QSM-1(a)Strategic Group Mapping – competitive positioning analysis
5 marks medium
A strategic analyst wants to study the competitive positioning of companies in the smartphone industry based on price range and product features. Explain how the analyst can use Strategic Group Mapping to analyse the industry. Also, state the insights that can be derived from such a map.
QSM-1(b)Divisional organizational structure – attributes and benefit
5 marks medium
A Mumbai-based conglomerate, PQR Ltd., has announced a major restructuring of its business operations. The company has decided to split its business into four separate units: Manufacturing, Retail, Services, and Technology. Each unit will operate as a separate business, with delegated responsibility for day-to-day operations and strategy to the respective unit managers. Identify the organization structure that PQR Ltd. has planned to implement. Discuss any four attributes and the benefits the firm may derive by using this organization structure.
QSM-1(c)Ansoff's Product-Market Growth Matrix – international expans
5 marks medium
GreenHarvest Foods, a well-established organic food company in the domestic market, is planning to expand globally. As part of its international strategy, the company is introducing region-specific organic products by adapting ingredients, flavours and packaging to suit local consumer preferences in different countries. Through this approach, GreenHarvest Foods aims to cater to diverse markets and strengthen its global footprint. Which expansion strategy from Ansoff's Product-Market Growth Matrix best aligns with GreenHarvest Foods' approach?
QSM-2(a)Significance of vision and mission in strategic planning
5 marks medium
"A well-defined vision and mission statement provide direction and purpose to an organization." Explain the significance of vision and mission statements in strategic planning.
QSM-2(b)Business environment – nature and impact on firm performance
5 marks medium
"A close and continuous interaction between a business and its environment helps in strengthening the business firm and using its resources more effectively." Explain Business environment and discuss how the interaction between a business and its environment helps the business firm.
QSM-3(a)Key strategic drivers of organizational strategy
5 marks medium
Write a short note on the Key Strategic Drivers of an organization.
QSM-3(b)Internationalization of business – process and strategic ste
5 marks medium
"International development is expensive and challenging." In the context of the statement, explain the internationalization of business and the steps involved in such strategic planning.
QSM-4(a)Ansoff's Product-Market Growth Matrix – four quadrants
5 marks medium
Explain the 'product market growth matrix' as propagated by Igor Ansoff as a device for identifying growth opportunities for the future.
QSM-4(b)Strategic performance measures – importance and role
5 marks medium
Why Strategic Performance Measures are essential for organizations?
QSM-4(b)-ORChange management during digital transformation
5 marks medium
Why is change management crucial during digital transformation, and what are some key strategies for navigating change effectively?
Q1(a)Financial statement analysis – ratio-based reconstruction
5 marks medium
The following information pertains to P Limited for the year ended 31st March, 2025: Sales ₹3,60,00,000; Rate of Income Tax 40%; Return on Net Worth 30%; Share Capital to Reserves Ratio 6:4; Current Ratio 2:1; Percentage of Net Profit to Sales 8%; Inventory Turnover (based on cost of goods sold) 12; Cost of goods sold ₹1,44,00,000; Sundry Debtors ₹12,00,000; Sundry Creditors ₹16,00,000; Interest on 14% debentures ₹3,36,000. You are required to CALCULATE: (i) Operating Expenses; (ii) Share Capital and Reserves; (iii) Closing Stock; (iv) Fixed Assets.
Q1(b)CAPM – risk-free rate, market return, Beta interpretation
5 marks medium
Mr. Raman, a portfolio manager, is analyzing a set of securities using the Capital Asset Pricing Model (CAPM). He has gathered the following information: Security A Ltd – Beta 1.2, CAPM Return 15.20%; Security B Ltd – Beta 0.8, CAPM Return 12.80%; Security C Ltd – Beta 1.1, CAPM Return ?; Cash in hand – Beta ?, CAPM Return Nil; Treasury Bill – Beta ?, CAPM Return ?; Stock Market i.e. Nifty – Beta ?, CAPM Return ?.
Q1(c)NPV analysis – service vs replace decision for machinery
5 marks medium
A company wants to invest in a machinery that would cost ₹50,000 at the beginning of year 1. It is estimated that the net cash inflows from operations will be ₹18,000 per annum for 3 years, if the company opts to service a part of the machine at the end of year 1 at ₹10,000. In such a case, the scrap value at the end of year 3 will be ₹12,500. However, if the company decides not to service the part, then it will have to be replaced at the end of year 2 at ₹15,400. But in this case, the machine will work for the 4th year also and get operational cash inflow of ₹18,000 for the 4th year. It will have to be scrapped at the end of year 4 at ₹9,000. Assuming cost of capital at 10% and ignoring taxes, will you RECOMMEND the purchase of this machine based on the net present value of its cash flows? If the supplier gives a discount of ₹5,000 for purchase, WHAT would be your decision? (PV factors at end of years 0, 1, 2, 3, 4, 5, 6 are respectively 1, 0.9091, 0.8264, 0.7513, 0.6830, 0.6209 and 0.5644.)
Q1A(i)Vision vs mission – elements of strategic intent
2 marks hard
Case: PlaySphere Interactive was founded in Bangalore in 2010 as a small startup developing mobile puzzle games. In 2015, the new CEO redefined the company's vision as 'To be India's leading creator of immersive gaming experiences' and its mission as 'To design culturally relevant games with global quality.' The company's breakthrough came with MythQuest, a fantasy RPG based on Indian mythology that reached millions of downloads, aided by an in-house game engine optimized for low-bandwidth conditions. As player volumes increased, PlaySphere benefited from the experience curve – costs per unit declin…
PlaySphere's declaration 'To be India's leading creator of immersive gaming experiences' is best classified as which element of strategic intent, and why?
(A) Mission – because it defines operational purpose
(B) Objective – because it is short-term and measurable
(C) Vision – because it describes long-term aspirations
(D) Corporate Strategy – because it defines resource allocation
Q1A(ii)Porter's Five Forces – competitive dynamics in gaming indust
2 marks hard
Case: PlaySphere Interactive was founded in Bangalore in 2010 as a small startup developing mobile puzzle games. In 2015, the new CEO redefined the company's vision as 'To be India's leading creator of immersive gaming experiences' and its mission as 'To design culturally relevant games with global quality.' The company's breakthrough came with MythQuest, a fantasy RPG based on Indian mythology that reached millions of downloads, aided by an in-house game engine optimized for low-bandwidth conditions. As player volumes increased, PlaySphere benefited from the experience curve – costs per unit declin…
The success of MythQuest despite foreign competitors highlights which forces from Porter's Five Forces model that PlaySphere managed to withstand?
(A) Bargaining Power of Suppliers and Threat of New Entrants
(B) Industry Rivalry and Threat of Substitutes
(C) Bargaining Power of Buyers and Threat of New Entrants
(D) Industry Rivalry and Bargaining Power of Suppliers
Q1A(iii)Experience curve – declining unit costs with cumulative outp
2 marks hard
Case: PlaySphere Interactive was founded in Bangalore in 2010 as a small startup developing mobile puzzle games. In 2015, the new CEO redefined the company's vision as 'To be India's leading creator of immersive gaming experiences' and its mission as 'To design culturally relevant games with global quality.' The company's breakthrough came with MythQuest, a fantasy RPG based on Indian mythology that reached millions of downloads, aided by an in-house game engine optimized for low-bandwidth conditions. As player volumes increased, PlaySphere benefited from the experience curve – costs per unit declin…
As PlaySphere scaled up, development costs per unit declined due to learning efficiencies and process standardization. Which strategic management concept explains this phenomenon?
(A) Economies of Scale
(B) Value Chain Analysis
(C) Experience Curve
(D) Cost Leadership
Q1A(iv)Strategic Business Units – levels of strategy
2 marks hard
Case: PlaySphere Interactive was founded in Bangalore in 2010 as a small startup developing mobile puzzle games. In 2015, the new CEO redefined the company's vision as 'To be India's leading creator of immersive gaming experiences' and its mission as 'To design culturally relevant games with global quality.' The company's breakthrough came with MythQuest, a fantasy RPG based on Indian mythology that reached millions of downloads, aided by an in-house game engine optimized for low-bandwidth conditions. As player volumes increased, PlaySphere benefited from the experience curve – costs per unit declin…
The restructuring of PlaySphere into two SBUs (Mobile Games and Immersive Games) represents which level of strategy, and how does it help execution?
(A) Functional-level – focuses on departmental activities
(B) Corporate-level – manages a portfolio of businesses
(C) Business-level – defines competitive positioning in one industry
(D) Operational-level – deals with day-to-day activities
Q1A(v)Types of strategic control – special alert control
2 marks hard
Case: PlaySphere Interactive was founded in Bangalore in 2010 as a small startup developing mobile puzzle games. In 2015, the new CEO redefined the company's vision as 'To be India's leading creator of immersive gaming experiences' and its mission as 'To design culturally relevant games with global quality.' The company's breakthrough came with MythQuest, a fantasy RPG based on Indian mythology that reached millions of downloads, aided by an in-house game engine optimized for low-bandwidth conditions. As player volumes increased, PlaySphere benefited from the experience curve – costs per unit declin…
When regulations on in-app purchases suddenly changed, PlaySphere applied which type of strategic control and why?
(A) Premise Control – checking underlying assumptions
(B) Implementation Control – tracking key projects
(C) Special Alert Control – responding to sudden events
(D) Strategic Surveillance – scanning broad signals
Q1B(i)BCG Matrix – high share, high growth classification
2 marks easy
Bright Screens' LED TV division has high market share in a fast-growing electronics segment. It invests heavily in advertising and R&D to stay ahead of competitors. How should this division be classified in the BCG Matrix?
(A) Dog
(B) Star
(C) Cash Cow
(D) Question Mark
Q1B(ii)Core competency – inimitable capabilities
2 marks easy
A company has strong R&D capability, but competitors can easily replicate its products. However, its organisational culture enables continuous innovation which competitors cannot imitate. What is MOST likely the firm's core competency?
(A) R&D capability
(B) Product design
(C) Organisational culture enabling innovation
(D) Manufacturing efficiency
Q1B(iii)Kurt Lewin's change management model – Refreeze step
1 marks easy
What is the critical final step in Kurt Lewin's three-step model for institutionalizing organizational change?
(A) Unfreeze (Creating the motivation to change)
(B) Change (Implementing the new processes)
(C) Refreeze (Stabilizing the change by institutionalizing new norms)
(D) Innovate (Creating a brand-new process)
Q2(a)Modigliani-Miller model with taxes – leverage and firm value
6 marks medium
Zanshu Ltd. is an all equity financed company with a market value of ₹25,00,000 and cost of equity (Ke) 21%. The company wants to buyback equity shares worth ₹5,00,000 by issuing and raising 15% perpetual debt of the same amount. Rate of tax may be taken as 30%. After the capital restructuring and applying MM Model (with taxes), you are required to CALCULATE: (i) Market value of Zanshu Ltd.; (ii) Cost of Equity (Ke); (iii) Weighted average cost of capital (using market weights) and comment on it.
Q2(b)Operating, financial and combined leverage; ROI
4 marks medium
The following particulars are related to PQR Ltd.: Sales ₹1,50,00,000; Variable Cost ₹84,00,000; Fixed Cost ₹12,00,000. The company has borrowed ₹90,00,000 at 10% and its equity capital is ₹1,10,00,000. You are required to CALCULATE: (i) Return on Investment (ROI); (ii) Operating and Financial Leverages; (iii) Combined Leverage; (iv) Earnings Before Interest and Taxes (EBIT), if the sale is dropped to ₹1,00,00,000.
Q3Debtors ageing analysis – effective collection cost and rece
10 marks hard
Being a financial controller of Shilpa Limited, you have been provided with the debt collection policy and the debtors' ageing analysis as on the date of analysis. Ageing analysis: Customer A – Current ₹3,12,500; 31–60 days ₹1,05,000; Total ₹4,17,500. Customer B – 61–90 days ₹3,11,200; Total ₹3,11,200. Customer C – Current ₹6,81,600; Total ₹6,81,600. Customer D – 91 or more days ₹1,62,000; Total ₹1,62,000. Customer E – 31–60 days ₹3,01,500; 61–90 days ₹2,10,000; 91+ days ₹38,000; Total ₹5,49,500. Totals: Current ₹9,94,100; 31–60 days ₹4,06,500; 61–90 days ₹5,21,200; 91+ days ₹2,00,000; Grand Total ₹21,21,800. Collection Policy: (a) Normal credit terms are 30 days; (b) Interest of 2% charged on accounts overdue for 45 days; (c) Interest of 4% charged on accounts overdue for more than 75 days; (d) Cash discount of 2% given to customers paying within 10 days of invoice due date. Additional Information: (a) 40% of invoice value after bad debt in 31–60 days category pay after 45th day but within 60th day, with 1.5% uncollectible; (b) 25% of invoice value after bad debt in 61–90 days category pay after 75th day but within 90th day, with 3% uncollectible; (c) 15% of total invoice value overdue for 91+ days is uncollectible; (d) 50% of customers avail cash discount; (e) Administration cost ₹50,000. Operating cost of sales ratio is 0.75.
Q4(a)Profit maximization – limitations as a financial objective
4 marks medium
"The profit maximization is not an operationally feasible criterion." COMMENT on it.
Q4(b)Types of preference shares and their features
4 marks medium
EXPLAIN any four types of Preference Shares along with their Salient Features.
Q4(c)Combined leverage – DOL and DFL risk interaction
2 marks easy
A company is analyzing its risk profile using combined leverage. It observes that its Degree of Operating Leverage (DOL) is low while its Degree of Financial Leverage (DFL) is high. The management believes this combination helps balance overall risk. Based on the concept of combined leverage, EXPLAIN whether this is a suitable risk combination and JUSTIFY your answer briefly.
Q4(c)-ORPecking order theory of capital structure
2 marks easy
Pecking order theory suggests that managers may use various sources for raising of fund in an order. EXPLAIN the preferred order of financing sources suggested by this theory.