating two five-star properties in Kathmandu and Pokhara, is evaluating a NPR 1.2 billion capital deployment plan. AHG’s core luxury city hotels face decelerating revenue growth due to market saturation. The board is debating three strategic alternatives:

    • Alternative 1 (Related Concentric Diversification): Develop a chain of 6 mid-scale 3-star business hotels under a new brand name (‘Annapurna Express’) along major commercial transit corridors (Biratnagar, Butwal, Nepalgunj, Bhairahawa).
    • Alternative 2 (Market Development & Luxury Eco-Tourism): Acquire and redevelop a heritage wildlife safari lodge in Chitwan National Park and an ultra-luxury tented camp in Upper Mustang.
    • Alternative 3 (Backward Vertical Integration): Acquire a 500-acre organic agriculture and dairy farm in Makwanpur to supply 100% of the group’s F&B operations.

    As Chief Strategy Officer: a. Conduct a Strategic Evaluation of the three alternatives using Suitability, Feasibility, and Acceptability (SFA) criteria. b. Formulate a final strategic recommendation for AHG with clear rationale. c. Design a corporate risk management framework for the chosen strategy. d. Establish key implementation milestones for a 36-month execution horizon.

    [20]
    View model solution

    Strategic Portfolio Evaluation & Corporate Growth Blueprint: AHG

    a. Strategic Evaluation using SFA Framework

    1. Alternative 1 (Mid-Scale Business Express Hotels):
      • Suitability: High; capitalizes on rising domestic business travel along trade corridors.
      • Feasibility: High; lower construction and operational cost per key.
      • Acceptability: Strong steady cash flow yields (18–22% ROI).
    2. Alternative 2 (Luxury Eco-Tourism - Chitwan & Mustang):
      • Suitability: High; aligns perfectly with AHG’s luxury brand DNA and captures ultra-high-margin foreign leisure spending.
      • Feasibility: Moderate; seasonal access risks in Mustang and strict conservation regulations in Chitwan.
      • Acceptability: High ADR (USD 350+), establishing prestigious global brand equity.
    3. Alternative 3 (Backward Integration - Farm):
      • Suitability: Low to moderate; farming requires agricultural expertise outside AHG’s core management capabilities.
      • Feasibility: Distracts executive leadership from hospitality operations.
      • Acceptability: Low financial return on invested capital compared to hotels.

    b. Strategic Recommendation

    Adopt a Hybrid Growth Strategy combining Alternatives 1 and 2 (65% Alternative 1 / 35% Alternative 2) while rejecting Alternative 3 (farm supplies can be secured via contract farming without capital acquisition):

    • Deploy NPR 750 million to roll out the ‘Annapurna Express’ mid-scale chain to generate high-volume, recession-resilient domestic cash flows.
    • Deploy NPR 450 million to acquire the Chitwan luxury safari lodge to strengthen international brand prestige and complete a ‘Golden Triangle’ luxury circuit (Kathmandu - Pokhara - Chitwan).

    c. Risk Management Framework

    • Construction Overruns: Enforce guaranteed maximum price (GMP) contracts with Tier-1 contractors.
    • Brand Dilution: Maintain strict brand separation: ‘Annapurna Luxury Collection’ distinct from ‘Annapurna Express’.

    d. 36-Month Implementation Milestones

    • Months 1–12: Complete Chitwan lodge refurbishment and launch flagship Annapurna Express in Bhairahawa near the international airport.
    • Months 13–24: Open Annapurna Express locations in Butwal and Biratnagar; achieve central reservation engine integration.
    • Months 25–36: Complete Nepalgunj and Dhangadhi properties; achieve overall portfolio EBITDA of NPR 280 million.