University Of Pune Question Paper
M.M.S./M.B.S. (Semester – I) Examination, 2010
102 : BUSINESS POLICY AND STRATEGIC MANAGEMENT
(2005 Pattern) (Old)
Time : 3 Hours Max. Marks : 70
Instructions : i) Attempt any four questions from questions 1 to 7.
These carry 13 marks each.
ii) Question No. 8 is compulsory, it carries 18 marks.
1. How corporate strategies are developed using analysis of environmental appraisal ?
Explain. 13
2. Discuss Porter’s Five-Forces Model of true competition in an Industry ? 13
3. Describe the essential characteristics of a mission statement. In what different
ways can a mission statement be formulated ? 13
4. Why are strategists interested in determining organizational capabilities ? Explain
with examples. 13
5. Explain McKinsey’s 7-S frame work with reference to IT company of your choice. 13
6. Explain the role of objectives in strategic management. What are the desirable
characteristics of objectives in order to be effective ? 13
7. Write short notes on any two :
a) BCG matrix.
OR
GE Nine cell matrix. 7
b) Definition and benefits of vision.
OR
Value chain analysis. 6
8. Solve the case (enclosed).
Case Study
Systematic Analysis and logical reasoning will be given more weightage.
Bharat Heavy Electricals Limited Concentrates on the Power Equipment Industry
Bharat Heavy Electricals Limited (BHEL) is India’s largest engineering and
manufacturing enterprise, operating in the energy sector, employing more than
42000 people. Established in 1956, it has established its presence in the heavy
electrical equipments industry nationally as well as globally. BHEL is one of the
navaratnas (lit. nine gems) among the public sector enterprises in India. Its vision
is to be ‘a world class enterprise committed to enhancing stakeholder value’. Its
mission statement is: ‘to be an Indian multinational engineering enterprise providing
total business solutions through quality products, systems, and services in the
fields of energy, industry, transportation, infrastructure, and other potential areas’.
BHEL is a huge organisation, manufacturing over 180 products categorised into
30 major product groups, catering to the core sectors of power generation and
transmission, industry, transportation, telecommunications and renewable energy.
It has 14 manufacturing divisions, four power sector regional centres, over 100
project sites, eight service centres and 18 regional offices. It acquires technology
from abroad and develops its own technology at its research and development
centres. The operations of BHEL are organised into three business sectors of
power, industry and overseas business. Besides the business sector departments,
there are the corporate functional departments of engineering and R & D, human
resource development, finance and corporate planning and development.
BHEL’s turnover hit an all-time high of Rs. 18,739 crore, registering a growth of
29 per cent, while net profit increased by 44 per cent to touch Rs. 2,415 crore in
2006-07. The company has a comfortable order book position of Rs. 55,000
crore for 2007-8 and beyond. The company booked export orders worth
Rs. 1,903 crore in 2006-07. It is looking forward to US$10 billion exports by
2012 from the present US$ 4 billion. The capital investment plan of BHEL for the
11th National Plan period envisages an investment of Rs. 3,200 crore, mainly to
enhance its manufacturing capacity from 10000 MW to 15000 MW.
BHEL has formulated a five-year strategic plan with the aim of achieving a
sustainable profitable growth, targeting at a turnover of Rs. 45,000 crore by 2012.
The strategy is driven by a combination of organic and inorganic growth. Organic
growth is planned through capacity and capability enhancement, designed to
leverage the company’s core areas of power, supported by the industry,
transmission, exports and spares and services businesses. For the purpose of
inorganic growth, BHEL plans to pursue mergers and acquisition and joint ventures
and grow operations both in domestic and export markets.
BHEL is involved in several strategic business initiatives at present for
internationalisation. These include targeting the export markets, positioning itself
as a reputed engineering, procurement and construction (EPC) contractor globally,
and looking for opportunities for overseas joint ventures.
An example of a concentration strategy of BHEL in the power sector is the joint
venture with another public enterprise, National Thermal Power Corporation, to
perform EPC activities in the power sector. It is to be noted that NTPC as a
power generation utility and BHEL as an EPC contractor have worked together
on several domestic projects earlier, but without a formal partnership. BHEL also
has joint ventures with GE of the US and Siemens AG of Germany. Other strategic
initiatives include management contract for Bharat Pumps and Compressors Ltd.
and a proposed takeover of Bharat Heavy Plates and Vessels, both being sister
public sector enterprises.
Despite its impressive performance, BHEL is unable to fulfil the requirements for
power equipment in the country. The demand for power has been exceeding the
growth and availability. There are serious concerns about energy shortages owing
to inadequate generation and transmission, as well as inefficiencies in the power
sector. Since this sector is a major part of the national infrastructure, problems in
the power sector affect the overall economic growth of the country as well as its
attractiveness as a destination for foreign investments. BHEL also faces stiff
competition from international players in the power equipment sector, mainly of
Korean and Chinese origin. There seems to be an undercurrent of conflict between
the two governmental ministries of power and heavy industries. BHEL operates
administratively under the Ministry of Heavy Industries, but supplies mainly to
the power sector that is under the Ministry of Power. There has been talk of
establishing another power equipment company as a part of the NTPC for some
time, with the purpose of lessening the burden on BHEL23.
Questions :
1) BHEL is mainly formulating and implementing concentration strategies nationally
as well as globally, in the power equipment sector. Do you think it should
broaden the scope of its strategies to include integration or diversification ?
Why ?
2) Suppose BHEL plans to diversify its business. What areas should it diversify
into ? Give reasons to justify your choice.
———————
M.M.S./M.B.S. (Semester – I) Examination, 2010
102 : BUSINESS POLICY AND STRATEGIC MANAGEMENT
(2005 Pattern) (Old)
Time : 3 Hours Max. Marks : 70
Instructions : i) Attempt any four questions from questions 1 to 7.
These carry 13 marks each.
ii) Question No. 8 is compulsory, it carries 18 marks.
1. How corporate strategies are developed using analysis of environmental appraisal ?
Explain. 13
2. Discuss Porter’s Five-Forces Model of true competition in an Industry ? 13
3. Describe the essential characteristics of a mission statement. In what different
ways can a mission statement be formulated ? 13
4. Why are strategists interested in determining organizational capabilities ? Explain
with examples. 13
5. Explain McKinsey’s 7-S frame work with reference to IT company of your choice. 13
6. Explain the role of objectives in strategic management. What are the desirable
characteristics of objectives in order to be effective ? 13
7. Write short notes on any two :
a) BCG matrix.
OR
GE Nine cell matrix. 7
b) Definition and benefits of vision.
OR
Value chain analysis. 6
8. Solve the case (enclosed).
Case Study
Systematic Analysis and logical reasoning will be given more weightage.
Bharat Heavy Electricals Limited Concentrates on the Power Equipment Industry
Bharat Heavy Electricals Limited (BHEL) is India’s largest engineering and
manufacturing enterprise, operating in the energy sector, employing more than
42000 people. Established in 1956, it has established its presence in the heavy
electrical equipments industry nationally as well as globally. BHEL is one of the
navaratnas (lit. nine gems) among the public sector enterprises in India. Its vision
is to be ‘a world class enterprise committed to enhancing stakeholder value’. Its
mission statement is: ‘to be an Indian multinational engineering enterprise providing
total business solutions through quality products, systems, and services in the
fields of energy, industry, transportation, infrastructure, and other potential areas’.
BHEL is a huge organisation, manufacturing over 180 products categorised into
30 major product groups, catering to the core sectors of power generation and
transmission, industry, transportation, telecommunications and renewable energy.
It has 14 manufacturing divisions, four power sector regional centres, over 100
project sites, eight service centres and 18 regional offices. It acquires technology
from abroad and develops its own technology at its research and development
centres. The operations of BHEL are organised into three business sectors of
power, industry and overseas business. Besides the business sector departments,
there are the corporate functional departments of engineering and R & D, human
resource development, finance and corporate planning and development.
BHEL’s turnover hit an all-time high of Rs. 18,739 crore, registering a growth of
29 per cent, while net profit increased by 44 per cent to touch Rs. 2,415 crore in
2006-07. The company has a comfortable order book position of Rs. 55,000
crore for 2007-8 and beyond. The company booked export orders worth
Rs. 1,903 crore in 2006-07. It is looking forward to US$10 billion exports by
2012 from the present US$ 4 billion. The capital investment plan of BHEL for the
11th National Plan period envisages an investment of Rs. 3,200 crore, mainly to
enhance its manufacturing capacity from 10000 MW to 15000 MW.
BHEL has formulated a five-year strategic plan with the aim of achieving a
sustainable profitable growth, targeting at a turnover of Rs. 45,000 crore by 2012.
The strategy is driven by a combination of organic and inorganic growth. Organic
growth is planned through capacity and capability enhancement, designed to
leverage the company’s core areas of power, supported by the industry,
transmission, exports and spares and services businesses. For the purpose of
inorganic growth, BHEL plans to pursue mergers and acquisition and joint ventures
and grow operations both in domestic and export markets.
BHEL is involved in several strategic business initiatives at present for
internationalisation. These include targeting the export markets, positioning itself
as a reputed engineering, procurement and construction (EPC) contractor globally,
and looking for opportunities for overseas joint ventures.
An example of a concentration strategy of BHEL in the power sector is the joint
venture with another public enterprise, National Thermal Power Corporation, to
perform EPC activities in the power sector. It is to be noted that NTPC as a
power generation utility and BHEL as an EPC contractor have worked together
on several domestic projects earlier, but without a formal partnership. BHEL also
has joint ventures with GE of the US and Siemens AG of Germany. Other strategic
initiatives include management contract for Bharat Pumps and Compressors Ltd.
and a proposed takeover of Bharat Heavy Plates and Vessels, both being sister
public sector enterprises.
Despite its impressive performance, BHEL is unable to fulfil the requirements for
power equipment in the country. The demand for power has been exceeding the
growth and availability. There are serious concerns about energy shortages owing
to inadequate generation and transmission, as well as inefficiencies in the power
sector. Since this sector is a major part of the national infrastructure, problems in
the power sector affect the overall economic growth of the country as well as its
attractiveness as a destination for foreign investments. BHEL also faces stiff
competition from international players in the power equipment sector, mainly of
Korean and Chinese origin. There seems to be an undercurrent of conflict between
the two governmental ministries of power and heavy industries. BHEL operates
administratively under the Ministry of Heavy Industries, but supplies mainly to
the power sector that is under the Ministry of Power. There has been talk of
establishing another power equipment company as a part of the NTPC for some
time, with the purpose of lessening the burden on BHEL23.
Questions :
1) BHEL is mainly formulating and implementing concentration strategies nationally
as well as globally, in the power equipment sector. Do you think it should
broaden the scope of its strategies to include integration or diversification ?
Why ?
2) Suppose BHEL plans to diversify its business. What areas should it diversify
into ? Give reasons to justify your choice.
———————
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