CUSTOMER_CODE
SMUDE
DIVISION_CODE
SMUDE
EVENT_CODE
SMUAPR15
ASSESSMENT_CODE MB0052_SMUAPR15
QUESTION_TYPE
DESCRIPTIVE_QUESTION
QUESTION_ID
17689
QUESTION_TEXT
Define Joint venture. Explain its characteristics.
SCHEME OF
EVALUATION
A Joint venture may be defined as a business venture in which two
or more independent companies join together, contribute to equity
capital in equal or agreed proportion and establish a new company.
A joint venture is the only way to gain entry into a foreign market,
particularly if the foreign Govt. requires that, for entry into that
market, a local partner has to be chosen.
(3 marks)
Joint ventures exhibit some common characteristics, they are:
1.An agreement between the parties for common long-term business
objectives such as production, marketing/sales, research
cooperation, financing etc. Production joint ventures are more
common
2.Pooling of assets and resources, like plant, machinery, equipment,
finance, management know-how, intellectual property rights etc., by
the parties for achievement of the agreed objectives.
3.Characteristics of the pooled assets and resources as contributions
by the respective parties.
4.Pursuance of the agreed objective through a new management
system or structure, which is separate from the existing management
systems of the parties.
5.Sharing of profits from the joint venture between the parties
usually in proportion to their capital contributions. The liabilities of
the parties are also normally linked to their capital contributions.
(7 marks)
QUESTION_TYPE
DESCRIPTIVE_QUESTION
QUESTION_ID
17690
QUESTION_TEXT
What are the various objectives of Strategy Alliance?
1Development of a new product
2.Development of a new technology
3.Reducing manufacturing cost
SCHEME OF EVALUATION 4.Entering new markets
5.Marketing and sales.
6.Distribution.
(Each 1½ Marks)
QUESTION_TYPE
DESCRIPTIVE_QUESTION
QUESTION_ID
17691
QUESTION_TEXT
Explain various types of industries as advocated by Porter.
1.Fragmented industry
2.Emerging industry
SCHEME OF EVALUATION 3.Mature industry
4.Declining industry
5.Global Industry
(2 Marks)
QUESTION_TYPE
DESCRIPTIVE_QUESTION
QUESTION_ID
73293
QUESTION_TEXT
Explain the BCG portfolio model and four performance situations
BCG matrix.
SCHEME OF
EVALUATION
The Boston consulting Group (BCG) model is a growth market share
matrix, depicting a company’s competitiveness in terms of market
growth rate, and its relative market shares. The model is also known
as a portfolio matrix. Four performance situations of product groups
of SBUs were identified as four quadrants in the matrix namely.
1. Stars are high market share products or SBUs operating in high–
growth markets. The model predicts that stars will have very strong
need to support their growth. But, because they are in a strong
competitive position. (2 marks)
2. Cash cows are high share products or SBUs operating in a low
growth market. Because of their market position, their cash
generation should be high, but because the market is assumed to be
mature, their cash investment needs to be small. (1 mark)
3. Question marks problem children are low share business in
high–growth markets. They are assumed to have cash needs
because they need to finance growth. But, they generate little cash.
If a question marks/problem child’s market share cannot be
changed, it will continue to absorb cash. (2 marks)
4. Dogs are low–share business in low growth markets because of
their low share, it is assumed that their progress is low and,
therefore, their profits will also below or non–existent. Since growth
is low, expansion of share is assumed to be very costly. (2 marks)
QUESTION_TYPE
DESCRIPTIVE_QUESTION
QUESTION_ID
73294
QUESTION_TEXT Explain the term Merger and explain different types of Merger.
SCHEME OF
EVALUATION
A Merger is a combination of two or more organizations, in which
one acquires the assets and liabilities of the other in exchange for
shares or cash or the organizations are dissolved and a new
company is formed, which takes over the assets and liabilities of the
dissolved organizations and new shares are issued. (2 marks)
Types of Mergers: (Each carries 2 marks with explanation)
1. Horizontal merger
2. Vertical merger
3. Concentric merger
4. Conglomerate merger
QUESTION_TYPE
DESCRIPTIVE_QUESTION
QUESTION_ID
125381
QUESTION_TEXT
Explain the Porter’s Competitive Threat Model
The major types of competitive threat model are as follows
1. Industry (existing competitors)
2. Threat of substitutes
3. Bargaining power of buyers
SCHEME OF
EVALUATION
4. Bargaining power of suppliers
a. No close substitutes available for the product offered by the
suppliers
b. The product(s) sold by the supplier(s) is an important or
critical input in the buyer’s product
5. Threat of new entrants
(5 pts each carries 2 marks =10 marks)