Business Management and Strategy TEST NO. 4 (CH 8 - 9)

BUSINESS MANAGEMENT AND STRATEGY
TEST NO. 4 (CH 8 – 9)
Question No. 1:
Companies which pursue market-driven business strategies consider that sponsorship of high
profile and attractive events are communication techniques to create awareness and affiliation of
their companies and brands with the target market. These companies enter into agreements and
provide financial and nonfinancial support for social, cultural, literary and sports events to a
group, organization or an individual celebrity in anticipation of creation of a lasting awareness of
the company’s name or its brand among the audience. Sponsorship by leading companies, as a
promotional alternative, has gained world-wide prominence in recent years.
Briefly describe six main objectives which are envisaged to be achieved through sponsorship of
such high profile and attractive events? (06)
Question No. 2a:
In the preceding five decades, a significant number of companies have pursued well- conceived
strategies of Globalisation in order to seize the immense business opportunities by operating on a
worldwide basis. These companies have achieved notable success in the expansion of their
business globally and have manufacturing facilities and marketing networks spread in several
countries.
State and briefly explain six significant objectives of multinational companies in pursuing
policies of Globalisation. (06)
Question No. 2b
In the current economic scenario, business organizations are under continuous stress to achieve
economies in their production and operating costs. The pressures for cost reduction emanate
from the management as well as the competitors and customers.
Identify eight operational and strategic areas which must be scanned continuously by an industry
leader to achieve cost economies and maintain its competitive advantage. (08)
Question No. 3
Briefly explain key techniques and methods associated with Just In Time. (08)
Question No. 4
For each of the following situation, identify the degree of development of purchase function.
Also give salient characteristics of each stage of development:
1. Purchase department in XYZ corporation formalizes the communication link between
technical department and vendors. It also helps in price negotiation
2. Procurement department in in Omer textile has established long term relationship with
the suppliers and is involved in critical decisions too by the top management.
3. Purchase function at Sapphire Consultants in considered as essential by top management.
It timely informs about price changes and also helps internal coordination. (06)
Question No. 5a:
Just-in-Time is an operational excellence technique originated in Japan that focuses on reducing

inventory levels to improve efficiency. What are the key techniques adopted by organizations to
implement JIT? (06)
Question No. 5b:
Q7. House of Fashion (HF) is a leading chain of stores in kids’ apparels and accessories. They
are regarded for their high quality product at affordable prices. Recently they diversified their
business and initiated Mens’ Fashion (MF) targeting men apparels. The products received
positive response from the customers and added high revenues towards profitability of the
organization. Recently, one of the categories of shirts has been reported to have some defect and
whole category of shirts have been returned by the customers. Key complaints include bleeding
of the shirts and skin allergies reported by the customers. Firm also had to face legal actions by
various customers. Internal investigation revealed that a certain consignment of fabric was sub-
standard and it could be identified because of lack of quality control department.
HF intends to expand in Women apparels but owing to past experience, management is

considering to place quality control measures and hire a risk specialist to deal with risk
management issues.
Required:
Identify key classifications of quality related costs and two costs that HF should incur in each of
the classifications. (10)

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BUSINESS MANAGEMENT AND STRATEGY

TEST NO. 4 (CH 8 – 9)

Question No. 2a:

Question No. 5a:

Just-in-Time is an operational excellence technique originated in Japan that focuses on reducing

Question No. 5b:

HF intends to expand in Women apparels but owing to past experience, management is

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