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SUBJECTS

A B C

ACCOUNTING MANAGEMENTAUDIT MANAGEMENTADVERTISING ADVERTISING MANAGEMENTAUTOMOBILE MANAGEMENTASSET MANAGEMENTAVIATION MANAGEMENTAGRICULTURE MANAGEMENTARCHITECTURAL MANAGEMENTAIR TRANSPORT MANAGEMENT

BANKING MANAGEMENTBPO MANAGEMENTBANKING & FINANCIAL SERVICES MANAGEMENT BUSINESS MARKETINGBUSINESS ETHICSBUSINESS COMMUNICATIONBUSINESS LOGISTICS BIO TECHNOLOGY MANAGEMENTBUSINESS ADMINISTRATIONBUSINESS MANAGEMENTBUSINESS ENVIRONMENTBUSINESS PLANNINGBUSINESS STRATEGYBOI-TECHNOLOGY MANAGEMENT

CORPORATE LAWCONSUMER BEHAVIORCORPORATE FINANCECOST MANAGEMENT & ACCOUNTANCYCORPORATE & FINANCE MANAGEMENTCORPORATE GOVERANCECOMMUNICATION MANAGEMENTCLINICAL PHARMACOLGYCLINICAL RESEARCHCUSTOMER RELATIONSHIP MANAGEMENTCONSTRUCTION MANAGEMENTCUSTOMER CARE MANAGEMENTCALL CENTRE MANAGEMENTCO – OPERATIVE MANAGEMENTCONSUMER MANAGEMENTCORPORATE FINANCE MANAGEMENTCHARTERED FINANCE MANAGEMENT

D E F

DAIRY MANAGEMENTDISTRIBUTION LOGISTIC MANAGEMENTDATABASE MANAGEMENTDEVELOPMENT STRATEGY

E-BUSINESS SYSTEME-COMMERCEENERGY MANAGEMENTEQUITY RESEARCH MANAGEMENTENTREPRENEUR MANAGEMENTEVENT MANAGEMENTENTREPRENEURSHIP MANAGEMENTEXPORT IMPORT MANAGEMENT

FINANCEFINACE MANAGEMENTFINACIAL & COST ACCOUNTINGFINANCIAL ACCOUNTANCYFINANCIAL INSTITUTIONSFASHION MANAGEMENTFOREIGN EXCHANGE MANAGEMENT

EXPORT MANAGEMENT

G H I

GENERAL MANAGEMENTGLOBAL MARKETING MANAGEMENT

H R MANAGEMENTHUMAN RESOURCE MANAGEMENTHOSPITAL MANAGEMENTHEALTHCARE MANAGEMENTHOSPITALITY MANAGEMENTHOTEL MANAGEMENTHOLISTIC MANAGEMENTHOSPITAL ADMINISTRATIONHARDWARE MANAGEMENT

INTERNATIONAL FINACEINTERNATIONAL FINACE MANAGEMENTINTERNATIONAL HR MANAGEMENTINTERNATIONAL BUSINESSINFORMATION TECHNOLOGYINDUSTRIAL MANAGEMENTINVESTMENT MANAGEMENTINVESTMENT ANALYSIS MANAGEMENTINDUSTRIAL MARKETINGINDUSTRIAL RELATIONSINFORMATION MANAGEMENTINDUSTRIAL SAFETY MANAGEMENTINTERNATIONAL BUSINESS MANAGEMENTINVENTORY MANAGEMENTINDUSTRIAL RELATION LABOUR LAWIT FOR MANAGEMENTINFRASTRUCTURE MANAGEMENTINTELLECTUAL PROPERTY RIGHTSINTERIOR MANAGEMENT

L M N

LOGISTICSLOGISTIC MANAGEMENTLOGISTIC ENGINEERING

MARKETINGMARKETING MANAGEMENTMASS COMMUNICATIONMEDIA MANAGEMENTMUTUAL FUND MANAGEMENTMARKET RISK MANAGEMENTMARKETING FINANCE MANAGEMENTMATERIAL MANAGEMENTMANAGEMENT INFORMATION SYSTEMMANAGEMENT OF SALES FORCEMANAGERIAL ECONOMICSMANUFACTURING PLANNING & CONTROLMASS COMMUNICATION MANAGEMENTMERGERS & ACQUISITIONSMARKET RISK MANAGEMENT

NETWORKINGNETWORK MANAGEMENTNETWORKING MANAGEMENT

O P Q

OPERAIONSOPERATIONS MANAGEMENTORGANIZATION BEHAVIOROPERATING SYSTEMOPERATION RESEARCH

PRINCIPLE & PRACTICE OF MANAGEMENTPERSONNEL MANAGEMENTPROJECT MANAGEMENTPRODUCTION & OPERTION MANAGEMENTPROFFESSIONAL COMMUNICATIONPURCHASING MANAGEMENTPETROLEUM MANAGEMENT

QUANTITATIVE METODSQUATITATIVE TECHNIQUES IN MANAGEMENTQUANTITATIVE MANAGEMENT

PORTPOLIO MANAGEMENTPHARMACOLOGY MANAGEMENTPUBLIC RELATIONSHIP MANAGEMENTPUBLIC ADMINISTRATION

R S T

RESEARCH METHODOLOGYRETAIL MANAGEMENTRISK & SAFETY MANAGEMENTRISK & INSURANCE MANAGEMENTRURAL MANAGEMENT

SALES & DISTRIBUTION MANAGEMENTSIX SIGMA MANAGEMENTSIX SIGMA GREEN BELT MANAGEMENTSIX SIGMA BLACK BELT MANAGEMENTSTATICAL QUALITY CONTROLSUPPLY CHAIN MANAGEMENTSTORE MANAGEMENTSOFTWARE PROJECT MANAGEMENTSHIPPING MANAGEMENTSOFTWARE MANAGEMENTSAP CONSUTANCY MANAGEMENTSALES MANAGEMENT

TELECOM MANAGEMENTTOTAL QUALITY MANAGEMENTTREASURY MANAGEMENTTOTAL SUPPLY MANAGEMENTTRAVEL & TOURISM TRAINING & DEVELOPINGTAKE OVER AQUISATION TAXATION MANAGEMENTTEXTILE MANAGEMENT

E-BUSINESS SYSTEM

Case : 1GM’s E-Business StrategyINTRODUCTIONUS-based General Motors (GM), the largest automobile company in the world, was in trouble in thelate 1990s. The company’s market share in the US automobile market had been steadily declining froma high of 50% in the late 1960s to a low of 28% by 1999.Analysts pointed out that GM had been in thegrip of a vicious circle.The company faced low demand for its automobiles as they were not developed in line with thechanging customer needs and preferences. However, GM continued producing automobiles which didnot met customer requirements, leading to excess inventories at its factories and dealers.The building up of inventory at the dealers made the company even more desperate, and most often itresorted to higher dealer incentives which reduced the company’s profits significantly. This againforced GM to produce more cars to compensate for the eroded profit margins. Commenting on thedilemma GM faced in the late 1990s, John Paul MacDuffie, Professor, Wharton Business School,explained, “That belief in volume, and doing whatever it takes to keep volume, has driven a lot of theirdecisions.GM’s labor costs are fixed, meaning they remain the same regardless of what the volume of sales is.GM wanted to keep factories open as much as possible. There was some value in that strategy, but Ithink they overdid it.” Analysts added that the reason for the decline in GM’s US market share wasthat it had failed to introduce new models that customers wanted in quick time. To address this

challenge, GM made e-business a strategic priority. It wanted to reinvent itself by embracing ebusinessacross its value chain.In August 1999, after a year of research in collaboration with Forrester Research, GM launched abusiness division called e-GM that was responsible for all of the company’s websites and its On Starcommunication system. Through this initiative, the company planned to reduce costs, improve qualityAN ISO 9001 : 2008 CERTIFIED INTERNATIONAL B-SCHOOLand boost demand for its products.Ult also wanted to position itself as a provider of Internet-based information services and a majorplayer in the e-commerce arena. Commenting on this, Computerworld magazine quoted, “GM wants tobe more than your car company. Think in-car, real-time stock quotes, talking e-mail messages andvideo games.Think satellite-based radio services and online car financing. Think of a multibillion-dollar onlinetrading exchange. These are just a few of the businesses in which GM is making huge informationtechnology investments. “The philosophy that drove GM e-projects was the ‘launch and learn’approach. The company launched e-business projects, did pilot tests for them and then decided whetherto abandon or continue them. However, analysts expressed doubts whether GM would be able tosuccessfully implement its e-business strategy, and if it did, what the significance of this strategy forthe company would be.Commenting on this, Derek Slater, Executive Editor of CIO Magazine said, “Can e-business make adifference for an old economy, big and slow manufacturer the way it can for nimble, informationbasedbusinesses?” Raising similar doubts, an Internet World magazine article queried, “Will Internethardware and services become GM’S best products? And this in turn raises this question: Will Internetservices become GM’s core product some day?”NEED FOR E-BUSINESS STRATEGYWith the advent of the Internet wave in 1999, GM wanted to reposition itself strategically. It wanted tomake use of its vast customer base and huge assets to emerge as a leading player in the new economybusinesses of entertainment and e-commerce. The 1999 annual report of GM stated: “Besides mergersand acquisitions, there is no bigger trend in business today than that towards electronic business.Issues1. What do you understand by the E-Business strategy implementation across an organization’s valuechain?2. What are the rationale and benefits associated with e-commerce initiatives in an automobilecompany?3. What are the Channel conflict arising from e-business initiative?Case : 2Marriott’s Customer - Focused E- Business StrategyDELIGHTING CUSTOMERSHeadquartered at Washington in the US, Marriott International (Marriott) is a world leader in thehospitality industry. In year 2003, it had a network in excess of 2,600 operating units in the US and aworkforce of 145,000 employees, spread over 65 countries across the world. Marriott’s diverse

portfolio of popular hotel brands included leading brands such as Marriott, JW Marriott, Renaissance,Ramada International, Courtyard, Residence Inn, and The Ritz-Canton, among others.Marriott became the first hospitality company to win the CIO - 100 award from CIO magazine for fourconsecutive years (2000-03). The award was based on the company’s exceptional customer service andrelationship capability. Reacting to the receipt of award in 2003, Carl Wilson, Executive VicePresident and Chief Information Officer of Marriot said, “This award is the result of a culture andcommitment among Marriott’s information technology leadership team, associates and businesspartners to create great value for our company.”Since its inception, Marriott has focused on providing excellent customer service. The companyoffered personalized services to its clients, whom it referred to as its ‘guests.’It had introduced several innovative technologies and impIemented them even before its competitorsdid. For instance, in the 1980’s, the company launched Marriott Automated Reservation System forHotel Accommodation (MARSHA), a totally new concept of hotel reservation in the hospitalityindustry at that time.Marriott made continuous improvements in its business processes in its efforts to ‘delight’ itscustomers. In 1998, the company adopted an e-business strategy to re-orient itself to serve itscustomers better. The company was operationalizing a strategy to switch over from a decentralizedproperty-orientation to a centralized customer- orientation in its services. The company invested $70million (mn) over a two-year period to implement a variety of IT applications in diverse functionaldisciplines such as sales, accounting and personnel. A key component of Marriott’s e-business systemwas its CRM applications, developed in association with the leading CRM software company - SiebelSystems.By installing eCRM applications, Marriott was able to offer several new services that enhanced itshospitality services. The company’s website, www.marriott.com became one of the most frequentlyvisited sites in the hospitality industry, giving clients access to the services offered by the entireMarriott chain of hotels and resorts. Il these initiatives boosted the company’s ability to serve itsclients, and also contributed to its own strong financial performance. For the financial year ending2001-02, the company reported revenues of $84.41 billion (bn) and a net profit of $2.77 bn.BACKGROUND NOTEIn 1927, J. William Marriott (William) set-up a nine-seat root beer shop in Washington. After sometime, William started serving hot food along with root beer and named the shop as The Hot Shoppe’ In1929, Hot Shoppe was officially incorporated as Hot Shoppes, Inc. In 1937, Hot Shoppe ventured intoairline catering at Washington airport, serving the Eastern, American and Capital airlines. Over thenext three decades, Hot Shoppes diversified into other businesses including food services managementby starting a cafeteria at the US Treasury Building and Highway division. e-business strategy and thetime involved for implementation.To execute e-business strategy successfully, organizations also require the best network and systems

management tools available. It is also important to develop a framework for organizational alignmentand decision-making and a more complex IT management and governance structure. A clearframework that establishes who can make which decisions, and where and how the e-business projectwill be managed is required.Issues1. Bring out the facts of the case.2. Identify the various E-business initiatives.3. What are the strategies an organization to focus in order to excel in the E-business.4. Apart from the facts provided in the case, what other initiatives you can project keeping in mind thesuccess of an organization towards E-business.In 1966, the company ventured overseas, acquiring an airline catering kitchen in Caracas, Venezuela.In November 1967, its name was changed to Marriott Corporation (Marriott).In 1982, Marriott acquired Host -International, a leading hospitality services provider in the US,becoming the largest operator of airport terminal food, beverage and merchandise facilities in the US.In the 1980s, Marriott acquired several companies including American Resorts Corp. (vacationbusiness, 1984), Gladieux Corporation (food service company, 1985), Service Systems (contact foodservice company, 1985), Howard Johnson Company (hotels & inns, 1985) and Residency InnCompany (1987). With the acquisition of Saga Corporation, a diversified food service managementcompany in 1986, Marriott became the largest food service management company in the US.Issues1. Taking out the facts of the case , Bring out the importance of a customer-focused e-business strategyin the hospitality industry.2. Establish the role of IT in integrating different business processes to make them more customerorientedbased on your understanding of the case.Case : 3E-Strategies - Case StudiesIn the e-business environment, organizations must focus on their core competencies and should rely onexternal partners for all their non-core activities. The Internet enables a significant reduction in the costof inter-organizational coordination and transactions, which fundamentally changes the nature ofbusiness relationships and encourages greater use of business partners over internal departments.Business managers have more choice to outsource business processes they require.E-business strategies can significantly improve various organizational functions including supply chainmanagement (SCM), product development, marketing, HR and so on. It will also enhance the benefitsfor organizations adopting e-business including shortening of new product development cycle time,providing better information to suppliers and vendors, reducing data integrity issues, significantlyenhancing customer experience and more. The e-SCM initiatives typically start with e-procurementwith answering questions such as whether there is a need for e-market places for procurement and howto transform SCM from the organization driven inventory building to customer driven order approach.Another e-SCM initiative, e-sourcing is a cross-functional and cross-enterprise process that aims at

optimizing supply chain lifecycle performance through the Internet.Organizations have to develop new partnerships, create new e-intermediaries (e-supply network) anddevelop appropriate standards for data exchange and inter-organization related processes. They alsohave to decide on what services they will source via the-Internet and have to develop robust KMsystems to improve internal efficiency, enable faster decision-making and facilitate information andknowledge sharing.E-Strategies have to be developed for the sell side of an organization solving distribution related issuessuch as shall the organization serve directly to its customers and how will the organization’s existingchannels react if it uses the web as a new channel. Other sell side issues include how to managecustomer relationships online and online marketing and how to use online channels like B2B emarketplaces,online retailers and virtual distributors. One of the major hurdles to overcome includessolving conflicts between old and new channel successfully.Getting prices right on the web is one of the critical success factors for establishing an e-business.However, few companies have been able to develop a right online pricing strategy. Organizations mustensure that their e-pricing strategy should not conflict with their core business principles and strategicobjectives. They should employ the right software tools and related skills to enhance their onlinepricing performance. Moreover, the tools for optimizing e-pricing, for example, software formonitoring competitors’ prices do not require much investment.Organizations not only have to redefine their core business processes but non-core processes such ashuman resources as well to derive the full potential of the Internet. By developing effective Internetbasedbusiness-to-employee (B2E) systems, organizations can persuade their employees to embracechange. The benefits of these systems include reduced interaction costs, allowing employee selfserviceand mass customization.Online brand management is another issue that must be tackled by organizations. In their rush toestablish a presence on the Internet, most organizations have failed to build strong, distinctive onlinebrands. Questions such as if one branch of an organization develops a website, will it not confusecustomers of other branches of the company and how to differentiate local and global brands on theInternet has to answered.After addressing all issues related to electronically enabling the functional areas mentioned above, anorganization is ready to manage the execution of its overall e-business strategy.Issues1. Bring out the facts of the case.2. Identify the various E-business initiatives.3. What are the strategies an organization to focus in order to excel in the E-business.4. Apart from the facts provided in the case, what other initiatives you can project keeping in mind thesuccess of an organization towards E-business.Case : 4A PROACTIVE APPROACH TO ENVIRONMENTALRESPONSIBILITY

INTRODUCTIONDell is a premier provider of computer systems world-wide. Through its direct usiness model, Delldesigns, manufactures and customises products and services to customer requirements.DELL IRELANDDell’s European manufacturing operation is located in Limerick with a European Business Centrelocated at Cherrywood in Dublin. The company has been in Operation in Ireland since 1990, andemploys around 4,500 people. Dell is Ireland’s largest exporter, largest technology company andsecond largest company overall.Dell’s manufacturing facility operates a Just-in-Time manufacturing strategy. Dell’s suppliers deliverthe required materials at regular intervals during the day and load them onto the manufacturing line.The final product is boxed and loaded directly onto transport trucks and shipped to supplier-ownedmerge centres. There, the monitor and other requested peripherals are added before final shipment tothe customer.SOCIAL RESPONSIBILITY TO STAKEHOLDERSThe need for a business to be responsible for its actions is widely accepted. Businesses do not exist inisolation; they provide goods and services to people and make use of’ materials and labour supplied bypeople. Businesses have responsibilities to stakeholders to ensure their actions do not cause harm.CHARACTERISTICS OF AN ENVIRONMENTALLY RESPONSIBLE COMPANYDell is committed to a culture of environmental sustainability and responsibility. It continually reducesits impact on the environment through product design, manufacturing, product ownership experienceand product end-of-life solutions.The characteristics of an environmentally responsible company include:• Awareness — of how the company’s policies can impact on stakeholders• Sensitivity — to the requirements of local community and environment• Honesty — about the actions of the company• Consultation — with stakeholders prior to developing new policies or products• Openness — transparency with stakeholders about company practicesDell has developed a Code of Conduct, which correlates closely to the above characteristics. It allowsstakeholders to understand that they can believe what Dell says and trust what it does.ENVIRONMENTAL AUDITSocially responsible companies conduct environmental audits to assess the impact of their businesseson the environment. Dell complies with all the environmental laws and regulations, including ISO14001 and OHSAS 18001, and manages its facilities with the environment in mind. Dell designsproducts with up-to-date recyclable materials, using the Reduce, Reuse, Recycle initiative at tsmanufacturing site. It commits to taking back old computer parts for recycling.Dell continually explores all kinds of recycling options to rind the stateof-the-art best practices forrecycling of its old IT equipment.CORPORATE ENVIRONMENTAL GOALSDell has identified corporate environmental goals to work towards in the future. This environmentalpolicy provides a framework designed to ensure sustainable practices throughout the entire productlife cycle.

Dell’s vision is to create a company culture where environmental excellence is second nature. Thefollowing environmental policy objectives have been established to achieve its mission.PRODUCT CONCEPT & DESIGNDell designs products with a focus on:• Safe operation• Extending product life span• Reducing energy consumption• Avoiding environmentally sensitive materials• Promoting dematerialisation• Using parts that can be recycledIn 2000, Dell began a programme called ‘Design for the Environment’, which evaluates theenvironmental performance of a product and the impact of its packaging, energy and materials.Many Dell systems (and virtually all Dell monitors) comply with the U.S. Environmental ProtectionAgency (EPA) Energy Star programme for energy efficient computers, which reduces air pollution.The EPA estimates that offices can save 5O% of equipment electricity costs by taking advantage ofpower management, where inactive computers go into “sleep mode”. This decrease in electricity usagecan reduce emissions of carbon dioxide, which causes the greenhouse effect, and sulphur dioxide andnitrogen dioxide —, two primary causes of acid rain.PREVENT WASTE & POLLUTIONDell operates its facilities in a way that minimises harmful impacts on the environment. It also places ahigh priority on reducing waste, recycling and reuse programmes and pollution prevention.100% of all boxing material, cardboard boxes and protective foam are recycled or recovered throughDell’s local recycling facilities.In 2005, Dell developed a Forest Products Stewardship Model that established three main goals withrespect to paper products: protecting endangered forests, improving forest practices and reducingdemand on forests.CONTINUALLY IMPROVE PERFORMANCEDell uses an Environmental Management System (EMS) to establish goals, implement programmes,monitor technology and environmental management practices, evaluate progress, and continuallyimprove environmental performance. Dell also encourages a culture of environmental responsibilityamong employees and management.Dell-owned buildings are monitored and controlled by an automated building management system,which monitors energy usage and controls temperature. By monitoring building occupancy, energyconsumption and cost per unit are reduced.DEMONSTRATE RESPONSIBILITY TO STAKEHOLDERSDell acts in an environmentally responsible manner to ensure the health and safety of its employees,neighbours and the environment.COMPLIANCE WITH THE LAWDell conducts business with integrity and complies with environmental laws and regulations.RECYCLING AND DONATINGAs computers become more common in homes and businesses, there is a growing concern about theenvironmental impact of old computers.CONSUMER EQUIPMENT END-OF-LIFE STRATEGIES

As part of Dell’s policy that ‘No Computer Should Go to Waste’, Irish consumers can recycle usedcomputer systems, monitors or printers through the Dell website at no cost with a new purchase.BUSINESS EQUIPMENT END-OF-LIFE STRATEGIESIn November 2004, Dell Ireland launched recycling services for business and consumer customers.The new service is part of Dell’s global effort to increase product recovery by 50% in 2005.Dell offers business customers Dell Asset Recovery Services (ARS), which allows customers torecycle or re-sell used computer equipment of any brand.Reuse is also a critical element of the product life cycle and Dell also supports donation as aresponsible means of disposing of computers.RECYCLEIn November 2004, Dell hosted a free recycling event in Limerick to raise awareness amongconsumers and small businesses of the importance of electronics recycling. More than 540 carsdropped off 19.1 tonnes of old computer equipment for recycling. 630 computers, 825 monitors, 330printers and other peripherals filled three 40-foot freight trucks.At the event, Nicky Harterv, Vice President of Dell’s Manufacturing and Business Operationscommented “As an environmentally responsible company, offering a whole range of recycling servicesto both the consumer and business customer, it is important that we help raise the awareness of theimportance of recycling to the environment and of the options available.”DONATEIn January 2004, Dell was a partner in the Reuse Technology (RT) Centre, a scheme that facilitates thereuse of computers by community and non-profit groups. Dell customers are encouraged throughDell’s website to donate used systems to the RT Centre, who refurbish them, reload software and givethem to suitable non-profit organisations. This makes hundreds of used computers available tocommunities that would not otherwise be able to afford them. Dell also contributes a percentage of itsown used computers to the RT Centre.COMMUNICATING THE MESSAGEIn March 2005, Dell called on all Irish consumers to “Go Green” for St. Patrick’s Day, followingresearch which highlighted a lack of awareness among consumers of the computer recycle and reuseoptions. The study found while 85% of the public recycle household waste at least once a month, only9% plan to recycle their home computer.Dell announced in June 2005 that Irish consumers are leading the way in the use of its computerrecycling services in the Europe, Middle East and Africa (EMEA) region. Irish online recycling andcomputer donations accounted for over a quarter of Dell’s total EMEA numbers in the first quarter of2005.“Last year alone, Irish customers recycled over 22 tonnes of computer equipment through Dell. Thesefigures emphasise the importance of having these services available,” said Jean Cox-Kearns, Dell’sSenior Manager for Asset Recovery Services.COST-BENEFIT ANALYSISThe costs to Dell of meeting its ethical and environmental responsibilities include:• Resources for a take-back and recycling organisation.• Promoting recycling and its benefits can incur costs (advertising, transportation, sorting etc.).The benefits include:

• A well managed company that understands its impact on the communities in which it operates.• Improved working conditions and higher motivation amongst employees.• Meeting expectations of “green” customers.• Positive publicity for the corporation.In December 2004, Business Ethics magazine presented Dell with its Environmental Progress Awardfor the company’s commitment to the environment and industry-leading computer recycling initiatives.CONCLUSIONDell’s success is based on its ability to meet and exceed the requirements of customers. The samefocus on business efficiencies and customer satisfaction helps Dell’s environmental programme toconserve product energy consumption, reduce or eliminate materials for disposal, prolong product lifespan and provide effective and convenient equipment recovery solutions. Dell’s philosophy is that “Nocomputer should go to waste” and key to meeting that goal is making customers aware that it providesrecycling services that are easy-to- use, safe and affordable.ISSUES(1) Why does Dell treat its stakeholders in a socially and ethically responsible manner?(2) In your opinion, which of Dell’s strategies makes the most impact on the environment? Explainyour answer.(3) Explain the importance of the “Energy Star” programme for consumers and businesses

E-COMMERCE MANAGEMENT

E-CommerceStrategy, Technologies and ApplicationsCASE STUDY : 1Mrs Geeta Kapoor is a middle aged lady, who is very fond of shopping. Uptill now shealways used the traditional methods of shopping. But one day her shopping activity canstuck up due to unprecedented rains, that is when her neice brought up the idea ofinternet shopping. Mrs Kapoor felt that while internet e-commerce might be a veryattractive facility to many customers, it does not solve all shopping problems for her.Question :1) What do you feel are the reasons for Mrs Kapoor above statement?2) Explain the advantages and disadvantages of ordering the products online.3) Use the Web site Evaluation Model and evaluate a couple of Web sites. Comparethe results of the two evaluations.4) Compute an overall score to each of the sites along with reasons.AN ISO 9001 : 2008 CERTIFIED INTERNATIONAL B-SCHOOLCASE STUDY : 2Mr Laxman Shastri is a master in the commerce field and over the period he hasacquired a lot of computer literacy as he feels that the definition of E-Commerce putforward as “Electronic Commerce is commerce enabled by internet era technologies” isvery true.But still a number or lot of concepts have to be understood along with the nature of theinternet.Question :1) Explain packet switching2) How does packet switching differ from a switched network.3) Draw a simple diagram of hardware, network and software facilities utilized when ane-shop is accessed from a home PC.4) List the facilities available on the web.CASE STUDY : 3The recent introduction of EDI into Leroy Merlin, one of the larger DIY retailers in the

French market. The French DIY sector is fragmented with a few medium size chainsand many independent operators. This contrast with the UK DIY sector which isdominated by a few large operators all of which have operational EDI Systems. The useof EDI by Leroy Merlin will no doubt be emulated by the other players of comparablesize but it seems likely to contribute to continue the rationalization that is taking place inthis sector in France.Question :1) For each stage of the business trade cycle, list the stage specific advantages anddisadvantages of using EDI.2) What problems might be encountered in the above case with the implementation ofEDI?3) EDI is typically applied to trade exchanges, orders, invoices etc but it can also beused for non-trade purposes. Suggest how EDI might be used in this case?4) Suggest any instances where a mature EDI supply chain can facilitate a change in thenature of the product of service.CASE STUDY : 4Mr. Apte is retired manager from a multinational company. He worked in the Auditdepartment of the company. He has all his life done a great hard work. After thesystem in the company became computerized he adapted himself to the computerizedenvironment. But still he does not feel comfortable with e-banking services and alwaysfeels that the old system was only better.Question :1) Explain the reasons for Mr Apte holding the above views.2) Explain what you mean by Internet banking?3) What do you feel are the advantages and disadvantages of E-Banking?4) How can the problems in Internet banking be resolved?

BUSINESS ENVIRONMENTAL1. Discuss how the environment acts does as a stimulant to business. Analyse why business often does little for the preservation of physical environment despite the fact that it is significant for business activity. 2. Explain the relevance of ecological issues to business environment3. What do you understand by Business Social Responsibility ( B S R ). How this can be used to improve the Business Environment.4. Explain how the business in an organization can be regulated with regard to the Organization’s Basic Objectives.5. Describe in detail the different role played by the Government towards enriching the business Environment.6. In the Business Environment context, explain how the Political and legal Environment of business plays a vital role. Justify by bringing in suitable examples. 7. Evaluate the advantages and disadvantages of FDI. What is your opinion on the role of FDI in the Retail Sector? Justify your views with India's experience in this sector.

EVENT MANAGEMENTEVENT MANAGEMENT (1st Set)CASE STUDY : 1A group of university students decided to hold a rock concert in the mountains in Juneand advertised the concert on the Internet. Three bands attended the three-day concert,and there was twenty-four hour music. One young girl described the entire situation asliving hell, although why she stayed is unfathomable. “The dance area was in a valleyand to get a drink of water you had to climb a sheep hill. Even then, the water was dirtyand brown. The restrooms were so far away that nobody bothered to use them. Themusic pounded all night and the floor in the cabin we were in vibrated so you could notsleep. My friend got sick and there was no medical help. The organizers did not have aclue. They just wanted to make a fast buck.Question :1) What are some of the things that could go wrong, or have wrong at similar events?2) List three ways in which the organizers were negligent?3) List three ways in which the event could have been improved?4) This event was described to the authorities as a cultural festival. Do you think itbelongs in that category?AN ISO 9001 : 2008 CERTIFIED INTERNATIONAL B-SCHOOLCASE STUDY : 2

You are going to rent a venue for a fashion show. The venue you have in mind is an oldtheater that lends itself well to the event, with excellent sight lines for the audience.However, the décor and lighting planned by your artistic director for your fashionparade may compromise safety. Drapes over the ceiling area will obscure the normallighting and will prevent the fire sensors and sprinklers from working correctly. Also,there are a number of props that may hinder access into and out of the venue. On theother hand, the audience expected is quite small.Question :1) What are the some of the Safety risk associated with this event?2) Who is responsible for the safety of the venue and the audience?3) With whom should you discuss the risks associated with your event concept?4) How could the risks be reduced?CASE STUDY : 3Sponsorship is one of the most common funding sources for staging an event. In somecases, the sponsor is happy to provide cash to support the event in exchange forincreased profile and sales of the sponsor’s products. In other cases sponsor provides‘Value in kind’ that is the sponsor will provide free goods and services, again with theexpectation that this arrangement will have a bottom-line benefit. For example, anewspaper sponsor may provide free advertising space. Some sponsors use an event topromote a new product, and in this case, the whole event is aimed at developingcustomer awareness and loyalty.Question :1) Can the sponsor’s involvement lead to some benefit for the organization in terms ofincreased profile or increased sales?2) What other benefits are there?3) Will it be time-consuming for their staff?4) Define the term sponsorship in brief.CASE STUDY : 4The 2008 exhibition of Designer Jewellery Artists of the South Pacific is being held inthe foyer of a large Honolulu, Hawaii hotel. The governer will open the exhibition, anda number of dignitaries from Tahiti, Guam, Tonga, and Samoa will be in attendance.These will be some security risks associated with the visiting guests, as well as with theitems on display. Threats and Protests could also disrupt the opening.Question :1) Who will be responsible for security (probably more than one body)?2) What are some of the potential security problems?3) What are the occupational health and safety issue?4) What steps can be taken to prevent a security incident?5) What plans should be in place should an incident occur?

WE ARE PROVIDING CASE STUDY ANSWERSASSIGNMENT SOLUTIONS, PROJECT REPORTS

AND THESIS

ISBM / IIBMS / IIBM / ISMS / KSBM / NIPM

SMU / SYMBIOSIS / XAVIER / NIRM / PSBM

ISM / IGNOU / IICT / ISBS / LPU / ISM&RC

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Financial Management

Q-1) What are the techniques of Capital Budgeting? Explain in brief. Q-2) What are the approaches (models) of Dividend Policy.Q-3) Write a note on Stock Markets in India.Q-4) Explain Inventory Management, which is a part of Working Capital Management.

Q-5) What are the techniques of analyzing financial statements. Q-6) Explain the concept of budget. Describe any 5 types of budgets.Q-7) What do you mean by leverages. Explain all three types of leverages.Q-8) Explain the concept of break even analysis.

FINANCE MANAGEMENTa) What is meant by financing decisions? Mention two limitations of accounting rate of return.b) Explain Financial Risk.c) Mention the utility of public deposits as a source of fund.D) Explain operating Lease.e) Discuss the relation between debt financing and financial leverage.F) What is a letter of creditg) Differentiate between Bonus issue and stock split.H) Define the term 'take over.'i) What is Capital Asset pricing model?j) How cost of preference share capital is calculated?K) What is dividend pay-out Ratio?l) Explain the concept of Capital Rationing.m) Mention two advantages of Lease financing.n) Define Economic Value added in relation to shareholder's value criteria.

Financial Management

ZIP ZAP ZOOM CAR COMPANYZip Zap Zoom Company Ltd is into manufacturing cars in the small car (800 cc) segment. It was setup 15 years back and since its establishment it has seen a phenomenal growth in both its market andprofitability. Its financial statements are shown in Exhibits 1 and 2 respectively.The company enjoys the confidence of its shareholders who have been rewarded withgrowing dividends year after year. Last year, the company had announced 20 per cent dividend,which was the highest in the automobile sector. The company has never defaulted on its loanpayments and enjoys a favourable face with its lenders, which include financial institutions,commercial banks and debenture holders.The competition in the car industry has increased in the past few years and the companyforesees further intensification of competition with the entry of several foreign car manufacturesmany of them being market leaders in their respective countries. The small car segment especially,will witness entry of foreign majors in the near future, with latest technology being offered to theIndian customer. The Zip Zap Zoom’s senior management realizes the need for large scaleinvestment in up gradation of technology and improvement of manufacturing facilities to pre-emptcompetition.Whereas on the one hand, the competition in the car industry has been intensifying, on theother hand, there has been a slowdown in the Indian economy, which has not only reduced thedemand for cars, but has also led to adoption of price cutting strategies by various car manufactures.The industry indicators predict that the economy is gradually slipping into recession.Exhibit 1 Balance sheet as at March 31,200 x(Amount in Rs. Crore)Source of FundsShare capital 350Reserves and surplus 250 600Loans :Debentures (@ 14%) 50Institutional borrowing (@ 10%) 100

Commercial loans (@ 12%) 250Total debt 400Current liabilities 2001,200Application of FundsFixed AssetsGross block 1,000Less : Depreciation 250Net block 750Capital WIP 190Total Fixed Assets 940Current assets :Inventory 200Sundry debtors 40Cash and bank balance 10Other current assets 10Total current assets 260-1200Exhibit 2 Profit and Loss Account for the year ended March 31, 200x(Amount in Rs. Crore)Sales revenue (80,000 units x Rs. 2,50,000) 2,000.0Operating expenditure :Variable cost :Raw material and manufacturing expenses 1,300.0Variable overheads 100.0Total 1,400.0Fixed cost :R & D 20.0Marketing and advertising 25.0Depreciation 250.0Personnel 70.0Total 365.0Total operating expenditure 1,765.0Operating profits (EBIT) 235.0Financial expense :Interest on debentures 7.7Interest on institutional borrowings 11.0Interest on commercial loan 33.0 51.7Earnings before tax (EBT) 183.3Tax (@ 35%) 64.2Earnings after tax (EAT) 119.1Dividends 70.0Debt redemption (sinking fund obligation)** 40.0Contribution to reserves and surplus 9.1* Includes the cost of inventory and work in process (W.P) which is dependent on demand(sales).** The loans have to be retired in the next ten years and the firm redeems Rs. 40 crore everyyear.The company is faced with the problem of deciding how much to invest in upgradation of its plans and technology. Capital investment up to a maximum of Rs. 100crore is required. The problem areas are three-fold. The company cannot forgo the capital investment as that could lead to reduction in its marketshare as technological competence in this industry is a must and customers would shift tomanufactures providing latest in car technology. The company does not want to issue new equity shares and its retained earning are not enoughfor such a large investment. Thus, the only option is raising debt. The company wants to limit its additional debt to a level that it can service without takingundue risks. With the looming recession and uncertain market conditions, the companyperceives that additional fixed obligations could become a cause of financial distress, and

thus, wants to determine its additional debt capacity to meet the investment requirements.Mr. Shortsighted, the company’s Finance Manager, is given the task of determining the additionaldebt that the firm can raise. He thinks that the firm can raise Rs. 100 crore worth debt and service iteven in years of recession. The company can raise debt at 15 per cent from a financial institution.While working out the debt capacity. Mr. Shortsighted takes the following assumptions for therecession years.a) A maximum of 10 percent reduction in sales volume will take place.b) A maximum of 6 percent reduction in sales price of cars will take place.Mr. Shorsighted prepares a projected income statement which is representative of the recessionyears. While doing so, he determines what he thinks are the “irreducible minimum” expendituresunder recessionary conditions. For him, risk of insolvency is the main concern while designing thecapital structure. To support his view, he presents the income statement as shown in Exhibit 3.Exhibit 3 projected Profit and Loss account(Amount in Rs. Crore)Sales revenue (72,000 units x Rs. 2,35,000) 1,692.0Operating expenditureVariable cost :Raw material and manufacturing expenses 1,170.0Variable overheads 90.0Total 1,260.0Fixed cost :R & D ---Marketing and advertising 15.0Depreciation 187.5Personnel 70.0Total 272.5Total operating expenditure 1,532.5EBIT 159.5Financial expenses :Interest on existing Debentures 7.0Interest on existing institutional borrowings 10.0Interest on commercial loan 30.0Interest on additional debt 15.0 62.0EBT 97.5Tax (@ 35%) 34.1EAT 63.4Dividends --Debt redemption (sinking fund obligation) 50.0*Contribution to reserves and surplus 13.4* Rs. 40 crore (existing debt) + Rs. 10 crore (additional debt)Assumptions of Mr. Shorsighted R & D expenditure can be done away with till the economy picks up. Marketing and advertising expenditure can be reduced by 40 per cent. Keeping in mind the investor confidence that the company enjoys, he feels that the companycan forgo paying dividends in the recession period.He goes with his worked out statement to the Director Finance, Mr. Arthashatra, and advocatesraising Rs. 100 crore of debt to finance the intended capital investment. Mr. Arthashatra does notfeel comfortable with the statements and calls for the company’s financial analyst, Mr. Longsighted.Mr. Longsighted carefully analyses Mr. Shortsighted’s assumptions and points out thatinsolvency should not be the sole criterion while determining the debt capacity of the firm. He pointsout the following :

Apart from debt servicing, there are certain expenditures like those on R & D and marketingthat need to be continued to ensure the long-term health of the firm. Certain management policies like those relating to dividend payout, send out importantsignals to the investors. The Zip Zap Zoom’s management has been paying regular dividendsand discontinuing this practice (even though just for the recession phase) could raise seriousdoubts in the investor’s mind about the health of the firm. The firm should pay at least 10 percent dividend in the recession years. Mr. Shortsighted has used the accounting profits to determine the amount available each yearfor servicing the debt obligations. This does not give the true picture. Net cash inflowsshould be used to determine the amount available for servicing the debt. Net Cash inflows are determined by an interplay of many variables and such a simplistic viewshould not be taken while determining the cash flows in recession. It is not possible toaccurately predict the fall in any of the factors such as sales volume, sales price, marketingexpenditure and so on. Probability distribution of variation of each of the factors that affectnet cash inflow should be analyzed. From this analysis, the probability distribution ofvariation in net cash inflow should be analysed (the net cash inflows follow a normalprobability distribution). This will give a true picture of how the company’s cash flows willbehave in recession conditions.The management recognizes that the alternative suggested by Mr. Longsighted rests on data,which are complex and require expenditure of time and effort to obtain and interpret. Consideringthe importance of capital structure design, the Finance Director asks Mr. Longsighted to carry out hisanalysis. Information on the behaviour of cash flows during the recession periods is taken intoaccount.The methodology undertaken is as follows :(a) Important factors that affect cash flows (especially contraction of cash flows), like salesvolume, sales price, raw materials expenditure, and so on, are identified and the analysis iscarried out in terms of cash receipts and cash expenditures.(b) Each factor’s behaviour (variation behaviour) in adverse conditions in the past is studied andfuture expectations are combined with past data, to describe limits (maximum favourable),most probable and maximum adverse) for all the factors.(c) Once this information is generated for all the factors affecting the cash flows, Mr.Longsighted comes up with a range of estimates of the cash flow in future recession periodsbased on all possible combinations of the several factors. He also estimates the probability ofoccurrence of each estimate of cash flow.Assuming a normal distribution of the expected behaviour, the mean expectedvalue of net cash inflow in adverse conditions came out to be Rs. 220.27 crore with standarddeviation of Rs. 110 crore.Keeping in mind the looming recession and the uncertainty of the recession behaviour, Mr.Arthashastra feels that the firm should factor a risk of cash inadequacy of around 5 per cent even inthe most adverse industry conditions. Thus, the firm should take up only that amount of additionaldebt that it can service 95 per cent of the times, while maintaining cash adequacy.To maintain an annual dividend of 10 per cent, an additional Rs. 35 crore has to be kept aside.Hence, the expected available net cash inflow is Rs. 185.27 crore (i.e. Rs. 220.27 – Rs. 35 crore)Analyse the debt capacity of the company.NO. 2COOKING LPG LTDDETERMINATION OF WORKING CAPTIALIntroductionCooking LPG Ltd, Gurgaon, is a private sector firm dealing in the bottling and supply of domesticLPG for household consumption since 1995. The firm has a network of distributors in the districts ofGurgaon and Faridabad. The bottling plant of the firm is located on National Highway – 8 (New

Delhi – Jaipur), approx. 12 kms from Gurgaon. The firm has been consistently performing we.” andplans to expand its market to include the whole National Capital Region.The production process of the plant consists of receipt of the bulk LPG through tank trucks,storage in tanks, bottling operations and distribution to dealers. During the bottling process, thecylinders are subjected to pressurized filling of LPG followed by quality control and safety checkssuch as weight, leakage and other defects. The cylinders passing through this process are sealed anddispatched to dealers through trucks. The supply and distribution section of the plant prepares theinvoice which goes along with the truck to the distributor.Statement of the Problem :Mr. I. M. Smart, DGM(Finance) of the company, was analyzing the financial performance of thecompany during the current year. The various profitability ratios and parameters of the companyindicated a very satisfactory performance. Still, Mr. Smart was not fully content-specially with themanagement of the working capital by the company. He could recall that during the past year, inspite of stable demand pattern, they had to, time and again, resort to bank overdrafts due to nonavailabilityof cash for making various payments. He is aware that such aberrations in the financeshave a cost and adversely affects the performance of the company. However, he was unable topinpoint the cause of the problem.He discussed the problem with Mr. U.R. Keenkumar, the new manager (Finance). Aftercritically examining the details, Mr. Keenkumar realized that the working capital was hithertoestimated only as approximation by some rule of thumb without any proper computation based onsound financial policies and, therefore, suggested a reworking of the working capital (WC)requirement. Mr. Smart assigned the task of determination of WC to him.Profile of Cooking LPG Ltd.1) Purchases : The company purchases LPG in bulk from various importers ex-Mumbai andKandla, @ Rs. 11,000 per MT. This is transported to its Bottling Plant at Gurgaon through 15MT capacity tank trucks (called bullets), hired on annual contract basis. The averagetransportation cost per bullet ex-either location is Rs. 30,000. Normally, 2 bullets per day arereceived at the plant. The company make payments for bulk supplies once in a month,resulting in average time-lag of 15 days.2) Storage and Bottling : The bulk storage capacity at the plant is 150 MT (2 x 75 MT storagetanks) and the plant is capable of filling 30 MT LPG in cylinders per day. The plant operatesfor 25 days per month on an average. The desired level of inventory at various stages is asunder. LPG in bulk (tanks and pipeline quantity in the plant) – three days average production / sales. Filled Cylinders – 2 days average sales. Work-in Process inventory – zero.3) Marketing : The LPG is supplied by the company in 12 kg cylinders, invoiced @ Rs. 250 percylinder. The rate of applicable sales tax on the invoice is 4 per cent. A commission of Rs.15 per cylinder is paid to the distributor on the invoice itself. The filled cylinders aredelivered on company’s expense at the distributor’s godown, in exchange of equal number ofempty cylinders. The deliveries are made in truck-loads only, the capacity of each truck being250 cylinders. The distributors are required to pay for deliveries through bank draft. Onreceipt of the draft, the cylinders are normally dispatched on the same day. However, forevery truck purchased on pre-paid basis, the company extends a credit of 7 days to thedistributors on one truck-load.4) Salaries and Wages : The following payments are made : Direct labour – Re. 0.75 per cylinder (Bottling expenses) – paid on last day of the month. Security agency – Rs. 30,000 per month paid on 10th of subsequent month. Administrative staff and managers – Rs. 3.75 lakh per annum, paid on monthly basis on thelast working day.5) Overheads :

Administrative (staff, car, communication etc) – Rs. 25,000 per month – paid on the 10th ofsubsequent month. Power (including on DG set) – Rs. 1,00,000 per month paid on the 7th Subsequent month. Renewal of various licenses (pollution, factory, labour CCE etc.) – Rs. 15,000 per annum paidat the beginning of the year. Insurance – Rs. 5,00,000 per annum to be paid at the beginning of the year. Housekeeping etc – Rs. 10,000 per month paid on the 10th of the subsequent month. Regular maintenance of plant – Rs. 50,000 per month paid on the 10th of every month to thevendors. This includes expenditure on account of lubricants, spares and other stores. Regular maintenance of cylinders (statutory testing) – Rs. 5 lakh per annum – paid onmonthly basis on the 15th of the subsequent month. All transportation charges as per contracts – paid on the 10th subsequent month. Sales tax as per applicable rates is deposited on the 7th of the subsequent month.6) Sales : Average sales are 2,500 cylinders per day during the year. However, during the wintermonths (December to February), there is an incremental demand of 20 per cent.7) Average Inventories : The average stocks maintained by the company as per its policy guidelines: Consumables (caps, ceiling material, valves etc) – Rs. 2 lakh. This amounts to 15 daysconsumption. Maintenance spares – Rs. 1 lakh Lubricants – Rs. 20,000 Diesel (for DG sets and fire engines) – Rs. 15,000 Other stores (stationary, safety items) – Rs. 20,0008) Minimum cash balance including bank balance required is Rs. 5 lakh.9) Additional Information for Calculating Incremental Working Capital During Winter. No increase in any inventories take place except in the inventory of bulk LPG, whichincreases in the same proportion as the increase of the demand. The actual requirements ofLPG for additional supplies are procured under the same terms and conditions from thesuppliers. The labour cost for additional production is paid at double the rate during wintes. __________No changes in other administrative overheads. The expenditure on power consumption during winter increased by 10 per cent. However,during other months the power consumption remains the same as the decrease owing toreduced production is offset by increased consumption on account of compressors /Acs. Additional amount of Rs. 3 lakh is kept as cash balance to meet exigencies during winter. No change in time schedules for any payables / receivables. The storage of finished goods inventory is restricted to a maximum 5,000 cylinders due tostatutory requirements.NO. 3M/S HI-TECH ELECTRONICSM/s. Hi – tech Electronics, a consumer electronics outlet, was opened two years ago in Dwarka, NewDelhi. Hard work and personal attention shown by the proprietor, Mr. Sony, has brought success.However, because of insufficient funds to finance credit sales, the outlet accepted only cash and bankcredit cards. Mr. Sony is now considering a new policy of offering installment sales on terms of 25per cent down payment and 25 per cent per month for three months as well as continuing to acceptcash and bank credit cards.Mr. Sony feels this policy will boost sales by 50 percent. All the increases in sales will becredit sales. But to follow through a new policy, he will need a bank loan at the rate of 12 percent.The sales projections for this year without the new policy are given in Exhibit 1.Exhibit 1 Sales Projections and Fixed costsMonth Projected sales without instalmentoption

Projected sales with instalmentoptionJanuary Rs. 6,00,000 Rs. 9,00,000February 4,00,000 6,00,000March 3,00,000 4,50,000April 2,00,000 3,00,000May 2,00,000 3,00,000June 1,50,000 2,25,000July 1,50,000 2,25,000August 2,00,000 3,00,000September 3,00,000 4,50,000October 5,00,000 7,50,000November 5,00,000 15,00,000December 8,00,000 12,00,000Total Sales 43,00,000 72,00,000Fixed cost 2,40,000 2,40,000He further expects 26.67 per cent of the sales to be cash, 40 per cent bank credit card sales on which a2 per cent fee is paid, and 33.33 per cent on installment sales. Also, for short term seasonalrequirements, the film takes loan from chit fund to which Mr. Sony subscribes @ 1.8 per cent permonth.Their success has been due to their policy of selling at discount price. The purchase per unitis 90 per cent of selling price. The fixed costs are Rs. 20,000 per month. The proprietor believes thatthe new policy will increase miscellaneous cost by Rs. 25,000.The business being cyclical in nature, the working capital finance is done on trade – off basis.The proprietor feels that the new policy will lead to bad debts of 1 per cent.(a) As a financial consultant, advise the proprietor whether he should go for the extension ofcredit facilities.(b) Also prepare cash budget for one year of operation of the firm, ignoring interest. Theminimum desired cash balance & Rs. 30,000, which is also the amount the firm, has onJanuary 1. Borrowings are possible which are made at the beginning of a month and repaid atthe end when cash is available.NO.4SMOOTHDRIVE TYRE LTDSmoothdrive Tyre Ltd manufacturers tyres under the brand name “Super Tread’ for the domestic carmarket. It is presently using 7 machines acquired 3 years ago at a cost of Rs. 15 lakh each having auseful life of 7 years, with no salvage value.After extensive research and development, Smoothdrive Tyre Ltd has recently developed anew tyre, the ‘Hyper Tread’ and must decide whether to make the investments necessary to produceand market the Hyper Tread. The Hyper Tread would be ideal for drivers doing a large amount ofwet weather and off road driving in addition to normal highway usage. The research anddevelopment costs so far total Rs. 1,00,00,000. The Hyper Tread would be put on the marketbeginning this year and Smoothdrive Tyrs expects it to stay on the market for a total of three years.Test marketing costing Rs. 50,00,000, shows that there is significant market for a Hyper Tread typetyre.As a financial analyst at Smoothdrive Tyre, Mr. Mani asked by the Chief Financial Officer(CFO), Mr. Tyrewala to evaluate the Hyper-Tread project and to provide a recommendation orwhether or not to proceed with the investment. He has been informed that all previous investments inthe Hyper Tread project are sunk costs are only future cash flows should be considered. Except forthe initial investments, which occur immediately, assume all cash flows occur at the year-end.

Smoothedrive Tyre must initially invest Rs. 72,00,00,000 in production equipments to makethe Hyper Tread. They would be depreciated at a rate of 25 per cent as per the written down value(WDV) method for tax purposes. The new production equipments will allow the company to followflexible manufacturing technique, that is both the brands of tyres can be produced using the sameequipments. The equipments is expected to have a 7-year useful life and can be sold for Rs.10,00,000 during the fourth year. The company does not have any other machines in the block of 25per cent depreciation. The existing machines can be sold off at Rs. 8 lakh per machine with anestimated removal cost of one machine for Rs. 50,000.Operating RequirementsThe operating requirements of the existing machines and the new equipment are detailed in Exhibits11.1 and 11.2 respectively.Exhibit 11.1 Existing Machines Labour costs (expected to increase 10 per cent annually to account for inflation) :(a) 20 unskilled labour @ Rs. 4,000 per month(b) 20 skilled personnel @ Rs. 6,000 per month.(c) 2 supervising executives @ Rs. 7,000 per month.(d) 2 maintenance personnel @ Rs. 5,000 per month. Maintenance cost :Years 1-5 : Rs. 25 lakhYears 6-7 : Rs. 65 lakh Operating expenses : Rs. 50 lakh expected to increase at 5 per cent annually. Insurance cost / premium :Year 1 : 2 per cent of the original cost of machineAfter year 1 : Discounted by 10 per cent.Exhibit 11.2 New production Equipment Savings in cost of utilities : Rs. 2.5 lakh Maintenance costs :Year 1 – 2 : Rs. 8 lakhYear 3 – 4 : Rs. 30 lakh Labour costs :9 skilled personnel @ Rs. 7,000 per month1 maintenance personnel @ Rs. 7,000 per month. Cost of retrenchment of 34 personnel : (20 unskilled, 11 skilled, 2 supervisors and 1maintenance personnel) : Rs. 9,90,000, that is equivalent to six months salary. Insurance premiumYear 1 : 2 per cent of the purchase cost of machineAfter year 1 : Discounted by 10 per cent.The opening expenses do not change to any considerable extent for the new equipment and thedifference is negligible compared to the scale of operations.Smoothdrive Tyre intends to sell Hyper Tread of two distinct markets :1. The original equipment manufacturer (OEM) market : The OEM market consists primarily ofthe large automobile companies who buy tyres for new cars. In the OEM market, the HyperTread is expected to sell for Rs. 1,200 per tyre. The variable cost to produce each HyperTread is Rs. 600.2. The replacement market : The replacement market consists of all tyres purchased after theautomobile has left the factory. This markets allows higher margins and Smoothdrive Tyreexpects to sell the Hyper Tread for Rs. 1.500 per tyre. The variable costs are the same as inthe OEM market.Smoothdrive Tyre expects to raise prices by 1 percent above the inflation rate.The variable costs will also increase by 1 per cent above the inflation rate. In addition, the HyperTread project will incur Rs. 2,50,000 in marketing and general administration cost in the first yearwhich are expected to increase at the inflation rate in subsequent years.

Smoothdrive Tyre’s corporate tax rate is 35 per cent. Annual inflation is expected to remainconstant at 3.25 per cent. Smoothdrive Tyre uses a 15 per cent discount rate to evaluate new productdecisions.The Tyre MarketAutomotive industry analysts expect automobile manufacturers to have a production of 4,00,000 newcars this year and growth in production at 2.5 per year onwards. Each new car needs four new tyres(the spare tyres are undersized and fall in a different category) Smoothdrive Tyre expects the HyperTread to capture an 11 per cent share of the OEM market.The industry analysts estimate that the replacement tyre market size will be one crore this yearand that it would grow at 2 per cent annually. Smoothdrive Tyre expects the Hyper Tread to capturean 8 per cent market share.You also decide to consider net working capital (NWC) requirements in this scenario. Thenet working capital requirement will be 15 per cent of sales. Assume that the level of working capitalis adjusted at the beginning of the year in relation to the expected sales for the year. The workingcapital is to be liquidated at par, barring an estimated loss of Rs. 1.5 crore on account of bad debt.The bad debt will be a tax-deductible expenses.As a finance analyst, prepare a report for submission to the CFO and the Board of Directors,explaining to them the feasibility of the new investment.No. 5COMPUTATION OF COST OF CAPITAL OF PALCO LTDIn October 2003, Neha Kapoor, a recent MBA graduate and newly appointed assistant to theFinancial Controller of Palco Ltd, was given a list of six new investment projects proposed for thefollowing year. It was her job to analyse these projects and to present her findings before the Boardof Directors at its annual meeting to be held in 10 days. The new project would require aninvestment of Rs. 2.4 crore.Palco Ltd was founded in 1965 by Late Shri A. V. Sinha. It gained recognition as a leadingproducer of high quality aluminum, with the majority of its sales being made to Japan. During therapid economic expansion of Japan in the 1970s, demand for aluminum boomed, and palco’s salesgrew rapidly. As a result of this rapid growth and recognition of new opportunities in the energymarket, Palco began to diversify its products line. While retaining its emphasis on aluminumproduction, it expanded operations to include uranium mining and the production of electricgenerators, and finally, it went into all phases of energy production. By 2003, Palco’s sales hadreached Rs. 14 crore level, with net profit after taxes attaining a record of Rs. 67 lakh.As Palco expanded its products line in the early 1990s, it also formalized its caital budgetingprocedure. Until 1992, capital investment projects were selected primarily on the basis of the averagereturn on investment calculations, with individual departments submitting these calculations forprojects falling within their division. In 1996, this procedure was replaced by one using present valueas the decision making criterion. This change was made to incorporate cash flows rather thanaccounting profits into the decision making analysis, in addition to adjusting these flows for the timevalue of money. At the time, the cost of capital for Palco was determined to be 12 per cent, whichhas been used as the discount rate for the past 5 years. This rate was determined by taking a weightedaverage cost Palco had incurred in raising funds from the capital market over the previous 10 years.

It had originally been Neha’s assignment to update this rate over the most recent 10-yearperiod and determine the net present value of all the proposed investment opportunities using thisnewly calculated figure. However, she objected to this procedure, stating that while this calculationgave a good estimate of “the past cost” of capital, changing interest rates and stock prices made thiscalculation of little value in the present. Neha suggested that current cost of raising funds in thecapital market be weighted by their percentage mark-up of the capital structure. This proposal wasreceived enthusiastically by the Financial Controller of the Palco, and Neha was given the assignmentof recalculating Palco’s cost of capital and providing a written report for the Board of Directorsexplaining and justifying this calculation.To determine a weighted average cost of capital for Palco, it was necessary for Neha toexamine the cost associated with each source of funding used. In the past, the largest sources offunding had been the issuance of new equity shares and internally generated funds. Throughconversations with Financial Controller and other members of the Board of Directors, Neha learntthat the firm, in fact, wished to maintain its current financial structure as shown in Exhibit 1.Exhibit 1 Palco Ltd Balance Sheet for Year Ending March 31, 2003Assets Liabilities and EquityCashAccounts receivableInventoriesTotal current assetsNet fixed assetsGoodwillTotal assetsRs. 90,00,0003,10,00,0001,20,00,0005,20,00,00019,30,00,00070,00,00025,20,00,000Accounts payableShort-term debtAccrued taxesTotal current liabilitiesLong-term debtPreference sharesRetained earningsEquity sharesTotal liabilities andequity shareholdersfundRs. 8,50,0001,00,00011,50,0001,20,00,0007,20,00,0004,80,00,0001,00,00,00011,00,00025,20,00,000She further determined that the strong growth patterns that Palco had exhibited over the last ten years

were expected to continue indefinitely because of the dwindling supply of US and Japanese domesticoil and the growing importance of other alternative energy resources. Through further investigations,Neha learnt that Palco could issue additional equity share, which had a par value of Rs. 25 pre shareand were selling at a current market price of Rs. 45. The expected dividend for the next period wouldbe Rs. 4.4 per share, with expected growth at a rate of 8 percent per year for the foreseeable future.The flotation cost is expected to be on an average Rs. 2 per share.Preference shares at 11 per cent with 10 years maturity could also be issued with the help ofan investment banker with an investment banker with a per value of Rs. 100 per share to be redeemedat par. This issue would involve flotation cost of 5 per cent.Finally, Neha learnt that it would be possible for Palco to raise an additional Rs. 20 lakhthrough a 7 – year loan from Punjab National Bank at 12 per cent. Any amount raised over Rs. 20lakh would cost 14 per cent. Short-term debt has always been usesd by Palco to meet working capitalrequirements and as Palco grows, it is expected to maintain its proportion in the capital structure tosupport capital expansion. Also, Rs. 60 lakh could be raised through a bond issue with 10 yearsmaturity with a 11 percent coupon at the face value. If it becomes necessary to raise more funds vialong-term debt, Rs. 30 lakh more could be accumulated through the issuance of additional 10-yearbonds sold at the face value, with the coupon rate raised to 12 per cent, while any additional fundsraised via long-term debt would necessarily have a 10 – year maturity with a 14 per cent couponyield. The flotation cost of issue is expected to be 5 per cent. The issue price of bond would be Rs.100 to be redeemed at par.In the past, Palco had calculated a weighted average of these sources of funds to determine itscost of capital. In discussion with the current Financial Controller, the point was raised that whilethis served as an appropriate calculation for external funds, it did not take into account the cost ofinternally generated funds. The Financial Controller agreed that there should be some cost associatedwith retained earnings and need to be incorporated in the calculations but didn’t have any clue as towhat should be the cost.Palco Ltd is subjected to the corporate tax rate of 40 per cent.From the facts outlined above, what report would Neha submit to the Board of Directors ofpalco Ltd?NO. 6ARQ LTDARQ Ltd is an Indian company based in Greater Noida, which manufactures packaging materials forfood items. The company maintains a present fleet of five fiat cars and two Contessa Classic cars forits chairman, general manager and five senior managers. The book value of the seven cars is Rs.20,00,000 and their market value is estimated at Rs. 15,00,000. All the cars fall under the same blockof depreciation @ 25 per cent.A German multinational company (MNC) BYR Ltd, has acquired ARQ Ltd in all cash deal.

The merged company called BYR India Ltd is proposing to expand the manufacturing capacity byfour folds and the organization structure is reorganized from top to bottom. The German MNC hasthe policy of providing transport facility to all senior executives (22) of the company because themanufacturing plant at Greater Noida was more than 10 kms outside Delhi where most of theexecutives were staying.Prices of the cars to be provided to the Executives have been as follows :Manager (10) Santro King Rs. 3,75,000DGM and GM (5) Honda City 6,75,000Director (5) Toyota Corolla 9,25,000Managing Director (1) Sonata Gold 13,50,000Chairman (1) Mercedes benz 23,50,000The company is evaluating two options for providing these cars to executivesOption 1 : The company will buy the cars and pay the executives fuel expenses, maintenanceexpenses, driver allowance and insurance (at the year – end). In such case, the ownership of the carwill lie with the company. The details of the proposed allowances and expenditures to be paid are asfollows :a) Fuel expense and maintenance Allowances per monthParticulars Fuel expenses Maintenance allowanceManagerDGM and GMDirectorManaging DirectorChairmanRs. 2,5005,0007,50012,00018,000Rs. 1,0001,2001,8003,0004,000b) Driver Allowance: Rs. 4,000 per month (Only Chairman, Managing Director and Directorsare eligible for driver allowance.)c) Insurance cost: 1 per cent of the cost of the car.The useful life for the cars is assumed to be five years after which they can be sold at 20 percent salvage value. All the cars fall under the same block of depreciation @ 25 per cent using writtendown method of depreciation. The company will have to borrow to finance the purchase from a bankwith interest at 14 per cent repayable in five annual equal instalments payable at the end of the year.Option 2 : ORIX, The fleet management company has offered the 22 cars of the same make at leasefor the period of five years. The monthly lease rentals for the cars are as follows (assuming that thetotal of monthly lease rentals for the whole year are paid at the end of each year.Santro Xing Rs. 9,125Honda City 16,325Toyota Corolla 27,175Sonata Gold 39,250Mercedes Benz 61,250Under this lease agreement the leasing company, ORIX will pay for the fuel, maintenance and

driver expenses for all the cars. The lessor will claim the depreciation on the cars and the lessee willclaim the lease rentals against the taxable income. BYR India Ltd will have to hire fulltimesupervisor (at monthly salary of Rs. 15,000 per month) to manage the fleet of cars hired on lease.The company will have to bear additional miscellaneous expense of Rs. 5,000 per month forproviding him the PC, mobioe phone and so on.The company’s effective tax rate is 40 per cent and its cost of capital is 15 per cent.Analyse the financial viability of the two options. Which option would you recommend? Why?

FINANCIAL MANAGEMENT(A). (1).Mr. Nimish holds the following portfolio. (10 marks)Share Beta InvestmentAlpha 0.9 Rs.12, 00,000Beta 1.5 Rs. 3, 50,000Carrot 1.0 Rs. 1, 00,000What is the expected rate of return on his portfolio, if the risk rate is 7 per cent and theexpected return on the market portfolio is 16 per cent?(A). (2). A share is selling for Rs.60 on which a dividend of Rs.4 per share is expected at the endof the year. The expected market price after dividend declaration is to be Rs.70. Compute thefollowing: - (10 marks)(i) The return on investment ® in shares.(ii) Dividend yield(iii) Capital Gain Yield(B) DIC Ltd. provides the following data: (20 marks)Comparative trial balanceMarch 31 year 2 March 31 year 1 Increase(Decrease)Debit Balance 20 10 10Cash Rs.190 Rs. 90 Rs.100Working capital (other than cash) 100 200 (100)Investment (Long term) 500 400 100Building and equipment 40 50 (10)Total 850 750 100CreditAccumulated Depreciation 200 160 40Bonds 150 100 50Reserves 350 350 ---Equity Shares 150 140 103Total 850 750 100Income StatementFor the period ending March 31, year 2(Amount in Rs lakh)Sales Rs.1000Cost of Goods Sold 500Selling Expense Rs.50Administrative Expenses 50 100Operating Income 400Other chargesGain on sale of building and equipment Rs 5Loss on sale of investments (10)Interest (6)Taxes (189) (200)Net Income after taxes 200Notes: (a) The depreciation charged for the year was Rs.60 Lakh(b) The Book value of the building and equipment disposed was Rs 10 Lakh(c)Prepare a Cash Flow Statement (Based on AS-3)(C). (1). A. Ltd. produces a product which has a monthly demand of 4,000 units. The productrequires a component X which is purchased at Rs.20. For every finished product one unit of

component is required. The ordering cost is Rs.120 per order and the holding cost is 10 percent per annum. (10 marks)You are required to calculate:(i) Economic order quantity(ii) If the minimum lot size to be supplied is 4, 000 units, what is the extra cost, thecompany has to incur?(iii) What is the minimum carrying cost, the company has to incur?4(C). (2). 4. Master Tools Ltd. Is currently operating its business at 75% level, producing 38275 units ofa tools component and proposes to increase capacity utilization in the coming year by 33 1/3 % over theexisting level of production. (10 marks)The following data has been supplied:(1)Unit cost structure of the product at current level:Rs.Raw Material 5Wages 2Overheads 3Fixed Overhead 2Profit 3_____15(i) Raw Material will remain in stores for 1 month before issued for production. Material willremain in process for further 1 month. Suppliers grant 4 months credit to the company.(ii) Finished goods remain in godown for 2 months(iii) Debtors are allowed credit for 2 months.(iv) Lag in wages and overheads payments in 1 month, and these expenses accrue evenlythroughout the production cycle.(v) No increase either in cost of inputs or selling price is envisagedYou are required to prepare a Projected Profitability statement and the Working CapitalRequirement at new level, assuming that a minimum cash balance of Rs.20000 has to be maintained.(D). A stock is currently trading for Rs.29. The risk less interest is 7 % p.a continuouslycompounded. Estimate the value of European call option with a strike price of Rs.30 and a timeof expiration of 4 months. The standard deviation of the stock’s annual return is 0.45. Apply BSmodel. (20 marks)5(E). Following is the EPS record of AB Ltd over the past 10 years. (20 marks)Year EPS Year EPS10 Rs.30 5 Rs.169 20 4 158 19 3 147 18 2 186 17 1 (12)(i) Determine the annual dividend paid each year in the following cases:(a) If the firm’s dividend policy is based on a constant dividend payout ratio of 40 per centfor all years(b) If the firm pays at Rs 10 per share, and increases it to Rs 12 per share when earningsexceed Rs.14 per share for the previous 2 consecutive years.(c) If the firm pays dividend at Rs 7 per share each except when EPS exceeds Rs 14 pershare, when an extra dividend equal to 80 per centof earnings beyond Rs.14 would bepaid.(ii) Which type of dividend policy will you recommended to the company and why?(F). (1). A US MNC has its subsidiary in India. The subsidiary has issued 15 pr cent preferenceshares of the face value of Rs.100, to be redeemed at year-end 9. Flotation costs are expected tobe 5 per cent; these costs can be amortized for tax purpose during 8 years at a uniform rate.The corporate tax rate is 35 per cent. Determine the costs of preference shares from theperspective of the subsidiary. (10 marks)

(F). (2) The US inflation rate is expected to be Rs.3 per cent annually and that of India isexpected to be 4.5 per cent annually. The current spot rate of US $ in India is Rs.47.4060/US $.(10 marks)Find the expected rate of US $ in India after one year and after 5 years from now usingpurchase power theory of exchange rate

FINANCIAL & COST ACCOUNTING

Q1) ABC Ltd. Produces room coolers. The company is considering whether it should continue tomanufacture air circulating fans itself or purchase them from outside. Its annual requirement is25000 units. An outsider vendor is prepared to supply fans for Rs 285 each. In addition, ABC Ltdwill have to incur costs of Rs 1.50 per unit for freight and Rs 10,000 per year for quality inspection,storing etc of the product.In the most recent year ABC Ltd. Produced 25000 fans at the following total cost :Material Rs. 50,00,000Labour Rs. 20,00,000Supervision & other indirect labour Rs. 2,00,000Power and Light Rs. 50,000Depreciation Rs. 20,000Factory Rent Rs. 5,000Supplies Rs. 75,000Power and light includes Rs 20,000 for general heating and lighting, which is an allocation based onthe light points. Indirect labour is attributed mainly to the manufacturing of fans. About 75% of itcan be dispensed with along with direct labour if manufacturing is discontinued. However, thesupervisor who receives annual salary of Rs 75,000 will have to be retained. The machines used formanufacturing fans which have a book value of Rs 3,00,000 can be sold for Rs 1,25,000 and theamount realized can be invested at 15% return. Factory rent is allocated on the basis of area, and thecompany is not able to see an alternative use for the space which would be released. Should ABCLtd. Manufacture the fans or buy them?AN ISO 9001 : 2008 CERTIFIED INTERNATIONAL B-SCHOOLPage 1 Out of 1Q2) Usha Company produces three consumer products : P, Q and R. The management of thecompany wants to determine the most profitable mix. The cost accountant has supplied the followingdata.Usha Company : Sales and Cost DataDescription Product TotalP Q RMaterial Cost per unitQuantity (Kg) 1.0 1.2 1.4Rate per Kg (Rs) 50 50 50Cost per unit (Rs) 50 60 70Labour Cost per unit 30 90 90Variable Overheads per unit 15 10 25Fixed Overheads (Rs .000) 9,175Current Sales (Units ,000) 100 50 60 210Projected Sales (Units ,000) 109 55 125 289Selling Price per unit (Rs) 150 200 270Raw material used by the firm is in short supply and the firm can expect a maximum supply of 350lakh kg for next year. Is the company’s projected sales mix most profitable or can it be changed forthe better?Q3) DSQ Company Ltd, a diversified company, has three divisions, cement, fertilizers and

textiles. The summary of the company’s profit is given below :(Rs/Crore)Cement Fertilizer Textiles TotalSales 20.0 12.0 18.0 50.0Less : Variable Cost 8.0 9.6 5.4 23.0Contribution 12.0 2.4 12.6 27.0Less : Fixed Cost (allocated todivisions in proportion tovolumes of Sales)8.0 4.8 7.2 20.0Profit (Loss) 4.0 (2.4) 5.4 7.0After allocating the company’s fixed overheads to products the Fertilizers, division incurs a loss ofRs 2.4 crore. Should the company drop this division?

General Management1. What is Input & Output model?2. Describe some major kinds of strategies/policies & the hierarchy of strategies?3. What do you mean by reengineering organization & Explain key aspects?4. What is departmentation & Types of departmentation?5. Distinguish strength of appraisal against verifiable objectives?6. Explain Maslow hierarchy of needs theory?7. Define Leadership with examples?8. Explain communication flow in the organization?

GENERAL MANAGEMENT

CASE-1 : ATTEMPT ANY 4 CASES, EQUAL MARKS PER CASE (20 Marks)Case on Discomfort in a factory and Management Decision MakingMohan remembered the call from the head office as he puts down the telephone receiver. His bossfrom head office he said, "I just read your analysis and I want you to go down to our plant in Kollakalnear Mysore right away. You know we cannot afford this plant any more - the costs are just too high.So go down there, check out what would be our operational costs would be if we move, and reportback to me in a week."Mohan knew the challenge quite well as the branch manager of the Good will Specialty Products. Hiscompany is into manufacturing of special apparel for injured and people with other medical conditions.He needs to deal with high-cost labor in a remote village not so sophisticated plant, unionizedmanufacturing plant. Although he had done the analysis there were 480 people who made a living atthis facility and if it is closed most of them will find it very difficult to get another job in the smalltown consisting of about 10 000 people.Instead of the Rs.20/- per hour paid to the Kollakal workers the wages paid to the migrant workers nearAurangabad will be much cheaper Rs.7/- hour working in sub human conditions. This provides asaving of 15 lakhs to the company for a year, which, can now be used to meet the costs for training,transportation and other matters.After two days of talking with Migrant workers association and representatives of other companiesusing the same services in the town, Mohan had enough information to formulate alternative plan forproduction and the cost figures for production and transportation. What was bothering him was only

the thought that how is going to handover the termination of service notice to the Kollakal workers.The plant in Kollakal had been in operation since 1930s making special apparel for persons sufferingfrom injuries and other medical conditions. Mohan has often talked to the employees who wouldrecount stories of their fathers and grant fathers working in the company plant-the last of the originalmanufacturing operations in the town.AN ISO 9001 : 2008 CERTIFIED INTERNATIONAL B-SCHOOLBut friendship aside competitors had already edged past Good will in terms of price and weredangerously close to overtaking it in product quality. Although Mohan and his Boss had tried toconvince the union to accept the lower wages, union leaders resisted it. In fact, in one occasion whenMohan tried to discuss a cell manufacturing approach, which would cross train employees to performup to three different jobs, local union leaders could barely restrain their anger. Yet probing beyondtheir anger Mohan sensed their vulnerability, but could not break through.Tomorrow he will discuss his report with the CEO. Mohan does not want to be responsible fordismantling of the plant at Kollakal, an act, which Mohan believes is personally wrong, but he ishelpless. Mohan said to himself "The costs are too high, the union's unwilling to cooperate, and thecompany needs to make a better return on its investment if it has to continue at all. It sounds right, butit feels wrong. What should I do?Questions :1. Assume you want to lead the change to save the Kollkal plant. Describe how you would proceed?2. What is the primary type of change needed - technology, product, structure or people/culture?3. What techniques would you use to overcome union resistance and implement change?CASE-2 (20 Marks)A small group of managers at Falcon Computer met regularly on Wednesday mornings to develop astatement capturing what they considered to be the 'Falcon Culture'. Their discussions were wideranging,covering what they thought their firm's culture was, what it should be and how to create it.They were probably influenced by other firms in their environment since they were located in theSilicon Valley area of California. Falcon computer was a new firm, having been created just eightmonths earlier. Since the corporation was still in the start- up phase managers decided it would betimely to create and instill the type of culture they thought would be most appropriate for theirorganization. After several weeks of brain storming, writing, debating, and rewriting, the managementgroup eventually produced a document called 'Falcon Values', which described the culture of thecompany as they saw it. The organizational culture statement covered such topics, as treatment ofcustomers, relations among work colleagues, preferred style of social communication, the decisionmaking process, and the nature of working environment.Peter Richards read over the Falcon values statement shortly after he was hired as a software trainer.After observing managerial and employee behaviors at Falcon for a few weeks, he was struck by widediscrepancy between the values expressed in the document and what he observed as actual practice

within the organization. For example the Falcon values document-contained statements such as this:"Quality; attention to detail is our trademark; our goal s to do it right the first time. We intend todeliver defect free products and services to customers on the date promised."However Richards had already seen shipping reports showing that a number of defective computerswere being shipped to customers. And his personal experience supported his worst fears. When heborrowed four brand-new Falcon computers from the shipping room for use in a training class hefound that only two of them started up correctly without additional technical work on his part.Another example of the difference between the Falcon Values document and actual practice concernedthis statement on communication: "Managing by personal communication is part of the Falcon way.We value and encourage open, direct, person to person communication as part of our daily routine."Executives bragged about how they arranged their chairs in a circle to show equality and to facilitateopen communications whenever they met to discuss the Falcon values document Richards had heardthe "open communication" buzzword a lot since coming to Falcon, but he hadn't seen much evidenceof such communication. As a matter of fact all other meetings used a more traditional layout with topexecutives at the front of the room. Richards believed that the real organizational culture that wasdeveloping at Falcon was characterised by secrecy and communications that followed the formal chainof command. Even the Falcon values document Richard was told had been created in secret.Richards soon became disillusioned. He confided in a coworker on afternoon "the falcon valuesdocument was so at avarice with what people saw everyday that very few of them took it seriously."Employees quickly learned what was truly emphasized in the organization-hierarchy, secrecy, andexpediency and focused on those realities instead, ignoring many of the concepts incorporated in thevalues document. Despite this frustration Richards stayed with Falcon until it filed for bankruptcy twoyear later. "Next time" he thought to himself as he cleaned out his desk "ill pay more attention to whatis actually going on, and less to what top management says is true. Furthermore, I guess you just can'tcreate values."Questions1. What is more important the statement in a corporate culture document or actual managerialbehaviour?2. Why did the Falcon executives act as they did?3. Why didn't employees like Richards blow the whistle on Falcon, challenging the inconsistencybetween values and behaviour?4. How can executives go about changing the old values that govern an organization?CASE-3 (20 Marks)Study the case below.Discuss customer insight? Define CRM,role and advantages for todaysmanagement?Archana Tuli (Owner of a water purifier): Look at my water purifier. Last week a person came to myhouse saying my service contract was up for renewal. Mind you, that was the first time in 10 months Iwas seeing anyone from Purifo. I did not like his barging into my time without prior notice. But that

did not bother him. He had a list to clear, never mind if I was in the midst of cooking lunch.I asked him about the servicing, since under the maintenance contract the company should haveserviced the unit twice that year. " You should have called the company," he said. But that was apreventive maintenance contract and it was for the company to call and take a date.Finally, he set about servicing the machine. I found that his handling of the machine was ratherclumsy. He dropped the casing twice and strewed the carbon all over the sink. I discovered that he wasjust four months old in the Company. Before that, he used to sell plastic boxes. Is this what I get forbeing your customer?Then he said the filter candle needed to be changed which I would have to pay for. That annoyed me. Ishowed him the contract, which clearly stated that the company would replace the candle once a yearat its cost. He did not know that. Would you believe that? Clearly such service contracts are simply ameans to make money. There is no attitude to servicing. He came because it was February and he hadcontract renewal targets to complete. He came without calling, expecting we would drop everythingelse to serve him. He had no clue as to what he had to give the customer for the contract. He messed upmy kitchen and did not even attempt to tidy it up.The worst was that when I started the machine, the water would not flow. I was furious. Purifo sendsincompetent, inexperienced people to cut costs. I carry the responsibility of providing my family asafe, hygienic environment at home, so I am prepared to pay for preventive maintenance. But what didI get?But it is a good product and I am an informed consumer who knows how to work around amanufacturer's inefficiency. I simply gave the service contract to a private firm. I don't want to haveanything to do with Purifo.Ritikant Sharma (Credit Card holder): Every month, I receive a credit card bill and my payment is sentthe very next day. Five months ago, the bill did not come on the 22nd evening as it normally would. Ireceived the bill 10 days later with a charge of Rs. 675/- for overdue interest. I was taken aback andcalled up by the bank. But the bank manager argued that the bill had been sent earlier. It was my wordagainst his.I wrote to Monet Bank, protesting against this undue charge. Eventually, after six letters from me,including one to the managing director, the bank " waived" the interest. But I was left with a bitter tastein my mouth. I wondered why the bank did this to me. Did I deliberately delay payment? I had thiscard for three years and not once had I defaulted on payment.I also wondered if the bank considered the cost of this argument to me. Was it worth the Rs. 675/-?Why was the customer not right this time? And what about all those times when I paid four daysbefore the due date? I was amazed that the bank treated me like an errant schoolboy. Since then I havenot felt good about using the Monet credit card.Worse, every month the bill continues to show the overdue interest and every month there is a fresh

exchange of letters on the matter. Only last week I received an invitation to become a member ofanother credit card company. I am planning to surrender the Monet Card.Divya Mathur (Owner of a washing machine): You say I am an important customer of Crysta. Great.But for your customer service cell, I am just a number. For six months now, I have been havingproblems with the washing machine. Last month, when I called the customer service cell to follow upan old complaint about the motor, the lady who took the call asked me to repeat the details: modelnumber, date of purchase, and the like. When I pointed out that all these details had been given severaltimes before and all she needed to do was check the complaint order number, her response wasshocking. " May be, but I can't boot the system. I am only standing in for someone who has notreported today. So, you have to give the details again." She said.Tell me what am I getting for being your customer? Respect? Good handling? No. Now you come hereand ask me personal details like family income, number of members, husband's designation. You stillhaven't told me why you need all this information. You are researching. Are you collecting thisinformation to help your company or me?Then there was the problem with the V-belt. Within a day of replacing it, there were some crackingsounds. The engineer said he would have to wait for the senior supervisor to examine it. Reason? " Werecently changed our supplier and all his pieces are turning out to be defective." I was taken aback. Itfrightened me to know that there was no quality check at your end. We outsource a lot of stuff for ourgarment business, but every button and needle is checked before it is used. We are not a multinational,just an old family-managed business.Radhika Iyer (School Teacher): That feeling for the customer is simply not there. The customer is not aperson but a collective noun. If the customer was important, wouldn't my water purifier Company tellme when it changed the service agent? When I called the number in my contract card, I discovered thatthe number now belonged to a courier company. I had to call the head office in Mumbai and get thenew service agent's number in Delhi.Is this fair? Or does it matter? I guess the Company's attitude was: " If a customer needs service, let herbreak her back and spend money to find out who the new agent is. " The only motives are profits andsales volumes. Not customer loyalty or service. Therefore a customer is one who buys your product,not one who has bought your product. Once you've bought the product you are a 'has been'. Whywould you want to invest energy in a set of people to whom a sale has been made? You spend energyas long as a sale is not made. Once a sale is done, it is for the customer to invest energy in sustaininghis relationship with the manufacturer. Isn't that how it is? The manufacturer's attitude is-you need memore than I need you, so guess who should work harder?And everyone once in a while, there is a new face at my door asking me if I own a Zento purifier.

Dammit, don't you have a customer file? No, he says. We go from door to door. Splendid. Then whatdo you do with all the data you collect? And every one of these men asks me the same questions: whendid you buy it, what is your model number, is it working properly? The worst is: " What is youraddress?" I don't care what the information is being used for. But I don't want to be disturbed forinformation, which you already have.We believe that because India now manufactures Coke and Mercedes, we have progressed. But thisnew market is no different from the gray market, where you can buy anything but cannot expectservice. For instance, I bought a packet of macaroni, which said I had to boil it in 250 ml of water. Idid that, but after the prescribed five minutes of boiling, there was enough water left in the pan. I thenboiled it for another three minutes, and the pasta dissolved into a unrecognizable mass.One day, I met someone who worked for this macaroni company. I told him about my experience. Hesaid I should let the pan rest for five minutes after turning off the heat. The residual water would getabsorbed. That worked. Couldn't the firm have said so on the pack? Or is it cheaper to let the customerlearn? Does the Company use experienced hands-on cooks while designing these products or are theyMBAs who can't tell a stove from a cigarette lighter?I bought a jar of mayonnaise the other day. The label said it should be used within six months. Ofwhat? Of the date of manufacture or of the date of opening the seal? Do I refrigerate it or not? It takesus back to what I said before: once the sale has been made, the consumer does not matter anymore.The sale is not on the customer's involvement, loyalty or satisfaction. It never was; it will never be.DIPANKAR BARUAH (Cell Phone Owner): There are numerous messages that are flashed on the cellphone to announce the sale of wedding suits, printers, shoes, or TV programmes, or updates on cricketscores. These messages usually send out a single, short beep. Only personal messages are announcedwith a long, continuous beep. Last week, I was distracted by six ad messages for a chocolate. And allof them were long beeps. It made me mad because I was in the midst of meeting clients and that kindof triviality is distracting.The cell phone is a great device. It helps me catch messages, which I would otherwise have missed.But I don't want it to distract me during a meeting. Please respect my privacy. The cell phone is for myconvenience, not for the convenience of callous advertisers. Now, I leave the cell phone with thesecretary and she calls me only if the message is a personal one.Tell me, has the advertiser benefited? He sought to get his messages across to 1,50,000 subscribers atone go. It appears to me that my cell phone has become a cheap medium for advertising. Since it hasdone me the favour of selling me the cell phone, the cell phone operator can pass on my personaldetails to advertisers without even asking me. The cell phone is a private medium of communication,

not a public address system like a radio.We have allowed a million new products to enter the country but along with that, we have not allowedthe market mindset to evolve or grow. Few people realize that the customer needs to be treated withrespect.BERYL DIAS (owner of a laser printer): This printer cost me Rs. 28,000. My company did not fund it.I saved for it for a year. Saving that kind of money was not easy. I wanted the best, which is what Ithought I got when I bought it., It worked very well and I know it is a good product. But that's wheremy ecstasy ends.One day, the paper jammed and I needed help. So I called up the company. The lady who took the callsaid: " You will have to bring the printer here, we are not going to come there." I felt that was veryhostile. I expressed surprise that their service engineers would not come to my home. The lady gaveme a silly reason. " If your mixie breaks down wouldn't you take it to the service center?" Maybe shetook the liberty to talk down to me because I was a woman and I operated a home office. But there's aworld of difference between a Rs. 2,500 mixie and a Rs. 28,000 printer. But she was surly from theword go. Worse, their office was located very far from where I lived and going there would meanwasting an entire morning.It was her surly behaviour that angered me the most. I recall how the sales engineers hovered aroundme when I had first contacted the company for a brochure. For three weeks someone from thecompany would call me practically daily. They virtually pushed me into buying the printer. Iremember I still had the last Rs.1,500 /-to save up, when they decided to give me a Rs.1,000/- discountto hasten my decision. Their sales pitch mesmerized me. Today, I am just a statistic. I can almost hearthem saying: "You have no choice. If your printer is not working, that's your problem. If you live afar,that's also your problem.!"I had not considered the after - sales trauma when I brought the printer. I assumed that the companywould come home to repair it, as other companies do for other products. They did not tell me abouttheir service terms at the time of the sale. It was not important, I guess. For, all they wanted was myRs.28, 000/-.To repair the printer, I went through an agent, who lost my complaint order papers, forgot to intimatethe company about the part I wanted and made me wait for four weeks before the printer was repaired.Then I discovered it had not been repaired at all. I decided then that I wouldn't have anything to dowith the company ever again. I sold that printer and brought another brand after ascertaining that therewas a service agent close by. My old printer was state of the art, but the real differentiator is the efforta firm is willing to put into customer service.CASE-4 : (20 Marks)Company Social Responsibility & AIDS

The AIDS epidemic today is unparalleled in the challenges it poses to the world, and it is clearly anissue that no one can address alone. Business is an essential partner in the response to AIDS. Theprivate sector like the other sectors is not immune from AIDS. Involvement of the private sector in theresponse to HIV/AIDS is crucial to the success of our country's efforts against the epidemic.Questions1. What is the impact of AIDS on businesses? Do you agree that businesses in the near future wouldbe actively interested in addressing the issue of AIDS? Justify your answer2. ABC Corporation wants to partner with an NGO and address the issue of AIDS around its factory,discuss what steps should ABC Corporation take to initiate, manage and sustain its partnershipwith the NGO .CASE-5 : (20 Marks)Read the following case study and answer the questions that followPrakash Gupte is a sales representative with Beta Water Purifiers. Prakash is a star sales representativewith the highest sales turnover record for 5 consecutive months. He is an aggressive and a dynamicsales person with a strong target-orientation. His marketing manager Shreyans Desai is very proud ofhis accomplishments. Based on his performance appraisal, Prakash has been promoted to the rank ofAssistant Manager (Marketing). He is now required to supervise the work of 6 sales representativesand to manage sales targets for his area.After assuming charge as an Asst. Marketing Manager, Prakash set the targets for the first month andcommunicated these to the sales representatives in a direct and explicit manner. 4 sales representativesfound the targets to be too ambitious but reserved their comments. After the meeting they discussed theissue informally and dispersed. Prakash called the fortnightly review meeting to take stock of thesituation. He was extremely disappointed to know that all the six representatives were trailing behindin target achievement. He was very blunt in communicating his disappointment and told their team toget their targets by the end of the month. After the meeting, all the six representatives expressed theirdispleasure with the meeting and found the demand of Prakash unreasonable. They commonlyperceived him to be a difficult person to deal with. They thought of approaching Shreyans for this.Harish and Sameer, two of the representatives met Shreyans and discussed this with him. Shreyans wasa little upset with Prakash, but he thought to himself that Prakash is very efficient but lacks tact towork with people. He assured the duo that he will speak to Prakash in this regard.Shreyans called Prakash for an informal chat and advised him to go a little easy with people. Prakashwas clearly agitated about this since he took this as a personal affront, as he sensed during this meetingthat someone must have complained about his behavior to Shreyans. Instead of going easy with theteam, he turned more bitter in his approach. He called a meeting of all the sales representatives, andindirectly communicated his displeasure with the incident. He once again made it clear that the targets

were attainable but needed a greater sense of commitment from the group. Obviously the salesrepresentatives did not like this. At the month-end briefing, Prakash was absolutely disappointed withthe team for having under-achieved on the targets’ count. He rebuked them for going slow on theirwork and told them sternly to adhere to the targets in the next month. Deepak, on of the salesrepresentatives, objected to highly monthly targets and suggested that the targets be made morereasonable. To this Prakash retorted by saying that the targets were absolutely reasonable. Obviouslythe team was disheartened with this. They all decided to collectively approach Shreyans this time andseek his intervention. When they met Shreyans to brief him about the situation, Shreyans was sure thathe had made a mistake somewhere.QUESTIONS:1) What happened when Prakash got promoted to the position of Asst. Manager (Marketing)? Whydid this happen?2) If you were entrusted with the responsibility of managing 6 sales representatives & creating aneffective sales team, how would you do it

HOSPITAL ADMINISTRATION

1. Hospital waste causing environmental pollution and leading to negative recycling with serious medical and health consequences- Discuss at length.2. Keeping the Hospital staff equipped with latest knowledge in the new millennium in clinical, technical and managerial competence is the need of the hour. Identify some new methods to achieve the objective.3. List out the various areas of Hospital Administration. Review them in your own style.4. What do you understand by the term MBO? Apply the concept to the Hospitals with appropriate examples.5. Based on your study, establish certain Management techniques for the administrative Improvement andAdministrative Reforms of Hospitals.Case Studies(20X2=40)Case No.1In an effort to build a solid health care workforce for the future,a group of about 30 employees from various departments of aHospital in Georgia spoke to high school students about thedifferent disciplines in health care. The hospital also hasassembled a resource book for high school guidance counselorson the various health care careers, the type of educationrequired, salaries/wages, and availability of jobs. The hospitalprovides partial funding for a permanent staff position to helpmaintain the RN program. The hospital offers clinical rotations tostudents in the nursing and radiology programs and prides itselfon treating the students as though they are valuable employees.As a result, students feel as though they are making a positivedifference in the organization and are more likely to apply for ajob upon graduation.The hospital's employment specialist assists applicants inapplying for appropriate jobs based on their qualifications andcommunicates with them throughout the application process. Inseveral departments, applicants undergo a peer interview toensure that the appropriate candidate is selected for theposition.Once hired, new employees attend an orientation where they

learn the importance of organizational values, expectations ofemployees, customer service, etc. The hospital's values play acrucial role in the culture of the organization, and employees areexpected to continually exhibit these values and behaviors.The organization's culture has created a pleasing environmentfor both employees and patients. Employees are on a first namebasis with one another, they acknowledge each other whenpassing in the hall, and they always take time to help theircolleagues.This program strives to open the lines of communicationbetween administration and employees by holding monthlyluncheons with administrators and employees. Each month,several employees are selected at random to attend theluncheon. The luncheons give employees the opportunity toshare ideas and concerns with administrators; administration'smotto is "If you don't say it, I can't hear it." This ethic allowsemployees to have ownership in the organization.Administration also supports a "No Secrets" policy in which it isopen and willing to share financial and other information withemployees at informational meetings. Administration makesrounds throughout the hospital to ensure employees have thetools necessary to do their jobs, thanks them for their hardwork, and simply communicates with them.Workforce Problem the Program/Initiative Was Designedto Address Shortage of nurses Turnover rate Employee job satisfactionMajor Objectives Decrease turnover rate Decrease job vacancies Create a pleasant work environmentSignificant Results Decreased nurse job vacancy rate to less than 2 percent Leader in quality care in Georgia- based on SatisQuestpatient satisfaction survey Received the highest scores in history on the MeetingProfessionals International (MPI) Employee Surveys(Athens Regional Medical Center is now used as a MPIbenchmark for organizations.) Decreased turnover rate to 14 percent Awarded Hospital of the Year by the Georgia Alliance ofCommunity Hospitals, and first place in overall quality andpatient care by the Georgia Hospital AssociationIssues to be Discussed1. Facts of the case.2. By making additional study, Analyse the means to achievethe major objectives as stated in the case.3. How would you address the workforce problems as given inthe case effectively?Case No 2 Hospital Waste Management:A Case Study ofChandigarh AdministrationHospital waste is the term used to denote unwantedmaterial produced by various medical processes carried out inmedical treatment and other laboratory procedures. Hospitalwastes comprise both infectious and non-infectious wastesgenerated in the different sections of a hospital, which if notproperly collected, transported or disposed-off, may causecross-infections in the hospital and pose a major publichealth hazard and environmental pollution.

The waste can be classified into the following categories1. General WasteThis includes domestic type of waste, packing material,garbage from hospital kitchen and other waste materialswhich do not pose a special handling problem or hazards tohuman health or environment.2. Chemical WasteThis waste comprises material discarded from diagnostic andexperimental work and cleaning, housekeeping anddisinfecting work. This may contain hazardous animal wasteswhich are toxic, corrosive, flammable, and reactive orgenotoxic. Such wastes require special precautions inhandling.3. Pathological WasteThis waste consists of tissues, body parts removed insurgery, and human fetuses. This may be infections wastematerial.4. Highly Infectious WasteThis contains pathogens in sufficient quantity and exposureto it could result in disease. This category includes culturesand stock of infectious agents from laboratory work, wastefrom surgery and autopsies on patients with infectiousdiseases, wastes from infected patients in isolation wards,wastes that have been in contact with animals etc.5. Sharp ObjectsThese include needles, syringe, scalpels, blades, brokenglass, nails and other type of materials which can causepuncture.6. Pharmaceutical WastesThis includes pharmaceutical products, drugs and chemicalthat have been returned from wards, or having spilled or areoutdated or contaminated, or discarded for any otherreasons.7. Pressurised ContainersThis includes those containers used for demonstration ofinstrumental purposes containing innocuous of inert gas andaerosol cans which may explode if incinerated or accidentallypunctured.8. Laboratory WasteThis includes wastes which arise during storage, use andspillage of solid drugs and chemicals, blood and bloodproducts, which may be toxic or contaminated.Proper management of various types of waste is essential forthe upkeep of hospital sanitation. Segregation at source, safetransfer, requisite treatment and disposal through costeffective technologies can bring about significant changes.Infectious waste from hospital and health careEstablishments contain pathological wastes, used disposable,semi-wet products (the used blood bags etc.) This waste isoften thrown into the community bins instead of beingproperly treated and disposed-off.Presently in most Government hospitals and Pvt. NursingHomes there is no specialized system of handling, collection,transportation and disposal of Solid Waste includinghazardous bio-medical wastes. Hospital waste is responsiblefor various health hazards, including serious diseases likeAIDS & Hepatitis.The Government notification in this regard has made itmandatory to join hands in order to ensure efficienthospital/medical waste management. The said Notification

aims “to provide for a system for management of allpotentially infectious and hazardous waste in accordance withthe bio-medical waste management and handling rules1998”.Bio-medical waste is defined as the waste generated duringthe diagnosis, treatment or immunization of humanbeings/animals or in research activities and training theretoor in the production or testing of biological, includingcategories mentioned in schedule of the biomedical wasterule 1998.Ten numbers of categories have been framed:(i) Human anatomical waste,(ii) Animal waste,(iii) Microbiology and Bio-technology waste,(iv) Waste sharps,(v) Discarded medicines and cytological drugs,(vi) Solid waste-I,(vii) Liquid wastes,(viii) Incineration as, and(ix) Chemical waste.The collection of bio-medical waste is further to be donecategory-wise as the waste is to be disposed of in particulartype of container having specific colour coding.The “City beautiful”, Chandigarh has made theimplementation of the bio-medical waste rule, 1998 possibleby installation of incinerators in PGI, Medical College &Hospital, Sector-32 and in the process of starting incineratorin General Hospital, Sector-16, Chandigarh.Private Nursing Homes also produce almost equal amount ofSolid Waste and bio-medical waste, but they don’t have anyindependent facility available with them for its disposal. Theyneed either to get together for a private incinerator of theirown or Municipal Committee may set upon incinerator and letthem use on rented charges.If followed thoroughly, this will make the city free frombiomedical waste, which at present is being dumped in open,thereby reducing the spread of infection. We suggest herethe following to deal with the problem of waste management.(i) Creating AwarenessAwareness is to be created amongst patients, attendants,medical personnel and people in general regardingimportance of bio-medical waste management throughvarious media devices. An integrated approach with sharingtreatment and disposal technologies amongst group ofhospitals and medical units should be introduced. It will becost effective and can cover more number of medical units.(ii) Developing a ManualA manual need to be developed to define procedure andresponsibilities in connection with waste disposal.(iii) Need of strict supervision and control.(iv) Need of developing linkages with local government.(v) Need to avoid misuse of disposable items.(vi) Offices responsible for waste disposal need be framed.Hospital waste management would be beneficial to both thepatients as well as the hospital staff especially those who arealways in touch with these wastes. This would also improvegeneral environment.Issues to be discussed1. Facts of the Case.2. Analyze the different categories of waste as discussed in

the case in your style by making additional study.3. Comment on the framed categories which are 10 innumber.4. How would you deal with the problem of Hospital wastemanagement (Add on to the suggestions given in the case)

Hospitality Management

1. What is the importance of indoor leisure in hospitality? 2. Write a note on bar-attached restaurants. 3. What are the functions of rooms department? , 4. Outline a typical food service system and its subsystems. 5. What are the problems of food preparation?

6.Define the terms" Hotel" and" Hotel chains".7. Discuss how a front office in a luxury hotel is administered. 8. Describe the various steps involved in menu planning.

Hotel Management

Q1) What are the minor operating departments of a hotel? Explain each.Q2) What are the basic principles in requisitioning guest and cleaning supplies?Q3) Write short notes on the following (Any 2)a) Role of the housekeeping control desk.b) Lost and found procedurec) Responsibilities of the Public area supervisor.Q4) How can we reduce physical stress?Q5) What are the types of notices in a house keeping operation?Q6) How do small hotels survive?Q7) Explain briefly what services dos a franchisor provide to a franchisee?Q8) Explain the role of maintenance (engineering department)?Q9) Discuss the relationship between management and supervisors?Q10) Explain the meaning of the various occupancy codes?

HUMAN RESOURCE MANAGEMENT.Case –1 ( 20 Marks)The reality of software development is a huge company like Microsoft-it employs more than48,000 people- is that a substantial portion of your work involves days of boredom punctuated byhours of tedium. You basically spend your time in an isolated office writing code and sitting inmeetings during which you participate in looking for and evaluating hundreds of current employeesand potential employees. Microsoft has no problem in finding and retaining software programmers.Their programmers work for very long hours and obsess on the goal of shipping product.From the day new employees begin at Microsoft, they know they are special. New hires allhave one thing in common-they are smart. The company prides itself on putting all recruits through agrueling “interviewing loop”, during which they confront a barrage (an overwhelming number ofquestions or complaints) of brain-teasers by future colleagues to see how well they think. Only thebest and the brightest survive to become employees. The company does this because Microsoftiestruly believe that their company is special. For example, it has high tolerance for non-conformity,would you believe that one software tester comes to work everyday dressed in extravagant Victorian

outfits? . But the underlying theme that unites Microsofties is the belief that the firm has a manifestdestiny to change the world.The least important decision as programmer can have a large importance which it can affect anew release that might be used by 50 million people. Microsoft employees are famous for putting inlong hours. One program Manager said “In my First Five Years, I was the Microsoft stereotype.I lived on caffeine and vending-machine hamburgers and free beer and 20-hour work-days……Ihad no life…..I considered everything outside the building as a necessary evil”. More recently thingshave changed. There are still a number of people who put in 80-hour weeks, but 60 and 70 hourweeks are more typical and some even are doing their jobs in only 40 hours.No discussion of the employee life at Microsoft would be complete without mentioning thecompany’s lucrative stock option program. Microsoft created more millionaire employees, faster,than any company in American history-more than 10,000 by the late – 1990’s while the company iscertainly more than a place to get rich, executive still realize that money matters. One formerManager claims that the human resources’ department actually kept a running chart of employeesatisfaction versus the company’s stock price. “When the stock was up, human resources could turnoff the ventilation and everybody would say they were happy. When the stock was down, we couldgive people Massages and they would tell us that the Massages were too hard.” In the go-go 1990’s,when the Microsoft stock was doubling every few months and yearly stock splits were predictable,employees not only got to participate in the Microsoft’s manifest destiny, they would get rich in theprocess. By the spring of 2002, with the world in a recession, stock prices down, and the growth forMicrosoft products slowing, it wasn’t so clear what was driving its employees to continue thecompany’s dominance of the software industry.Questions1. If you were the programmer, would you want to work at Microsoft? Why or Why not?2. How many activities in this case can you tie into specific motivation theories? List theactivities; list the motivation theories, and how they apply.3. As Microsoft continues to get larger and its growth rate flattens do you think Managementwill have to modify any of its motivation practices? Elaborate.4. Can money act as a motivator? Explain.Case-2 (20Marks)Merlyn Monroe is not a complainer. If she has a major ache, she usually suffers in silence.Although her employer, Atlantic Mutual Insurance, has an employee assistance program- to provideemotional and psychological support in the work plan. She certainly never thinks of using it, even ifshe did have a worry on her mind. “They say its confidential but who really knows? Asked Ms.Monroe’, an administrative assistant at the insurance company.But Merlyn Monroe’s life changed on September 11, 2001. Her office at 140 Broadway in NewYork City, was near the world trade Center. She watched the whole thing from her 50th Floor officewindow.Ms.Monroe had never seen so much destruction in her life. She had never seen such a horrificterrorist attack. Nor had she forced her to relieve 9/11 over and over.Everything she talked to people they wanted details, which made it worse for her. She had somuch anger about what had happened to her life and lives of so many people and the city where sheworked for 40 Years.Two weeks after 9/11, Ms.Monroe was still suffering after effects. Even though she lives on state

Island and Atlantic Mutual’s offices have been temporarily relocated to Madison, New Jersey, not anhour goes by when she doesn’t have flashbacks of her experiences of 9/11.Questions1. What should Atlantic Mutual Management do, if anything, to cope with the aftereffects of9/11?2. How long would You expect employees to be adversely affected by 9/11 if a companyprovides no formal assistance for dealing with anger and stress?3. What, if anything, should Management do about employees who appear to be suffering fromsuch kind or trauma and stress, but will neither admit it nor accept help from their employee?4. Outline the role of HR specialist in providing a safe and healthy environment for employees.Case – 3 (20 Marks)Patil, RK Materials, is very angry, anxious and restless. He bumped into Mehta, RK Materials,threw the resignation letter on his table, screamed and walked out of the room swiftly.Patil has a reason for his sudden outburst. Details of the story will tell the reasons for Patil’sanger and why he put his resignation, only four months after he took up his job.In the year 2000 Patil quit his prestigious Mittal plant at Vishakhapatnam. As a managerMaterials, Patil had various powers like he could even place an order of materials worth Rs.50 Lakhs.He required nobody’s prior consent.Patil Joined a pulp-making plant located at Kerala, as RK Materials. The plant is part of a multiproductand multi-plant conglomerate owned by a prestigious business house in India. The perks,reputation and designation of the conglomerate attracted Patil away from the public sector steelmonolith.When he joined the eucalyptus pulp making company, little did Patil realize that he needed priorapproval to place an order for materials worth Rs.25lakh. He thought that he had the authority toplace an order for materials by himself worth half the amount of what he used to as at the Mega Steelmaker. He placed the order, materials arrived, were received, accepted and used up in the plant.Trouble started when the bill for Rs.25 lakh came from the vendor. The accounts departmentwithheld the payment for the reason that the bill was not endorsed by Mehta. Mehta refused to signon the bill as his approval was not taken by Patil before placing the order.Patil felt very angry and cheated. A brief encounter with Mehta only made the situation worse.Patil was rudely told that he should have known company rules before venturing. He decided to Quit.Questions1. Do you think the company has any orientation programme? If yes, discuss its effectiveness.2. If employees were properly selected, there should be no need for an orientation programme”.Comment on the statement.3. If You were Patil, how would you react to the above situation?4. Discuss the purpose of orientation. What are various requisites of an effective programme?Case-4 (20Marks)ABC Tool Engineering is a company producing machinery and machine tools and some otherrelated engineering products for specialist production companies. It’s workforce consists of 1000employees, two-thirds of which work in the production department. In 2000, the Managementdecided to introduce a total quality Management Scheme to increase efficiency and quality control.Throughout the 1990’s, more flexible arrangements had been introduced together with a breakdownof old work demarcation lines. Machines were now built by flexible teams of workers employingdifferent skills like fitters, electricians, hydraulic engineers, etc. In 2000, the initiatives towards TQM

were made with the introduction of BS 1110. Workers were asked to inspect the quality of their workwhich resulted in reduction of the need for specialist inspectors and both time and money were saved.Agreements were negotiated with the union for extra pay as a result of the increase in workerresponsibility. In 2001, the Management decided to introduce a full-blown Total-quality ManagementScheme on the basis of the success with the introduction of BS 1110. Problem solving groups wereformed based on work groups with voluntary participation. Group leaders, who were mainlysupervisors, were trained is how to run a group and in problem-solving techniques. The aims of thegroups were1. Identifying problems inside their work area.2. Propose solutions3. Identifying problems outside their work area4. Refer external problems to a review team.The review team consisted of Managers with one representative from each group, usually thegroup leader. The unions were lukewarm to the scheme and some shop stewards were directly againstit. Within a period of 9 Months, the Total quality Management Scheme was reviewed and the seniorManagement came to the conclusion that it had not lived up to expectations, and few board memberscalled it a failure. Some reason s they had identified were that team leaders had felt uncomfortable intheir roles and there has been a lot of skepticism from some of the workers.Questions1. According to You, why did the Bs1110 Scheme succeed and the TQM Scheme failed in ABCengineering? Define the term “workers” participation in management. Bring out theprerequisites for its success.2. Explain in your own words what empowerment means to You. Also discuss “A worker is aworker, a Manager a Manager and never the two shall meet.” Do You agree? Why?3. What suggestions would You give to a similar company who were thinking of introducingTotal Quality Management to make it a success?.

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HUMAN RESOURCE MANAGEMENT

Q.1. Elaborate on the system of HR Planning. Outline the steps to be undertaken by organizations to effectively engage in HR Planning.Q.2. Discuss the various ways in which the commitment of errors in performance appraisal can be minimized.Q.3. The nature and scope of the Human Resource Management Systems keeps on evolving with the changes in the external and internal environments of organizations. Elaborate on the same. { marks : 20 }Q.4. what are some of the traditional and current sources of recruitment used by organizations? What are their pros and cons?Q.5. How does HRM enable organizations to adapt to the dynamic changes in the environment? Illustrate with examples.Q.6. As an HR executive, how would you go about devising HRIS for a mid – sized organization?

Q 7 . Discuss the various principles and purposes of promotion and types and purpose of transfers.

HUMAN RESOURCE MANAGEMENT

CASE STUDY : 1A policy is a plan of action. It is a statement of intention committing the management to a general course ofaction. When the management drafts a policy statement to cover some features of its personnel programmes,the statement may often contain an expression of philosophy and principle as well. Although it is perfectlylegitimate for an organization to include its philosophy, principles and policy in one policy expression.Q1) Why organizations adopt personnel policies explain the benefits?Q2) What are the sources and content of personnel policies?Q3) Explain few personnel policies?Q4) Explain principles of personnel policies?CASE STUDY : 2Recruitment is understood as the process of searching for and obtaining applicants for jobs, from amongwhom the rights people can be selected. Theoretically, recruitment process is said to end with the receipt ofapplications, in practice the activity extends to the screening of applications so as to eliminate those who arenot qualified for the job.Recruitment refers to the process of receipt of applications from job seekers. In reality, the term is used todescribe the entire process of employee hiring. These are recruitment boards for railways, banks and otherorganization.Q1) Explain in detail the general purpose of recruitment?Q2) Explain factors governing Recruitment?Q3) Explain the Recruitment process with diagram?Q4) Explain Recruitment planning?CASE STUDY : 3Navin AGM materials, is fuming and fretting. He bumped into Kiran, GM Materials, threw the resignationletter on his table, shouted and walked out of the room swiftly.Navin has reason for his sudden outburst. He has been driven to the wall. Perhaps details of the story willtell the reasons for Navin’s bile and why he put in his papers, barely four months after he took up hisassignment.The year was 2005 when Navin quit the prestigious Sail plant at Mumbai. As a manager material Navinenjoyed the power. He could even place an order for materials worth Rs 25 lakh. He needed nobody’s priorapproval.Navin joined a pulp making plant located at Pune as AGM Materials. The plant is owned by a prestigiousbusiness house in India. Obviously perks, designation and reputation of the conglomerate lured Navin awayfrom the public sector.When he joined the pulp making company, little did Navin realize that he needed prior approval to place anorder for materials worth Rs 12 lakhs. He had presumed that he had the authority to place an order by

himself worth half the amount of what he used to do at the mega steel maker. He placed the order materialarrived, were recived, accepted and used up in the plant.Trouble started when the bill for Rs 12 lakh came from vendor. The accounts department withheld paymentfor the reason that the bill was not endorsed by Kiran. Kiran rused to sign the bill as his approval was nottaken by Navin before placing the order.Navin felt fumigated and cheated. A brief encounter with Kiran only aggrarated the problem. Navin wascurtly told that he should have known company rules before venturing. Navin decided to quit the company.Q1) Does the company have an orientation programme?Q2) If yes how effective is it?Q3) How is formal Orientation programme conducted?Q4) If you were Navin what would have you done?CASE STUDY : 4Bitter it may taste, shrill it may sound, and sleepless nights it may cause, but it is true. In a major shake upAirbus. The European aircraft manufacturers has thrown a big shock to its employees. Before coming to thedetails of the shock, a peep into the company’s resume.Name AirbusCreated 1970President CEO : Vijay M.Employees 57000Turnover 26 Bn (Euro)Total Aircraft sold (Feb2007)7187Delivered 4598Headquarters Paris (France)Facilities 16Rival BoeingAirbus announced on February 27, 2007 that it would shed 10,000 jobs across four European contries andsell six of its unit. N the same day the helpless workers did what was expected of them – downed tools andstaged protests. The protesting workers at Airbus’s factory at Meaulte, northern France, were seen picketingoutside the factory gate after holding up production a day earlier. To be fair to Airbus, its managemententered talks with unions before the job loss and sale was formally announced. But the talks did not mollifythe agitated workers.Job sheating and hiring of units are a part of Power and restructuring plan unleashed by Airbus to save itselffrom increasing loss of its ground to the arch rival, Boeing Co.Airbus Power & Strategy was first mooted in October 2006 but sparkled a split between France & Germanyover the distribution of job losses and the placement of future ones. Later the two countries agreed to shareboth job losses and new technology.The power and plan, if finalized, would mean a 3 per cent reduction to Airbus’s 55000 employee strength.Q1) Why should Power and focus on shedding jobs to save on cost?Q2) Are there no alternative strategies?Q3) Will the proposed shedding of jobs and scale of six units help airbus survive the intense competition from Boeing?Q4) Comment on the whole issue?

Information Technology

1. What are the characteristics of a technologically enabled organization?2. How does an Organization acquire & disseminal knowledge?3. Why do you suppose inquiry – only applications were developed instead of fully on lines system?4. What kind of technology is least flexible? Most flexible?5. How does strategic planning differ between a firm that offers services & one that manufacturers a product? Is there a difference in the impact of technology on strategy in any two types of firms?6. What kind of business activities do you think are most amenable to common systems in different countries?7. What kind of programs do you think are likely to make the most use of floating – point instructions?8. Distinguish between computer hardware & software which most concerns a manager?9. What kind of software does a server for a local area network need to have?10. What is OLAP? How does it contribute to the organization?11. Why are standards so important in communications?12. What industries are most likely able to take advantage EDI?13. Are there applications where it does not matter if multiple databases are simultaneously updated?14. Most organizations today have computers and software, all of which are supposed to workon a network, from different Vendors? What are the potential problems with using products from many different sources?15. What are the differences in design for multi-user system versus a personal system on a pc?16. Does a system have to use the most modern technology to be successful? Why or why not? Are there disadvantages to utilizing the most up-to-date technology?17. Why should one insist on a demonstration of a package?18. What is a spaghetti organization?19. How can you transform a huge firm like General Motors with the help of information technology?20. How more user development eventually eliminates the need for professional systems analysis and programmers?21. How can a company use multimedia today?22. How does one go about identifying the expert to be used in developing an expert system?23. Describe how a virus actually works? What kind of files does it want to infect?24. What kind of changes does information technology either create or facilitate within and between organizations? What other changes are associate with IT?25. What are the drawbacks of work place monitoring? Why management might wants to monitor worker productivity?

INFORMATION TECHNOLOGY

Google.Com — The World’s Number OneInternet Search Engine“A profitable dot.com is a rare thing. For one founded only in late 1998, and - ivorse - a dotcom thatincludes advertising as one half of its business plan, Google’s progress is a feat. But then it could be arguedthat Google has been flying in the face of conventional wisdom since its launch.”- Neil McIntosh, ‘Seeking Search Engine Perfection,’ (The Guardian), January 2002.“Google had not had a single print or television advertisement so far and most people felt that when it waslaunched there was not a market for another search engine. But with all other search engines developinginto portals, Google stuck to the basics and now it is better than every other search engine.”- Matthew Ragas, Consultant, ‘The Cult Runs Deep,’ (The Economic Times), March 2003.THE MOST PREFERRED SEARCH ENGINE’

In early 2003. Googlc.com (Google). the California (US) based company Google Inc.’s search engine, wasnamed the ‘Best Search Engine’ by Pandecta magazine. Google also received the ‘Outstanding SearchService’ award by Search Engine Watch.2 The Search Engine Watch newsletter claimed that Google wasthe most heavily used search site by Internet browsers. These developments were not a major surprise forGoogle, which had received many such awards and recognitions since its inception in 1998 (Refer ExhibitI).Google was preferred by millions of browsers over search engines such as Alta Vista, Infoseek, Netscapeand Lycos. Not only did Google rank much higher than other search engines in terms of efficiency andeffectiveness, it also scored over others in terms of layout due to its uncluttered look (Refer Exhibit II for acomparison of popular search engines). Google searched more than three billion web pages and processedmore than 200 million search requests every day. The search engine could search for every possible file typeon the World Wide Web, in 36 languages and provided interface in 86 languages.The fact that Google had become a household name (reportedly, even a generic term for search engines)without even spending a penny on print/television advertisements or online banners was regarded as acommendable achievement, Its success was largely attributed to its constant focus on providing the bestsearch services online, both in terms of speed as well as accuracy. Larry Page (Larry), CEO and co-founderof Google commented. ‘It is through our maniac pursuit to offer only the best technology and searchexperience that Google has earned its reputation.”_________________________________1 A search engine is an Internet based utility that helps surfers search for specified keywords by displayinga listof documents (web pages) on the World Wide Web that contain those keywords. Different searchengines use their on proprietary software to provide faster, more accurate and meaningful search resultsto their users. Most popular search engines, such as Google and Alta Vista, are free-to-use.2 Pandecta is a monthly c-business magazine for Internet entrepreneurs. Search Engine Watch is a leadingInternet technical guide for web developers and search engine users.BACKGROUND NOTE ____________The founders of Google. Lam Page (Larry) and Sergey Brin (Sergey) graduated in computer science fromStanford University in 1995. By January 1996, the duo began working on extending their summer projectwork on a search engine. They wanted to develop a technology that would retrieve a relevant set of datafrom a massive database of information. They named their search engine ‘BackRub’ because of its ability toidentify and analyze ‘back links’ that pointed to a given website. Larry began creating a new kind of server3

environment that used low-end personal computers (PCs) instead of costly big machines. For this, theyneeded to buy several low cost PCs. However, due to shortage of cash, they had to borrow PCs from theuniversity.By 1997, BackRub gained a lot of popularity due to its unique approach to solving search problems on the.Internet. Throughout the first half of 1998, Larry and Sergey’ focused on perfecting their technology. To

store huge amounts of data, they bought a terabyte of memory disks (one trillion bytes equal one terabyte) atbargain prices. Larry used his dormitory room as a data center, while Sergey used his room to set up abusiness office. By now they knew that their search technology was superior to any other technologyavailable. They actively started looking for potential partners interested in licensing the same.They contacted many people including friends and family. One of the people whom they got in touch withwas David Fib (Fib), the founder of Yahoo, a leading portal.4 Filo complimented them for the ‘solidtechnology’ they had built, but did not enter into any agreements with them. Instead, he encouraged them tostart their own company. The owners of many other portals also refused to invest in their technology. Onesuch portal’s CEO told them, “As long as we are 80% as good as our competitors. that is good enough. Ourusers do not really care about search.”During the late 1990s. the ‘dotcom fever’ was at its peak in the US, and almost everyone was opening adotcom company. Though Larry and Sergey were not very keen on opening their own company. theydecided to set up one since they were unable to attract any partners. 1-however, they had to first clear off thedebts they had accumulated to buy the memory disks amid to move out of their ‘dorm office.’ The duo puttheir PhD plans on hold, and began looking for a prospective investor for their business.Help came in the form of a faculty member who introduced them to Andy Bechtolsheim (Andy), one of theco-founders of Sun Microsystems. Andy saw their presentation and instantly knew that it had a lot ofpotential. As Andy was in a great hurry to attend a business meeting that day, he ‘closed’ the deal by writingthe duo a check for $100,000. However, the check was made out in the name of Google Inc.5, an entity thatdid not yet exist. Since Lam’ and Sergey could not deposit the check in their accounts, they decided to set upa corporation named Google Inc._______________________________3 Servers are computers or devices that manage the resources rn a network. For instance,users on a file server can store files on the server, which is essentially a storage devicededicated to storing files. In a search engine, database servers are used to processdatabase queries.4 A portal is a website featuring commonly used services as a starting point and acommon gateway to the web (a web portal) or a niche topic (vertical portal/vortal). Theservices offered by most portals include a search engine, news, email, stock quotes,chat, forums, maps, shopping and customization options. Large portals include manymore services apan from the ones mentioned above.5 The name Google was derived from the word Googol, which denotes the number onefollowed by a hundred zeros. It was coined by Milton Sirotta, nephew of EdwardKasner, an American Mathematician.Larry and Sergey realized that they would have to develop a new kind of server set up to provide a fast andaccurate search service. So, Google made use of large clusters (around 10.000) of Linux9 PCs so that searchqueries could be quickly answered. The system consisted of three types of servers, a web server, an indexserver and a doe server. A typical query was answered in the following manner: Google sent the user query

to a web server (which acted as a query processor), which in turn forwarded it to the index servers. Theindex servers searched for keywords and phrases that matched the search query. Thereafter, the doc serverdid the job of retrieving the actual documents that contained the search results. These results were thenreturned to the user (Refer Figure Ito see the life cycle of a query).Figure I: Life Cycle of a Search Query on GoogleThis innovation helped Google achieve greater scalabilily10 at lower costs and faster response times evenduring peak loads. At the front end. Google made use of a search technology that carried out a series ofsimultaneous calculations to process a query. This ensured that the entire search look only a fraction of asecond to complete.Google had a comprehensive database of web content running into over three billion web pages. In addition,Google stored a cached copy of even indexed web page so that users could access the web page even whenthe main server was down or the link was broken. Thus, Google accessed more information on the Internetand presented it in a searchable format than any other search engine (Refer Table I for details regarding thedatabase)._________________________________9 The Linux operating system was developed by l.inus Torvalds at the University of Helsinki in Finland,toprovide PC users with a free or very low cost operating system. Traditional systems like UNIX wereveryexpensive. Linux is reputed for being a very efficient and fast operating system. Google’s setup wasone of the biggest commercial Linux server clusters ever.10 Scalability is defined as the ability of a computer (hardware or software application) to perform welleven when it is changed in size or volume in order to meet a users need.GOOGLE’S BUSINESS MODELMost search engine companies spent a lot of money on marketing to build their brands. Google, however,focused solely on building a ‘better’ search engine. Its superior search technology was the primary reasonfor us popularity among Internet surfers and corporate clients. Sergey said, “We developed our approach tosearch technology to address the very real challenge of finding information on the Internet. Everything wedo — from the development of our advanced technology to the design of our user interface — is focused ondelivering the best search experience on the web. We are delighted with the response we have received fromGoogle users around the world who have enthusiastically embraced our approach to search.”Word-of-mouth recommendation became the main force driving traffic to the Google website. Within threeyears of its launch, the website was answering more than 200 million searches a day. With traffic increasingconstantly, it became clear to Google that it could develop its business around two revenue streams, onlineadvertising programs and search services. Half of Google’s revenues came from the two main searchservices it provided to its clients: ‘Google WebSearch’ and ‘Google SiteScarch.’GOOGLE SEARCH SERVICESLaunched in mid-1999, the WebSearch service enabled clients (destination sites and portals) to offerGoogle’s search services to their members. The client could use the results page for selling its own

advertisements on the web. The WebSearch Service provided many useful features like cached links.directory definitions, file types. I’m feeling lucky (a button that allowed users to bypass all results and go tothe first page that was returned for a query) and a spell checker.The Google SiteSearch service provided clients with a fully customizable search on the (client) companyextranets and public websites. SiteSearch improved site navigation and usability and also increased sitestickiness.12 Visitors to a website using the SiteSearch service could easily locate a specific product orservice and find company information. This not only enhanced customer communications, it also reducedthe number of customer service calls to the company. This in turn helped clients improve sales opportunitiesby providing product and service information quickly to the customer. Using SiteSearch thus increased thechances of customer loyalty for the (client) company and also reduced the need for customer support.In 1999, many companies signed up as Google’s clients. The list included Virgilio, an Italian portal:Virgin.net. Britain’s leading online entertainment guide: The Washington Post: Cisco Systems: Son: Procter& Gamble; MarthaStewart.com; Hungary Minds.com; eBoodle.comn; Real Names Corporation; New YorkTimes: Ask Jeeves: AT&T: Bizrate: Dealtime: and Earthlink. The year 1999 also brought with it a lot ofawards for Google. Google was ranked first among 13 search and portal sites13 in a survey conducted byNPD Online Research14 for user satisfaction and loyalty. The company received the Technical ExcellenceAward for Innovation in Web Application Development by PC magazine. A high paint was the company’sinclusion in Time magazine’s Top Ten Best Cybertech list for 1999._______________________________12 The stickiness of a website refers to its ability o make visitors stay longer and/or return again andagain.13 Oilier companies included AltaVista, AOL, Ask Jeeves, Excite, Go Network, Google, GoTo.comn,HotBot, LookSmart, Lycos, Netscape, WebCrawler, and Yahoo.14 The NPD group is an international marketing information company headquartered in Port Washington,New York. The company was the ninth largest market research firm in the US (based on 1998 revenues).with a set of keywords (as many keywords as required), which Google used to create a text-basedadvertisement. Each keyword was then matched to different creative executions. Advertisers could alsopurchase predetermined keywords or keyword phrases (from Google), which were used by Google to matcha user’s query to a closely related advertisement.These advertisements appeared as links on top of the search results page (Refer Figure II). Once theseadvertisements were put in place, the company constantly monitored them to improve their performance (i.e.by selecting more appropriate keywords and rewriting the text of the advertisement). Google chargedapproximately $10,000 or more per quarter for the premium sponsorship advertisement program.Figure II: Google’s Premium Sponsorship ProgramImpressed by the efficiency of the services provided by Google, Yahoo entered into a partnership with it inJune 2000. This added to Google’s reputation of being a leading technology provider (by now it wasanswering 18 million user queries every day). Google entered into partnership deals with companies fromother countries as well, including China’s leading portal NetEase arid leading Japanese portal NEC’sBIGLOBE.In mid-2000, Google brought out with a cheaper alternative to Premium Sponsorship in the form of the

AdWords program. Under this program, Google allowed its customers to create their own advertisement textor purchase carefully selected key words to target potential customers. The results for Ad Words werehighly targeted and advertisements appeared only if a user entered the same keywords or phrases that anadvertiser had purchased. For example, if a user entered a query ‘dental insurance’ into the Google searchbox, it would produce search results and text based advertisements relating to the purchase of dentalinsurance online. The advertisements brought out under the AdWords program appeared adjacent to thesearch results (Refer Figure II).Google also faced stiff competition from other search engines like Verity and Overture. Verity had grown tobecome a leader in the corporate search market while Overture had strengthened its position in the paidsearch listings business. Overture had signed a series of contracts with various businesses, the mostsignificant being contracts with CNN and CNN’s various online properties. These developments were acause for concern for Google as it earned approximately one third of its revenues in 2002 by being a thirdparty search results supplier.However, Google remained confident of its position for a variety of reasons. Google had a strong tie up withAOL and provided most of the portal’s web search capabilities. According to Nielsen NetRatings, a webtraffic tracker. AOL and Google together got six times the search traffic of Yahoo in late 2002. Also, Googlehad a strong user response from its clients including AOL. Yahoo and many media customers who usedGoogle’s services, most importantly its news sections, to draw’ visitors.Analysts were, however, rather skeptical about optimistic projections regarding Google’s future. AnalystDanny Sullivan of Search Engine Watch said. “The bulk of 000gle’s business these days is built aroundGooglc.com. If partners continue to grumble, the pendulum could swing — and Google may end up facing amutiny and a world full of hostile competitors, each seeking a piece of the king of search.”Google faced another setback in February 2003 when Google Watch website22 nominated it for the PrivacyInternational’s 2003 Big Brother Awards.23 Google was accused of, among other things, recording all thepersonal information it could through its cookies.24 retaining all data indefinitely and not mentioning why itneeded such data. Google toolbar was also suspected of being a spyware.25However, Google did not make it to the final list because Privacy International did not find the company tobe a major threat to Internet privacy. An analyst at Search Engine Watch commented. “Nevertheless, thenomination has caused some to wonder about the privacy of their search requests at Google. In addition,some allegations made in the nomination have been transformed by others as proof of privacy violationswithout being closely examined.”In spite of these unpleasant developments. Google continued to be popular amoung users. The receipt ofPandecta Magazine Award and the ‘Business People of the car’ award by Wired Magazine in early 2003indicated that Google had strong growth prospects. Problems and threats notwithstanding, Google continuedto be regarded the world over as the perfect search engine.’In early 2003, analysts remarked that Google could even go public in the near future like man oiliersuccessful Silicon Valley ventures. Whether or not the company decided in favor of taking on the pressuresof stock-market performance, analysts expected Google to continue innovating and developing breakthroughtechnologies. In line with these expectations, a Google source stated. “Whatever is to come in the way of

search technology, you can be assured that Google is working to make it faster, more accurate and eveneasier to use.”_______________________________22 Google Watch was formed by Daniel l3ramht in mid-2002 and is hacked by a non-profit organizationnamed Public Information Research.23 Privacy International’s Big Brother Awards are given to those websites that are found guilty of privacyviolations on the Internet.24 Cookies are small text tiles placed on a computer’s hard disk by a website through the web browser.They are used to store information that enables websites to identify users between visits.25 Spyware refers to software that gets installed in a user’s PC and sends information about the user — allwithout his/her knowledge. The information gathered is typically about the users activities on theinternet and is transmitted to the makers of the spyware. This information is used for marketing purposeseither by the spyware developers themselves or to third-parties who purchase the information.Questions for Discussion:1. In what ways were the services offered by Google different from those offered byother search engines? Discuss with specific reference to technology, corporateclient servicing and customer friendliness.2. Most dotcom companies relied heavily on online advertisements as the primarysource of revenue, and many also spent a lot of money on advertising their brands.However, Google did not do so — and was still rated as the world’s most preferredsearch engine. Critically discuss Google’s business model in the light of the above.Was Google’s decision not to use conventional advertising a wise one or not?3. “Over the last three years, Google has stolen 40% of the search market directly at theexpense of AOL, MSN, and Yahoo.” Do you think Googlcs leadership position isgoing to become a threat to the company’s future growth and survival? Whatmeasures should the company take in order to sustain its position as the leadingInternet search services provider in the future?Mercedes Benz’s E-Biz Solution: The FactoryDelivery Reservation System“One of our most fundamental goals in developing the system was to strengthen and market the Mercedes-Benz brand in the United States. The fact that we would be one of the first car manufacturers in the UnitedStates to have a factory delivery program would be seen as a very positive thing in this regard.”- William Engelke, Assistant Manager, IT Systems, MercedesBenz USInternational, commenting on the FDRS.LINKING CUSTOMERSBy 2000, Mercedes Benz United States International (MBUSI), builder of the high-quality M-Class sportsutility vehicle (SUV), established itself as a company that also delivered superior customer services. Onesuch service was the delivery option where by the customer could take delivery of the vehicle at the factoryin Alabama. US.The program called the Factory Delivery Reservation System (FDRS), enabled MBUSI to create andvalidate 1800 orders per hour. FDRS also automatically generated material requirements and Bills ofMaterial1 for 35,000 vehicles per hour. The Customer Relationship Management (CRM) solution thatmade FDRS possible was based on Lotus Domino2 and IBM Netfinity3 server1.Analysts felt that with its innovative use of the new program, MBUSI not only managed to improve itscustomer relations by providing the best service, but also demonstrated its commitment to customers by

making them an integral part of the process. Customers were, in a way linked directly to the factory floor —which was a powerful sales tool.BACKGROUND: MBUSI AND ITS BUSINESS CHALLENGESMBUSI was a wholly-owned subsidiary of Daimler Chrylser AG5 In 1993, DaimlerBenz realized that tile ‘Benz brand could be extended to wider market segmentsTraditionally, Mercedes Benz6 appealed to older and sophisticated customers only.Daimler Benz wanted to attract customers below 40 years of age, who wanted arugged vehicle with all tile safety and luxury features of a Mercedes.Daimler Benz decided to develop a SUV known as the M-Class. It expected strong demand for the newvehicle and therefore planned to build its first car-manufacturing facility — MEUSI — in the (Tuscaloosa,Alabama) US. The MBUSI facility had many_____________________________1 Bill of Material keeps track of all raw materials, parts, and subassemblies used to create a finishedproduct.2 A product of 113M Corp., Lotus Notes and Domino R5 are the industry’s leading client/servercombinationfor collaborative messaging and e-business solutions.3 The IBM Netfinity server offers solutions for file-and-print and application computing needs.4 A computer or device on a network that manages network resources. For example, a file server is acomputerand storage device dedicated to storing files. Any user on the network can store files on the server. Aprint server is a computer that manages one or more printers, and a network server is a computer thatmanages network traffic. A database server is a computer system that processes database queries.5 DaimlerChrysler AG was the result of a merger between two leading car manufacturers — DaimlerBenz ofGermany and Chrysler Corp. of the US in 1998.6 A luxury brand of passenger cars, Sports Utility Vehicles from DaimlerChrysler.advantages. First, labor costs in the US were almost half that of in Germany. Second, the US was the leadinggeographic market for SUVs. Third, as the vehicles were assembled in the US, they could be distributed toCanada and Mexico more efficiently.In January 1997, the factory started production at partial capacity and by the end of the year, it wasproducing at full capacity. By 2000, the factory was rolling out around 380 vehicles per day. The new MClass‘all-activity’ vehicle represented a new concept for the company. Also, mass customization requiredthat each vehicle be treated as a separate project, with its own Bill of Material. To deal with thesechallenges, Daimler Benz decided to implement an enterprise wide Information Technology (IT) system,with the help of IBM Global Services7.To further strengthen the image of Mercedes Benz in the US. MBUSI planned to deliver vehicles at thefactory, becoming the first international automobile manufacturer in the US to do so. MBUSI also wanted toenrich the customers’ experience. Commented William Engelke. “The factory delivery option givesMercedes-Benz customers something that they do not get from other automobile manufacturers which iswhy we think the program will resonate with our customers. We think that having the factory deliveryprogram available to Mercedes customers adds to the overall experience of the customer.”THE DESIGN OF FDRSThe FDRS program was proposed in the first quarter of 1998. In the third quarter of 1998. MBUSI enteredinto a contract with IBM. A development team was constituted with IBM Global Solutions specialists and

IBM c-commerce developers, who worked closely with MBUSI. The program became operational by thefirst quarter of 1999. The IT team at MBUSI had a clear set of functional specifications for FDRS. However,they relied on IBM to transform the concept into an e-business solution.The FDRS was designed in such a way that customers buying the M-Class SUV could specify that will takedelivery of their new vehicle at the factory. They could place the order at an of the 355 Mercedes Benzdealers in the US. An authorized employee at the dealership entered the factory delivery order the webinterface. Timing was the most important aspect of the FDRS’ functionality, as it was closely linked withMBUSI’s vehicle production schedule.Mercedes Benz United States of America (MBUSA)8, based in Montvale, NJ, was the first link in the FDRSprogram. It was (he point where the dealer actually placed the order. MBUSA’s role was to coordinate thedistribution of vehicles to dealers across the country. Later, it had to add the order to the company’s BaanEnterprise Resource Planning (ERP)9 system, which scheduled the order for production. About three monthsbefore the production date, the dealer could schedule in a window, the date and time of arrival of thecustomer at the factory for delivery. The window was then automatically computed by the FDRS to give thedealer, the possible delivery dates. Apart from the delivery date, the customer could also specify theaccessories for the car and also request a factory tour._________________________________IBM Global Services is the services and consultancy division of IBM Corp. that offers extensive c-businesssolutions.MBUSA is the wholly owned US subsidiary of Daimler-Chrylser.ERP attempts to integrate all departments and functions across a company onto a single computer systemthat can Serve all those different departments particular needs.Figure 1 : System Architecture of FDRSFDRS was based on Lotus Domino (Refer Exhibit I). Lotus Enterprise Integrator10 and IBM Netfinityservers. It also interfaced with IBM S/390 Parallel Enterprise Server. Model 9672-R45 located in Montvale.NJ (Refer Figure 1).There were two Domino servers — an IBM Netfinity 5500 and an IBM Netfinity 3000. The former thatacted as the “internal Domino server’ was placed behind a firewall.11 It replicated databases through thefirewall to the external server. The replication. which was encrypted, represented the primary means bywhich the FDRS system achieved security. Netfinity 3000 acted as an ‘external Domino server.’ It hadpublic information and was also the primary communication linkage for dealers.The back-end of the FDRS was equipped with an Oracle database that updated the internal Domino serverdatabase with order information. The updation was done using Lotus Enterprise Integrator. The data whichwas replicated to the internal Domino_________________________________10 A server-based data distribution product that enables data exchange between Lotus Domino and anumber of host and relational applications.11 A system designed to prevent unauthorized access to or from a private network. Firewalls can beimplemented in both hardware and software. Firewalls are frequently used to prevent unauthorizedInternet users from accessing private networks connected to the Internet, especially intranets. All

messages entering or leaving the intranet pass through the firewall, winch examines each message andblocks those that do not meet the specified security criteria.server included lists of valid dealers and lists of order numbers. When an order was placed by the dealer onthe FDRS system, the data as first stored on the external Domino server, after which it was replicated to theinternal Domino server. Then it was replicated to the back-end database via the Lotus Enterprise Integrator.Data replication between the Lotus Notes servers happened every 15 minutes and data exchange with theback-end database three times per day.There was also a link between the back end database and an IBM S/39012 mainframe based system located atMBUSA via a T113 line. MBUSA managed the flow of vehicles to Mercedes dealers across (lie UnitedStates. This mainframe based system received new vehicle orders (as opposed to factory delivery reservationrequests) from individual dealers. The orders were then sent to MBUSIs Baan system and also to the backenddatabase. The vehicle ordering and factory reservation data were coordinated with each other when theback-end database uploaded the data to the internal Domino server. This coordinated the production anddelivery information.FDRS IMPLEMENTATIONOne of the most challenging aspects of the implementation seemed to be the complexity of the Lotus andDomino scripts. The development tea in had to group all the information from diverse systems. CommentedWilliam Engelke. “There was a substantial amount of very complex coding involved in the FDRS solution.This application involves a lot more than having our dealers fill out a form and submitting it. There aremany things the servers have to do for the system to function properly such as looking at calendars andproduction schedules. We built a solution with some very advanced communication linkages.”IBM faced many technical challenges during time implementation of the program. One of them was thedifferent timing schemes of the Lotus Notes databases and backend databases (ERP). This led todiscrepancies in the data. Domino server was a Near Real Time (NRT) Server14, and MBUSI’s backendactivities were both real time15 and batch processing16. Also, to get the best results, the Domino server wasan optimised subset of the ERP table set How ever, the development team achieved a balance between thetwo ‘sides’ of the solution b focusing on issues of timing, error detection schemes, and alerts.___________________________________12 The IBM S/390 servers offer direct high speed access to the c-business application and are used forEnterprise Computing.13 A dedicated phone connection supporting data rates of 1544 Mbits per second. A T1 Line actuallyconsists of 24 individual channels, each of which supports 64 Kbits per second. Each 64 Kbit per secondchannel can be configured to voice or data traffic.14 The NRT Server System supports real time distribution of near-real time data.15 Real lime refers to events simulated by a computer at the same speed that they would occur in real life.16 Executing a series of noninteractive jobs all at one time. The term dates back to the days when usersentered programs on punch cards. They gave a batch of these programmed cards to the system operator, whofed them into the computer. Usually, batch jobs are stored up during working hours and then executedwhenever the computer is idle. Batch processing is particularly useful for operations that require thecomputer or a peripheral device for an extended period of time. Once a batch job begins, it continues until it

is done or until an error occurs. Note that batch processing implies that there is no interaction with the userwhile the program is being executed.17 The ERP tables are the database tables, (thousands of them), on which the package is built. Theprogrammers and end users must set these tables to match their business processes. Each table has a decision‘switch’ that leads the software down one decision Path or another.CUSTOMER SATISFACTION: FDRS’ PRIMARY BENEFITMBUSI seemed to measure FDRS’ success in terms of increased satisfaction of its customers, The companyalso believed that the marketing and customer satisfaction aspects outweighed the significance of moretraditional cost-based benefits. Apart from the factory delivery experience, the program also offered thecustomer a factory tour and ride on the off-road course at a low cost.The company also seemed to gain strategic marketing benefits from the FDRS program, as it was able toestablish Mercedes-Benz as a premium brand. (Refer Table I for advantages of FDRS in different areas).Customers could also visit the various tourist spots in Alabama after picking up their M-class vehicles.Table 1: Advantages of the FDRS ProgramAREA ADVANTAGESStrategic MarketingBenefitsFDRS was expected to improve customer satisfaction and brand loyalty, as itenriched Mercedes’ customer’s experience.The program also strengthened the brand image of Mercedes in the US.Cost SavingsDevelopment of a web-based solution enabled MBUSI to offer the factory deliveryprogram at substantially lower costs, due to less reliance on administrativepersonnel.Regional EconomicDevelopment“Package Marketing” the FDRS program with a ride to tourist sites, enhanced theimage of Alabama as a tourist destination.DaimlerChryslerAGThe creation of a similar — albeit smaller — factory delivery system to theEuropean Customer Delivery Center in Sindelfingen, Germany, reflected favorablyon the MBUSI business unit.Source : MBUSIFUTURE OF FDRSIn 2000, MBUSI planned to leverage FDRS’ platform by adding a range of other services. MBUSI built anadvanced platform to create communication links to its suppliers. Through the link, MBUSI provided themfeedback on the quality of supplies it received. The dealers and suppliers had a user-ID and password, whichthe system recognized. It then routed them into the appropriate stage of the FDRS.The company also planned to extend the innovative system to include transactional applications such asordering materials and checking order status on the Web. The company expected that the new system basedon FDRS. would be more cost-effective than the Electronic Data Interchange (EDI)18 system.Q.1) “The factory delivery option gives Mercedes-Benz customers something that they do not get fromother automobile manufacturers”. Briefly discuss the salient features of the Factory Delivery ReservationSystem of MBUSI.Q.2) “One of the most fundamental goals in developing the FDRS was to strengthen and market the

Mercedes-Benz brand in the United States”. Discuss other benefits of the FDRS program.

INTERNATIONAL BUSINESS

CASE 1 (20 Marks)Kodak started selling photographic equipment on Japan 1889 and by the 1930s it had a dominant position inthe Japanese market. But after World War II, U.S occupation forces persuaded most U.S companies includingKodak to leave Japan to give the war torn local industry a chance to recover. Kodak was effectively priced outof the market by tariff barriers; over the next 35 years Fuji gained 70% share of the market while Kodak sawits share slip to miserable 5%. During this period Kodak limited much of its activities in Japan.This situation persisted until early 1980s when Fuji launched an aggressive export drive, attacking Kodak inthe north American and European markets. Deciding that a good offence is the best defense, in 1984 and thenext six year, Kodak outspent Fuji in Japan by a ratio of more than 3 to 1. It erected mammoth $ 1 million nearsigns as land marks in many of the Japan’s big cities and also sponsored Sumo wrestling, Judo, and tennistournaments and even the Japanese team at the 1988 Seoul Olympics. Thus Kodak has put Fuji on defensive,forcing it to divert resources from overseas to defend itself at home. By 1990’s, some of Fuji’s best executiveshad been pulled back to Tokyo.All this success, however , was apparently not enough for Kodak. In may 1995, Kodak filed a petition with theUS trade office, that accured the Japanese government and Fuji of “Unfair trading practices”. According to thepetition, the Japanese government helped to create a ‘ profile sanctuary’ for Fuji in Japan by systematicallydenying Kodak access to Japanese distribution channels for consumer film and paper. Kodak claims Fuji haseffectively shut Kodak products out of four distributors that have a 70% share of the photo distribution market.Fuji has an equity position in two of the distributors, gives large year –end relates and cash payments to allfour distributors as a reward for their loyalty to Fuji, and owns stakes in the banks that finance them. Kodakalso claims that Fuji uses similar tactics to control 430 wholesale photo furnishing labs in Japan to which it isthe exclusive supplier. Moreover Kodak’s petition claims that the Japanese government has activelyencourages these practices.But Fuji a similar counter arguments relating to Kodak in U.S. and states bluntly that Kodak’s charges are aclear case of the pot calling the kettle back.(a) What was the critical catalyst that led Kodak to start taking the Japanese market seriously?(b) From the evidence given in the case do you think Kodak’s charges of unfair trading practices against Fujiare valid? Support your answer.CASE 2 (20 Marks)Two Senior executives of world’s largest firms with extensive holdings outside the home country speak.Company A : “We are a multinational firm. We distribute our products in about 100 countries. We

manufacture in over 17 countries and do research and development in three countries. We look at all newinvestment projects both domestic and overseas using exactly the same criteria”.The execution from company A continues, “ of course the most of the key ports in our subsidiaries are held byhome country nationals. Whenever replacements for these men are sought, it is the practice, if not the policy,to look next to you at the lead office and pick some one (usually a home country national) you know andtrust”.Company B : “ We are multinational firm. Our product division executives have worldwide profitresponsibility. As our organisational chart shows, the united states is just one region on a par with Europe,Latin America, Africa etc, in each division”.The executive from Company B goes on to explain, “the worldwide Product division concept is rather difficultto implement. The senior executives incharge of this divisions have little overseas experience. They have been3 | P a g epromoted from domestic ports and tend to view foreign consumers needs as really basically the same as ours.Also, product division executives tend to focus on domestic market, because it generates more revenue thanforeign market. The rewards are for global performance, but strategy is to focus on domestic. Most of thesenior executives simply do not understand what happens overseas and really do not trust foreign executives,even those in key portions?Questions :1 Which company is truly Multinational ? Why?2 List three differences between Company , Multi National company and Trans Multi National Company ?CASE - 3 (20 Marks)Strategic R & D by TNCs in Developing CountriesTNCs have had long units in developing host countries for adapting products and processes to the localconditions, and in a few cases, to products for local markets. Since the min-1980s, however, they have alsostarted locating strategic R & D centres in some developing countries, for developing generic technologiesand products for regional or global markets. The main incentives for this are : (a) access to highly qualifiedscientists as shortages of research personnel emerge in certain fields in industrialised countries, (b) Costdifferentials in research salaries between developing and industrialised countries, and (c) rationalisation ofoperations, assigning particular affiliates the responsibility for developing, manufacturing, and marketingparticular products worldwide. Th new trends are more visible in industries dealing with new technologies,such as microelectronics, biotechnology, and new materials. In these technologies, the location of R & D canbe geographically de-linked more easily from the location of manufacturing. It is also possible to separate R &D in core activities from that in non-core activities. Consequently, countries like India, Israel, Singapore,Malaysia or Brazil serve TNCs as good locations for strategic R & D.For instance, Sony Corporation of Japan has around nine R & D units in Asian developing countries. It has

three units in Singapore conducting R & D on core components such as optical data shortage devices,integrated chip design for audio products and CD-ROM drives, and multimedia and microchip software. It hasthree units in Malaysia working on video design, derivative models and circuit blocks for new TV chases,radio cassettes, discman and hi-fi receiver designs. It has one unit in Republic of Korea focusing on the designof compact discs, radio cassettes, tape recorders, and car stereos. It has one in Taiwan designing anddeveloping video tape-recorders, minidisk players, video CDs, and duplicators. Finally, it has one unit inIndonesia focusing on the design of audio products.Such units often work in collaboration with science and technology institutes in the host country. For instance,Daimler Benz has established such a unit in Bangalore, India, in collaboration with the Indian Institute ofScience to work on projects related to its vehicles and avionics business. Current work includes interfacedesign of avionics landing systems and smart GPS sensors for use by the group’s business worldwide.Source: World Investment Report 1999.Questions:(a) Explain why MNCs have located R & D centres in developing countries?(b) Mention the areas where R & D activities can easily be decentralised.4 | P a g eCASE -4 (20 Marks)VK Ltd a multi-product Company, furnishes you the following data relating to the year 2000.First Half of the year Second Half of the yearSales Rs. 45,000 Rs. 50,000Total Cost Rs. 40,000 Rs. 43,000Assuming that there is no change in prices and variable costs and that the fixed expenses are incurred equallyin the two half years periods calculate for the year 2000.1. The Profit Volume ration2. Fixed Expenses3. Break-Even Sales4. Percentage of margin of safety.

INTERNATIONAL MARKETING

1. How does a company decide whether it should enter international markets or not? Is it always beneficial to enter foreign markets? Can companies shun international markets and still survive? (10 Marks)2. What are the most critical factors that determine success in global markets? Explain those taking suitable examples.3. Take a stand on the following:A company should serve different country markets with standard offeringsORA company should serve different country markets with customized offerings Justify your stand. Also advice how the company could take a decision on the above stated issue.4. Discuss on the distribution structure that is used in a foreign market and indicate how does a company decide such a distribution structure?5. “To gain competitive advantage, a global company has to leverage its competencies from all the locations where it has operations”. Critically analyze this statement6. Elaborate on the Marketing Mix decision with regard to an international Market. Substantiate your views by appropriate examples.7. Briefly explain the term Global Brand? How does a brand attain the status of Global brand? Explain with suitable examples.

INTERNATIONAL MARKETING MANAGEMENT

Case-1 : The use of the marketing mix in product launchIntroductionNIVEA® is an established name in high quality skin and beauty care products. It is part of a range ofbrands produced and sold by Beiersdorf. Beiersdorf, founded in 1882, has grown to be a global companyspecialising in skin and beauty care.In the UK, Beiersdorf’s continuing goal is to have its products as close as possible to its consumers,regardless of where they live. Its aims are to understand its consumers in its many different markets anddelight them with innovative products for their skin and beauty care needs. This strengthens the trust andappeal of Beiersdorf brands. The business prides itself on being consumer-led and this focus has helpedit to grow NIVEA into one of the largest skin care brands in the world.Beiersdorf’s continuing programme of market research showed a gap in the market. This led to thelaunch of NIVEA VISAGE® Young in 2005 as part of the NIVEA VISAGE range offering acomprehensive selection of products aimed at young women. It carries the strength of the NIVEA brandimage to the target market of girls aged 13-19. NIVEA VISAGE Young helps girls to develop a properskin care routine to help keep their skin looking healthy and beautiful.The market can be developed by creating a good product/range and introducing it to the market(product-orientated approach) or by finding a gap in the market and developing a product to fill it(market-orientated approach). Having identified a gap in the market, Beiersdorf launched NIVEAVISAGE Young using an effective balance of the right product, price, promotion and place. This isknown as the marketing mix or ‘four Ps’. It is vital that a company gets the balance of these fourelements correct so that a product will achieve its critical success factors. Beiersdorf needed to developa mix that suited the product and the target market as well as meeting its own business objectives.The company re-launched the NIVEA VISAGE Young range in June 2007 further optimising itsposition in the market. Optimised means the product had a new formula, new design, new packaging anda new name. This case study shows how a carefully balanced marketing mix provides the platform forlaunching and re-launching a brand onto the market.Product :The first stage in building an effective mix is to understand the market. NIVEA uses market research totarget key market segments which identifies groups of people with the same characteristics such asage/gender/attitude/lifestyle. The knowledge and understanding from the research helps in thedevelopment of new products. NIVEA carries out its market research with consumers in a number ofdifferent ways. These include:• using focus groups to listen to consumers directly• gathering data from consumers through a variety of different research techniques• product testing with consumers in different markets.Beiersdorf’s market research identified that younger consumers wanted more specialised face care

aimed at their own age group that offered a ‘beautifying’ benefit, rather than a solution to skin problems.NIVEA VISAGE Young is a skin care range targeted at girls who do not want medicated products butwant a regime for their normal skin.Competitor products tend to be problem focussed and offer medicated solutions. This gives NIVEAcompetitive advantage. NIVEA VISAGE Young provides a unique bridge between the teenage marketand the adult market.The company improved the product to make it more effective and more consumer-friendly. Beiersdorftested the improved products on a sample group from its target audience before finalising the range forre-launch. This testing resulted in a number of changes to existing products. Improvements included:• Changing the formula of some products. For example, it removed alcohol from one product and usednatural sea salts and minerals in others.• Introducing two completely new products.• A new modern pack design with a flower pattern and softer colours to appeal to younger women.• Changing product descriptions and introducing larger pack sizes.Each of these changes helped to strengthen the product range, to better meet the needs of the market.Some of these changes reflect NIVEA’s commitment to the environment. Its corporate responsibilityapproach aims to:• reduce packaging and waste - by using larger pack sizes• use more natural products – by including minerals and sea salts in the formula• increase opportunities for recycling - by using recyclable plastic in its containers.Price :Lots of factors affect the end price of a product, for example, the costs of production or the businessneed to maximise profits or sales. A product’s price also needs to provide value for money in the marketand attract consumers to buy.There are several pricing strategies that a business can use:• Cost based pricing – this can either simply cover costs or include an element of profit. It focuses on theproduct and does not take account of consumers.• Penetration price – an initial low price to ensure that there is a high volume of purchases and marketshare is quickly won. This strategy encourages consumers to develop a habit of buying.• Price skimming – an initial high price for a unique product encouraging those who want to be ‘first tobuy’ to pay a premium price. This strategy helps a business to gain maximum revenue before acompetitor’s product reaches the market.On re-launch the price for NIVEA VISAGE Young was slightly higher than previously. This reflectedits new formulations, packaging and extended product range. However, the company also had to takeinto account that the target market was both teenage girls and mums buying the product for theirdaughters. This meant that the price had to offer value for money or it would be out of reach of its targetmarket.As NIVEA VISAGE Young is one of the leading skin care ranges meeting the beautifying needs of thismarket segment, it is effectively the price leader. This means that it sets the price level that

competitors will follow or undercut. NIVEA needs to regularly review prices should a competitor enterthe market at the ‘market growth’ point of the product life cycle to ensure that its pricing remainscompetitive.The pricing strategy for NIVEA is not the same as that of the retailers. It sells products to retailers at oneprice. However, retailers have the freedom to use other strategies for sales promotion. These takeaccount of the competitive nature of the high street. They may use:• loss leader: the retailer sells for less than it cost to attract large volume of sales, for example bysupermarkets• discounting – alongside other special offers, such as ‘Buy one, get one free’ (BOGOF) or ‘two forone’.NIVEA VISAGE Young’s pricing strategy now generates around 7% of NIVEA VISAGE sales.PlacePlace refers to:• How the product arrives at the point of sale. This means a business must think about what distributionstrategies it will use.• Where a product is sold. This includes retail outlets like supermarkets or high street shops. It alsoincludes other ways in which businesses make products directly available to their target market, forexample, through direct mail or the Internet.NIVEA VISAGE Young aims to use as many relevant distribution channels as possible to ensure thewidest reach of its products to its target market. The main channels for the product are retail outletswhere consumers expect to find skin care ranges. Around 65% of NIVEA VISAGE.Young sales are through large high street shops such as Boots and Superdrug. Superdrug is particularlyimportant for the ‘young-end’ market. The other 35% of sales mainly comes from large grocery chainsthat stock beauty products, such as ASDA, Tesco and Sainsbury’s. Market research shows that around20% of this younger target market buys products for themselves in the high street stores when shoppingwith friends. Research also shows that the majority of purchasers are actually made by mums, buying forteenagers. Mums are more likely to buy the product from supermarkets whilst doing their groceryshopping.NIVEA distributes through a range of outlets that are cost effective but that also reach the highestnumber of consumers. Its distribution strategies also consider the environmental impact of transport. Ituses a central distribution point in the UK. Products arrive from European production plants usingcontract vehicles for efficiency for onward delivery to retail stores. Beiersdorf does not sell direct tosmaller retailers as the volume of products sold would not be cost effective to deliver but it useswholesalers for these smaller accounts. It does not sell directly through its website as the costs ofproducing small orders would be too high. However, the retailers, like Tesco, feature and sell theNIVEA products in their online stores.

PromotionPromotion is how the business tells customers that products are available and persuades them to buy.Promotion is either above-the-line or below-the-line. Above-the-line promotion is directly paid for, forexample TV or newspaper advertising.Below-the-line is where the business uses other promotional methods to get the product message across:• Events or trade fairs help to launch a product to a wide audience. Events may be business to consumer(B2C) whereas trade fairs are business to business (B2B).• Direct mail can reach a large number of people but is not easy to target specific consumers costeffectively.• Public relations (PR) includes the different ways a business can communicate with its stakeholders,through, for example, newspaper press releases. Other PR activities include sponsorship of high profileevents like Formula 1 or the World Cup, as well as donations to or participation in charity events.Branding – a strong and consistent brand identity differentiates the product and helps consumers tounderstand and trust the product. This aims to keep consumers buying the product long-term.• Sales promotions, for example competitions or sampling, encourage consumers to buy products in theshort-term.NIVEA chooses promotional strategies that reflect the lifestyle of its audience and the range of mediaavailable. It realises that a ‘one way’ message, using TV or the press, is not as effective as talkingdirectly to its target group of consumers. Therefore NIVEA does not plan to use any above-the-linepromotion for NIVEA VISAGE Young.The promotion of NIVEA VISAGE Young is consumer-led. Using various below-the-line routes,NIVEA identifies ways of talking to teenagers (and their mums) directly.• A key part of the strategy is the use of product samples. These allow customers to touch, feel, smelland try the products. Over a million samples of NIVEA VISAGE Young products will be given awayduring 2008. These samples will be available through the website, samples in stores or in ‘goody bags’given out at VISAGE roadshows up and down the country.• NIVEA VISAGE Young launched an interactive online magazine called FYI (Fun, Young &Independent) to raise awareness of the brand. The concept behind the magazine is to give teenage girlsthe confidence to become young women and to enjoy their new-found independence. Communicationchannels are original and engaging to enable teenagers to identify with NIVEA VISAGE Young. Themagazine focuses on ‘first time’ experiences relating to NIVEA VISAGE Young being their firstskincare routine. It is promoted using the Hit40UK chart show and the TMF digital TV channel.• In connection with FYI, NIVEA VISAGE Young has recognised the power of social network sites forthis young audience and also has pages on MySpace, Facebook and Bebo. The company is using thepower of new media as part of the mix to grow awareness amongst the target audience.ConclusionNIVEA VISAGE Young is a skincare range in the UK market designed to enhance the skin and beautyof the teenage consumer rather than being medicated to treat skin problems. As such, it has created a

clear position in the market. This shows that NIVEA understands its consumers and has produced thisdifferentiated product range in order to meet their needs.To bring the range to market, the business has put together a marketing mix. This mix balances the fourelements of product, price, place and promotion. The mix uses traditional methods of place, such asdistribution through the high street, alongside more modern methods of promotion, such as throughsocial networking sites. It makes sure that the message of NIVEA VISAGE Young reaches the rightpeople in the right way.Answer the following questions:1. Describe what is meant by a business being ‘consumer led’.2. What are the key parts of the marketing mix? Explain how each works with the others.3. Explain why the balance of the marketing mix is as important as any single element.4. Analyse the marketing mix for NIVEA VISAGE Young. What are its strongest points? Explain whyyou think this is so.Case-2 : SWOT analysis in action at ŠkodaIntroductionIn 1895 in Czechoslovakia, two keen cyclists, Vaclav Laurin and Vaclav Klement, designed andproduced their own bicycle. Their business became Škoda in 1925. Škoda went on to manufacturecycles, cars, farm ploughs and airplanes in Eastern Europe. Škoda overcame hard times over the next 65years. These included war, economic depression and political change. By 1990 the Czech managementof Škoda was looking for a strong foreign partner. Volkswagen AG (VAG) was chosen because of itsreputation for strength, quality and reliability. It is the largest car manufacturer in Europe providing anaverage of more than 5 million cars a year – giving it a 12% share of the world car market. VolkswagenAG comprises the Volkswagen, Audi, Škoda, SEAT, Volkswagen Commercial Vehicles, Lamborghini,Bentley and Bugatti brands. Each brand has its own specific character and is independent in the market.Škoda UK sells Škoda cars through its network of independent franchised dealers.To improve its performance in the competitive car market, Škoda UK’s management needed to assess itsbrand positioning. Brand positioning means establishing a distinctive image for the brand compared tocompeting brands. Only then could it grow from being a small player. To aid its decision-making, ŠkodaUK obtained market research data from internal and external strategic audits. This enabled it to takeadvantage of new opportunities and respond to threats.The audit provided a summary of the business’s overall strategic position by using a SWOT analysis.SWOT is an acronym which stands for:• Strengths – the internal elements of the business that contribute to improvement and growth• Weaknesses – the attributes that will hinder a business or make it vulnerable to failure• Opportunities – the external conditions that could enable future growth• Threats – the external factors which could negatively affect the business.This case study focuses on how Škoda UK’s management built on all the areas of the strategic audit.The outcome of the SWOT analysis was a strategy for effective competition in the car industry.Strengths

To identify its strengths, Škoda UK carried out research. It asked customers directly for their opinionsabout its cars. It also used reliable independent surveys that tested customers’ feelings. For example, theannual JD Power customer satisfaction survey asks owners what they feel about cars they have ownedfor at least six months. JD Power surveys almost 20,000 car owners using detailed questionnaires. Škodahas been in the top five manufacturers in this survey for the past 13 years. In Top Gear’s 2007 customersatisfaction survey, 56,000 viewers gave their opinions on 152 models and voted Škoda the ‘number 1car maker’. Škoda’s Octavia model has also won the 2008 Auto Express Driver Power ‘Best Car’.Škoda attributes these results to the business concentrating on owner experience rather than on sales. Ithas considered ‘the human touch’ from design through to sale. Škoda knows that 98% of its driverswould recommend Škoda to a friend. This is a clearly identifiable and quantifiable strength. Škoda usesthis to guide its future strategic development and marketing of its brand image.Strategic management guides a business so that it can compete and grow in its market. Škoda adopted astrategy focused on building cars that their owners would enjoy. This is different from simplymaximising sales of a product. As a result, Škoda’s biggest strength was the satisfaction of itscustomers. This means the brand is associated with a quality product and happy customers.WeaknessesA SWOT analysis identifies areas of weakness inside the business. Škoda UK’s analysis showed that inorder to grow it needed to address key questions about the brand position. Škoda has only 1.7% marketshare. This made it a very small player in the market for cars. The main issue it needed to address was:how did Škoda fit into this highly competitive, fragmented market?This weakness was partly due to out-dated perceptions of the brand. These related to Škoda’s easternEuropean origins. In the past the cars had an image of poor vehicle quality, design, assembly, andmaterials. Crucially, this poor perception also affected Škoda owners. For many people, car ownership isall about image. If you are a Škoda driver, what do other people think?From 1999 onwards, under Volkswagen AG ownership, Škoda changed this negative image. Škoda carswere no longer seen as low-budget or low quality. However, a brand ‘health check’ in 2006 showed thatŠkoda still had a weak and neutral image in the mid-market range it occupies, compared to other playersin this area, for example, Ford, Peugeot and Renault. This meant that whilst the brand no longer had apoor image, it did not have a strong appeal either. This understanding showed Škoda in which directionit needed to go. It needed to stop being defensive in promotional campaigns. The company had sought tocorrect old perceptions and demonstrate what Škoda cars were not. It realised it was now time to saywhat the brand does stand for. The marketing message for the change was simple. Škoda owners wereknown to be happy and contented with their cars. The car-buying public and the car industry as a wholeneeded convincing that Škoda cars were great to own and drive.Opportunities and Threats

OpportunitiesOpportunities occur in the external environment of a business. These include for example, gaps in themarket for new products or services. In analysing the external market, Škoda noted that its competitors’marketing approaches focused on the product itself.Audi emphasises the technology through its strapline, ‘Vorsprung Durch Technik’ (‘advantage throughtechnology’). BMW promotes ‘the ultimate driving machine’. Many brands place emphasis on themachine and the driving experience. Škoda UK discovered that its customers loved their cars more thanowners of competitor brands, such as Renault or Ford.Information from the SWOT analysis helped Škoda to differentiate its product range. Having acomplete understanding of the brand’s weaknesses allowed it to develop a strategy to strengthen thebrand and take advantage of the opportunities in the market. It focused on its existing strengths andprovided cars focused on the customer experience. The focus on ‘happy Škoda customers’ is anopportunity. It enables Škoda to differentiate the Škoda brand to make it stand out from the competition.This is Škoda’s unique selling proposition (USP) in the motor industry.ThreatsThreats come from outside of a business. These involve, for example, a competitor launching cheaperproducts. A careful analysis of the nature, source and likelihood of these threats is a key part of theSWOT process.The UK car market includes 50 different car makers selling 200 models. Within these there are over2,000 model derivatives. Škoda UK needed to ensure that its messages were powerful enough forcustomers to hear within such a crowded and competitive environment. If not, potential buyers wouldoverlook Škoda. This posed the threat of a further loss of market share.Škoda needed a strong product range to compete in the UK and globally. In the UK the Škoda brand isrepresented by seven different cars. Each one is designed to appeal to different market segments. Forexample:• The Škoda Fabia is sold as a basic but quality ‘city car’• The Škoda Superb offers a more luxurious, ‘up-market’ appeal• The Škoda Octavia Estate provides a family with a fun drive but also a great big boot.Pricing reflects the competitive nature of Škoda’s market. Each model range is priced to appeal todifferent groups within the mainstream car market. The combination of a clear range with competitivepricing has overcome the threat of the crowded market.The following example illustrates how Škoda responded to another of its threats, namely, the need torespond to EU legal and environmental regulations. Škoda responded by designing products that areenvironmentally friendly at every stage of their life cycle. This was done by for example:-• Recycling as much as possible. Škoda parts are marked for quick and easy identification when the caris taken apart.• Using the latest, most environmentally-friendly manufacturing technologies and facilities available.For instance, areas painted to protect against corrosion use lead-free, water based colours.

• Designing processes to cut fuel consumption and emissions in petrol and diesel engines. These uselighter parts making vehicles as aerodynamic as possible to use less energy.• Using technology to design cars with lower noise levels and improved sound quality. Outcomes andbenefits of SWOT analysis.Škoda UK’s SWOT analysis answered some key questions. It discovered that:• Škoda car owners were happy about owning a Škoda• the brand was no longer seen as a poorer version of competitors’ cars.However,• the brand was still very much within a niche market• a change in public perception was vital for Škoda to compete and increase its market share of themainstream car market.The challenge was how to build on this and develop the brand so that it was viewed positively. Itrequired a whole new marketing strategy.Škoda UK has responded with a new marketing strategy based on the confident slogan, ‘themanufacturer of happy drivers.’ The campaign’s promotional activities support the new brand position.The key messages for the campaign focus on the ‘happy’ customer experience and appeal at anemotional rather than a practical level. The campaign includes:• he ‘Fabia Cake’ TV advert. This showed that the car was ‘full of lovely stuff’ with the happy music(‘Favourite things’) in the background.• An improved and redesigned website which is easy and fun to use. This is to appeal to a youngaudience. It embodies the message ‘experience the happiness of Škoda online’.Customers are able to book test drives and order brochures online. The result is that potential customerswill feel a Škoda is not only a reliable and sensible car to own, it is also ‘lovely’ to own.Analysing the external opportunities and threats allows Škoda UK to pinpoint precisely how it shouldtarget its marketing messages. No other market player has ‘driver happiness’ as its USP. By building onthe understanding derived from the SWOT, Škoda UK has given new impetus to its campaign. At thesame time, the campaign has addressed the threat of external competition by setting Škoda apart from itsrivals.ConclusionŠkoda is a global brand offering a range of products in a highly competitive and fragmented market. Thecompany must respond positively to internal and external issues to avoid losing sales and market share.A SWOT analysis brings order and structure to otherwise random information. The SWOT model helpsmanagers to look internally as well as externally. The information derived from the analysis givesdirection to the strategy. It highlights the key internal weaknesses in a business, it focuses on strengthsand it alerts managers to opportunities and threats. Škoda was able to identify where it had strengths tocompete. The structured review of internal and external factors helped transform Škoda UK’s strategicdirection.The case study shows how Škoda UK transformed its brand image in the eyes of potential customers and

build its competitive edge over rivals. By developing a marketing strategy playing on clearly identifiedstrengths of customer happiness, Škoda was able to overcome weaknesses. It turned its previouslydefensive position of the brand to a positive customer-focused experience. The various awards Škodahas won demonstrate how its communications are reaching customers. Improved sales show that ŠkodaUK’s new strategy has delivered benefits.Answer the1. What was the key weakness that Škoda was able to identify?2. What strength did Škoda use to turn its brand weakness into an opportunity?3. How has Škoda strategically addressed external threats?4. What in your view are the important benefits of using a SWOT analysisCase-3 : Marketing strategy for growthIntroductionBusinesses must respond to change in order to remain competitive. Developing appropriate strategieswhich allow them to move forward is essential. Wilkinson is a prime example of a business that hasresponded to changing customer needs throughout its history. It is one of the UK’s long-establishedretailers of a wide range of food, home, garden, office, health and beauty products.James Kemsey (JK)Wilkinson opened his first Wilkinson Store in Charnwood Street, Leicester in 1930. After the SecondWorld War, the 1950s saw a rise in the use of labour-saving devices and DIY. Wilkinson responded bymaking this type of product the focus of its sales. In the 1960s customers wanted more convenienceshopping. Wilkinson started selling groceries and supermarket goods and created the Wilko brand. In the1980s Wilkinson extended its range of low-cost products to include quality clothing, toys, toiletries andperfumes. In 1995 it opened a central distribution centre in Workshop, serving stores in the north ofEngland and in 2004, a new distribution centre opened in Wales. In 2005 Wilkinson launched itsInternet shopping service, offering over 800,000 product lines for sale online. Wilkinson currently hasover 300 stores, which carry an average of 25,000 product lines. 40% of these are Wilko ‘own-brand’products. The company’s target is to see this element grow and to have over 500 stores by 2012.Wilkinson’s growth places it in the top 30 retailers in the UK. Recently it has faced increasingchallenges from competitors, such as the supermarket sector. Wilkinson needed to combat this andidentify new areas for growth. Over two years it conducted extensive market research. This has helped itcreate a marketing strategy designed to continue growing by targeting a new market segment - thestudent population. This case study focuses on how Wilkinson created and implemented this strategy,using the findings of its market research to drive the strategy forward.Marketing strategy aims to communicate to customers the added-value of products and services. Thisconsiders the right mix of design, function, image or service to improve customer awareness of thebusiness’ products and ultimately to encourage them to buy. An important tool for helping develop an

appropriate marketing strategy is Ansoff’s Matrix. This model looks at the options for developing amarketing strategy and helps to assess the levels of risk involved with each option. Marketing strategiesmay focus on the development of products or markets. Doing more of what a business already doescarries least risk; developing a completely new product for a new audience carries the highest risk bothin terms of time and costs.Based on its research, Wilkinson committed to a market development strategy to sell its products to anew audience of students. This is a medium risk strategy as it requires the business to find and developnew customers. It also carries costs of the marketing campaigns to reach this new group. The main focusof the strategy was to increase awareness of the brand among students and encourage them to shopregularly at Wilkinson stores.Market researchMarket research is vital for collecting data on which to base the strategy. Market research takes one oftwo main forms – primary research and secondary research. Primary research (also called fieldresearch) involves collecting data first hand. This can take many forms, the main ones being interview,questionnaires, panels and observation. Secondary research (also called desk research) involvescollecting data which already exists. This includes using information from reports, publications, Internetresearch and company files.Both methods have advantages and disadvantages. The advantages of primary research are that it isrecent, relevant and designed specifically for the company’s intended strategy. The main disadvantage isthat it is more expensive than secondary research and can be biased if not planned well. Secondaryresearch is relatively cheap, can be undertaken quickly and so enables decision-making sooner.However, secondary research can go out-of-date and may not be entirely relevant to the business’ needs.Wilkinson undertook primary market research using questionnaires from students across the UK andsecondary research using government and university admissions data. The statistics revealed that therewere three million potential student customers.They had a combined annual spend of around £9 billion per year. This research confirmed that thechoice of focusing on the student market as a means of growth was valid. Wilkinson undertook furtherresearch to identify how to reach students and persuade them to start shopping at Wilkinson stores. Thisinformation was used to formulate a focus strategy. This was aimed specifically at the needs of thestudent ‘market segment’.Marketing to studentsWilkinson involved 60 universities in research, using questionnaires distributed to students initially inYears 2 and 3 of a range of universities and then to ‘freshers’ (new students) through the University andColleges Admission Service. This ensured the widest range of students was included to eliminate bias. It

also gave a wide range of responses. From this initial group, students were asked a second set ofquestions. Participants were rewarded with Amazon vouchers to encourage a good take-up. The researchfocused on two areas:1. student awareness of the Wilkinson brand and2. reasons why students were currently not using the stores regularly.The market research enabled Wilkinson to put together its marketing strategy. The aim was to ensure thestudent population began shopping at Wilkinson stores early in their student experience. This wouldhelp to maintain their customer loyalty to Wilkinson throughout their student years and also to developthem as future customers after university. Repeat business is key to sustained growth. Wilkinsonwanted to create satisfied customers with their needs met by the Wilkinson range of products. Amarketing campaign was launched which focused on a range of promotional tactics, specificallydesigned to appeal to university students:• Wilkinson being present at freshers’ fairs – and giving free goody bags with sampleproducts directly to students• direct mail flyers to homes and student halls, prior to students arriving• advertisements with fun theme, for example, showing frying pans as tennis racquets• web banners• offering discounts of 15% with first purchase using the online store• gift vouchers• free wallplanners.The challenge was to get students into Wilkinson stores. The opportunity was to capture a new customergroup at an early stage and provide essential items all year round. This would lead to a committedcustomer group and secure repeat business.Outcomes/evaluationWilkinson wanted to know what would inspire students to shop at Wilkinson more and what factorswould help to attract non-customers. The research provided significant primary information to analysethe effects of the campaign. Wilkinson used questionnaires collected from the first year undergraduatesto gather qualitative data. In addition, Wilkinson obtained quantitative data from various othersources, including:• redemption rates – how many people used the discount vouchers when buying• sales analysis – how much extra business did the stores handle• footfall in stores analysis – how many extra people went into stores.This information helped Wilkinson to develop its plans for future marketing campaigns. It identifiedMotivation factors for the student audience which would help to encourage future purchase. Keyfactors included products being cheaper than competitors and easy access to stores. 23% of studentsquestioned gave ‘distance from university’ as a reason for not regularly visiting the store. The layout ofthe store was another major problem affecting repeat visits. These findings have been taken on board byWilkinson in its future planning of store locations and layouts.Researching students’ opinions after the campaign showed that:• Awareness of Wilkinson brand had significantly risen from 77% to 95% of those interviewed. Thisbrought it in line with Morrison supermarkets, a key competitor.

ConclusionWilkinson’s marketing strategy began with its corporate aim to grow and increase stores across the UK.It was facing increased competition from supermarkets and needed to identify an area to focus on. Topursue a growth strategy, Wilkinson used market research to identify new target customers. This enabledit to prepare marketing strategies to fit the audience.Primary and secondary research was used to find out customer views regarding its brand. Data indicatedthe student market segment was a significant area to focus on to achieve market development. Amarketing campaign using data from a follow-up survey was put in place. The campaign showedsignificant increase in students’ levels of awareness about Wilkinson and its products. It encouragedthem either to shop more or to try Wilkinson for the first time. The campaign helped to achieve many ofthe business’ aims, creating increased brand awareness and repeat visits. It also helped to inform thecompany’s future strategies for growth. Market research gathered will help to formulate future plans fornew stores. These will be in line with Wilkinson commitment to providing communities with affordableproducts across the country.Answer the following questions1. What is the difference between primary and secondary research? Identify one example of primary andsecondary research carried out by Wilkinson.2. Explain why Wilkinson needed a marketing strategy to help them to grow.3. Evaluate the benefits of the marketing campaign to Wilkinson.4. Analyse how effective the marketing campaign was in helping Wilkinson respond to competitivepressures.Case-4 : Extending the product life cycleIntroductionBusinesses need to set themselves clear aims and objectives if they are going to succeed. The KelloggCompany is the world’s leading producer of breakfast cereals and convenience foods, such as cerealbars, and aims to maintain that position. In 2006, Kellogg had total worldwide sales of almost $11billion (£5.5 billion). In 2007, it was Britain’s biggest selling grocery brand, with sales of more than£550 million. Product lines include ready-to-eat cereals (i.e. not hot cereals like porridge) and nutritioussnacks, such as cereal bars. Kellogg’s brands are household names around the world and include RiceKrispies, Special K and Nutri-Grain, whilst some of its brand characters, like Snap, Crackle and Pop, areamongst the most wellknown in the world.Kellogg has achieved this position, not only through great brands and great brand value, but through astrong commitment to corporate social responsibility. This means that all of Kellogg’s business aimsare set within a particular context or set of ideals. Central to this is Kellogg’s passion for the business,the brands and the food, demonstrated through the promotion of healthy living.The company divides its market into six key segments. Kellogg's Corn Flakes has been on breakfast

tables for over 100 years and represents the ‘Tasty Start’ cereals that people eat to start their day. Othersegments include ‘Simply Wholesome’ products that are good for you, such as Kashi Muesli, ‘ShapeManagement’ products, such as Special K and ‘Inner Health’ lines, such as All-Bran. Children will bemost familiar with the ‘Kid Preferred’ brands, such as Frosties, whilst ‘Mum Approved’ brands likeRaisin Wheats are recognised by parents as being good for their children.Each brand has to hold its own in a competitive market. Brand managers monitor the success of brandsin terms of market share, growth and performance against the competition. Key decisions have to bemade about the future of any brand that is not succeeding. This case study is about Nutri-Grain. It showshow Kellogg recognised there was a problem with the brand and used business tools to reach a solution.The overall aim was to re-launch the brand and return it to growth in its market.The product life cycleEach product has its own life cycle. It will be ‘born’, it will ‘develop’, it will ‘grow old’ and, eventually,it will ‘die’. Some products, like Kellogg’s Corn Flakes, have retained their market position for a longtime. Others may have their success undermined by falling market share or by competitors. The productlife cycle shows how sales of a product change over time. The five typical stages of the life cycle areshown on a graph. However, perhaps the most important stage of a product life cycle happens beforethis graph starts, namely theResearch and Development (R&D) stage. Here the company designs a product to meet a need in themarket. The costs of market research - to identify a gap in the market and of product development toensure that the product meets the needs of that gap - are called ‘sunk’ or start-up costs. Nutri-Grain wasoriginally designed to meet the needs of busy people who had missed breakfast. It aimed to provide ahealthy cereal breakfast in a portable and convenient format.1. Launch - Many products do well when they are first brought out and Nutri-Grain was no exception.From launch (the first stage on the diagram) in 1997 it was immediately successful, gaining almost 50%share of the growing cereal bar market in just two years.2. Growth - Nutri-Grain’s sales steadily increased as the product was promoted and became wellknown. It maintained growth in sales until 2002 through expanding the original product with newdevelopments of flavour and format. This is good for the business, as it does not have to spend moneyon new machines or equipment for production. The market position of Nutri-Grain also subtly changedfrom a ‘missed breakfast’ product to an ‘all-day’ healthy snack.3. Maturity - Successful products attract other competitor businesses to start selling similar products.This indicates the third stage of the life cycle - maturity. This is the time of maximum profitability, whenprofits can be used to continue to build the brand. However, competitor brands from both Kellogg itself

(e.g. All Bran bars) and other manufacturers (e.g. Alpen bars) offered the same benefits and this sloweddown sales and chipped away at Nutri-Grain’s market position. Kellogg continued to support thedevelopment of the brand but some products (such as Minis and Twists), struggled in a crowded market.Although Elevenses continued to succeed, this was not enough to offset the overall sales decline. Not allproducts follow these stages precisely and time periods for each stage will vary widely. Growth, forexample, may take place over a few months or, as in the case of Nutri-Grain, over several years.4. Saturation - This is the fourth stage of the life cycle and the point when the market is ‘full’. Mostpeople have the product and there are other, better or cheaper competitor products. This is called marketsaturation and is when sales start to fall. By mid-2004 Nutri-Grain found its sales declining whilst themarket continued to grow at a rate of 15%.5. Decline - Clearly, at this point, Kellogg had to make a key business decision. Sales were falling, theproduct was in decline and losing its position. Should Kellogg let the product ‘die’, i.e. withdraw it fromthe market, or should it try to extend its life?Strategic use of the product life cycleWhen a company recognises that a product has gone into decline or is not performing as well as itshould, it has to decide what to do. The decision needs to be made within the context of the overall aimsof the business. Kellogg’s aims included the development of great brands, great brand value and thepromotion of healthy living. Strategically, Kellogg had a strong position in the market for both healthyfoods and convenience foods. Nutri-Grain fitted well with its main aims and objectives and thereforewas a product and a brand worth rescuing.Kellogg decided to try to extend the life of the product rather than withdraw it from the market. Thismeant developing an extension strategy for the product. Ansoff’s matrix is a tool that helps analysewhich strategy is appropriate. It shows both market-orientated and product-orientated possibilities.Extending the Nutri-Grain cycle – identifying the problemKellogg had to decide whether the problem with Nutri-Grain was the market, the product or both. Themarket had grown by over 15% and competitors’ market share had increased whilst Nutri-Grain sales in2003 had declined. The market in terms of customer tastes had also changed – more people missedbreakfast and therefore there was an increased need for such a snack product.The choice of extension strategy indicated by the matrix was either product development ordiversification. Diversification carries much higher costs and risks. Kellogg decided that it needed tofocus on changing the product to meet the changing market needs.Research showed that there were several issues to address:1. The brand message was not strong enough in the face of competition. Consumers were not impressedenough by the product to choose it over competitors.2. Some of the other Kellogg products (e.g. Minis) had taken the focus away from the core business.

3. The core products of Nutri-Grain Soft Bake and Elevenses between them represented over 80% ofsales but received a small proportion of advertising and promotion budgets.4. Those sales that were taking place were being driven by promotional pricing (i.e discounted pricing)rather than the underlying strength of the brand.Implementing the extension strategy for Nutri-Grain having recognised the problems, Kellogg thendeveloped solutions to re-brand and re-launch the product in 2005.1. Fundamental to the re-launch was the renewal of the brand image. Kellogg looked at the corefeatures that made the brand different and modelled the new brand image on these. Nutri-Grain isunique as it is the only product of this kind that is baked. This provided two benefits:• the healthy grains were soft rather than gritty• the eating experience is closer to the more indulgent foods that people could be eating (cakes andbiscuits, for example). The unique selling point, hence the focus of the brand, needed to be the ‘softbake’.2. Researchers also found that a key part of the market was a group termed ‘realistic snackers’. Theseare people who want to snack on healthy foods, but still crave a great tasting snack. The re-launchedNutri-Grain product needed to help this key group fulfil both of these desires.3. Kellogg decided to re-focus investment on the core products of Soft Bake Bars and Elevenses as thesehad maintained their growth (accounting for 61% of Soft Bake Bar sales). Three existing Soft Bake Barproducts were improved, three new ranges introduced and poorly performing ranges (such as Minis)were withdrawn.4. New packaging was introduced to unify the brand image.5. An improved pricing structure for stores and supermarkets was developed.Using this information, the re-launch focused on the four parts of the marketing mix:• Product – improvements to the recipe and a wider range of flavours, repositioning the brand as‘healthy and tasty’, not a substitute for a missed breakfast• Promotion – a new and clearer brand image to cover all the products in the range along withadvertising and point-of-sale materials• Place – better offers and materials to stores that sold the product• Price – new price levels were agreed that did not rely on promotional pricing. This improved revenuefor both Kellogg and the stores.As a result Soft Bake Bar year-on-year sales went from a decline to substantial growth, with Elevensessales increasing by almost 50%. The Nutri-Grain brand achieved a retail sales growth rate of almostthree times that of the market and most importantly, growth was maintained after the initial re-launch.ConclusionSuccessful businesses use all the tools at their disposal to stay at theSuccessful businesses use all thetools at their disposal to stay at the top of their chosen market. Kellogg was able to use a number ofbusiness tools in order to successfully re-launch the Nutri-Grain brand. These tools included the productlife cycle, Ansoff’s matrix and the marketing mix. Such tools are useful when used properly.Kellogg was able to see that although Nutri-Grain fitted its strategic profile – a healthy, convenient

cereal product – it was underperforming in the market. This information was used, along with the aimsand objectives of the business, to develop a strategy for continuing success. Finally, when Kelloggchecked the growth of the re-launched product against its own objectives, it had met all its aims to:• re-position the brand through the use of the marketing mix• return the brand to growth• improve the frequency of purchase• introduce new customers to the brand.Nutri-Grain remains a growing brand and product within the Kellogg product family.Answer the following questions:1. Using current products familiar to you, draw and label a product life cycle diagram, showing whichstage each product is at.2. Suggest appropriate aims and objectives for a small, medium and large business.3. Consider the decision taken by Kellogg to opt for product development. Suggest a way in which itcould have diversified instead. Justify your answer.

Investment Analysis Management

CASE STUDY 1 (Marks 20)

Downloaded Data of Bank of Baroda and HDFC Bank from www.nseindia.com of last 11 years has been summarized as follows. You are required to analyze the data using appropriate statistical tools, interpret the results and provide necessary advice to the investors as research analyst.

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Sr.No Date Symbol Price Symbol Sr.No Date Price

1 1-Apr-97BANKBARODA 56.75 HDFCBANK 1 1-Apr-97 46.45

2 1-Apr-98BANKBARODA 108.35 HDFCBANK 2 1-Apr-98 72.8

3 1-Apr-99BANKBARODA 45 HDFCBANK 3 1-Apr-99 67.6

4 3-Apr-00BANKBARODA 47.4 HDFCBANK 4 3-Apr-00 247.15

5 30-Mar-01BANKBARODA 60.45 HDFCBANK 5 2-Apr-01 223.15

6 1-Apr-02BANKBARODA 50.45 HDFCBANK 6 1-Apr-02 233.65

7 1-Apr-03BANKBARODA 86.45 HDFCBANK 7 1-Apr-03 234.3

8 1-Apr-04BANKBARODA 250.45 HDFCBANK 8 1-Apr-04 384.35

9 1-Apr-05BANKBARODA 221.85 HDFCBANK 9 1-Apr-05 551.55

10 3-Apr-06BANKBARODA 232.95 HDFCBANK 10 3-Apr-06 773.85

11 30-Mar-07BANKBARODA 215.05 HDFCBANK 11 30-Mar-07 954.15

CASE STUDY 2 (20 Marks)

Given below are the returns on the three stocks Supertex, Colourtex and Wivetex for a four year period.

Compute the average returns, variance and standard deviation if a portfolio is constructed such that the

stock has lowest standard deviation accounts for 50% of the funds, a stock having the next lowest standard

deviation accounting for 30% and the third stock accounting for 20% of the funds.

Period ( Years) Annual Returns (%)

Supertex Colourtex Wivetex

1 10 11 8

2 12 9 12

3 14 13 9

4 16 17 15

CASE STUDY 3 (20 Marks)

Pruthvi Hardware Ltd. Invested on 1-04-2006 in equity shares as below:-

Company Number of Shares Cost (Rs.)

Mafatlal .Ltd. .1000 (Rs.100 Each) 2,00,000

Natraja Pencil Ltd. 500 (Rs.10 each) 1,50,000.

In September 2006, Mafatlal Ltd. Paid 10% dividend and in October, 2006 Nataraj Ltd. Paid 30% dividend. On

31-3-2007, market price of shares of Mafatlal Ltd. And Nataraj Ltd. Were Rs.220 and Rs.290 respectively.

Pruthvi Hardware ltd. have been informed by their investment advisor that :-

6. Dividend s from Mafatlal L Ltd. And Nataraj Ltd. For the year ending 31-03-2008 are likely to be

20% and 35% respectively.

You are required to

9. Calculate the average return from the portfolio for the year ended 31-03-2007.

10. Advice P Ltd. Of the comparative risk of two investments by calculating the standard deviation in

each case.

CASE STUDY 4 (20 Marks)

A) The following table provides details about three mutual fund portfolios. Find out the Sharpe,

Treynor and Jensen Index and rank them. What are your suggestions to the investors?

(10 Marks)

Portfolio Return on Standard Deviation Beta

Portfolio

Equity Fund 26 12 1.25

Mid Cap 40 10 0.80

Fund

Infra – Fund 24 14 1.40

Market Index 18 1.00

Risk Free Rate of Return : 6%

1. The beta of Equity fund is higher than the Beta of Mid Cap fund but the returns are higher in Mid Cap Fund than Equity Fund. Do you agree with this statement? If yes, explain with reasonable examples.

2. The beta of Infra – Fund is the highest among all three fund but the returns is the lowest among all three fund. Explain with reasonable examples.

B) Share of HDFC and BANK of Baroda display the following returns over the past two years:-

(10 Marks)

YEAR HDFC BANK OF BARODA

First Year 232 775

Second Year 215 955

1) What is the expected return on a portfolio made up of 40% of Pepsi and 60% of Coca-Cola?

2) What is the standard deviation of each share?

3) What is the covariance of Share of Pepsi and Coca-Cola?

4) What is the correlation coefficient? 5) Interpret the results in each case and advice the investors for investment decision?

LABOUR LAW (Marks 80)CASE 1 : (30 Marks)Trade Unions in the TNC Supply Chain and their relationship with the CSRmovementChinese enterprises are essentially passive players at the sharp end of CSR in China. They are in aposition of having to juggle between the different factors governing the development of industrialrelations in China, including trade union reform. In this often tense dynamic, CSR is seen as anexternal factor and trade unions an internal factor. These two factors have an impact on each other.As part of the research for this case study, the research team (RT) ‘shadowed’ a CSR audit. Thefactory had come under very heavy CSR pressure in 2004. Altogether, the RT carried out twoinvestigations: in March (see earlier printed report) and August 2006Initial conclusions:1) That factories undergoing CSR audits have better working conditions than those that don’t.2) There is no evidence to suggest that trade unions have an impact on wage levels at enterprise level.However, factories subject to CSR pressure are generally large workplaces and this was perhaps afactor in improving labour conditions. Moreover, CSR-targeted factories are prone to data distortiondue to ‘training of workers’ answers’ in interview and double or even triple accounting.Enterprise Y was established in 1997 and now has 1,200 workers. It was ‘Re-registered’ in 2002 totake advantage of tax breaks etc. It manufactures electronic goods for export chiefly to three retailersand over 50% of goods go to a single US company.Employment breakdown: 80 managers, 300 skilled workers; remainder are ordinary workers.Managers and skilled workers have contracts and social insurance based on minimum legal standards.The extent of contracts among unskilled workers remains unclear. The enterprise had previouslyAN ISO 9001 : 2008 CERTIFIED INTERNATIONAL B-SCHOOL2supplied a ‘comprehensive’ contract and social insurance list to CSR audit team (excludingprobationary workers) but the RT’s interviews with workers revealed that many had no idea if theyhad a contract or not or if they were paying into various social insurance schemes such as work injury

or pensions. The RT was not given access to formal SI contribution records.Wages were verified at between 900-1100 yuan per month with on average more than 60 hours o/tbut this was subject to orders. There were few disputes and conditions generally were better than atsurrounding factories. Up until Aug 2006 accommodation was free and reasonably good. The labourturnover rate for unskilled workers was just 8% and most workers had been there more than twoyears already. However, in the same period the labour turnover rate for skilled workers had increaseddramatically.Enterprise Trade UnionEstablished in 2004. Trade union chair M directly elected by workers, largely as a result of pressurefrom the Brand. By August the follow-up research revealed M had left, apparently for ‘personalreasons’ according to management. Former vice chair C had taken over his position. C’s previousexperience had been as a member of a trade union committee in an SOE trade union. He wasappointed to the post at Y. The local township union said that there would be fresh union elections‘soon’. The trade union at Y had three other union committee members. All were mid or senior levelmanagers: human resources manager, one an engineer, and a finance manager. The union had anoffice in the enterprise but has no bank account or independent accounts/expenses system. All unionactivities were entirely dependent on management transferral of funds.Trade Union WorkApproach to union work very similar to work in SOEs – i.e. very traditional. Also the union worksvery closely with the township union and pretty much depends on it for policy etc. The latter is verypleased with the Y union, which has received a number of awards. Activities include labourproductivity competitions, May Day competitions. Prizes include going on holiday to HK. Examplesof general day union work included: Management introduced a charge for canteen food. The service had been franchised to outsidecontractors. In response the union organised a small group (xiao zu) which negotiated with thecompany and succeeded in getting the food and food hygiene situation improved. Dormitory Management Team: made up of company reps and worker reps. Aim was to selfmanagethe dormitories and avoid management imposing arbitrary fines on workers. Thecommittee’s work was based on a ‘Dormitory Management Contract’ which the union drewup. Any fines imposed had to be in accordance with the contract and workers reported animprovement in the overall dormitory conditions.3Union representing workers in wage consultationsThe union was very proud of this aspect of its work. Wages stipulated in contracts were 574 yuan permonth – however the real income of workers varied between 900 and 1100 per month due to o/t.On 1 September 2006 – the government introduced new standards for min. wage which were reset at690 yuan per month, which at current contract and o/t levels in the factory would mean a 300 yuanper month wage increase. Company provided figures which made it clear that if they abided by thewage increase in current market conditions they would go bust. Y’s HR department presented aproposal saying that Y should meet new min. wage requirements but cancel food and board subsidy.However, this would break contracts with workers in which the company agreed to supply food anddormitory accommodation. Management consulted with local government and township trade unionand decided to try and solve the problem through consultations with enterprise union.RT investigation found that the consultation did not follow either the regulations on collectiveconsultations on wages, nor did they constitute a collective contract. Instead: Workers Rep meetingcalled by boss: mostly production managers but also a small number of line workers present whowere appointed as ‘reps’ by the trade union chair. RT observed this meeting and also provided legaladvice to worker reps. At the meeting was a deputy managing director and the two managers from theunion committee.Meeting procedures and presentations recorded in report – worker reps presented with an ultimatumregarding bankruptcy plus threat of dismissal from HR dep. for anyone who did not agree with thecancellation of free food and board. Trade union said: it wanted the new min. wage standard met;new charges for food and board should be reasonable and include a self management team for

dormitory. Union also called for further consultation with members.Not much feedback from members. Union held further talks with senior company managers. This ledto the Method of New wage Management. New charges 200 for dorm and 60 for food, a rate belowmarket prices but reduced the wage rise itself to between 40-60 yuan. RT interviews with workersshowed that most workers agreed with the new arrangements. A minority felt that they had beencheated. All signed the new agreement and anyone who refused was told their contracts would not berenewed.CSR auditRT shadowed and at times provided translation for a social audit team. Despite the professionalism ofthe audit team, their task to report actual conditions at the factory was essentially a failure. The auditteam asked that the factory management bring o/t levels down to legal levels, although they alsoexpressed an understanding of local conditions and stated that workers were able to take adequate resttime despite high levels of overtime. No workers expressed dissatisfaction with pay and conditionsdirectly to audit team.The audit team also had an extensive meeting with trade union chair who told them that the newwage levels had been met but did not mention the introduction of dormitory and canteen charges. Theaudit team also asked that a dispute mediation committee be established at factory level as well aswarning management that a complaints system for workers should be implemented as soon aspossible. Also discussions over whether the deposit that the factory demanded for work uniform wasan illegal job deposit. Audit team agreed that it wasn’t.4Audit team did not discover the fact that some workers who did not meet piece rate targets had tocomplete quotas in their own time – up to 1-2 hours per day! The trade union chair had told workersit was in their interests to lie to audit team over working hours as trained to do so by enterprisemanagement. He was under no pressure to take this line from the enterprise itself.Discussion: Organisation of the trade union was from CSR pressure not pressure from workers i.e. ineffect top down. 2004 US client retailer had cancelled an order due to working conditions andthis had caused losses. Union operated in a cooperative manner with management not confrontational. With regard to a workers’ complaints and mediation system. The US client did not believe itto be true when management had told them there were no disputes with or among the workers.The real situation was that the union had not taken part in any disputes. RT checked with theMOLSS and found that a dispute had occurred following a death in the dormitory.Management denied it was due to a work injury and police ruled out criminal behaviour.Eventually MOLSS brokered compensation with family and Y enterprise. No details madeavailable. However, RT concluded from this dispute that the company did not have an injurycompensation scheme for workers. If they did have, the settlement would have been betweenthe dead worker’s family and the insurance company. Audit ream did not discover that the HR department pressured workers to hand in their noticewhen they wanted to cut staff levels rather than simply lay them off. This was to avoidcompensation. The union also kept silent on this. The wage negotiation process was entirely non-confrontational except for HR attitude to theworkers, who were threatened with dismissal if they objected to concluding the agreement. The union helped the enterprise and the brand find an easy way out of the wage dilemma. Itdid not ‘represent’ the workers in this process.Questions :1. What is the experience of China about Trade Union in the above mentioned case?2. How Trade Union resolved the dispute? By confrontation or by negotiations?3. What is the general impression about the Trade Union movement with reference to this case?4. Give your comments and opinion5CASE 2 (30 Marks)

Acas and Essex Ambulance Service NHS Trust: Improvingconsultation and working patterns.The ChallengeEssex Ambulance Service (EAS) is an organisation dealing with unscheduled care,predominantlyaccessed via 999 calls. It was established as an NHS Trust in 1990 and employs around 1,300 peoplewho are primarily members of two unions, Unison and the GMB.The Trust had two inter-related problems. Firstly, relations between management and unions haddeteriorated after a national ambulance dispute in 1989. Trade unions did not have recognition at theTrust, and a trade union representative described the management-union relationship throughout the1990s as “arms-length” and “fairlytense”. During this time, trade union involvement was restricted to representatives attending healthand safety committees and representing union members during individual disputes. Consultationbetween management and the workforce was nonexistent, and this was due in part to the managementstyle of the organisation. A JNCC (joint negotiation and consultation committee) was established atthe unions’ insistence, but it was largely ineffective. Decisions made at the JNCC were oftenoverturned or ignored by the Chief Executive Officer (CEO), thereby damaging the committee’scredibility, and the CEO had no involvement in the committee.This contributed to a second problem: a failure to respond to different staff interests by modernisingworking arrangements for part-time and relief staff. These workers were unable to influence theirwork roster and shift patterns to the same extent as full-time and longer serving staff. And because ofa lack of consultation mechanisms, it was proving difficult to agree on strategies that would mutuallyresolve the problem.The Trust eventually recognised trade unions in 1999. In 2002, following the departure of keymanagers who had resisted engaging in joint consultation, trade union representatives, supported bymanagement, contacted Acas for help in addressing these problems and improving the employmentrelations climate. Acas was approached, according to the HR manager, because it was seen as“independent, and expert around this area”.How Acas helpedIn October 2002 the Acas adviser met with management and trade unions to develop two sets ofworkshop programmes, each addressing the issues identified as problems.Two initial workshop sessions were held to discuss rostering issues. The Acas adviser led theseworkshops, using techniques to break down barriers between participants, including splitting theminto mixed (management-trade union) groups to work on problems and design solutions. Throughoutthe workshops, the adviser also profiled examples of how problems were resolved in otherorganisations she had worked with.By the end of the first workshop a number of recommendationswere developed, including the need to have clear principles driving consultation, the need for areview of the roster system, and the need to have stronger informal ties between key managementunionplayers. The Acas adviser then put together a report based on the ideas and suggestions6generated at the workshop, and these were discussed at a further workshop, at which participantsratified and agreed a new system of rosters.‘Break-out groups’ addressed problems in a way that included the voice of all parties, andstakeholders and the adviser also worked with specific sub-groups of staff – for example reliefworkers (who fill in for workers on holiday or sick leave) – to tackle particular rostering problemsand design improved working practices.The adviser organised a subsequent facilitated workshop in early 2003, attended by key Trustmanagers and union groups. Its aim was to establish the purpose of the JNCC and its terms ofreference. Whilst no formal output emerged from the workshop, participants felt that it had formedthe basis for the renewal of the forum. The HR manager described the imperatives driving thisinitiative:“… bear in mind we’re coming from a stance where the unions weren’t involved in negotiation at all

… We’re moving towards Agenda for Change now and that’s very much about partnership workingwith staff-side. So we wanted to make sure that the JNCC had the right terms of reference and wasgoing to be working effectively for both sides to benefit.”The benefits: improved consultation and working patterns:A range of positive outcomes flowed from Acas’ involvement at the Trust, with management andtrade union representatives emphasising their significance in light of the relationship difficulties andlow levels of trust at the Trust during the 1990s. Firstly, the JNCC has become a central feature ofemployment relations at the Trust. It now functions effectively, partly as a result of good informalrelations between key trade union representatives and HR managers. The Committee has provided avehicle for regular management-trade union dialogue on a wide variety of issues, including work-lifebalance and flexible working. The JNCC has also become a crucial medium for discussions aroundAgenda for Change. Secondly, in terms of work rosters, there is a new system that accommodates theinterests of both full-time staff and those on a variety of different contracts. Employees who formerlyhad little advance knowledge of when they were working can now plan their rest days more clearly.In facilitating changes in working patterns, the Acas project has brought part-time staff closer to thestrategic concerns of the Trust. This has meant that human resource planning is clearer and moreconsensual in nature, and levels of commitment from part-time staff are, according to trade unionrepresentatives, higher than in the past.Thirdly, the process of improving consultative mechanisms and the roster system has helped buildrelationships between management and union representatives, enabling them to develop other newpractices relating to, for example, meal breaks and work-life balance initiatives. A joint approach hasalso been taken to managing the implementation of Agenda for Change, with trade unionrepresentatives reporting that they now feel that they have some ownership over its development.There are now ‘joint management-union chairs’ for sub-groups, including Agenda for Change subgroups,each tackling a variety of new issues and reforms. These new issues are approached in a verydifferent way to the past, when the level of dialogue was virtually non-existent. There are stilldifferences and problems, but the new framework has sustained a high degree of joint working.Central to this has been the strong explicit commitment and support for consultative mechanismsfrom the union and senior management, including the interim CEO, who chaired the JNCC. As onetrade union representative explained:“(The Acas project) has built a foundation to move forward on the working lives for our relief staff,for full time staff. And we’ve now got the JNCC firmly established as the main staff conduit to thehead of the organisation on a formal basis.”7According to HR managers and trade union representatives, longer term benefits of Acasinvolvement have become evident over the last two years. These include increased levels of trustbetween employees, unions and managers, and improved formal and informal workplace relations.Trade union representatives and managers now speak to each other openly and constructively, andimprovements to operational systems and practices are the subject of consultation and dialogue to amuch greater extent than in the past. Such is the nature of the turnaround that Trust managers andunion representatives are often called upon to provide advice to other Trusts who are attempting toimprove employer-trade union relationships.Questions:-1. Give the brief history of the above mentioned case study2. What was the problem? How it was resolved?3. What was the effect of solution on the unit’s mechanism?4. What is the message ?8CASE 3 (20 Marks)Changing role of trade unionsThe curtain has at last come down on one of the most famous marquees in the motorcar industry,with MG Rover finally shutting down production earlier this month.A company that once employed 40,000 people in the British Midlands, with an equal numberemployed in the factories of suppliers, had been forced to scale down its operations over the years.But even skeletal operations with 4,000 people has now ceased. It is an example of what destructivetrade unionism can do to an industry.

Arthur Scargil in the 1980s set out to destroy industry in the Midlands with his brand of militant anddestructive trade unionism. Finally Mrs Thatcher stood up to him and showed him the limits to whichtrade unions could push industry.She privatised industries and Scargil lost his power base, which was mainly in public sector heavyindustries. Successive governments in Britain after Mrs Thatcher have refused to bail out publicsector undertakings with subsidies and grants.This has resulted in Britain transforming itself from being the sick man of Europe to one of the moredynamic economies in the West.In India too we have had examples of the Arthur Scargil brand of trade unionism. What Datta Samantdid to the cotton textile and engineering industries in Mumbai was equally devastating.Almost all the textile mills in the city closed because of the unreasonable demands made by tradeunions under Datta Samant. India has the advantages of (a) growing both long staple and short staplecotton and (b) a huge domestic market.We could have been the cotton textile source for the whole world. But battling militant trade unions,on the one hand, while coping with price controls imposed by unimaginative governments and textilequotas imposed by foreign governments, on the other, proved too much for our textile industry.It did not have the necessary financial and managerial resources, and it failed to modernize andremain competitive in terms of quality and cost. So it declined and became terminally ill.Trade unions are a legitimate system for organizing workers and to voice their rights and grievances.Without them companies would become either too paternalistic or too dictatorial.Responsible unions help to create a middle path in the relationship between management and labourwhile maintaining the responsibilities of the former and the dignity of the latter.Where things go wrong is when the management becomes authoritarian, especially in owner/familymanagedcompanies, or when a trade union leader allows emotion and ego to overcome reason.9Fortunately today, workers have become better informed and aware of the economic forces thatimpact their industry. The media has helped to create much greater economic awareness.So it is not so easy to mislead them. Managements too have become more sensitive and skilled inhandling relationships with employees. This is true of even family-owned and managed businesses.TVS [Get Quote] in the South is a prime example of how a large family-managed industrial grouphas successfully managed its relationship with employees through enlightened management. Thereare more such examples in other parts of the country.Perhaps the labour departments of governments at the state and the Centre should sponsor theinstitutes of management to do case studies of companies that have built up such successfulrelationships. Instead of merely administering rules and labour laws, these government departmentscould also act as apostles of good practices in the field.As the skill levels and educational qualifications of employees advance, the role and significance oftrade unions tend to diminish. This is because (a) employees are able to represent their own case and(b) managements are more sensitive to the needs of individual employees, whose intellectual skillsbecome almost uniquely valuable.This is already happening in the sunrise industries based on brainpower such as IT andtelecommunications. Another phenomenon in these modern industries is that employees have greateropportunity and tendency to move from one company to another, not only because of better terms ofemployment but also because of their yearning to learn new skills.This appetite for learning is something remarkable, especially in the IT industry. In fact, people inthat industry are more bothered about what they can learn in a company than about how much theyearn.This phenomenon is facilitated by the fact that there are plenty of employment opportunities in ITand it is a young industry. That is why one does not notice any union flags in the Silicon Valley of

India/Bangalore's Electronic City.Trade unions have declined in their importance even in the UK, the original home of trade unions.The UK's Labour Party was formed by socialist leaders of trade unions.Today, Tony Blair does not have to depend on trade unions as much as his predecessors had to do inthe 1980s and 90s. The Labour Party's appeal to the public is based on key policy issues such asspending on the National Health Service and the education system, rather than anything to do withlabour policy.In the US, trade unions are powerful in negotiations with individual employers, but have nosignificant political clout although they generally support the Democratic Party.The same is the case in Japan. Even in Germany, France, and Italy, the role of trade unions hasbecome more focused on negotiations with employers rather than on politics.The privatization or corporatisation of many public services such as electricity and water supply hasaccelerated this shift. Hopefully the same shift in the character and role of trade unions will happen in10India -- even in places like Kerala and Bengal, as employment starts to move to more intellect-basedactivities and public sector industries are privatized.Responsible trade union leaders with a long-term vision will adapt their policies to suit the newrealities.Correspondingly, there has also been a change in the attitude of management, even in familymanagedcompanies. They are now better educated and many of them have been exposed tointernational education and international markets.They realise the dignity of human beings more than their previous generation and therefore are lessprone to treat employees in a scurvy manner. More and more companies are investing in managementtraining and development.This has also helped to create much better awareness of the aspirations of workmen, among themanagers.Yet the last vestiges of negative union practices continue to persist in monopolistic public serviceslike the state transport undertakings, state electricity boards, etc.The only way to correct this is to corporatise or privatise these undertakings or open them up tocompetition. A prime example of the change that is possible is what has happened in aviation.Once airline services were opened up to competition, the whole scene changed. Instead of treatingpassengers with the indifference typical of a public sector employee, Indian Airlines staff learnt evento smile while greeting passengers.In addition, we have created some world-class private carriers in the domestic market who are nowset to take wing on international routes. Even the railways can be privatised.The rail track in each region can be owned and operated by a company, which then allows competingcompanies to run their trains on these tracks. Similarly, there is no reason why urban bus servicescannot be made more efficient by opening them up to competition.Today they are run as monopolies due to pressure from unionised labour. For example, in Mumbaithe urban bus service is cross-subsidised by BEST Electric Supply services.Questions:-1. What do you know about changing role of Trade Union activities?2. What is the role of responsible Trade Unionism?3. Is Privatisation a challenge for Union activities?4. What is the lesson learnt from the IT sector?

Logistics Management

Case 1 (10 Marks)

M/s Britecolor Paints Ltd. (BPL) is a manufacturer of decorative paints for households commercial premises

and industrial application.

7. M/s. BPL had embarked on a policy of satisfying every possible customer in respect of shades, delivery and durability. Thus it went ahead and created twenty-five depots, one almost in every major city. The manufacturing base however, was maintained at Pune. The factory received information in connection with stocks from depots J once in a week and there was no inter-communication between depots. Since they were in a competitive market, price was predetermined, i.e. the manufacturer had no liberty to price the product as per one’s own choice. 8. In their effort to satisfy the customer, M/s BPL manufactured every possible shade by combining various primary shades and would await the prospective customer to carry out the purchase. It ensured that these shades were available at

each and every depot even at the cost of transportation incurred in sending goods in less than full truckload lots.

This certainly provided a very high service level and customers who could get the shade as per their desire, were

fully satisfied.

(c) While on one hand M/s BPL had a population of very satisfied customers, they had almost 50% of their

total domestic sales lying as finish Goods inventory at various depots, on the other hand.

11. Industrial paints, though not very customised, the respective industrial customer was quite satisfied. Consequently, the inventory of finished goods was very low in this segment. But at the same time, realisation was also lower due to stiff competition from other industrial paint manufacturers than the domestic segment.

12. Nevertheless, the economic runs of industrial paints were always assured due to high off-take by the

industrial customers.

13.The objective of the manufacturer was to increase the realization taking into account, economic runs,

inventory, seasonality and individual choices of domestic / industrial customer.

Qeustions

If you are appointed as the logistics consultant, then advise M/s BPL in respect of ‘

3. How to achieve economy in transportation, by maintaining almost same service level?

4. Demand Forecasting technique to take care of seasonality, reduction in inventory.

5. Information technology to substitute maintenance of high inventory without affecting customer service

level.

6. Connectivity between factory and depots (networking Diagram)

Case 2 (10 Marks)

ABCL Ltd. is leading/ Fast Food Processing Company operating from Thane. It is involved in the fast food businesssince last 10 years and has tie up with a foreign firm operating in the same field. It handles both Vegetable as well

Non—Vegetable products for which it arranges the vegetables and chickens from the local vegetable vendors and

poultry farms as well as from far off places like Nasik, Pune and Aurangabad. It has very good market in Mumbai,

Pune and surrounding cities. The products are sold in the brand name of ‘Nasta’ which is very popular brand

amongst the young collegians and office goers. it has its ‘7,- most modern kitchen at New •Mumbai to cater the

needs for fresh Nasta. Vegetables and chicken items are transported from the procurement centres of Nasik,

Pune, Aurangabad using hired Trucks. While transporting vegetables and chickens there were shortages,..

damages and decomposition problems which varies from 1Y’lo 15% and there is inconsistency in the transit time

the reliability of the

raw material transporters is very low. Packaging of the Nasta is very good and attractive but it is not long lasting

tyje. Hoever, the quality and taste are the reasons for its popularity. Nasta is sold in three different packs — party,

family and individual. The Nasta looses the taste and flavour after 8 hours, if not preserved in refrigeration. The

Nasta is distributed through 25 distribution centers including three at its main procurement centers of Nasik Pune,

and Aurangabad.. Logistics information network is not up to the mark. ‘The procurement centers directly

communicate to the operating center at Thane. Due to lack of proper co-ordination at different distribution centers it

has started creating the problems of stocks, spoilage, pilferage and wastage of raw material as well as finished

goods at certain distribution and procurement centers. Transportation and storage problems are identified as main

culprits for the heavy losses being incurred at some centers. Holidays, festivities and college seasonably puts a lot

of pressure on the existing demand and supply situation of the Nasta resulting in losses and mismanagement.

Entry of multinationals has increased the competition and put a let of pressure on the Nasta. Managing Director

has formed a team of Senior Executive to suggest a concrete plan to fight the competition and overcome the

transport, storage and other related problems so as to increase the market share and margin.

Questions

In case you are appointed as logistic consultant to solve the problems, you are required to put forward your suggestions for:6) Proper transportation policy to ensure minimum transportation loss of vegetables and poultry products and reduction in the packaging costs. 7) Demand Forecasting techniques to take care of the seasonality, reduction in inventory and shortage and other related problems. 8) Suggestion for improved Purchase and Distribution policy. 9) Is it advisable to have company owned dedicated transport fleet?

Case 3 (10 Marks)

Mumbai four mills, provide high-quality bakery flours to commercial bakers as well as to the consumer market. The commercial buyers have consistent demand and brand-loyalty, whereas consumers have minimal brand-loyalty but also generally prefer known names over store brands. Demand is seasonal for the flours with the annual break occurring just before Diwali and slacking off dramatically during January and February. To offset these both, Mumbai Flour Mills and its major supermarket chain-accounts carry out special deals and sales promotions.

The Production planning Dept. of the company located at Akola, Maharashtra, has the responsibility for

controlling the inventory levels at the plant warehouse at Nagpur as well as three distribution centres located at

Nasik in Maharashtra, Bhopal in Madhya Pradesh and 1-lyderabad in Andhra Pradesh. Planning has been

routinely based on past experience and history. No formal forecasting is performed. Distribution centres get their

requirements by rail from Nagpur. The lead time of replenishment from

Nagpur to distribution centres is 7 days. The replenishment rate is 48 to 54 pallets per wagon depending upon the type of wagon used. In case of any emergency demand, eighteen pallets can be made available by truck with a 3 days transit time.

Recently the company has experienced two major stock out for its consumer-size 5 Kg. sacks of refined quality

white flour. One of these was due to problems in milling operations, the other occurred when marketing initiated a

“buy one, get one free” coupon promotion. Since these events, the planning has become overly cautious and errs

on the side having excess inventories at the distribution centres. Additional, two other events have affected

Distribution Centre’ throughput:

(1) implementation of direct factory supply for replenishing the five largest super market chains, and (2) a price increase making Mumbai Flour more expensivethan its national brand competitors such a Pillsbury or ATA Maida.Of 1500 pallets in the Hyderabad Distribution Centre the Mumbai Flour Mills shows only 396 pallets for open

orders. This has led the company to use outside overflow storage, where there are another 480 pallets. Flour is

easily damaged, hence, Mumhai Flour Mills prefers to minimise handling. Over stocking at Distribution centres

alone cost Rs. 1.85/- per pallet for outside storage to which must be added Rs. 4.25 per pallet extra handling and

Rs. 225 per truckload for transportation.

Similar scenarios are being played out at the other DCs as well. Mr. Mohan, the distribution manager is

contemplating various approaches to solving the inventory problem. It is clear that the product must be in place at

the time a consumer is making a decision to buy the product, but the company cannot

tolerate the overstocking situation and the stress that it is putting on facilities and cash flow. Mr. Mohan’s first thought is “a better information system” which will provide timely and accurate information throughout the organisation.On the basis of above case answer the following:

Questions:-

(1) Evaluate the alternative solution that could be considered by Mr. Mohan.

(2) What additional solution do you propose?

(3) Examine the transportation system and its drawbacks?

Case 4 (10 Marks)

M/s Modern Garments is the manufacturers of Ladies and Gents garments like shirts, tops and undergarments

etc. The technology is advanced and there are several players with access to such latest

technologies. The supply chains for M/s Modern Garments includes significant purchases of raw material, stitching, packaging and supply to customers. The logistics functions are the key competitive elements in the market, M/s Modern Garments is considering to take over the control of its inbound and out bound logistics function which affect the inventories, reduce the losses due to transit delays and improve the response timeand service reliability. However the cost implications of such changes have to be looked into.

The M/s Modem Garments has been a leader in the readymade shirts market in India for a number of years.

After liberalization they entered into a joint venture with a French Company to expand their business in the field

of Trousers and T-shirts. However new joint venture company M/s Modern Garments still continues to

manufacture its shirts at Thane near Mumbai and has started a new state-of-art garment manufacturing plant at

Pune in Maharashtra to compete with other market players. The company has planned to undertake the

distribution of garments made and packed in its plants at New-Mumbai and Kalyan so as to retain the control

over design, quality and service channel of the products.

After liberalization, the market has grown more matured and expectations of the customers towards the features

of the product have increased and also the technology and design has improved considerably. Now in the

market only garments with good delivery quality are acceptable. All the competitors have equally good quality

product in the market. Presently the area of logistics distribution, customer service and satisfaction are the area

of prime concern in order to have extra value addition to the product. The product defects due to stitching,

cutting and transportation are now under increasing scrutiny.

From the cost control point of view, the amount of money held up in distribution pipeline is significant. The large

variety of garments now means more raw materials to be held in stocks. Presently the incoming supplies are

arranged by the vendor firms, they may be persuaded to opt for jointly approved transporters. Due to product

variations, the order fulfillment and its processing is of considerable importance. The traditional information system

has become inadequate. There are over 500 retail outlets through which the finished products are distributed with

the help of more than 50 transporters. Lead- time variability is creating problem of buffer stocks• with distributors.

The transit time fluctuations are due to the breakdown of trucks, improper documentation and unfair practice of

over charging of the vehicles etc. Such variability has to be reduced. Major portion of logistics cost was allocated in

fleet management; where as warehousing, raw material management and information networking have

insignificant costs.

Questions

(i) Examine the possibility of alternatives in transportation of the inbound and outbound materials?

(ii) How to reduce the cost of inbound and outbound logistics functions? (iii) What could be the major problem in exploiting the inbound and outbound logistic functions? (iv) Is it advisable to have dedicated transport system to operate packaged materials mainly for the company? (v) What arrangements have to be made to ensure the service quality for customers?

Case 5 (10 Marks)

M/s Ador Electrodes Limited (AEL) was incorporated in the year 1981 and is the second largest player in the welding industry in India & has the widest product range amongst all its competitors. As it has happened to a the industries, the heat of the competition coming from the International Companies, mainly from China, started affecting to this industry too.

‘The company has four state-of-an-art manufacturing plants accredited with ISO certification & backed by strong

technical support from their foreign collaborators. The company is also having a well established all India

distribution network consisting of numbers of dealers. The products flow from the manufacturing plants to the

warehouses, managed & maintained by the company, located at different places across the country. The

dealers draw their requirements from these warehouses for onward delivery to their customers, The inventory of

the products is under the ownership of the company and is maintained as per the anticipated demand in the

region. Primary transportation from the plant to the warehouses is the responsibility of the company, whereas

the transportation from the warehouse to the customer is the dealer’s responsibility.

The biggest drawback in the present system is that the inventory at all warehouses is carried by the company, blocking the huge amount of company’s working capital. The level of average inventory they maintain is equal to their 6 months sales requirements. Over & above, in many places where the sales are low, the stocks remain unsold for longer periods. Moreover, because of improper maintenance of these warehouses the stocks also get damaged I spoiled or stolen. The warehouses are managed by the employees of the company having no ‘basic qualifications & experience in inventory and warehouse management.

The management of the company took a serious note of the situation and now wishes to take immediate steps to

overcome the current logistical problems to face the competitive scenario.

Questions:

1. What are the company’s present logistical problems?

2. Give your recommendations for improving the company’s logistical performance?

Case 6 (10 Marks)

1967 M/s. Vijay Enterprise ventured into trading of electronic consumer durable targeting the large potential market in the year 1970, the company managed to get the exclusive dealership of a leading electronic manufacturing company in India to market their products in the Western Indiá. Later on, the company with a view to create their own brand in the market established a plant in Maharashtra & started their own manufacturing activities. With a manufacturing capacity under their belt, the company increased their turnover tremendously in the next 20 years with the help of all India distribution network consisted of 4 regional offices, 4 mother warehouses, 12 C & F agents & 75 stockists & 5000 odd retail outlets.After the liberalisation of the Indian economy in 1991, the entire business scenario- particularly in consumer

durable industry - has undergone a drastic change. The company started experiencing the pressure of

competition from local as well as international players. It was observed that during the last 5 years sales growth

has come down and the company is losing its market share slowly& steadily.

The external agency that conducted a study for the Company came out with their following observations. 1. At all

levels in the company employee orientation is towards production rather than marketing

2 The cost of product distribution is the highest compared to the Industry standards3. The warehouse space was urderutilized — the utilization factor varies between 95 % during the peak season

and drop to 40% during the slack season.

4. There is duplication of many logistics operations. Every department has their own policies I practices and objectives. 5. In more than 20 per cent of the trips made to mother warehouses / C& F agents, the products are despatched in less than full truckloads, resulting in high transportation costs. 6. Only 65 % of shipments were delivered on time, as a result of slow information flow and inadequate connectivity across the system causing longer order processing time. 7. Transit damages were ranging between 2 to 5 % due to improper logistical packaging and inadequate material handling equipment. 6. The finished goods inventory is above the best managed company in the industry

Questions:

1. Identify the main logistical problems of the Company

2. To offer better customer service level and reduce the operating cost, how will you go about

redesigning the distribution network?

Case 7 (10 Marks)

M/s. Decorative Laminates Corporation (DLC) is a supplier of decorative sheets for wooden furniture makers in

domestic as well as commercial markets. In spite of competition n this field their sales volumes shown growth

during last 2 to 3 years. The last year was recorded 15% more sales compared to previous year. Even though the

sales volume are increasing• the profit margin is getting reduced day by day due to

future competition.

In one of the monthly management review meetings it was observed that the main cause for depleting profitability

is the increasing procurement costs. . The report presented by the new Purchase Manger revealed that in order to

obtain quantity discounts from the suppliers the company was purchasing inputs & other maintenance items much

more than their actual requirements. This has not only created a problem of holding huge inventories but

necessitated hiring of additional warehouse space to accommodate these high inventories. It has also been

observed that most of the purchasing tasks like inventory control are still performed manually. The computers are

used only for maintaining purchasing records and printing purchase orders.

Questions1. What is the main problem in this case? What are your suggestions to the company on inventory

management?

2. What type of logistical cost approach you would suggest to the company?

Case 8 (10 Marks)

M/s. Compu-Tech is on the reputed Indian companies producing various types of computer printers. Their production plant is situated at Noida in northern India and the products are distributed through distribution centers located in every region.The company introduced LS popular line of Desk Jet printers first time in India in 2005. Immediately on the launch

of this products

The solo more than one lacs units during that year. But the problems came with the boom in sales. Already, the

company was running into serious inventory snags, particularly with service to its customers situated In southern

region. The printers were generally shipped to all the distribution centers & onward to the customers by road only.

Unfortunately, that resulted in long lead times, making It tough to meet the shorter delivery time offered by the local

sellers mainly from Southern India.

The Company also found itself running short of production capacity to meet the quantity requirements of certain large institutional & industrial customers. To add to it, quite often the company was running out of stock for certain fast moving models and at the same time facing problems of excess inventory of other models. Working out product wise demand from each market was also proving difficult for their manufacturing plant.

Questions’

1. What are the main problems in the logistical network of M/s. Compu-Tech?

What solutions would you propose o overcome these problems?

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