Test Series: April, 2018 MOCK TEST PAPER - 2 INTERMEDIATE ...€¦ · BI encompasses a wide variety of tools, that enable organizations to collect data from internal systems and external

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Test Series: April, 2018

MOCK TEST PAPER - 2

INTERMEDIATE (NEW): GROUP – II

PAPER – 7: ENTERPRISE INFORMATION SYSTEMS AND STRATEGIC MANAGEMENT

SECTION – A: ENTERPRISE INFORMATION SYSTEMS

ANSWERS

1. (i) Supporting Processes: These are the processes that back core processes and functions within

an organization. Examples of supporting or management processes include Accounting, Human

Resource (HR) Management and workplace safety. The main HR Process Areas are grouped into

logical functional areas like Recruitment and Staffing; Goal Setting; Training and Development;

Compensation and Benefits; Performance Management; Career Development and Leadership

Development.

(ii) To access the data, following options are possible while assigning access to different users.

Create – Allows to create data

Alter – Allows to alter data

View – Allows only to view data

Print – Allows to print data

(iii) Repeater: A repeater regenerates the signal over the same network before the signal becomes

too weak or corrupted to extend the length to which the signal can be transmitted over the same

network. They do no amplify the signals, however, when the signal becomes weak, they copy the

signal bit by bit and regenerate it at the original strength.

(iv) Web Portal: This shall provide the interface through which an individual / organization shall

perform e-commerce transactions. Web Portal is the application through which user interacts with

the e-commerce vendor. The front end through which user interacts for an e-commerce transaction.

These web portals can be accessed through desktops / laptops / PDA / hand- held computing

devices / mobiles and now through smart TVs also.

(v) Money Laundering: It is defined as the process by which the proceeds of the crime and the true

ownership of those proceeds are concealed or made opaque so that the proceeds appear to come

from a legitimate source. The objective in money laundering is to conceal the existence, illegal

source, or illegal application of income to make it appear legitimate. Money laundering is commonly

used by criminals to make ‘dirty’ money appear ‘clean’ or the profits of criminal activities are made

to appear legitimate.

2. (a) Let us define the variables first:

PM: Purchase Mode BA: Bill Amount

N: Counter (to track the number of purchases)

TBA: Total Bill Amount

NOP: Number of Purchases

TRP: Total Reward Points

IN_DISC: Initial Discount

© The Institute of Chartered Accountants of India

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ET_DISC: Extra Discount on purchases eligible to Initial Discount

(b) The major reasons for the emergence of Quality assurance in many organizations are as follows:

Organizations are increasingly producing safety-critical systems and users are becoming more

demanding in terms of the quality of the software they employ to undertake their work.

Organizations are undertaking more ambitious projects when they build software.

TRP = 0, TBA = 0, BA = 0

No

No

Yes

No

Yes

Yes

No

Yes

Start

Read PM, BA, NOP

If PM = Website? IN_DISC = 0.10

If PM = Phone App? IN_DISC = 0.20

IN_DISC = 0 TRP = NOP * 10

If 100 <= TRP <= 200? ET_DISC = 0.30

BA = BA – (BA*IN_DISC)

TBA = BA – (BA*ET_DISC)

If TRP > 200? ET_DISC = 0.40

Print TRP, TBA

Stop

TBA = BA


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Users are becoming more demanding in terms of their expectations about the quality of software

they employ to undertake their work,

Organizations are becoming more concerned about their liabilities if they produce and sell

defective software.

Poor quality control over the production, implementation, operation, and maintenance of software

can be costly in terms of missed deadlines, dissatisfied users and customer, lower morale among

IS staff, higher maintenance and strategic projects that must be abandoned.

Improving the quality of Information Systems is a part of a worldwide trend among organizations

to improve the quality of the goods and services they sell.

3. (a) Business Intelligence (BI) is a technology-driven process for analysing data and presenting

actionable information to help corporate executives, business managers and other end users make

more informed business decisions.

BI encompasses a wide variety of tools, that enable organizations to collect data from internal

systems and external sources, prepare it for analysis, develop and run queries against the data,

and create reports, dashboards and data visualizations to make the analytical results available to

corporate decision makers as well as operational workers.

BI systems can also help companies identify market trends and spot business problems that need

to be addressed.

Business Intelligence uses data from different sources and helps to finds answers to various

questions as shown on right hand side of above image.

BI data can include historical information, as well as new data gathered from source systems as it

is generated, enabling BI analysis to support both strategic and tactical decision-making

processes.

Initially, BI tools were primarily used by data analysts and other IT professionals who ran analyses

and produced reports with query results for business users. Increasingly, however, business

executives and workers are using BI software themselves, thanks partly to the development of

self-service BI and data discovery tools.

Business Intelligence combines a broad set of data analysis applications, including ad hoc analysis

and querying, enterprise reporting, Online Analytical Processing (OLAP), mobile BI, real-time BI,

operational BI, cloud and software as a service BI, open source BI, collaborative BI and location

intelligence.

BI technology also includes data visualization software for designing charts and other info-

graphics, as well as tools for building BI dashboards and performance scorecards that display

visualized data on business metrics and key performance indicators in an easy-to-grasp way.

BI applications can be bought separately from different vendors or as part of a unified BI platform

from a single vendor.

BI programs can also incorporate forms of advanced analytics, such as data mining, predictive

analytics, text mining, statistical analysis and big data analytics. In many cases, though, advanced

analytics projects are conducted and managed by separate teams of data scientists, statisticians,

predictive modelers and other skilled analytics professionals, while BI teams oversee more

straightforward querying and analysis of business data.

Business Intelligence data in terms of unstructured data, log files, sensor data and other types of

big data are stored in a data warehouse or smaller data marts that hold subsets of a company’s


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information. Before it’s used in BI applications, raw data from different source systems must be

integrated, consolidated and cleansed using data integration and data quality tools to ensure that

users are analysing accurate and consistent information.

(b) Some of the major differences between Installed Application and Web Application are as follows:

Particulars Installed Application Web Application

Definition These are programs installed

on the hard disc of the user’s

computer.

These are not installed on the hard

disc of the user’s computer, it is

installed on a webserver and it is

accessed using a browser and

internet connection.

Installation &

Maintenance

As software is installed on hard

disc of the computer used by

user, it needs to be installed on

every computer one by one.

This may take lot of time. Also,

maintenance and updating of

software may take lot time and

efforts.

As software is installed on only one

computer, i.e. a web server, it need

not be installed on each computer.

Hence, installation on user computer

is not required and maintenance and

updating of software becomes

extremely easy.

Accessibility As software is installed on the

hard disc of the user’s

computer, user needs to go to

the computer only, i.e. the

computer where software is

installed, to use the software. It

cannot be used from any

computer.

As software is not installed on the

hard disc of user’s computer and it is

used through browser and internet,

it can be used from any computer in

the world. Access to the software

becomes very easy. Also, it can be

used 24 x 7.

Mobile

Application

Using the software through

mobile application is difficult in

this case.

Using mobile application becomes

very easy as data is available 24 x 7.

Data Storage Data is physically stored in the

premises of the user, i.e. on

hard disc of user’s server

computer. Hence user will

have full control over data.

Data is not stored in the user’s

server computer. It is stored on a

web server. Hence user will not have

any control over the data.

Data Security As the data is in physical

control of the user, user shall

have the full physical control

over the data and he/she can

ensure that it is not accessed

without proper access.

Data security is a big challenge in

case of web application as the data

is not in control of the user or owner

of data. It is maintained on a web

server.

Performance A well written installed

application shall always be

faster than web application,

reason being data is picked

As data is picked from web server

using internet, speed of operation

may be slower.


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from local server without

internet.

Flexibility Installed applications shall

have more flexibility and

controls as compared to web

application. It is very easy to

write desktop applications that

take advantage of the user’s

hardware.

Web applications do not even

compare to the flexibility of desktop

applications. If you want to write a

web application that basically

interacts with the user’s hardware,

you are expected to stick with a

desktop application for your

program.

4. (a) User Access Logs: The Information Systems (IS) auditor needs to determine what events are

recorded in access logs. The IS auditor needs to understand the capabilities of the system being

audited and determine if the right events are being logged, or if logging is suppressed on events

that should be logged.

Centralized access logs: The IS auditor should determine if the organization’s access logs are aggregated or if they are stored on individual systems.

Access log protection: The auditor needs to determine if access logs can be altered, destroyed, or attacked to cause the system to stop logging events. For espec ially high-value and high-sensitivity environments, the IS auditor needs to determine if logs should be written to digital media that is unalterable, such as optical WORM ( Write Once Read Many) media.

Access log review: The IS auditor needs to determine if there are policies, processes, or procedures regarding access log review. The auditor should determine if access log reviews take place, who performs them, how issues requiring attention are identified, and what actions are taken when necessary.

Access log retention: The IS auditor should determine how long access logs are retained by the organization and if they are back up.

(b) Following were control lapses on the part of M-Commerce vendor ABC that led to the commission

of an offence of fraud committed by Mr. X.

Vendor has a poor policy documentation regarding accepting of mobile returns as objective.

Within organization, there must have been a person putting a red mark, when the same person was returning mobile as defective.

This reflects poor audit mechanism of the vendor.

These control lapses reflect higher probability of loss.

5. (a) Sample listing of Risks and Controls w.r.t Data Centre and Network Operations are as follows:

Risks Key IT Controls

The transaction may not be recorded

completely or accurately, and the related

items will be inaccurately or

incompletely recorded.

Batch and online processing procedures are

defined, executed and monitored for successful

and timely completion.

Any exception is reviewed and timely resolved.

Invalid items may be recorded or valid

items may be inaccurately or

Access to automated job scheduling tools, and

executable programs are defined to restrict to


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incompletely recorded. appropriate individuals as per job requirement.

Timely and adequate technical support

may not be available and issues may not

be resolved.

Entity has written agreement(s) with outside

contractors and/ or software vendors to provide

for technical support, as needed.

Management monitors compliance with these

agreements.

User queries may not be timely and

adequately resolved.

Help desk function exists to provide support on

user queries regarding systems.

Problems are recorded and the log for timely

resolution of all such user queries is monitored.

Timely execution and complete

processing and availability of data may

not be ensured.

Performance and capacity utilization of the

computer systems are measured, reported, and

reviewed by management.

Unavailability of applications and data

backups in the event of a disaster. I t can

also result in disclosure of sensitive

information.

All tapes, manuals, guides are properly labelled

and timely stored in a secured environmentally

controlled location.

Data may be lost and systems may not

be recoverable in the event of a serious

system failure. This may result in

regulatory/ legal complaints, loss of

reputation beside financial loss.

Schedule backup and storage of data is done

periodically and appropriately.

Management periodically reviews backups are

done as per back up policy and meet business

and legal requirements.

Backup may not be available if subject to

some disaster, resulting in risk of data

loss.

Backups are archived off-site.

Or

Information security is comprised of the following sub-processes:

Information Security Policies, Procedures, and practices: Refers to the processes

relating to approval and implementation of information security. The security policy is basis

on which detailed procedures and practices are developed and implemented at various

units/department and layers of technology, as relevant. These cover all key areas of

securing information at various layers of information processing and ensure that information

is made available safely and securely.

User Security Administration: Refers to security for various users of information systems.

The security administration policy documents define how users are created and granted

access as per organization structure and access matrix. It also covers the complete

administration of users right from creation to disabling of users is defined as part of security

policy.

Application Security: Refers to how security is implemented at various aspects of

application right from configuration, setting of parameters and security for transactions

through various application controls.


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Database Security: Refers to various aspects of implementing security for the database

software.

Operating System Security: Refers to security for operating system software which is

installed in the servers and systems which are connected to the servers.

Network Security: Refers to how security is provided at various layers of network and

connectivity to the servers.

Physical Security: Refers to security implemented through physical access controls.

(b) Order to Cash (O2C): OTC or O2C is a set of business processes that involve receiving and

fulfilling customer requests for goods or services. It is a set of business processes that involve

receiving and fulfilling customer requests for goods or services. An order to cash cycle consists of

multiple sub-processes including:

(i) Customer order is documented;

(ii) Order is fulfilled or service is scheduled;

(iii) Order is shipped to customer or service is performed;

(iv) Invoice is created and sent to customer;

(v) Customer sends payment /Collection; and

(vi) Payment is recorded in general ledger.

6. (a) Advantages of Digital Payments are as follows:

Easy and convenient: Digital payments are easy and convenient. Person do not need to

take loads of cash with themselves.

Pay or send money from anywhere: With digital payment modes, one can pay from

anywhere anytime.

Discounts from taxes: Government has announced many discounts to encourage digital

payments. User get 0.75% discounts on fuels and 10% discount on insurance premiums of

government insurers.

Written record: User often forgets to note down his / her spending, or even if nothing is done

it takes a lot of time. These are automatically recorded in passbook or inside E -Wallet app.

This helps to maintain record, track spending and budget planning.

Less Risk: Digital payments have less risk if used wisely. If user losses mobile phone or

debit/credit card or Aadhar card, no need to worry a lot. No one can use anyone else’s money

without MPIN, PIN or fingerprint in the case of Aadhar. It is advised that user should get card

blocked, if lost.

Drawbacks of Digital Payments are listed below:

Difficult for a Non-technical person: As most of the digital payment modes are based on

mobile phone, the internet and cards. These modes are somewhat difficult for non -technical

persons such as farmers, workers etc.

The risk of data theft: There is a big risk of data theft associated with the digital payment.

Hackers can hack the servers of the bank or the E-Wallet a customer is using and easily get

his/her personal information. They can use this information to steal money from the

customer’s account.

Overspending: One keeps limited cash in his/her physical wallet and hence thinks twice


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before buying anything. But if digital payment modes are used, one has an access to all

his/her money that can result in overspending.

(b) XBRL Tagging: It is the process by which any financial data is tagged with the most appropriate

element in an accounting taxonomy (a dictionary of accounting terms) that best represents the data

in addition to tags that facilitate identification/classification (such as enterprise, reporting period,

reporting currency, unit of measurement etc.). Since all XBRL reports use the same taxonomy,

numbers associated with the same element are comparable irrespective of how they are described

by those releasing the financial statements.

Comprehensive definitions and accurate data tags allow preparation, validation, publication,

exchange, consumption; and analysis of business information of all kinds. Information in reports

prepared using the XBRL standard is interchangeable between different information systems in

entirely different organizations. This allows for the exchange of business information across a

reporting chain. People that want to report information, share information, publish per formance

information and allow straight through information processing all rely on XBRL.

In addition to allowing the exchange of summary business reports, like financial statements, and

risk and performance reports, XBRL has the capability to allow the tagging of transactions that can

themselves be aggregated into XBRL reports. These transactional capabilities allow system -

independent exchange and analysis of significant quantities of supporting data and can be the key

to transforming reporting supply chains.


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Test Series: April, 2018

MOCK TEST PAPER - II

INTERMEDIATE COURSE: GROUP – II

PAPER –7: ENTERPRISE INFORMATION SYSTEMS & STRATEGIC MANAGEMENT

SECTION – B: STRATEGIC MANAGEMENT

SUGGESTED ANSWERS/HINTS

1. (a) Shoaib wishes to diversify in a business that is not related to their existing line of product and can

be termed as conglomerate diversification. He is interested in acquiring another industrial unit

located in Lucknow manufacturing tableware such as dinner sets, cups and saucers, bowls, which

is not related to their existing product. In conglomerate diversification, the new businesses/

products are disjointed from the existing businesses/products in every way; it is a totally unrelated

diversification. In process/ technology/ function, there is no connection between the new products

and the existing ones. Conglomerate diversification has no common thread at all with the firm's

present position.

On the other hand, Salim seeks to move forward in the chain of existing product by adopting

vertically integrated diversification. The cloth being manufactured by the existing processes can be

used as raw material of garments manufacturing business. In such diversification , firms opt to

engage in businesses that are related to the existing business of the firm. The firm remains

vertically within the same process and moves forward or backward in the chain. It enters specific

product/process steps with the intention of making them into new businesses for the firm. The

characteristic feature of vertically integrated diversification is that here, the firm does not jump

outside the vertically linked product-process chain.

Both types of diversifications have their own benefits. While vertically integrated diversification

brings synergy a conglomerate diversification helps in diversifying the risk. It is possible that a

downturn in one business is offset by upswing in other business. In the vertically integrated

diversification firms can take advantage of their existing competence that in turn will improve

chances of success.

(b) Ritchwick is a follower of transactional leadership style that focuses on designing systems and

controlling the organization’s activities. Such a leader believes in using authority of its office to

exchange rewards, such as pay and status. They prefer a more formalized approach to motivation,

setting clear goals with explicit rewards or penalties for achievement or non -achievement.

Transactional leaders try to build on the existing culture and enhance current practices. The style

is better suited in persuading people to work efficiently and run operations smoothly.

On the other hand, Yash is follower of transformational leadership style. The style uses charisma

and enthusiasm to inspire people to exert them for the good of the organization. Transformational

leaders offer excitement, vision, intellectual stimulation and personal satisfaction. They inspire

involvement in a mission, giving followers a ‘dream’ or ‘vision’ of a higher calling so as to elicit

more dramatic changes in organizational performance. Such a leadership motivates followers to

do more than originally affected to do by stretching their abilities and increasing their self -

confidence, and also promote innovation throughout the organization.

2. (a) (i) Correct: Consonance refers to the need for strategists to examine sets of trends, as well as

individual trends, in auditing strategies. A strategy must represent an adaptive response to

the external environment and to the critical changes occurring within it. One difficulty in

matching a firm’s key internal and external factors in the formulation of strategy is that most

trends are the result of interactions among other trends.


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(ii) Incorrect: Marketing function and production function complement each other. They need to

work in tandem to produce goods as per the needs and preferences of the customers.

Marketing links the production with the customers.

(b) To gain a deep understanding of a company’s industry and competitive environment, managers do

not need to gather all the information they can find and waste a lot of time digesting it. Rather, the

task is much more focused. A powerful and widely used tool for systematically diagnosing the

significant competitive pressures in a market and assessing the strength and importance of each

is the Porter’s five-forces model of competition. This model holds that the state of competition in

an industry is a composite of competitive pressures operating in five areas of the overall market:

Competitive pressures associated with the market manoeuvring and jockeying for buyer

patronage that goes on among rival sellers in the industry.

Competitive pressures associated with the threat of new entrants into the market.

Competitive pressures coming from the attempts of companies in other industries to win

buyers over to their own substitute products.

Competitive pressures stemming from supplier bargaining power and supplier -seller

collaboration.

Competitive pressures stemming from buyer bargaining power and seller-buyer Collaboration.

3. (a) Strategic management is not a bundle of tricks and magic. The term strategic management refers

to the managerial process of forming a strategic vision, setting objectives, crafting a strategy,

implementing and executing the strategy, and then over a period of time initiating whatever

corrective adjustments in the vision, objectives, strategy, and execution are deemed appropriate.

Strategic Management is a deliberate managerial process that involves systematic and analytical

thinking. It involves systematic and analytical thinking and action. Although, the success or failure

of a strategy is dependent on several extraneous factors, it cannot be stated that a strategy is a

trick or magic.

Formation of strategy requires careful planning and requires strong conceptual, analytical, and

visionary skills.

(b) Steps to understand the Competitive Landscape:

(i) Identify the competitor: The first step to understand the competitive landscape is to identify

the competitors in the firm’s industry and have actual data about their respective market

share. This answers the question: Who are the competitors?

(ii) Understand the competitors: Once the competitors have been identified, the strategist can

use market research report, internet, newspapers, social media, industry reports, and various

other sources to understand the products and services offered by them in different markets.

This answers the question: What are their product and services?

(iii) Determine the strengths of the competitors. What are the strength of the competitors?

What do they well? Do they offer great products? Do they utilize marketing in a way that

reaches out to more consumers than other companies? Why do customers give them their

business? This answers the questions: What are their financial positions? What gives them

cost and price advantage? What are they likely to do next? How strong is their distribution

network? What are their human resource strengths?

(iv) Determine the weaknesses of the competitors. Weaknesses (and strengths) can be

identified by going through consumer reports and reviews appearing in various media. After

all, consumers are often willing to give their opinions, especially when the products or services

are either great or very poor. This answers the question Where are they lacking?


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(v) Put all of the information together. At this stage, the strategist should put together all

information about competitors and draw inference about what they are not offering and what

the firm can do to fill in the gaps. The strategist can also know the areas which need to be

strengthen by the firm. This answers the questions: What will the business do with this

information? What improvements does the firm need to make? How can the firm exploit the

weakness of competitors?

4. (a) A Mission statement tells you the fundamental purpose of the organization. It concentrates on the

present. It defines the customer and the critical processes. It informs you of the desired level of

performance. On the other hand, a Vision statement outlines what the organization wants to be. It

concentrates on the future. It is a source of inspiration. It provides clear decision -making criteria.

A mission statement can resemble a vision statement in a few companies, but that can be a grave

mistake. It can confuse people. Following are the major differences between vision and mission:

1. The vision describes a future direction while the mission serves as ongoing intent.

2. The vision statement can galvanize the people to achieve defined objectives, even if they are

stretch objectives, provided the vision is specific, measurable, achievable, relevant and time

bound. A mission statement provides a path to realize the vision in line with its values. These

statements have a direct bearing on the bottom line and success of the organization.

3. A vision statement defines the purpose or broader goal for being in existence or in the

business and can remain the same for decades if crafted well while a mission st atement is

more specific in terms of both the future state and the time frame. Mission describes what will

be achieved if the organization is successful.

(b) Supply chain management is an extension of logistic management. However, there are differences

between the two. Logistical activities typically include management of inbound and outbound

goods, transportation, warehousing, handling of material, fulfillment of orders, inventory

management and supply/demand planning. Although these activities also form part of supply chain

management, the latter is much broader. Logistic management can be termed as one of its part

that is related to planning, implementing, and controlling the movement and storage of goods,

services and related information between the point of origin and the point of consumption.

Supply chain management is an integrating function of all the major business activities and

business processes within and across organisations. Supply Chain Management is a systems view

of the linkages in the chain consisting of different channel partners – suppliers, intermediaries,

third-party service providers and customers. Different elements in the chain work together in a

collaborative and coordinated manner. Often it is used as a tool of business transforma tion and

involves delivering the right product at the right time to the right place and at the right price.

5. (a) Strategic Business Unit (SBU) is a unit of the company that has a separate mission and objectives

and which can be planned independently from other businesses of the orgnanisation. The three

most important characteristics of SBU are:

It is a single business or a collection of related businesses which offer scope for independent planning and which might feasibly stand alone from the rest of the organization.

It has its own set of competitors.

It has a manager who has responsibility for strategic planning and profit performance. He has control of profit-influencing factors.

(b) Merger is considered to be a process when two or more companies come together to expand their

business operations. In such a case the deal gets finalized on friend ly terms and both the

organizations share profits in the newly created entity.


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Conglomerate merger happens in case of organizations that are unrelated to each other combine

together. There are no linkages with respect to customer groups, customer functions and

technologies being used. There are no important common factors between the organizations in

production, marketing, research and development and technology. In practice, however, there is

some degree of overlap in one or more of these factors.

(c) Experience curve is similar to learning curve which explains the efficiency gained by workers

through repetitive productive work. Experience curve is based on the commonly observed

phenomenon that unit costs decline as a firm accumulates experience in terms of a cumulative

volume of production. The implication is that larger firms in an industry would tend to have lower

unit costs as compared to those of smaller organizations, thereby gaining a competitive cost

advantage. Experience curve results from a variety of factors such as learning effects, economies

of scale, product redesign and technological improvements in production.

The concept of experience curve is relevant for a number of areas in strategic management. For

instance, experience curve is considered a barrier for new firms contemplating entry in an industry.

It is also used to build market share and discourage competition.

6. (a) Benchmarking is an approach of setting goals and measuring productivity of firms based on best

industry practices or against the products, services and practices of its competitors or other

acknowledged leaders in the industry. It developed out of need to have information against which

performance can be measured. Benchmarking helps businesses in improving performance by

learning from the best practices and the processes by which they are achieved. Thus,

benchmarking is a process of continuous improvement in search for competitive advantage. Firms

can use benchmarking practices to achieve improvements in diverse range o f management

functions like product development, customer services, human resources management, etc.

The various steps in Benchmarking Process are as under:

(i) Identifying the need for benchmarking: This step will define the objectives of the

benchmarking exercise. It will also involve selecting the type of benchmarking. Organizations

identify realistic opportunities for improvements.

(ii) Clearly understanding existing decisions processes: The step will involve compiling

information and data on performance.

(iii) Identify best processes: Within the selected framework best processes are identified. These

may be within the same organization or external to them.

(iv) Comparison of own process and performance with that of others: Benchmarking process

also involves comparison of performance of the organization with performance of other

organization. Any deviation between the two is analysed to make further improvements.

(v) Prepare a report and implement the steps necessary to close the performance gap: A

report on benchmarking initiatives containing recommendations is prepared. Such a report

also contains the action plans for implementation.

(vi) Evaluation: Business organizations evaluate the results of the benchmarking process in

terms of improvements vis-à-vis objectives and other criteria set for the purpose. It also

periodically evaluates and reset the benchmarks in the light of changes in the conditions that

impact the performance.

(b) Differentiation strategy is aimed at broad mass market and involves the creation of a product or

service that is perceived by the customers as unique. The uniqueness can be associated with

product design, brand image, features, technology, dealer network or customer se rvice. Because

of differentiation, the business can charge a premium for its product.


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Differentiation strategy should be pursued only after a careful study of buyers’ needs and

preferences to determine the feasibility of incorporating one or more different iating features into a

unique product that features the desired attributes.

To achieve differentiation, following measures can be adopted by an organization:

1. Offer utility for the customers and match the products with their tastes and preferences.

2. Elevate the performance of the product.

3. Offer the promise of high quality product/service for buyer satisfaction.

4. Rapid product innovation.

5. Taking steps for enhancing image and its brand value.

6. Fixing product prices based on the unique features of the product and buying capacity of the

customer.


Documents

Test Series: April, 2018 MOCK TEST PAPER - 2 INTERMEDIATE ...€¦ · BI encompasses a wide variety of tools, that enable organizations to collect data from internal systems and external