Date: 14 th
December 2012
Time: 1400 Hrs – 1700 Hrs Duration: Three (03) Hrs
Total marks for this paper is 100 marks. There are two parts in this question paper.
All questions in Part One are compulsory . It includes a mini case.
Part Two includes 6 Essay Type Questions . Answer 03 questions from this part.
Instructions to candidates
1 State your Registration Number on the front cover of the answer book and on each and every additional paper attached to it. Your name must not appear anywhere in the answer book or answer scripts.
2. Always start answering a question on a new page.
3. You are reminded that answers should not be written in pencil or red pen except in drawing diagrams.
4. Answer the questions using:
 Effective arrangement and presentation
 Clarity of expression
 Logical and precise arguments
 Clear diagrams and examples where appropriate
5. Illegible hand writing and language errors will be penalised.
Page 1 of 7

Question 01: Case study
‘’Unlocking our Potential with pride, passion and unrelenting progress’’ says Proton
Holdings Berhad which was established in 1983 as part of an ambitious National
Industrialisation plan of Malaysia. It was Malaysia's only carmaker until the establishment of the secondary national carmaker, Perodua .The main objectives of the establishment of
Proton were to spearhead the automotive industrialization process and manufacturing industries, to acquire/upgrade technology and industrial skills within the automotive manufacturing industry; and to strengthen the international competitiveness of Malaysia’s industrial capability. Malaysia’s capabilities in automobile engineering, research, development and manufacturing shows through Proton and it works as a symbol of national pride. Proton looks likes innovation and they challenge convention, always seeking new and better ways of doing things. They view change as opportunity. ‘’Proton’s foremost pledge is to deliver quality cars at an affordable price’’. In order to keep this promise;
Proton has invested in a two tiered approach: in-house improvement and working with its vendor base. In-house, Proton has launched a ‘’Sero Defect Campaign’’, operations as well.
For more than two decades since its establishment, that stake was jointly owned by
Mitsubishi Motors and parent Mitsubishi Corp. which each held a 7.93% shares in Proton until they sold it in March 2004. The Mitsubishi-Proton partnership had come to an end due to a lack of technology transfer. Initially the components of the car were entirely manufactured by Mitsubishi but slowly local parts were used as technologies were transferred and skills were gained. The Proton Waja which launched in early 2001, was the first car model designed internally by Proton. In 2006–2010, Perodua became the bestselling car company in Malaysia. In the first half 2011, the tables were turned where a highlight of the figures was that Proton had overtaken Perodua to be the best-selling brand that year. It had been many years since the first national carmaker has been No.1. In 2012,
58% of market share was concentrated into the two domestic carmakers, Perodua and
Proton. The leader was Perodua with 32.9% market share; the second was Proton, with
25.2% of share. Toyota was fast growing in third position, with 17.3%, up 2.6 from last year, but in March and April Toyota share exceeded 19%.
Proton trusts, respects and shares in knowledge fostering teamwork at the workplace.
Proton provides adequate skills and knowledge to all levels of personnel through systematic and structured training programmes. To boost the quality of its products, Proton performs a continuous Company-wide quality improvement programme and quality-conscious work culture and they consider the following principles: Quality in everything, Quality in the way things are done, Quality in spending, including reducing materials costs; High-quality products Quality services to customers, including after-sales support. In 1996, Proton acquired a 63.75% share in Lotus Group International Limited and now 100%.With the
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acquisition of Lotus technologies, Proton gained an additional source of engineering and automotive expertise. In October 2004; Proton announced that an understanding had been reached with Volkswagen AG of Germany to establish a strategic partnership . Under the tieup, the two carmakers were expected to exploit each other's strengths. Proton would gain access to Volkswagen Group's superior technical capabilities and technology . In return,
Volkswagen Group would utilise Proton's spare capacity .In 2007; Proton announced that talks regarding any partnership with Volkswagen Group had ended with immediate effect.
In order to survive in the complex and volatile global market Proton consistently requires new updated directions and insight into the philosophy of new automotive business trends.
Business innovation through globalisation, Green technology, alternative fuel and sustainable technology are some of the current driving factors for continual existence.
Proton is committed to the development of its green technology in line with the government’s initiative to make Malaysia a regional hub for hybrid, electric and environment-friendly vehicles. Proton will be conducting a Fleet Test Vehicle Programme for Range Extender Electric Vehicle (REEV) in collaboration with the Malaysian Government in the second half of 2011.Proton’s decision to be involved in the hybrid and Electric Vehicle
(EV) power trains is strategic in nature. Exora REEV was developed to reduce CO2 emissions.
In conjunction with the Government’s green growth agenda, and to provide consumers with the best fuel economy solution and improved vehicle performance. It is realised by integrating leading edge power train electrification and engine-generator systems through serial hybridisation The Proton REEV innovation was proven on the global stage when Exora
REEV won the Best E-REV category in the Brighton to London Future Car Challenge in
November 2010. This serves as a testament to Proton’s engineering prowess and technological advancement. They believe that with the new Proton hybrids, we will be able to compete with global OEMs who have already launched their hybrid cars in the market.
The EMAS project was the trigger for Proton’s efforts to meet global trends and to deliver a new family of world-class and eco-friendly vehicles, and a message to the public that Proton will not compromise on space, quality and performance through the electrification process.
The Proton’s Critical Mass Scheme serves as a platform to establish the critical mass within
Proton employees as a whole and the Engineering Division particularly by increasing the ratio of PhD and Masters Holders. This programme is one of the MOU components under the Proton-University Technology Malaysia (UTM) collaboration initiative. Using the resources, technology, innovations, manpower and design capabilities which includes the expertise of Proton's wholly-owned subsidiary Lotus Engineering UK, one of the world's leading automotive engineering consultancy companies, has provided Proton with an invaluable resource which has helped place the national car company at the forefront of the automotive industry.
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A competence gap analysis and improvement strategy was undertaken resulting in strategic partnerships with other leading engineering service provider to fill the gaps and jointly exploit business opportunities .Proton and Mitsubishi Motors Corporation (MMC) have jointly announced that they are in serious discussion for strategic collaboration to further strengthen the competitiveness of both companies again. The items being considered for collaboration include the following Joint production of engines in Malaysia’ Consignment production of MMC-brand vehicles at Proton facilities-,Sharing of major parts and components between MMC’s “Global Small” and Proton’s upcoming “Global Small Car” ,
Provision of MMC’s future tech such as electric, plug-in hybrid and hybrid vehicle technology .
According to the statement, Proton and MMC had “jointly proceeded with feasibility studies since late 2010 ″ to identify these areas of collaboration that improves global competitiveness for both parties. As results of collaboration with Mitsubishi Motors, led the introduction of the ‘’ Inspira ’’ and many models. In 2011, Proton Inspire won best
Value-for-Money Family Car, Proton Saga as Best People’s Car in Asian Auto – Auto Industry
Awards. Saga was named Best Model of the Year for two consecutive years 2009 and 2010.
The Group’s portfolio is the world-renowned Lotus sports car brand, with models such as
Elise, Exige, Europe and the Evora, the latest super car that remains true to Lotus’ heritage and core philosophies of being Visually Stunning, Exhilarating, Agile and Responsive, to suit a range of customer demands and preferences. Proton was talking with Nissan on collaboration, but it’s clear now that it didn’t work out.
(Source: www.proton.com)
(a) Explain the importance of innovations for Proton Holdings Berhad. Justify your answer using evidences from the case study above.
(08 Marks)
(b) Explain how Proton creates an innovative environment within the organisation.
(08 Marks)
(c) Explain the interactive model of innovation by Rothwell & Zegweld (1985). Has Proton
Holdings Berhad applied the above Model in their innovations? Justify your answer with the theoretical knowledge and evidence from the case study given above.
(10 Marks)
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(d) Discuss why Proton Holdings Berhad is trying to create strategic alliances with other companies.
(08 Marks)
(e) ‘’Proton’s foremost pledge is to deliver quality cars at an affordable price’’. In order to achieving the above, Proton has invested in a two tiered approach: in-house improvement and working with its vendor base. In-house, Proton has launched a ‘’Zero
Defect Campaign’’.
Do you agree with the above approach of Proton Holdings Berhad? Justify your answer using your knowledge on strategic marketing.
(06 Marks)
(Total 40 Marks)
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PART TWO
Answer three questions only
Question 02
(a) Adler and Shelter (1990) has suggested the dimensions of organisational knowledge base. Explain those dimensions using examples.
(10 Marks)
(b) Discuss the internal knowledge accumulation process of an innovative firm.
(10 Marks)
(Total 20 Marks)
Question 03
(a) Explain the different forms of Strategic Alliances. Provide examples known to you.
(12 Marks)
(b) Briefly discuss the risks and limitations of Strategic Alliances.
(08 Marks)
(Total 20 Marks)
Question 04
(a) Define the term ‘Technology Transfer’’
(03 Marks)
(b) Explain ‘’4A’s Conceptual Framework of Technology Transfer and Inward Technology
Transfer’’ of Technology Transfer.
(07 Marks)
(c) Select any company which is known to you and discuss how that selected company is applying/ (applied) 4A’s Conceptual Framework of Technology Transfer and
Inward Technology Transfer.
(10 Marks)
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(Total 20 Marks)
Question 05
(a) Explain the characteristics of a service and discuss how those characteristics differ from products. (10 Marks)
(b) Explain the service innovation process.
(10 Marks)
(Total 20 Marks)
Question 06
(a) As a manager for an innovative organisation, your duty is to build suitable environment which leads to a root for innovations. Explain how you propagate a virtuous cycle of innovation.
(10 Marks)
(b) Critically discuss how ERP systems have an impact on innovations. You need to highlight both benefits and problems of ERP systems which relates to innovations.
(10 Marks)
(Total 20 Marks)
Question 07
(a) Scholefield (1993) suggests that there are two forms of activity for a Research and
Development Department, Growth and Maintain. According to him, Level of
Research can be subdivided based on technology leverage. Explain those categories of research.
(10 Marks)
(b) Discuss emerging trends in Marketing of Services.
(10 Marks)
(Total 20 Marks)
-END- (Total 60 Marks)
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