MGMT 4000 Final Exam
Instructions (Please read carefully before you start):
You have 2 hours to complete this scenario-based exam. There will be three scenarios in total,
and you will pick two out of three to respond to. If you answer all three scenarios, only the first
two will be graded. Each scenario is worth 15 points, for a total of 30 points (15 points x 2
scenarios). Your responses will be in short answer format. Each scenario has 3 questions
associated with it, and all 3 questions must be answered for each scenario you choose to
answer. For example, you cannot choose to answer Scenario 1, Question 1 only. You must
answer questions 1-3. Note that not all questions are weighted the same, so some will require
more elaboration than others.
The exam is open-book for all materials you want to reference, including search engines,
websites, etc. Just no cell phones or talking to others. Links to external sources are provided intext, with blue underlined font. Be sure to reference these materials before answering the
questions.
Exam Rules:
1. You must remain muted throughout the exam with your camera enabled and yourself
and your workspace in view. You must have screen sharing enabled throughout.
2. No interactions with others of any kind (including, but not limited to, other students,
family, friends, etc.) during the exam. This is an individual assessment.
3. If you have a question for the professor or the TA, please use the ‘Get Help’ feature in
your breakout room and one of us will be there as soon as possible (depending on
whether we’re with another student, it could be several minutes, so move on until one
of us arrive). Don’t leave your breakout room unless absolutely necessary.
4. Do not copy and paste material from the textbook. Rather, paraphrase your ideas as
they relate to the question. The questions are made in a way that repeating details of
the book won’t be helpful anyways.
5. Only refer to material on your computer or in a physical book that you are using to write
the exam. NO cell phone use during the exam. If you are caught looking at your cell
phone, you will be removed from the exam and you will not complete the course, so
don’t risk it!
How to submit: When finished, submit your exam to the Final Exam folder in Dropbox. The
deadline of 2 hours after we start is strictly enforced so please watch your timing. After
submitting, please exit Zoom.
Good luck!!
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Scenario A:
According to a recent article in The Conversation, Covid-19 has had a strong negative impact on
food supply chains, resulting in major shortages across the globe. As a result, food retails are
needing to become more proactive across the value chain, taking over certain roles that were
typically done by other players in the past to minimize risk as much as possible. For example,
consumers are becoming increasingly interested in buying fruit and vegetables directly from
farmers rather than going to grocery stores to buy them. Similarly, consumer packaged goods
companies are building e-commerce platforms to sell their products directly to customers in an
online environment.
Overall, these changes are creating a new food value chain with a much less obvious path from
producers to consumers than in pre-Covid-19 times.
Question 1 (1 point): This change across the food value chain as players move into entirely
new roles is referred to as _____________________.
Answer: This change across the food value chain as players move into entirely new roles is
referred to as Vertical Integration.
Question 2 (8 points): Read through this article (or, if you prefer, any others you can find
through a Google search) to find at least 3 examples of ways in which players in the food
industry are moving into new untraditional roles. Describe these roles as they relate to the
different components of the value chain. Be sure to state which direction the players are
moving in.
Answer: After reading through the article, the first example of new untraditional roles that
players are creating is that some distributors have adapted to the covid-19 crisis by switching to
online ordering and delivering services. This switch would relate to the service used by the
distributors as they adapt by offering new service “online ordering and delivering” to the
consumers which is a forward vertical integration along the value chain. Another example
would be with the grocery retailers who gained more demand after the covid-19 crisis which
lead them to constantly and frequently clean stores, pay more bonuses in order to keep needed
employees and expanding hours of operations since most restaurants are closed which relates
to the firm’s infrastructure as it changed dramatically after covid-19.
Question 3 (6 points): Name a different industry that does not require firms to move into new
roles across a value chain. Provide some example companies and defend your choice of
industry.
Answer: Some industries that require only one person in charge such as lawyers or doctors
won’t need to move into new roles across a value chain as all the work can be done by 1 or 2
people in a sole proprietorship.
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Scenario B:
In 2007, two friends rented out air mattresses in their San Francisco apartment to strangers in
exchange for a small fee to help cover their monthly rent. A year later, after thinking about
ways to recreate this experience on a bigger scale, a small company by the name of Airbnb was
established which, despite struggling financially for a few years, eventually skyrocketed into the
successful home-sharing business we know today, worth a whopping $31 billion. A large driver
of Airbnb’s success was the fact that, up until that time, people were limited with the options
they had available in terms of overnight accommodations, with hotels, bed & breakfasts, and
hostels reigning as the dominant options to choose among. In each of these cases, a traditional
‘business-owned’ premise existed, in which the property one would be staying at was owned by
an organization. Airbnb, however, changed all of this by creating an entirely new market of
overnight accommodations owned and operated entirely by regular homeowners.
Despite this incredible growth, Airbnb has seen some increased competition in recent years,
with other home-share offerings such as VRBO, Flipkey, HomeAway, and several others that are
making this market feel once again crowded. As a result, the future direction and success of
Airbnb remains unclear.
Question 1 (1 point): The strategy that Airbnb followed in this scenario is a classic example of
_____________________.
Answer: The strategy that Airbnb followed in this scenario is a classic example of the Blue
Ocean Strategy, as instead of competing with regular hotels they created a brand new
untapped market with no one to compete to, while unlocking new demand in this market.
Question 2 (8 points): The book does a great job of explaining this strategy and giving some
examples of past success by firms looking to accomplish it. However, there is not much
indication of what a firm does once they reach that point of success. In your view, what
would be required for a firm to maintain its success following the implementation of this
strategy? Provide examples of how Airbnb can maintain its success by framing your responses
around each component of resource-based theory.
Answer: Once a firm reaches a point of success in the blue ocean strategy, they should work on
their dynamic capability by focusing on improving and updating their app so they could
maintain their dominant position in that market. Airbnb could maintain their success by
introducing new features to the app like for example giving more wide ranges/options to house
owners to keep it rare and maybe file a patent to protect their rights to be the only
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organization that can allow people to rent a regular person’s house so that they can secure it
and be rare and inimitable which will significantly reduce competition.
Question 3 (6 points): This strategy may be compared to the diversification strategy. First,
describe what makes these two strategies similar. Then, describe the main difference
between these two strategies. Finally, explain why a firm may choose one over the other.
Answer: The diversification and blue ocean strategies are similar in a way that both strategies
require an organization to move to an entirely new market/industry. In this scenario, the blue
ocean strategy is closer to the related diversification rather than the unrelated diversification as
Airbnb moved to a new market that shares important similarities as it still offers some form of
accommodation rather than an entirely new industry that lacks any similarities. However, one
main difference between those two strategies is that a diversification strategy requires a firm to
move to a new industry/market while a blue ocean strategy creates its own new market where
there is no one to compete to. A firm may choose to follow the blue ocean strategy rather than
the diversification strategy as sometimes the new industry might not offer strong profit
potential which can be too risky as entering the industry might be too expensive for a company
but the blue ocean strategy creates a new market which will require less costs as there is no
competition yet.
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Scenario C:
The finance industry has changed dramatically over the past several years, which has had a
significant impact on Canada’s big 5 banks, including Royal Bank of Canada (RBC). One of these
major changes is the increasing movement of younger generations (i.e., under 40) away from
traditional, in-person banking and towards digital banking. As a result, digital-centered banks
such as Tangerine, EQ Bank, or Simplii Financial are growing in popularity among this younger
age group. Indeed, according to the most recent J.D. Power & Associates report, young banking
clients are three times more likely to switch banks than older ones and many of these clients
are transitioning to digital-only banks such as those above.
Putting yourself into the perspective of RBC, one of the big 5 banks in Canada, you need to be
prepared for the changes taking place in the industry to ensure you don’t lose this important
demographic, but without such a radical change that you alienate the older generations that
still prefer in-person banking interactions.
Question 1 (6 points): Conduct a search engine search related to this scenario, starting with
RBC’s most recent Annual Report. Describe the strengths, weaknesses, opportunities, and
threats (at least 2 for each) from the perspective of RBC as they relate to changing customer
preferences. For each one, elaborate on why you have identified them as such. Of the threats
that you named, which one is the most likely to impact RBC? What are some ways in which
RBC can address these threats in the future?
Question 2 (7 points): Create a strategic group map for RBC to show where it stands as
compared to competitors (both the other big 5 banks and the emerging mid-size ones too) on
two relevant dimensions. What stands out after completing it? Write down some highlights
from the results of the map and indicate some ways in which RBC can improve its competitive
position going forward.
Question 3 (2 points): How can RBC measure the success on their performance of your
suggested improvements from your response to the previous question? Name one way, and
briefly explain why it would indicate an acceptable level of performance for RBC to achieve in
response to the scenario above.
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