1st Block Assessment

 

  CASE STUDY

 

In November 2017, China’s largest online travel agent (OTA), Shanghai-based Ctrip.com International Limited (Ctrip), announced the acquisition of the US-based travel recommendation service, Trip.com (Trip), for an undisclosed sum. This was the latest among several moves by Ctrip that signaled its ambitions to expand beyond Asia. Earlier in 2016, Ctrip bought Skyscanner, a Scotland-based flight Search Company, for about US$1.74 billion, making the travel industry sit up and take notice. The Trip deal was expected to help Skyscanner leverage Trip.com’s capabilities on its own platform. Travis Katz, CEO and founder of Trip, said, “The idea of this deal is for Skyscanner to marry in-destination reviews content in Trip’s arsenal to Skyscanner’s platform. The aspiration is not to only add static details, such as about the opening times of restaurants or museums, but to also enable Skyscanner users to see and eventually add social reviews within Skyscanner’s website and apps,”

 

Founded in June 1999 by James Liang, Neil Shen, Min Fan, and Qi Ji, Ctrip started out as a trip advisor service provider. The company aggregated information on hotels and flights and enabled customers to make informed and cost-effective hotel and flight bookings. Its inception and growth coincided with the travel boom in China and its revenues increased from Renminbi (RMB)6.9 million in 2000 to RMB105.3 million (US$12.7 million) in 2002.

 

Even the outbreak of the Severe Acute Respiratory Syndrome (SARS) in 2003 did not have a significant impact on Ctrip’s business. By October 2003, Ctrip had established room supply relationships with over 1,700 hotels in China and over 450 hotels internationally. It went public in December 2003, with its IPO soaring on the debut day. On Nasdaq, the shares opened at US$24.01, and at one point went up to US$37.35, thereby making Ctrip’s first IPO double its US$18 offer price on day one of trade.

 

COMPETING WITH TECHNOLOGY

 

Ctrip had constantly been acquiring new technologies to serve its customers. Artificial Intelligence, big data, and intelligent hardware employed by Ctrip were crucial in providing a superior travel experience. Jane Sun (Jane), Ctrip’s Chief Executive Officer, said, “For the user interface, we want to make sure that we know every customer who has purchased or searched on the Ctrip website. So when we list our products for them, it’s not millions of items that they have to search through -- the user experience wouldn’t be maximized. Hopefully we can personalize the display. All of that is in our design. When the customer purchases with us, they (may not) know what they want, but we know what would fit them. That’s a way technology will help us” .

 

CTRIP’S STRATEGIC INVESTMENTS AND ACQUISITIONS

 

Ctrip maintained its leading position through a series of strategic investments and acquisitions. From 2013, the company began expanding aggressively expanding internationally. Feifei Xu, Director of Brand Strategy, Labbrand, said, “Their international expansion aims to offer Chinese out-bound travelers or foreign companies in China an extension of their value-chain platform of tourism. By international expansion, they are mostly targeting outbound Chinese travelers.” In 2013, Ctrip invested in travel search engine Kuxun, hotel app Economy Hotel Manager, social trip sharing platform Chanyouji, and car rental services Yongche and eHi Car Services

 

CHALLENGES AND OPPORTUNITIES

 

The acquisition of Skyscanner, while contributing substantially to Ctrip’s growth, intensified both domestic and international competition. To compete effectively with Ctrip, other OTAs in China made attempts to attract large investments. Meituan Dianping raised US$4 billion in a funding round led by Tencent Holdings . Interestingly, Priceline, which was Ctrip’s largest shareholder, also participated in the funding round. Agoda.com, owned by the Priceline Group, established a strategic partnership with Meituan Dianping. This strategy of Priceline investing in Ctrip’s domestic competition indicated that it perhaps saw Ctrip as a potential threat and thus made an investment in Meituan Dianping that could lead to hedging its bets against Ctrip. However, analysts felt that Ctrip was strong enough to take a further share of the Chinese OTA market and its long-term growth prospects in China remained strong.

 

Adding Skyscanner’s revenue to Ctrip’s total boosted Ctrip’s Q3 2017 transportation-ticketing revenue by 41 percent to US$515 million. Cindy Wang, Chief Financial Officer, Ctrip, said, “The total number of transactions made by direct booking increased almost three-fold since May (2017), the month we launched the engine on Skyscanner, through September.”

 

 

 

 

1. For expansion of C Trip International Ltd. , what strategy was adopted ?

Acquisition of US based Trip .com

Selling of Trip .com

Becoming a Parter of Trip.com

None of the options

 

 

2. To enable customers to make informed and cost-effective hotel and flight bookings , The company aggregated information on ?

On hotels and flights

on budget hotels

on international flights

both a & b

 

3. Ctrip had continously been acquiring new _____ to serve its customers?

Customers

Technology

Offers

None of the options.

 

4. what technological tools were employed by Ctrip in providing a superior travel experience ?

Artificial Intelligence, big data, and intelligent hardware

Excellent Software

Market Research

Both B&C

 

5. Co. adopted a strategy of using technological tools and make customer purchase easier by?

Knowing what would fit customers , as customers (may not) know what they want

Giving promotional offers

Giving discounts, customers always know what they want

None of the options

 

6. Ctrip maintained its leading position through ?

series of strategic investments only

a series of strategic investments and acquisitions

Focussing on Industry Competition

Focussing on Attracting maximum customers

 

7. Investment strategy adopted by Ctrip was into field of?

Car rentals , Hotel Apps & travel search engines

Car rentals only

hotel app Economy Hotel Manager only

Both B & C

 

8. The strategy adopted for acquisition of Skyscanner, by Ctrip  helped in?

growth of international market

Growth in Foreign Lands

growth of both domestic and international markets

growth of domestic market

 

9. Main investment strategies adopted by the Companies in this case study were related to ?

Selling of a Product Line

Competitor analysis

Scanning Environment

Acquisitions

 

10. ______ has played a major role in this case study , and for capturing a wide market share by the company ?

Technology

Competitors

International Markets

Both B& C

 

2nd Block Assessment

 

 CASE STUDY

 

Navroze Godrej (Navroze), the young executive director for Strategy and Innovation at Godrej and Boyce, the holding company of the India-based Godrej Group, is a fourth generation scion of the Godrej family. Keen on bringing about a major change in his company’s design thinking, he set himself the goal of changing the Godrej Group’s old-world, engineering driven mindset into a forward looking design driven mindset. He aimed to shape the Godrej Group into a company that inculcated a culture of open collaboration between different work groups and businesses. As part of his efforts to fulfill this aim, he created a suitable ambience and office infrastructure to break down the organizational hierarchies. He also started the Godrej Design Lab to encourage young designers to showcase their work. The selected designers were mentored and their designs displayed at national level exhibitions. The case discusses whether the initiatives taken by Navroze to bring about organizational transformation to make the Godrej Group design, innovation, and consumer focused can succeed. The case gives enough scope to analyze whether the influx of young talent is capable of bringing in novel ideas to shape the company’s future.

 

In 2005, Navroze Godrej (Navroze) was inducted as a management trainee into Godrej & Boyce (G&B), the holding company of the Godrej Group. Navroze, a fourth generation-scion of the Godrej family which owned the Godrej Group, was all of 23 years old when he joined Godrej. He was quite different from the previous generations of the family in terms of being more agile and wanting to bring in change within the company. When Navroze was in his early twenties, he met Professor Hemmant Jha, (Jha) of the Institute of Design, Chicago, US. It turned out to be a momentous meeting and was a turning point for Navroze as it kindled in him a love for design, which soon turned into a lasting passion. Navroze was so impressed after chatting with Jha that he persuaded the professor to join G&B. Analysts said this was a smart move by Navroze – one that drove G&B toward innovation. After hiring Jha, Navroze and his team at G&B brought out novel designs and innovations which were patented under Godrej.

Godrej, one of the largest Indian privately-held diversified industrial companies, was founded by Ardeshir Godrej (Ardeshir) in 1897. Ardeshir, a lawyer by profession, gave up his career in law to pursue his passion for making high quality locks and safes. The business was expanded further by Ardeshir’s youngest brother, Pirojsha Godrej (Pirojsha), who joined the company in 1906. In 1909, Godrej secured its first patent for spring-less locks which Ardeshir sold under the Anchor brand. During the 1920s, Ardeshir manufactured the first of Godrej’s sturdy steel cupboards branded as ‘Storwel,’ that became a trend in Indian homes. Ardeshir launched a washing soap as well and the world’s first vegetable oil based toilet soap. The toilet soap was considered to be the best in its time, as it revolutionized the manufacturing process. Up till then, soaps were made from animal fat. Godrej earned a name for itself with the superior quality of locks and soaps it sold. In 1952, Godrej bagged a contract to manufacture ballot boxes for India’s first general elections. Every day, 15,000 ballot boxes were made at its Vikhroli factory in Mumbai, to supply the target of 1.2 million boxes.

In 2013, after Navroze graduated with a Master’s in design, he returned to join G&B and spearheaded a pilot project on a disruptive business model. One of the things he changed was the layout of the (office) shop-floor. Unlike the previous directors who worked from their closed office space, he preferred to sit with his project teams around a big table and discuss matters with them. The new furniture layout was intended to support both individual and group work. Navroze felt traditional desk arrangements created a barrier and prevented openness and collaboration.

GODREJ INNOVATION CENTER

In 2013, Navroze took the bold move of setting up a 25,000 square foot ‘Innovation Center’ in Vikhroli, Mumbai. This was a research and development center to conduct explorative study in areas involving security, lifestyle, well-being, energy, productivity, and connectivity. The innovation center had a fixed 20-member full-time team, while at any given time there were at least a 100 other employees who belonged to other departments deputed to accomplish time-bound projects. As Navroze believed in diversity, the members in the teams came from different backgrounds such as, design, marketing, research, business, engineering, and others. The center had enough space for meetings and lectures, and the furniture was such that it could be reorganized for display of prototype product designs, a collection of material types, and for any other informal interaction as well.

SPRINT PROGRAM

Navroze led the Sprint program that caused a cultural transformation in the company. He facilitated a bottom-up approach, where he invited all the employees of Godrej to submit ideas at the innovation center. Based on their ideas, Navroze set up work groups. For the first time, people with 20 years of experience and those who had joined just six months earlier began working together. The groups came up with ideas that ranged from cooking appliances to recycling of waste, to looking at resources and services for transit population.

GODREJ DESIGNLAB

In 2013, Navroze set up the Godrej DesignLab, (GDL), which was established in collaboration with a Mumbai-based design studio, Elle Décor. GDL was a platform for designers to co-create, experiment, innovate, and challenge the boundaries of product design. GDL aimed at providing a holistic support system to designers who could give a whole new level of futuristic designs. GDL was a forum where designers could submit their work in four categories of furniture, furnishings, lighting and home décor, & accessories.

THE HUBBLE

In April 2014, Navroze spearheaded the development of a second innovation center, the Hubble. It was conceived to serve as a hub where people could interact informally to encourage the culture of creative thinking. The Hubble was built on a spacious 25,000 square foot space in the Vikhroli office itself, to function as an eat, work, and play space with a coffee-shop-kind-of-atmosphere. It encouraged both private and collaborative work among the employees.

REINFORCING THE DESIGN TRADITION

The Chief Design Officer, of GPL, Anubhav Gupta (Gupta), said that though there was no vertical on design in the Godrej group of companies, design was considered a business horizontal as it had become omnipresent in all aspects of the Godrej Group. He said innovation at GPL was not about playing it safe but it required an ability to tolerate failure before earning superlative success. Innovation, according to Gupta, was finding the best possible or the most optimal design.

 

 

1. A smart strategy adopted by Navroz in the starting phase ,after getting impressed with professor Jha was ?

Strategy related to innovation

strategy related to acquisitions

Strategy related to controlling systems

strategy related to diversifications

 

2. The first patent secured by godrej , was related to which product?

spring-less locks

Almirah’s

Safe’s

Refregirator’s

 

3. The strategy adopted by godrej in respect of innovation , was done in respect of ?

achieving greater market share

to attract more & more customers

Both A& B

None of the options

 

4. Godrej revolutionised the manufacturing process, and created world’s first _______?

Animal fat based toilet soap

vegetable oil based toilet soap

Herbal Soaps

All

 

5. It was felt that old structure of traditional desk arrangements created _______?

efficient working environment

Prevented positive work culture

Barrier ,prevented openness and collaboration

All

 

6. On what kind of activities godrej majorly focussed in the innovation centre ?

Research & Development

cost cutting strategies

strategies to attrat customers

None of the options

 

7. Godrej earned a name for itself in the starting phase for which of the following products ?

Refrigerators

superior quality of locks and soaps

Soaps Only

Electronic Appliances

 

8. People/ employees in Godrej were allowed to interact informally which lead to encouragement of ___?

the culture of creative thinking

collaborative work among the employees

Both A & B

None of the options

 

9. In order to breakdown the organisational hierarchies , what basic strategy was adopted ?

Creation of a suitable ambience and office infrastructure

Creation of a friendly environment

Creating a competitive Environment

Both b & C

 

 

10. for India’s first general elections , what kind of contract was bagged by Godrej ?

to manufacture Lockers

to manufacture Soaps

to manufacture both ballot boxes & soaps

to manufacture ballot boxes

 

 

3rd Block Assessment

 

CASE STUDY

 

This case discusses about the acquisition of Florida-based Elizabeth Arden Inc, (Arden), a cosmetics, skin care, and fragrance major by Revlon Inc. (Revlon) another cosmetic giant. Post-merger, Revlon reported a 21.9% increase in its net sales in 2016. The case highlights the journey of both the businesses and also the tough time they faced prior to the merger. While Revlon had been weighed down by its debt, the sales of celebrity fragrances, a key part of Arden's portfolio, had declined. Arden's losses and increasing debt load left the company with few options to survive as a stand-alone business. Revlon pursued the deal largely in order to achieve scale.

 

Revlon bought Arden in a $870 mn deal in June 2016. The merger brought together the two cosmetics majors amidst hopes that a combined distribution network and marketing strategy could broaden their appeal. The industry showed a mixed response to the union. While some experts felt the synergy was not very realistic few other opined that it would revive the fortunes of Arden.

 

The case also discusses Revlon’s plans of restructuring the business. It headed towards shifting to a brand-centric structure aimed at identifying investment areas quicker and reacting faster to consumer needs in the domestic and international markets.

 

In March 2017, New York-based cosmetics, skin care, fragrance, and personal care company Revlon Inc, (Revlon) reported its net sales rose to $2.3 billion in 2016, a 21.9 percent increase compared to 2015. Revlon witnessed growth across all segments. This growth in sales came amidst Revlon’s plans to shift to a brand-centric structure after initiating a restructuring plan in 2016. The restructuring followed Revlon’s acquisition of Elizabeth Arden Inc, (Arden), a Florida-based, cosmetics, skin care, and fragrance major, for $ 870 million. The merged company was expected to leverage the strength of its brands and adapt to the changing behaviors and preferences of consumers to serve them better. In addition to expanding categories, channels, and geographies, Revlon expected to hit $5 billion in sales in the next five years. As part of the integration, it announced the elimination of 350 positions worldwide and streamlining of certain operations. In addition, project integration-related restructuring activities were estimated to cost between $65 million and $75 million by 2020.

THE JOURNEY OF ELIZABETH ARDEN

Born as Florence Nightingale Graham (Graham) in 1878 in Ontario, (Canada), Graham was the youngest of five children in a poverty stricken family. She dropped out of school due to a lack of finances and began training as a nurse. During nursing training she met a chemist experimenting with a facial cream that could help acne sufferers. The idea fascinated her, leading to her believing that most women would give anything for beauty. Graham took up a number of odd jobs that gave her an opportunity to display her salesmanship. While working briefly as a bookkeeper for the E R Squibb Pharmaceuticals Company in 1908, she spent hours in their lab learning about skincare. This further inspired her to fashion a small lab for beauty products of her own. To pursue her dream, she quit her job at Squibb and joined as an assistant in a newly established beauty parlor. Graham later worked for beautician Eleanor Adair as a “treatment girl” and gained valuable industry experience. In 1910, Graham borrowed money from her brother William and started ‘Red Door Salon’ with a partner, Elizabeth Hubbard . The first shop was opened on Fifth Avenue. The partnership soon dissolved and Graham became the sole proprietress. She decided to name her salon ‘Elizabeth Arden’. The name was derived from her former partner’s name and from Alfred, Lord Tennyson's poem ‘Enoch Arden’. The new name raised the prestige and glamor of not only the business but Graham as well. Thus, Graham changed her name to Elizabeth Arden (Arden) in 1915.

THE JOURNEY OF REVLON

The history of Revlon Inc, one of the world's leading cosmetics companies based in New York, can be traced back to 1932. Two brothers, Joseph Revson and Charles Revson, conceived of the idea of creating a nail enamel using pigments instead of the normal dyes. They collaborated with a local chemist named Charles Lachman (who contributed the ‘L’ to the Revlon name), to come up with their first product. Revlon developed a variety of new shades of nail polish. Seeing the booming beauty salons and the growing popularity of manicures they targeted beauty salons as a market to sell their nail polishes.

Arden was known for its fragrances including those licensed from celebrities like Marilyn Monroe, Catherine Zeta-Jones, Britney Spears, Justin Bieber, Taylor Swift, and many more. However, in 2014, the company posted the biggest ever quarterly loss in its history, a 28 per cent drop in revenue. The company was hit hard mainly because of a fall in the sales of its celebrity perfumes. The company statement said, “While the company had expected weaker sales comparisons due to the lower level of fragrance launch activity in fiscal 2014 versus fiscal 2013, the decline in sales of celebrity fragrances, particularly the Justin Bieber and Taylor Swift fragrances.

In June 2016, mired in financial woes, Revlon decided to pick up Arden. The company agreed to buy Arden in an $870 million deal. The wager was expected to create a beauty business with annual sales of $3 billion along with creating a platform in categories like mass, prestige, professional, color cosmetics, skin care, and fragrances. In addition to greater purchasing power, the merged entity was expected to benefit from cost savings of nearly $140 million by eliminating overlaps, integrated manufacturing, and distribution networks of both companies. Garcia said, “We see great opportunities for growth where they are strong and we are not.”

Some analysts expected a negative outcome from the union. They felt that Revlon was buying a troubled competitor with an elevated debt load. Although Revlon pointed to the expected synergies, experts found this unrealistic and opined that it could possibly result in higher leverage ratios. Wendy Liebmann, CEO of WSL Strategic Retail, stated, “There’s so little other business synergy. Arden is a fragrance and skin care house. Revlon is a color cosmetics and hair-color business. Different price points and distribution.

The deal not only marked a turnabout for investors, it also put an end to speculations that Revlon would be an acquisition target – rather than a buyer. Before the acquisition was announced, Arden's market capitalization was $280 million. Shares had fallen 40 percent off their 52-week high. But as soon as the news of the acquisition came in, Arden’s shares soared by as much as 50 per cent and closed at $14; Revlon rose about 6.6 percent to close at $33.25.

In January 2017, Revlon decided to divide and organize the business into four categories: the Revlon brand, Elizabeth Arden, fragrances and portfolio brands, (which included Almay, Mitchum, Gatineau, Sinful Colors and Pure Ice cosmetics. Each Revlon team was required to prepare a three-year growth plan and set priorities and strategies for their labels. The core corporate functions including finance, human resources, supply chain, research and development, legal, communications, and corporate social responsibility departments were to be reorganized to provide better support to the new brand-centric and regional structures.

 

 

 

1. In this case study, What strategy was adopted by Revlon for the purpose of Growth in the Market ?

Acquisition as growth strategy

Industry Analysis as growth Strategy

Leadership strategy

Competitor analysis strategy

 

2. This case study is about which two major companies ?

Revlon International & Mac

Maybelline & MAC

Elizabeth Arden Inc & Revlon Inc

Mayabelline & Revlon

 

3. In order to serve the customers better ,what strategy was adopted by Revlon ?

adapt to the changing behaviors & preferences of consumers

adapt to the changing Market conditions

adapt to the changing Political environment

adapt to the latest Technology

 

 

4. The case study discusses Revlon’s plans of____?

Restructuring the business

Closing the business

Both A& B

None of the options

 

5. This case study , highlights __?

the better condition of Elizabeth Arden Inc prior its acquisition

the journey of both the businesses and also the tough time they faced prior to the merger

the downfall of Revlon Inc . before the acquisition

None of the options

 

6. Revlon headed towards shifting to a brand-centric structure aimed at identifying investment areas quicker and reacting faster to _____?

consumer needs in the domestic and international markets

consumer needs in the domestic market only

consumer needs in the international markets

None of the options

 

7. As per this case study , Initially Arden was known for ?

Nail enamel

Face Creams

fragrances

Both A & B

 

8. Revlon decided to adopt restructural strategies - to divide and organize the business into categories, what were these categories ?

the Revlon brand

Elizabeth Arden brand

fragrances and portfolio brands

All of the options

 

9. In this case study , each Revlon team was required to prepare a _____ growth plan and set priorities and strategies for their labels?

three-year

Five Year

Ten years

seven Years

 

10. Main Motive behind the acquisition& merger strategy adopted in this case study was related to ?

Increasing the sales

attracting More & More customers

Capturing Major Market Share

All of the Options

 

 

 

4th Block Assessment

 

CASE STUDY

 

When a new technology comes along that is capable of improving dramatically the products of a whole industry, every firm in that industry has vital strategic decisions to make. It must ask itself:

• How far and how quickly should we amend or abandon our present products?
• How far and how quickly should we embrace the new technology?
• Are we big enough and capable enough to accomplish all the

essential changes on our own?

• How can we come out of this time of change stronger than we went in?

Once taken, these key decisions have to be implemented.

Technological change > Strategic decisions > Strategic Implementation

All this makes for exciting times within the industry, for producers and also for consumers, who also have some adjusting to do.

Imaging is one of the world’s growth markets and new technology is making its mark; imaging has ‘gone digital’. It is not a complete transformation. Analogue imaging has not been abandoned and still has millions of satisfied consumers. However, the industry will move on. This is because the new technology:

• is genuinely innovative
• has undeniable advantages in some key aspects
• has been shown to work
• is proving reliable
• is capable of further development
• will become cheaper in the long run.

The pace of change is accelerating. Abandoning former practices and establishing new ways of working is generating not only excitement, but also stresses and tensions. The new technology requires new skills, new attitudes and new approaches from both producers and consumers.

This case study looks at how AGFA, a leading player, is taking full advantage of the digital revolution. The company is using the new technology as:

• an engine for growing its business
• a means of providing its customers with better product possibilities and with greater flexibility and choice.

Agfa

Agfa is a leading name in the imaging industry. The Agfa-Gevaert Group de-velops, produces and distributes an extensive range of analogue and digital imaging systems. Agfa has divided its operations into three segments.

Segment: Consumer imaging.    

Activity/Products: Wide range of products using both digital and analogue technologies for taking, processing and manipulating photographs.

Segment: Graphic systems.    

Activity/Products: A wide range of electronic and photographic systems for the graphics industry, including workflow management systems, scanners and laser image setters.

Segment: Technical imaging.

Activity/Products: Medical uses eg X-ray equipment; non-destructive fault-testing eg in aircraft and pipelines; industrial imaging for motion pictures; document management systems and micrographics.

Agfa’s operations involve a high level of innovation. The company’s willingness and ability to work at the leading edge of technology help to make it a leader in its field.

 

For Agfa to remain a market leader, its managers must concern themselves with the future and ask themselves:

• Where is the industry heading?
• What are our competitors likely to do next?
• Where do we go from here?

With imaging, the answers currently are:

• The industry is heading towards greater use of digital imaging.
• Our competitors will invest in research and development aimed at enhancing quality at affordable prices.
• We look to get there first, with better products to sell to customers who are prepared for using them.

This approach requires a willingness to invest heavily in new projects that maximise the benefits of new technology.

- Every proposed project undergoes investment appraisal. This procedure establishes whether a particular project is worth taking forward. Managers will ask key questions about a proposal, including:

• How expensive are the initial outlay and the final total outlay likely to be?
• For how long are we likely to be spending money without any financial return?
• How long is it likely to be before we recover, from sales, all the money we have invested?
• What return can we reasonably expect from our investment in the long term?
• How big are the risks? What events over which we have little or no control could cause this project to falter or fail? How likely are they?

Risks for the imaging industry include:

• a significant rise in the cost of borrowing to finance investment
• a downturn in business activity worldwide that persuades industrial customers to postpone their own purchase of new plant and equipment
• poorer job prospects for the general public that deter private consumers from spending on the latest products.

Agfa must consider these factors as it contemplates large scale investment in new digitally based technologies.

During 2000 Agfa invested around 224 million Euros (equivalent to 4% of its sales revenue) in research and development. Part of this involved working with external partners eg universities and leading research centres. Much of the work reflected the need to move forward in:

• developing the transition from analogue to digital solutions
• meeting a wider variety of customer needs
• helping Agfa to create new market sectors and to enter them profitably.

Digital technologies are changing the way in which people take, process and use images. New processes allow customers to work with images quickly and efficiently, without requiring extensive expertise and knowledge. Take, for example, the newspaper world. With newspapers, speed is vital and editors want the best pictures to go with the latest stories.

• Digital technology is transforming newspaper production. For example, sports photographers no longer have to dash back to the office to develop prints, wondering anxiously what they have captured. They know immediately the quality of the image they have and they can despatch it immediately too. As a result, the publisher soon has on sale a comprehensive local Saturday night ‘sports special’ carrying action photos of spectacular moments that occurred hundreds of miles away just a short time earlier.
• The new technology is also transforming photography for the general public. For example, crystal clear photos of a baby can now be available to proud, anxious grandparents thousands of miles away within a few minutes of an infant’s birth.
• Technological advance does have a downside, in that demand for new products affects sales of older ones. As a market, analogue photography has almost reached maturity. It is still

significant in size with almost 70% of the market. However, with plenty of scope for further product developments and for repeat business. The growth of digital technology has not deterred Agfa and its competitors from bringing out new, improved products for use with ‘old’ technology.

• The real difference between analogue and digital lies in how images are recorded and processed. Analogue photography uses traditional cameras to expose silver-halide film. This still remains the most widely used way to capture images. Customers are well served with a variety of excellent products, from traditional slide and print films to Advanced Photo Systems (APS) films and single-use cameras with enhanced capability.
• Compared with digital systems, recent analogue advances are ‘low tech’, but so too is their cost. Image quality is excellent, and represents optimum value. The technology can also be applied widely; even single-use cameras take good pictures. However, analogue images cannot be viewed instantly, take time to enlarge or reduce and are on prints or negatives that cannot be re-used. Negatives need optimum storage conditions to remain in good condition long term. The chemicals used in processing also raise some environmental issues. Digital technology represents a genuine advance because it removes many of these difficulties.
• Digital images
• Digital images are based upon a grid or matrix. They vary in the quality of their resolution, which is expressed in pixels or dots per inch (dpi) or millimetre. The higher the resolution, the better the picture, and the more expensive the equipment producing it.
• There is a wide range of affordable digital cameras on the market now, offering varying levels of quality, capabilities and prices. There are also thousands of commercially available CD-ROMs offering images, graphics and more, all at different quality, sophistication and price levels. Consumers can also turn to the Internet, where millions of images are available for downloading to a PC.
• Digital offers some real advantages. Images are held in a digital file and are available for use immediately. They can be transferred immediately from camera to PC, where they can be compressed, amended, altered and despatched using e-mail, fast ISDN lines and the internet. They can be downloaded and printed or transferred to CDs using recently developed copying equipment that retains image quality at a high level.
• Consumers can take CDs to an Agfa Image Center where the quality, format and resolution can be chosen. Digital images have transformed access, ease of use and transmission of images to provide a flexible series of solutions for customer needs. With instantaneous image capture, digital images require only minimal storage facilities. Images can also be manipulated and altered and only the chosen images need to be put into print format.
• However, at the present stage of development, really high quality digitally produced images do not come cheap; the equipment required is expensive. Professional users face high set-up costs, but in industries where speed, quality, and flexibility in use really matter, the price is worth paying. Imaging is an industry where copyright is jealously guarded, and ease of transfer brings with it problems of security and copyright protection. Digital files can also be lost or become corrupted, so some form of back-up is vital. Agfa is aware of these additional consumer and business needs and continues to work on ways of meeting them.
• The imaging industry now has two main product markets: analogue and digital. Each product has strengths and weaknesses, the importance of which varies according to customer needs and requirements.
• There remains a need for both analogue and digital imaging, depending upon the requirements of client groups. For example, during construction, gas and oil pipelines need their joints X-rayed with periodical follow-up checks so that cracks and defects can be detected. This is a job for tried and tested analogue systems.

 

On the other hand, digital technologies have helped to transform the work of hospital radiologists. For example, a software package developed by Agfa called MUSICA (Multiscale Image Contrast Amplification) enables radiologists to manipulate X-ray images in various ways. Edges can be sharpened up to reveal key details, and images can be rotated to offer alternative perspectives. Users can zoom in on details, and select and sort images in a search for recurring patterns. Images can be shared across a number of hospital workstations and can also be transmitted for immediate expert analysis elsewhere.

The best investment programmes are supported by painstaking research: market research into what consumers require and product research to establish what the new technology can and cannot do for them. Agfa is at the heart of changes in imaging brought about by new technology. It is leading. It is also listening and learning. In a highly competitive industry, Agfa’s thorough approach is enabling it to retain important competitive advantages over its closest and fiercest rivals.

 

1. Some of the Vital strategic decisions in respect of new technology can be ?

How far and how quickly should we embrace the new technology

"Are we big enough and capable enough to accomplish all the essential changes on our own "

How far and how quickly should we amend or abandon our present products

All

 

 

2. Techonological Factors are related to which type of Environment ?

External Environment

Internal Environment

Competitive Environment

Structural environment

 

3. The product market related to Imaging industry is/ are ?

analogue only

Analogue and digital

digital only

none of the options

 

 

4. What is /are the reason/s , that the company adopts to new technology ?

Is innovative

Is reliable

good scope in long run

All

 

5. The downside of Technological advancement can be ___?

New technology becomes immediately popular

sale of older technology is not at all affected

sale of older technology is affected

All of the above

 

6. In the context of this case study , Adoption of New technology requires investment . is the statement true ?

Yes, Investment is required

Investment is not at all required

Both A & B

None of the options

 

7. Market Research for the Investment Purposes in context of the consumers is related to ?

Identification of their needs or wants

identification of Competitors

Both A& B

None of the Options

 

8. In a competitive industry , Agfa’s main approach is to gain ____________ over its competitors ?

technological Advantage

Competitive advantage

Economic Advantage

None of the Options

 

9. Advantages of using Digital Images according to this case study are ?

available for use immediately

can be transferred immediately from camera to other devices

can be downloaded and printed or transferred to CDs

ALL

 

10. As per this case study , the Organisational Structure Adopted by Afga is ?

Divisional Structure

Bureaurocratic structure

Line structure

Line & Staff Structure

 

90/100

 

5th Block Assessment

CASE STUDY

 

This case discusses how Beijing-based multinational technology giant, Lenovo Group Limited (Lenovo), emerged as a global brand from China. After becoming a market leader in the Chinese PC market, several international acquisitions helped the company establish a presence in global markets. The company’s 2005 acquisition of the PC division of US-based multinational technology giant International Business Machine (IBM) gave the Lenovo brand global recognition. Lenovo’s 2011 acquisition of German electronics manufacturer, Medion, in 2011 and a joint PC venture with Japanese multinational technology company NEC Corporation helped the company transform from a small Chinese electronics company into the world’s largest PC maker by shipping over 53 million units in 2013.

 

After some initial success with its ‘Protect and Attack’ strategy, Lenovo started to face reverses. In 2017, it lost its PC crown i.e. market leadership in the global personal computers (PCs) market, to its arch rival Hewlett-Packard (HP). Lenovo also found the going tough in the smartphone business that it entered in 2010 as part of its ‘PC Plus strategy’. Lenovo’s gamble of acquiring Motorola Mobility from Google failed to pay off, according to some analysts. By the end of 2015, Lenovo’s fortunes in the mobile market had dipped dramatically. It slipped to eighth position in China’s smartphone market as new and nimbler Chinese competitors such as Huawei, Xiaomi, Oppo, and Vivo continued to grow rapidly. Critics stated that Lenovo lacked innovation at a time when its rivals were upping their game in both the PC and smartphone markets. The challenge before Yang Yuanqing (Yang), CEO of Lenovo, was how to orchestrate a turnaround in the fortunes of the company and restore it to its past glory.

 

In August 2017, Beijing-based multinational technology giant, Lenovo Group Limited (Lenovo), reported a quarterly loss of US$ 72 million for the quarter ended June 30, 2017. It had made a profit of US$ 173 million for the same quarter of 2016. Lenovo also lost its market leadership in the global personal computers (PCs) market to its arch rival Hewlett-Packard (HP). HP led the global PC market with a 22.8% market share for the second quarter of 2017 while Lenovo stood second with a market share of 21.6%, according to International Data Corporation (IDC). Analysts attributed Lenovo’s troubles to the maturing PC market where demand was falling with consumers shifting to smart phones and tablets for daily activities including surfing the Internet. Critics opined that Lenovo’s products, be it PCs or smart phones, lacked innovation while HP had taken over the PC crown by launching a series of cool products targeted at gamers. In the smart phone market too, analysts felt that Lenovo had failed to read the market signals, while its competitors such as Huawei Technologies Co. Ltd. (Huawei), Xiaomi Inc. (Xiaomi), Oppo Electronics Corp. (Oppo), and Vivo Electronic Corp. (Vivo) were rolling out stylish and inexpensive smart phones and gaining market share in China.

The history of Lenovo dates back to 1984 when it was started as New Technology Developer Inc., the predecessor of the Legend Group Ltd. (Legend), by Founder and Chairman, Liu Chuanzhi (Liu), along with ten colleagues at the government-owned Computing Institute of the Chinese Academy of Sciences (CAS) with US$ 25,000. The company was started with the aim of commercializing the research and development (R&D) activities conducted at CAS. In 1985, as its first business deal, the company took over the responsibility of receiving, checking, and maintaining IBM computers imported by CAS and of training CAS staff.

 

The company invested the profits of US$ 146,583 it had received from servicing IBM computers in the design, production, and marketing of its first product – the Chinese character card – HanCard. The Chinese character card, which translated English operating software into Chinese characteristics, was based on the original concept developed by the Institute of Computer Technology (ICT) of CAS. At that time, foreign vendors were not able to come out with such an operating system for PCs in China. The successful launch of the Chinese card boosted Lenovo’s growth in the early 1990s.

In the 1990s, Lenovo was the first company to introduce the home computer concept in China and it grew into a national company cornering a market share of 27% in the domestic market. Lenovo’s competency was its deep understanding of the domestic market and its quick response to the demands of local consumers. The success of Lenovo and other domestic computer makers in China confounded the predictions made by several market analysts. According to Business Week , “It wasn’t supposed to happen this way. A few years ago, most analysts were convinced that the global players would gobble up the Chinese market, with locals like Lenovo stuck in second tier status – at best.”

 

Lenovo believed that to become a global brand, it was not enough just to be identified as a global firm. Establishing a presence in more developed and highly globalized markets such as the US and Europe was essential for its overall strategy. By 2001, though Lenovo’s market share had reached 30% in China, it realized that it would not be able to grow much more given the stiff competition in the country. In addition to this, the domestic market for home PCs was shifting toward laptops rather than desktop PCs. This posed a challenge to Lenovo despite its recording profits of US$ 130 million for the FY 2002-2003, as laptops were not just costly to manufacture but also involved tough competition from rivals such as Dell and HP. In a bid to combat these challenges the company decided to step into international markets.

 

The global economic slowdown in mid-2008 led to Lenovo posting a loss of US$ 226 million. During this time, the company’s CEO William Amelio stepped down in favor of Yang, while Liu returned to assume the role of Chairman.

Lenovo’s Protect and Attack strategy helped the company taste success in China as well as in other global markets. For the FY ended 2013, the company also emerged as the number one PC company in global emerging markets, as well as three of the seven largest PC markets in the world – China, Japan, and Germany. For the quarter ended June 30, 2013, Lenovo’s smartphone business.

With the acquisition of Motorola, Lenovo had ambitious plans to capture a portion of the pie in the global smartphone market. However, the company’s fortunes declined when its smartphone shipments decreased by 53% in China with Lenovo maintaining a meager 3% market share for the Q4 of 2015, according to Canalys. In the global market for smartphones, the company stood at fifth position with a market share of 5.7%.

In a bid to arrest the decline in sales in its smart phone market, Lenovo planned to focus on its Moto brand. According to Yang, “Singular branding will benefit the business.” Stating that the new strategy might not bring in much success to Lenovo, Steven Tseng, an analyst at Daiwa Capital Markets, said, “Customers are also really confused by the company’s strategy.”

Despite the challenging outlook in the global smartphone market, Yang remained optimistic about turning around Lenovo’s struggling mobile business. He stated that there was a US$ 110 million sequential improvement in operational pretax income, attributable to improvements in the mobile and data center businesses in the quarter ended June 30, 2017. Yang added, “Not only did this gave me more confidence we will turn around our mobile business in the second half of FY2018, I think the entire Lenovo is entering a new phase of growth.” .

 

 

1. As per this Case Study, Strategy adopted by Lenovo ,after some initial success was ?

Protect Strategy

Protect and Attack strategy

Merger Strategy

None of the Options

 

2. According to this case Study , Lenovo lost its market Leadership in 2017, to which of its Rivals ?

Apple

Samsung

Hewlett-Packard (HP)

Sony

 

3. Lenovo lacked ____ , when its rivals were upping their game in both the PC and smart phone markets.?

Innovation

strategic Decisions

Acquisition Strategy

Both B& C

 

4. What strategy was adopted by Lenovo , that contributed to its success in the global PC market ?

Retrenchment Strategy

Internal Restructuring Strategy

Internationalization Strategy

Functional Level Strategy

 

5. what strategical change/s in respect of the products,  was/were adopted by the Lenonovo’s competitors to attract the customers ?

Group of answer choices

Making product more stylish

attractive pricing strategies

Both A& B

Only B

 

6. As per this Case study, The main Objective of the company Lenovo as New Technology Developer Inc. in the start was ?

Commercialization Of Research & Development activities

To beat the competitors

Both A& B

None of the Options

 

7. In the starting Phase of the company, What was Lenovo’s Competency ?

deep understanding of the domestic market

quick response to the demands of local consumers

Both A& B

Only B

 

8. According to Lenovo to become a global brand - Apart from being identified as a global firm , what other strategy was also required ?

Establishing a presence in more developed and highly globalized markets

Improvement in Client servicing

adherence to International Standards

Both B& C

 

9. What challenge Lenovo had to face , despite of its recording profits ?

Shifting of Domestic Market from Home PC’s to Laptop’s

Shifting of Domestic Market from Laptops to Home PC’s

Shifting of Market Demand to Other Electronic Items

None of the Options

 

10. In a bid to arrest the decline in sales in its smart phone market, Lenovo planned to focus on which brand ?

Samsung Brand

VIVO Brand

Sony brand

Moto brand

 

 

Full Syllabus Assessment

 

 

CASE STUDY

 

Aggregate minerals are an important resource and their use is essential to national prosperity. They are vital for building new or improved housing, hospitals, schools, factories, roads and leisure facilities. Everything from a garden path to the Channel Tunnel. The processing of aggregates also provides materials for a whole range of non-construction uses: in agriculture, water purification, medicines, paint, toiletries, paper, plastics and steel making. Mineral working can have a significant effect on the landscape and on the living conditions of the people. It is essential that the industry operates to high environmental standards and manages its operations in a manner which minimises their impact on the environment. Business managers have to take these matters seriously as public awareness and concern has significantly increased over the last decade.

Companies are judged on the achievement of their “traditional” business objectives, such as return on investment, growth, market share etc. and now on their environmental performance and this is often looked for in specific statements, objectives and strategies set by a company. It is not only environmental campaigning groups or concerned consumers who realise the importance of the environment. Research has shown that three-quarters of managers feel that more emphasis should be placed on these issues. Where does this attitude spring from? There are a number of important influences and these include UK and EU environmental legislation, public opinion, pressure groups, influence of employees’ families and friends, the company’s own sense of social responsibility and, last but not least, market pressure from customers and end-users. These pressures are expected to grow, so a well managed company should prepare itself to respond to the concerns and take appropriate action.

The RMC Group has become the world’s largest producer of ready mixed concrete, also diversifying into a number of other construction material sectors. It employs the principle of vertical integration to secure raw materials - sand, gravel and crushed rock - required to sustain the production of ready mixed concrete and other added value finish

Security Analysis & Portfolio Management

 

1st Block Assessment

 

 

CASE STUDY

 

The need for corporate governance has arisen because of the increasing concern about the non-compliance of standards of financial reporting and accountability by boards of directors and management of corporate inflicting heavy losses on investors.

The collapse of international giants likes Enron, World Com of the US and Xerox of Japan are said to be due to the absence of good corporate governance and corrupt practices adopted by management of these companies and their financial consulting firms.The failures of these multinational giants bring out the importance of good corporate governance structure making clear the distinction of power between the Board of Directors and the management which can lead to appropriate governance processes and procedures under which management is free to manage and board of directors is free to monitor and give policy directions.

In India, SEBI realised the need for good corporate governance and for this purpose appointed several committees such as Kumar Manglam Birla Committee, Naresh Chandra Committee and Narayana Murthy Committee.Investors and shareholders of a corporate company need protection for their investment due to lack of adequate standards of financial reporting and accountability. It has been noticed in India that companies raised capital from the market at high valuation of their shares by projecting wrong picture of the company’s performance and profitability.The investors suffered a lot due to unscrupulous management of corporate that performed much less than reported at the time of rais­ing capital. “Bad governance was also exemplified by allotment of promoters’ share at preferential prices disproportionate to market value affecting minority holders interest”.

There is increasing awareness and consensus among Indian investors to invest in companies which have a record of observing practices of good corporate governance. Therefore, for encouraging Indian investors to make adequate investment in the stock of corporate companies and thereby boosting up rate of growth of the economy, the protection of their interests from fraudulent practices of corporate of boards of directors and management are urgently needed.Corporate governance is considered as an important means for paying heed to investors’ grievances. Kumar Manglam Birla Committee on corporate governance found that companies were not paying adequate attention to the timely dissemination of required information to investors in by India.Investors will be willing to invest in the companies with a good record of corporate governance.

 

1. The need for ……... has arisen because of the increasing concern about the non-compliance of standards of financial reporting and accountability by boards of directors and management of corporate inflicting heavy losses on investors.

corporate governance

PR

QR

none of the above

 

 

……... realised the need for good corporate governance

Group of answer choices

power

politics

SEBI

all of the above

 

 

3.

Investors and shareholders of a corporate company need protection for their………... due to lack of adequate standards of financial reporting and accountability.

Group of answer choices

 

decision-making

 

efficiency

 

investment

 

none of the above

 

 

4. It has been noticed in India that …………. raised capital from the market at high valuation of their shares by projecting wrong picture of the company’s performance and profitability.

Group of answer choices

 

companies

 

informal

 

both of the above

 

none of the above

 

5. …………..governance was also exemplified by allotment of promoters’ share at preferential prices disproportionate to market value affecting minority holders interest

Group of answer choices

 

industrial engineering

 

operations management

 

Bad

 

none of the above

 

 

6. There is increasing awareness and consensus among Indian investors to invest in ………….which have a record of observing practices of good corporate governance.

Group of answer choices

 

companies

 

trustee

 

AMC

 

none of the above

 

 

7. …………. on corporate governance found that companies were not paying adequate attention to the timely dissemination of required information to investors in by India.

Group of answer choices

 

sponsor

 

trustee

 

Kumar Manglam Birla Committee

 

all of the above

 

 

8.

Therefore, for encouraging Indian .............. to make adequate investment in the stock of corporate companies and thereby boosting up rate of growth of the economy, the protection of their interests from fraudulent practices of corporate of boards of directors and management are urgently needed.

Group of answer choices

 

sponsor

 

investors

 

AMC

 

none of the above

 

9. ………….. will be willing to invest in the companies with a good record of corporate governance.

Group of answer choices

 

Investors

 

PR

 

QR

 

none of the above

 

 

10. SEBI realised the need for …………….. and for this purpose appointed several committees such as Kumar Manglam Birla Committee, Naresh Chandra Committee and Narayana Murthy Committee.

Group of answer choices

 

good corporate governance

 

trustee

 

AMC

 

none of the above

 

 

 

 

2nd Block Assessment

 

CASE STUDY

 

In financial markets, stock valuation is the method of calculating theoretical values of companies and their stocks. The main use of these methods is to predict future market prices, or more generally, potential market prices, and thus to profit from price movement – stocks that are judged undervalued (with respect to their theoretical value) are bought, while stocks that are judged overvalued are sold, in the expectation that undervalued stocks will overall rise in value, while overvalued stocks will generally decrease in value.

In the view of fundamental analysis, stock valuation based on fundamentals aims to give an estimate of the intrinsic value of a stock, based on predictions of the future cash flows and profitability of the business. Fundamental analysis may be replaced or augmented by market criteria – what the market will pay for the stock, disregarding intrinsic value. These can be combined as "predictions of future cash flows/profits (fundamental)", together with "what will the market pay for these profits?" These can be seen as "supply and demand" sides – what underlies the supply (of stock), and what drives the (market) demand for stock?

In the view of John Maynard Keynes, stock valuation is not a prediction but a convention, which serves to facilitate investment and ensure that stocks are liquid, despite being underpinned by an illiquid business and its illiquid investments, such as factories.The most theoretically sound stock valuation method, called income valuation or the discounted cash flow (DCF) method, involves discounting of the profits (dividends, earnings, or cash flows) the stock will bring to the stockholder in the foreseeable future, and a final value on disposal.[1] The discounted rate normally includes a risk premium which is commonly based on the capital asset pricing model.

In July 2010, a Delaware court ruled on appropriate inputs to use in discounted cash flow analysis in a dispute between shareholders and a company over the proper fair value of the stock. In this case the shareholders' model provided value of $139 per share and the company's model provided $89 per share. Contested inputs included the terminal growth rate, the equity risk premium, and beta.[2]

The fundamental valuation is the valuation that people use to justify stock prices. The most common example of this type of valuation methodology is P/E ratio, which stands for Price to Earnings Ratio. This form of valuation is based on historic ratios and statistics and aims to assign value to a stock based on measurable attributes. This form of valuation is typically what drives long-term stock prices.

The other way stocks are valued is based on supply and demand. The more people that want to buy the stock, the higher its price will be. And conversely, the more people that want to sell the stock, the lower the price will be. This form of valuation is very hard to understand or predict, and it often drives the short-term stock market trends.

There are many different ways to value stocks. The key is to take each approach into account while formulating an overall opinion of the stock. If the valuation of a company is lower or higher than other similar stocks, then the next step would be to determine the reasons.

 

 

1.………...is the method of calculating theoretical values of companies and their stocks.

Group of answer choices

 

stock valuation

 

maslow

 

fayol

 

all

 

2. The main use of these methods is to predict……….. market prices

Group of answer choices

 

public

 

management

 

employees

 

future

 

3.In the view of fundamental analysis, stock valuation based on fundamentals aims to give an estimate of the …………. of a stock

Group of answer choices

 

planning

 

organising

 

staffing

 

intrinsic value

 

 

 

4. ………. analysis may be replaced or augmented by market criteria – what the market will pay for the stock, disregarding intrinsic value.

Group of answer choices

 

economics

 

engineering

 

management

 

Fundamental

 

5. …….. valuation is not a prediction but a convention, which serves to facilitate investment and ensure that stocks are liquid, despite being underpinned by an illiquid business and its illiquid investments, such as factories.

Group of answer choices

 

public

 

management

 

employees

 

stock

 

 

The most theoretically sound stock valuation method, called …………., involves discounting of the profits (dividends, earnings, or cash flows) the stock will bring to the stockholder in the foreseeable future, and a final value on disposal.

Group of answer choices

 

network flow problems

 

multi-commodity flow problems

 

income valuation or the discounted cash flow (DCF) method

 

none

 

 

The discounted rate normally includes a ………. which is commonly based on the capital asset pricing model.

Group of answer choices

 

planning

 

production

 

transportation

 

risk premium

 

 The fundamental valuation is the valuation that people use to justify ………….prices.

Group of answer choices

 

stock

 

minimize

 

keep same

 

all

 

 

The other way stocks are valued is based on ………. and demand.

Group of answer choices

 

all

 

new

 

old

 

supply

 

 

If the…………. of a company is lower or higher than other similar stocks, then the next step would be to determine the reasons.

Group of answer choices

 

information

 

valuation

 

both

 

none

 

 

 

3rd Block Assessment

 

 

CASE STUDY

 

Fundamental analysts examine earnings, dividends, assets, quality, ratio, new products, research and the like. Technicians employ many methods, tools and techniques as well, one of which is the use of charts. Using charts, technical analysts seek to identify price patterns and market trends in financial markets and attempt to exploit those patterns.

Technicians using charts search for archetypal price chart patterns, such as the well-known head and shoulders  or double top/bottom reversal patterns, study technical indicators, moving averages, and look for forms such as lines of support, resistance, channels, and more obscure formations such as flags, pennants, balance days and cup and handle patterns.

Technical analysts also widely use market indicators of many sorts, some of which are mathematical transformations of price, often including up and down volume, advance/decline data and other inputs. These indicators are used to help assess whether an asset is trending, and if it is, the probability of its direction and of continuation. Technicians also look for relationships between price/volume indices and market indicators. Examples include the moving average, relative strength index, and MACD. Other avenues of study include correlations between changes in Options (implied volatility) and put/call ratios with price. Also important are sentiment indicators such as Put/Call ratios, bull/bear ratios, short interest, Implied Volatility, etc.

There are many techniques in technical analysis. Adherents of different techniques (for example, Candlestick analysis -the oldest form of technical analysis developed by a Japanese grain trader-, Harmonics, Dow theory, and Elliott wave theory) may ignore the other approaches, yet many traders combine elements from more than one technique. Some technical analysts use subjective judgment to decide which pattern(s) a particular instrument reflects at a given time and what the interpretation of that pattern should be. Others employ a strictly mechanical or systematic approach to pattern identification and interpretation.

Contrasting with technical analysis is fundamental analysis, the study of economic factors that influence the way investors price financial markets. Technical analysis holds that prices already reflect all the underlying fundamental factors. Uncovering the trends is what technical indicators are designed to do, although neither technical nor fundamental indicators are perfect. Some traders use technical or fundamental analysis exclusively, while others use both types to make trading decisions.

 

 

1. Fundamental analysts examine ………

Group of answer choices

 

earnings

 

dividend

 

assets

 

all of the above

 

2. Using ……….., technical analysts seek to identify price patterns and market trends in financial markets and attempt to exploit those patterns

Group of answer choices

 

efficiency

 

stick

 

charts

 

all of the above

 

 

Technicians using charts search for archetypal price chart …………., such as the well-known head and shoulders

Group of answer choices

 

physiologic

 

safety

 

belonging

 

patterns

 

 

Technical analysts also widely use ………...of many sorts, some of which are mathematical transformations of price, often including up and down volume, advance/decline data and other inputs.

Group of answer choices

 

primal simplex algorithm

 

auction algorithm.

 

market indicators

 

none of the above

 

 

These indicators are used to help assess whether an ……... is trending

Group of answer choices

 

asset

 

physiological

 

safety

 

belonging

 

 

Technicians also look for relationships between price/volume indices and ……….indicators.

Group of answer choices

 

sociology research

 

management training

 

secondary and higher psychology instruction

 

market

 

 

 Some technical analysts use subjective judgment to decide which pattern(s) a particular instrument reflects at a given time and what the interpretation of that ………... should be.

Group of answer choices

 

pattern

 

tri

 

fri

 

hex

 

 

Contrasting with technical analysis is fundamental analysis, the study of ……….. factors that influence the way investors price financial markets.

Group of answer choices

 

after

 

equal to

 

economic

 

together

 

 

 

Technical analysis holds that prices already reflect all the underlying ……….factors.

Group of answer choices

 

25

 

20

 

fundamental

 

40

 

Some traders use technical or fundamental analysis exclusively, while others use both types to make …………...decisions.

Group of answer choices

 

20

 

economic

 

trading

 

correct

 

 

 

 

4th Block Assessment

 

 

CASE STUDY

 

In finance, arbitrage pricing theory (APT) is a general theory of asset pricing that holds that the expected return of a financial asset can be modelled as a linear function of various macro-economic factors or theoretical market indices, where sensitivity to changes in each factor is represented by a factor-specific beta coefficient. The model-derived rate of return will then be used to price the asset correctly—the asset price should equal the expected end of period price discounted at the rate implied by the model. If the price diverges, arbitrage should bring it back into line.

The theory was proposed by the economist Stephen Ross in 1976.In the APT context, arbitrage consists of trading in two assets – with at least one being mis-priced. The arbitrageur sells the asset which is relatively too expensive and uses the proceeds to buy one which is relatively too cheap.

Under the APT, an asset is mispriced if its current price diverges from the price predicted by the model. The asset price today should equal the sum of all future cash flows discounted at the APT rate, where the expected return of the asset is a linear function of various factors, and sensitivity to changes in each factor is represented by a factor-specific beta coefficient.

A correctly priced asset here may be in fact a synthetic asset - a portfolio consisting of other correctly priced assets. This portfolio has the same exposure to each of the macroeconomic factors as the mis-priced asset. The arbitrageur creates the portfolio by identifying x correctly priced assets (one per factor plus one) and then weighting the assets such that portfolio beta per factor is the same as for the mispriced asset.

When the investor is long the asset and short the portfolio (or vice versa) he has created a position which has a positive expected return (the difference between asset return and portfolio return) and which has a net-zero exposure to any macroeconomic factor and is, therefore, risk free (other than for firm-specific risk). The APT along with the capital asset pricing model (CAPM) is one of two influential theories on asset pricing. The APT differs from the CAPM in that it is less restrictive in its assumptions. It allows for an explanatory (as opposed to statistical) model of asset returns. It assumes that each investor will hold a unique portfolio with its own particular array of betas, as opposed to the identical "market portfolio". In some ways, the CAPM can be considered a "special case" of the APT in that the securities market line represents a single-factor model of the asset price, where beta is exposed to changes in value of the market.

Additionally, the APT can be seen as a "supply-side" model, since its beta coefficients reflect the sensitivity of the underlying asset to economic factors. Thus, factor shocks would cause structural changes in assets' expected returns, or in the case of stocks, in firms' profitability.

On the other side, the capital asset pricing model is considered a "demand side" model. Its results, although similar to those of the APT, arise from a maximization problem of each investor's utility function, and from the resulting market equilibrium (investors are considered to be the "consumers" of the assets).

Note: this is a timed quiz. You may check the remaining time you have at any point while taking the quiz by pressing the keyboard combination SHIFT, ALT, and T... Again: SHIFT, ALT, and T...

 

 

…………..is a general theory of asset pricing that holds that the expected return of a financial asset can be modeled as a linear function of various macro-economic factors or theoretical market indices, where sensitivity to changes in each factor is represented by a factor-specific beta coefficient.

Group of answer choices

 

APT

 

motivation

 

style

 

none of the above

 

 

 

is a general theory of asset pricing that holds that the expected return of a financial asset can be modeled as a linear function of various macro-economic factors or theoretical market indices, where sensitivity to changes in each factor is represented by a factor-specific beta coefficient.

Group of answer choices

 

economics

 

political science

 

psychology

 

APT

 

 

 

arbitrage consists of trading in two ………... – with at least one being mis-priced.

Group of answer choices

 

military bearing

 

physical fitness

 

confidence

 

assets

 

 

The arbitrageur sells the asset which is relatively too expensive and uses the proceeds to ………..one which is relatively too cheap.

Group of answer choices

 

buy

 

motivation

 

style

 

none of the above

 

 

 

 

Under the APT, an asset is mispriced if its……...diverges from the price predicted by the model.

Group of answer choices

 

same

 

current price

 

equal

 

relevant

 

 

 

The ............. today should equal the sum of all future cash flows discounted at the APT rate, where the expected return of the asset is a linear function of various factors, and sensitivity to changes in each factor is represented by a factor-specific beta coefficient.

Group of answer choices

 

physical

 

asset price

 

non-cooperative

 

emotional

 

 

A correctly priced ……….. here may be in fact a synthetic asset - a portfolio consisting of other correctly priced assets.

Group of answer choices

 

physical

 

cooperative

 

asset

 

all of the above

 

 

This ……... has the same exposure to each of the macroeconomic factors as the mispriced asset.

Group of answer choices

 

physical

 

portfolio

 

non-cooperative

 

emotional

 

 

The ……….. creates the portfolio by identifying x correctly priced assets (one per factor plus one) and then weighting the assets such that portfolio beta per factor is the same as for the mispriced asset.

Group of answer choices

 

physical

 

cooperative

 

arbitrageur

 

shares

 

 

The theory was proposed by the economist Stephen Ross in 1976.

Group of answer choices

 

APT

 

motivation

 

style

 

none of the above

 

 

 

 

 

 

5th Block Assessment

 

 CASE STUDY

 

The Treynor ratio (sometimes called the reward-to-volatility ratio or Treynor measure), named after Jack L. Treynor, is a measurement of the returns earned in excess of that which could have been earned on an investment that has no diversifiable risk (e.g., Treasury bills or a completely diversified portfolio), per each unit of market risk assumed.

The Treynor ratio relates excess return over the risk-free rate to the additional risk taken; however, systematic risk is used instead of total risk. The higher the Treynor ratio, the better the performance of the portfolio under analysis.Like the Sharpe ratio, the Treynor ratio (T) does not quantify the value added, if any, of active portfolio management. It is a ranking criterion only. A ranking of portfolios based on the Treynor Ratio is only useful if the portfolios under consideration are sub-portfolios of a broader, fully diversified portfolio. If this is not the case, portfolios with identical systematic risk, but different total risk, will be rated the same. But the portfolio with a higher total risk is less diversified and therefore has a higher unsystematic risk which is not priced in the market.

An alternative method of ranking portfolio management is Jensen's alpha, which quantifies the added return as the excess return above the security market line in the capital asset pricing model. As these two methods both determine rankings based on systematic risk alone, they will rank portfolios identically.In finance, Jensen's alpha (or Jensen's Performance Index, ex-post alpha) is used to determine the abnormal return of a security or portfolio of securities over the theoretical expected return. It is a version of the standard alpha based on a theoretical performance index instead of a market index.

The security could be any asset, such as stocks, bonds, or derivatives. The theoretical return is predicted by a market model, most commonly the capital asset pricing model (CAPM). The market model uses statistical methods to predict the appropriate risk-adjusted return of an asset. The CAPM for instance uses beta as a multiplier.Jensen's alpha was first used as a measure in the evaluation of mutual fund managers by Michael Jensen in 1968. The CAPM return is supposed to be 'risk adjusted', which means it takes account of the relative riskiness of the asset.

This is based on the concept that riskier assets should have higher expected returns than less risky assets. If an asset's return is even higher than the risk adjusted return, that asset is said to have "positive alpha" or "abnormal returns". Investors are constantly seeking investments that have higher alpha.

Since Eugene Fama, many academics believe financial markets are too efficient to allow for repeatedly earning positive Alpha, unless by chance. Nevertheless, Alpha is still widely used to evaluate mutual fund and portfolio manager performance, often in conjunction with the Sharpe ratio and the Treynor ratio.

 

 

 

1 . ………...is a measurement of the returns earned in excess of that which could have been earned on an investment that has no diversifiable risk

Group of answer choices

 

Treynor ratio

 

leadership

 

motivation

 

all

 

2. The Treynor ratio relates excess return over the ……….

Group of answer choices

 

history

 

product

 

market

 

risk-free rate

 

 

3. The higher the Treynor ratio, the better the performance of the ………... under analysis.

Group of answer choices

 

club

 

seminar

 

hotel

 

portfolio

 

 

4.

Like the ……….. ratio, the Treynor ratio (T) does not quantify the value added, if any, of active portfolio management.

Group of answer choices

 

performance optimization

 

safety engineering

 

testing

 

Sharpe

 

 

5. A ranking of portfolios based on the Treynor Ratio is only useful if the portfolios under consideration are sub-portfolios of a broader, …………... portfolio.

Group of answer choices

 

collective values,

 

beliefs

 

principles of organizational members

 

fully diversified

 

 

……………….is used to determine the abnormal return of a security or portfolio of securities over the theoretical expected return.

Group of answer choices

 

club

 

seminar

 

hotel

 

Jensen alpha

 

The security could be any asset, such as ,…………..

Group of answer choices

 

stock

 

assets

 

derivatives

 

all

 

 

 

The theoretical return is predicted by a market model, most commonly the …………

Group of answer choices

 

capital asset pricing model (CAPM).

 

different

 

unequal

 

relevant

 

The CAPM for instance uses …………. as a multiplier.

Group of answer choices

 

beta

 

leadership

 

motivation

 

all

 

 

 

It is a version of the standard alpha based on a theoretical performance index instead of a market index.

Group of answer choices

 

Jensen alpha

 

leadership

 

motivation

 

all

 

 

 

Full Syllabus Assessment

CASE STUDY

 

Mutual fund executives owe their livelihoods to shareholders, but most treat investors like ordinary customers rather than partners or bosses.

That’s why we get to this time of year and I feel a need to ask fund honchos to give shareholders some meaningful gifts for the holidays. The changes fund firms could make to help shareholders are endless — but I’m not greedy. Every year or two I create a wish list and would gladly settle for just a few upgrades at a time.

Fund companies should fulfill shareholder wishes not because ‘tis the season for it, but because it’s the right thing to do. Regulators know it; in the past, the things I have requested have become reality mostly when some wrongdoing came to light that required a slap on the wrist to the industry. These “reforms” have mostly been about injecting some common sense into the fund-ownership process.Funds provide investment objectives, but that’s a vague statement, more about methods than expectations. Rules prohibit funds from making projections.

But managers and fund directors know the background and they create targets that aren’t shared with the outside world; they understand that they created a fund because they felt they could achieve, say, “above-average results over time horizons of five years and longer.” Fund boards use those kinds of expectations to decide if a manager is doing the job well enough to be rehired, but they also give those managers a lot of slack. Shareholders, however, should be able to see whether the fund is achieving its internal goals. It would let them create clear expectations and measure whether a fund is meeting them.Many times, a fund’s biggest asset to the sponsor is that marketers can sell it, rather than that it can deliver superior performance. In those cases, it’s not in the shareholder’s best interests to keep things going.

Unfortunately, because mediocre funds create something of an annuity for the management company — regularly delivering fees from investors who are inert or simply oblivious to inferior, uninspired results — the fund world is not a meritocracy. Sponsors often keep lousy funds operating for decades.

If a fund doesn’t deserve to survive — if performance is undistinguished and second-rate — kill it off. Merge or liquidate it, but encourage shareholders to find worthwhile investments rather than subjecting them to second-rate, uninspired issues.The Internal Revenue Service does a better job of highlighting changes to tax codes and filing instructions than funds do of notifying shareholders whenever there are changes in the prospectus or operating rules. A simple, highlighted summary of what is new and different this year immediately alerts investors to changes; even if all they do is skim the documents, it enhances their understanding of the fund, and reduces the potential for surprises.

 

 

Mutual fund executives owe their livelihoods to shareholders, but most treat ………... like ordinary customers rather than partners or bosses.

Group of answer choices

 

Henri Fayol

 

Chester Barnard

 

Mary Parker Follet

 

Investors

 

 

 

……... companies should fulfill shareholder wishes

Group of answer choices

 

Fund

 

Henri Fayol

 

Chester Barnard

 

Mary Parker Follet

 

Funds provide ………... objectives, but that’s a vague statement, more about methods than expectations.

Group of answer choices

 

investment

 

culture

 

leadership

 

motivation

 

 

Rules prohibit funds from making ………....

Group of answer choices

 

social relationships

 

job content

 

projections

 

all

 

Shareholders, however, should be able to see whether the ………...is achieving its internal goals.

Group of answer choices

 

Lillian Gilbreth

 

Frank Gilbreth

 

fund

 

none of the above

 

 

 

a fund’s biggest asset to the ………. is that marketers can sell it

Group of answer choices

 

leadership

 

sponsor

 

style

 

none of the above

 

 

mediocre funds create something of an …………. for the management company

Group of answer choices

 

Henri Fayol

 

annuity

 

Chester Barnard

 

Mary Parker Follet

 

 

…………... often keep lousy funds operating for decades.

Group of answer choices

 

leadership

 

Sponsors

 

style

 

none of the above

 

 

Merge or liquidate it, but encourage …….to find worthwhile investments rather than subjecting them to second-rate, uninspired issues.

Group of answer choices

 

shareholders

 

culture

 

leadership

 

motivation

 

 

 

it’s not in the ……….. best interests to keep things going.

Group of answer choices

 

shareholder’s

 

Henri Fayol

 

Chester Barnard

 

Mary Parker Follet

 

 

 

 

1st Block Assessment

 

  CASE STUDY

 

In November 2017, China’s largest online travel agent (OTA), Shanghai-based Ctrip.com International Limited (Ctrip), announced the acquisition of the US-based travel recommendation service, Trip.com (Trip), for an undisclosed sum. This was the latest among several moves by Ctrip that signaled its ambitions to expand beyond Asia. Earlier in 2016, Ctrip bought Skyscanner, a Scotland-based flight Search Company, for about US$1.74 billion, making the travel industry sit up and take notice. The Trip deal was expected to help Skyscanner leverage Trip.com’s capabilities on its own platform. Travis Katz, CEO and founder of Trip, said, “The idea of this deal is for Skyscanner to marry in-destination reviews content in Trip’s arsenal to Skyscanner’s platform. The aspiration is not to only add static details, such as about the opening times of restaurants or museums, but to also enable Skyscanner users to see and eventually add social reviews within Skyscanner’s website and apps,”

 

Founded in June 1999 by James Liang, Neil Shen, Min Fan, and Qi Ji, Ctrip started out as a trip advisor service provider. The company aggregated information on hotels and flights and enabled customers to make informed and cost-effective hotel and flight bookings. Its inception and growth coincided with the travel boom in China and its revenues increased from Renminbi (RMB)6.9 million in 2000 to RMB105.3 million (US$12.7 million) in 2002.

 

Even the outbreak of the Severe Acute Respiratory Syndrome (SARS) in 2003 did not have a significant impact on Ctrip’s business. By October 2003, Ctrip had established room supply relationships with over 1,700 hotels in China and over 450 hotels internationally. It went public in December 2003, with its IPO soaring on the debut day. On Nasdaq, the shares opened at US$24.01, and at one point went up to US$37.35, thereby making Ctrip’s first IPO double its US$18 offer price on day one of trade.

 

COMPETING WITH TECHNOLOGY

 

Ctrip had constantly been acquiring new technologies to serve its customers. Artificial Intelligence, big data, and intelligent hardware employed by Ctrip were crucial in providing a superior travel experience. Jane Sun (Jane), Ctrip’s Chief Executive Officer, said, “For the user interface, we want to make sure that we know every customer who has purchased or searched on the Ctrip website. So when we list our products for them, it’s not millions of items that they have to search through -- the user experience wouldn’t be maximized. Hopefully we can personalize the display. All of that is in our design. When the customer purchases with us, they (may not) know what they want, but we know what would fit them. That’s a way technology will help us” .

 

CTRIP’S STRATEGIC INVESTMENTS AND ACQUISITIONS

 

Ctrip maintained its leading position through a series of strategic investments and acquisitions. From 2013, the company began expanding aggressively expanding internationally. Feifei Xu, Director of Brand Strategy, Labbrand, said, “Their international expansion aims to offer Chinese out-bound travelers or foreign companies in China an extension of their value-chain platform of tourism. By international expansion, they are mostly targeting outbound Chinese travelers.” In 2013, Ctrip invested in travel search engine Kuxun, hotel app Economy Hotel Manager, social trip sharing platform Chanyouji, and car rental services Yongche and eHi Car Services

 

CHALLENGES AND OPPORTUNITIES

 

The acquisition of Skyscanner, while contributing substantially to Ctrip’s growth, intensified both domestic and international competition. To compete effectively with Ctrip, other OTAs in China made attempts to attract large investments. Meituan Dianping raised US$4 billion in a funding round led by Tencent Holdings . Interestingly, Priceline, which was Ctrip’s largest shareholder, also participated in the funding round. Agoda.com, owned by the Priceline Group, established a strategic partnership with Meituan Dianping. This strategy of Priceline investing in Ctrip’s domestic competition indicated that it perhaps saw Ctrip as a potential threat and thus made an investment in Meituan Dianping that could lead to hedging its bets against Ctrip. However, analysts felt that Ctrip was strong enough to take a further share of the Chinese OTA market and its long-term growth prospects in China remained strong.

 

Adding Skyscanner’s revenue to Ctrip’s total boosted Ctrip’s Q3 2017 transportation-ticketing revenue by 41 percent to US$515 million. Cindy Wang, Chief Financial Officer, Ctrip, said, “The total number of transactions made by direct booking increased almost three-fold since May (2017), the month we launched the engine on Skyscanner, through September.”

 

 

 

 

1. For expansion of C Trip International Ltd. , what strategy was adopted ?

Acquisition of US based Trip .com

Selling of Trip .com

Becoming a Parter of Trip.com

None of the options

 

 

2. To enable customers to make informed and cost-effective hotel and flight bookings , The company aggregated information on ?

On hotels and flights

on budget hotels

on international flights

both a & b

 

3. Ctrip had continously been acquiring new _____ to serve its customers?

Customers

Technology

Offers

None of the options.

 

4. what technological tools were employed by Ctrip in providing a superior travel experience ?

Artificial Intelligence, big data, and intelligent hardware

Excellent Software

Market Research

Both B&C

 

5. Co. adopted a strategy of using technological tools and make customer purchase easier by?

Knowing what would fit customers , as customers (may not) know what they want

Giving promotional offers

Giving discounts, customers always know what they want

None of the options

 

6. Ctrip maintained its leading position through ?

series of strategic investments only

a series of strategic investments and acquisitions

Focussing on Industry Competition

Focussing on Attracting maximum customers

 

7. Investment strategy adopted by Ctrip was into field of?

Car rentals , Hotel Apps & travel search engines

Car rentals only

hotel app Economy Hotel Manager only

Both B & C

 

8. The strategy adopted for acquisition of Skyscanner, by Ctrip  helped in?

growth of international market

Growth in Foreign Lands

growth of both domestic and international markets

growth of domestic market

 

9. Main investment strategies adopted by the Companies in this case study were related to ?

Selling of a Product Line

Competitor analysis

Scanning Environment

Acquisitions

 

10. ______ has played a major role in this case study , and for capturing a wide market share by the company ?

Technology

Competitors

International Markets

Both B& C

 

2nd Block Assessment

 

 CASE STUDY

 

Navroze Godrej (Navroze), the young executive director for Strategy and Innovation at Godrej and Boyce, the holding company of the India-based Godrej Group, is a fourth generation scion of the Godrej family. Keen on bringing about a major change in his company’s design thinking, he set himself the goal of changing the Godrej Group’s old-world, engineering driven mindset into a forward looking design driven mindset. He aimed to shape the Godrej Group into a company that inculcated a culture of open collaboration between different work groups and businesses. As part of his efforts to fulfill this aim, he created a suitable ambience and office infrastructure to break down the organizational hierarchies. He also started the Godrej Design Lab to encourage young designers to showcase their work. The selected designers were mentored and their designs displayed at national level exhibitions. The case discusses whether the initiatives taken by Navroze to bring about organizational transformation to make the Godrej Group design, innovation, and consumer focused can succeed. The case gives enough scope to analyze whether the influx of young talent is capable of bringing in novel ideas to shape the company’s future.

 

In 2005, Navroze Godrej (Navroze) was inducted as a management trainee into Godrej & Boyce (G&B), the holding company of the Godrej Group. Navroze, a fourth generation-scion of the Godrej family which owned the Godrej Group, was all of 23 years old when he joined Godrej. He was quite different from the previous generations of the family in terms of being more agile and wanting to bring in change within the company. When Navroze was in his early twenties, he met Professor Hemmant Jha, (Jha) of the Institute of Design, Chicago, US. It turned out to be a momentous meeting and was a turning point for Navroze as it kindled in him a love for design, which soon turned into a lasting passion. Navroze was so impressed after chatting with Jha that he persuaded the professor to join G&B. Analysts said this was a smart move by Navroze – one that drove G&B toward innovation. After hiring Jha, Navroze and his team at G&B brought out novel designs and innovations which were patented under Godrej.

Godrej, one of the largest Indian privately-held diversified industrial companies, was founded by Ardeshir Godrej (Ardeshir) in 1897. Ardeshir, a lawyer by profession, gave up his career in law to pursue his passion for making high quality locks and safes. The business was expanded further by Ardeshir’s youngest brother, Pirojsha Godrej (Pirojsha), who joined the company in 1906. In 1909, Godrej secured its first patent for spring-less locks which Ardeshir sold under the Anchor brand. During the 1920s, Ardeshir manufactured the first of Godrej’s sturdy steel cupboards branded as ‘Storwel,’ that became a trend in Indian homes. Ardeshir launched a washing soap as well and the world’s first vegetable oil based toilet soap. The toilet soap was considered to be the best in its time, as it revolutionized the manufacturing process. Up till then, soaps were made from animal fat. Godrej earned a name for itself with the superior quality of locks and soaps it sold. In 1952, Godrej bagged a contract to manufacture ballot boxes for India’s first general elections. Every day, 15,000 ballot boxes were made at its Vikhroli factory in Mumbai, to supply the target of 1.2 million boxes.

In 2013, after Navroze graduated with a Master’s in design, he returned to join G&B and spearheaded a pilot project on a disruptive business model. One of the things he changed was the layout of the (office) shop-floor. Unlike the previous directors who worked from their closed office space, he preferred to sit with his project teams around a big table and discuss matters with them. The new furniture layout was intended to support both individual and group work. Navroze felt traditional desk arrangements created a barrier and prevented openness and collaboration.

GODREJ INNOVATION CENTER

In 2013, Navroze took the bold move of setting up a 25,000 square foot ‘Innovation Center’ in Vikhroli, Mumbai. This was a research and development center to conduct explorative study in areas involving security, lifestyle, well-being, energy, productivity, and connectivity. The innovation center had a fixed 20-member full-time team, while at any given time there were at least a 100 other employees who belonged to other departments deputed to accomplish time-bound projects. As Navroze believed in diversity, the members in the teams came from different backgrounds such as, design, marketing, research, business, engineering, and others. The center had enough space for meetings and lectures, and the furniture was such that it could be reorganized for display of prototype product designs, a collection of material types, and for any other informal interaction as well.

SPRINT PROGRAM

Navroze led the Sprint program that caused a cultural transformation in the company. He facilitated a bottom-up approach, where he invited all the employees of Godrej to submit ideas at the innovation center. Based on their ideas, Navroze set up work groups. For the first time, people with 20 years of experience and those who had joined just six months earlier began working together. The groups came up with ideas that ranged from cooking appliances to recycling of waste, to looking at resources and services for transit population.

GODREJ DESIGNLAB

In 2013, Navroze set up the Godrej DesignLab, (GDL), which was established in collaboration with a Mumbai-based design studio, Elle Décor. GDL was a platform for designers to co-create, experiment, innovate, and challenge the boundaries of product design. GDL aimed at providing a holistic support system to designers who could give a whole new level of futuristic designs. GDL was a forum where designers could submit their work in four categories of furniture, furnishings, lighting and home décor, & accessories.

THE HUBBLE

In April 2014, Navroze spearheaded the development of a second innovation center, the Hubble. It was conceived to serve as a hub where people could interact informally to encourage the culture of creative thinking. The Hubble was built on a spacious 25,000 square foot space in the Vikhroli office itself, to function as an eat, work, and play space with a coffee-shop-kind-of-atmosphere. It encouraged both private and collaborative work among the employees.

REINFORCING THE DESIGN TRADITION

The Chief Design Officer, of GPL, Anubhav Gupta (Gupta), said that though there was no vertical on design in the Godrej group of companies, design was considered a business horizontal as it had become omnipresent in all aspects of the Godrej Group. He said innovation at GPL was not about playing it safe but it required an ability to tolerate failure before earning superlative success. Innovation, according to Gupta, was finding the best possible or the most optimal design.

 

 

1. A smart strategy adopted by Navroz in the starting phase ,after getting impressed with professor Jha was ?

Strategy related to innovation

strategy related to acquisitions

Strategy related to controlling systems

strategy related to diversifications

 

2. The first patent secured by godrej , was related to which product?

spring-less locks

Almirah’s

Safe’s

Refregirator’s

 

3. The strategy adopted by godrej in respect of innovation , was done in respect of ?

achieving greater market share

to attract more & more customers

Both A& B

None of the options

 

4. Godrej revolutionised the manufacturing process, and created world’s first _______?

Animal fat based toilet soap

vegetable oil based toilet soap

Herbal Soaps

All

 

5. It was felt that old structure of traditional desk arrangements created _______?

efficient working environment

Prevented positive work culture

Barrier ,prevented openness and collaboration

All

 

6. On what kind of activities godrej majorly focussed in the innovation centre ?

Research & Development

cost cutting strategies

strategies to attrat customers

None of the options

 

7. Godrej earned a name for itself in the starting phase for which of the following products ?

Refrigerators

superior quality of locks and soaps

Soaps Only

Electronic Appliances

 

8. People/ employees in Godrej were allowed to interact informally which lead to encouragement of ___?

the culture of creative thinking

collaborative work among the employees

Both A & B

None of the options

 

9. In order to breakdown the organisational hierarchies , what basic strategy was adopted ?

Creation of a suitable ambience and office infrastructure

Creation of a friendly environment

Creating a competitive Environment

Both b & C

 

 

10. for India’s first general elections , what kind of contract was bagged by Godrej ?

to manufacture Lockers

to manufacture Soaps

to manufacture both ballot boxes & soaps

to manufacture ballot boxes

 

 

3rd Block Assessment

 

CASE STUDY

 

This case discusses about the acquisition of Florida-based Elizabeth Arden Inc, (Arden), a cosmetics, skin care, and fragrance major by Revlon Inc. (Revlon) another cosmetic giant. Post-merger, Revlon reported a 21.9% increase in its net sales in 2016. The case highlights the journey of both the businesses and also the tough time they faced prior to the merger. While Revlon had been weighed down by its debt, the sales of celebrity fragrances, a key part of Arden's portfolio, had declined. Arden's losses and increasing debt load left the company with few options to survive as a stand-alone business. Revlon pursued the deal largely in order to achieve scale.

 

Revlon bought Arden in a $870 mn deal in June 2016. The merger brought together the two cosmetics majors amidst hopes that a combined distribution network and marketing strategy could broaden their appeal. The industry showed a mixed response to the union. While some experts felt the synergy was not very realistic few other opined that it would revive the fortunes of Arden.

 

The case also discusses Revlon’s plans of restructuring the business. It headed towards shifting to a brand-centric structure aimed at identifying investment areas quicker and reacting faster to consumer needs in the domestic and international markets.

 

In March 2017, New York-based cosmetics, skin care, fragrance, and personal care company Revlon Inc, (Revlon) reported its net sales rose to $2.3 billion in 2016, a 21.9 percent increase compared to 2015. Revlon witnessed growth across all segments. This growth in sales came amidst Revlon’s plans to shift to a brand-centric structure after initiating a restructuring plan in 2016. The restructuring followed Revlon’s acquisition of Elizabeth Arden Inc, (Arden), a Florida-based, cosmetics, skin care, and fragrance major, for $ 870 million. The merged company was expected to leverage the strength of its brands and adapt to the changing behaviors and preferences of consumers to serve them better. In addition to expanding categories, channels, and geographies, Revlon expected to hit $5 billion in sales in the next five years. As part of the integration, it announced the elimination of 350 positions worldwide and streamlining of certain operations. In addition, project integration-related restructuring activities were estimated to cost between $65 million and $75 million by 2020.

THE JOURNEY OF ELIZABETH ARDEN

Born as Florence Nightingale Graham (Graham) in 1878 in Ontario, (Canada), Graham was the youngest of five children in a poverty stricken family. She dropped out of school due to a lack of finances and began training as a nurse. During nursing training she met a chemist experimenting with a facial cream that could help acne sufferers. The idea fascinated her, leading to her believing that most women would give anything for beauty. Graham took up a number of odd jobs that gave her an opportunity to display her salesmanship. While working briefly as a bookkeeper for the E R Squibb Pharmaceuticals Company in 1908, she spent hours in their lab learning about skincare. This further inspired her to fashion a small lab for beauty products of her own. To pursue her dream, she quit her job at Squibb and joined as an assistant in a newly established beauty parlor. Graham later worked for beautician Eleanor Adair as a “treatment girl” and gained valuable industry experience. In 1910, Graham borrowed money from her brother William and started ‘Red Door Salon’ with a partner, Elizabeth Hubbard . The first shop was opened on Fifth Avenue. The partnership soon dissolved and Graham became the sole proprietress. She decided to name her salon ‘Elizabeth Arden’. The name was derived from her former partner’s name and from Alfred, Lord Tennyson's poem ‘Enoch Arden’. The new name raised the prestige and glamor of not only the business but Graham as well. Thus, Graham changed her name to Elizabeth Arden (Arden) in 1915.

THE JOURNEY OF REVLON

The history of Revlon Inc, one of the world's leading cosmetics companies based in New York, can be traced back to 1932. Two brothers, Joseph Revson and Charles Revson, conceived of the idea of creating a nail enamel using pigments instead of the normal dyes. They collaborated with a local chemist named Charles Lachman (who contributed the ‘L’ to the Revlon name), to come up with their first product. Revlon developed a variety of new shades of nail polish. Seeing the booming beauty salons and the growing popularity of manicures they targeted beauty salons as a market to sell their nail polishes.

Arden was known for its fragrances including those licensed from celebrities like Marilyn Monroe, Catherine Zeta-Jones, Britney Spears, Justin Bieber, Taylor Swift, and many more. However, in 2014, the company posted the biggest ever quarterly loss in its history, a 28 per cent drop in revenue. The company was hit hard mainly because of a fall in the sales of its celebrity perfumes. The company statement said, “While the company had expected weaker sales comparisons due to the lower level of fragrance launch activity in fiscal 2014 versus fiscal 2013, the decline in sales of celebrity fragrances, particularly the Justin Bieber and Taylor Swift fragrances.

In June 2016, mired in financial woes, Revlon decided to pick up Arden. The company agreed to buy Arden in an $870 million deal. The wager was expected to create a beauty business with annual sales of $3 billion along with creating a platform in categories like mass, prestige, professional, color cosmetics, skin care, and fragrances. In addition to greater purchasing power, the merged entity was expected to benefit from cost savings of nearly $140 million by eliminating overlaps, integrated manufacturing, and distribution networks of both companies. Garcia said, “We see great opportunities for growth where they are strong and we are not.”

Some analysts expected a negative outcome from the union. They felt that Revlon was buying a troubled competitor with an elevated debt load. Although Revlon pointed to the expected synergies, experts found this unrealistic and opined that it could possibly result in higher leverage ratios. Wendy Liebmann, CEO of WSL Strategic Retail, stated, “There’s so little other business synergy. Arden is a fragrance and skin care house. Revlon is a color cosmetics and hair-color business. Different price points and distribution.

The deal not only marked a turnabout for investors, it also put an end to speculations that Revlon would be an acquisition target – rather than a buyer. Before the acquisition was announced, Arden's market capitalization was $280 million. Shares had fallen 40 percent off their 52-week high. But as soon as the news of the acquisition came in, Arden’s shares soared by as much as 50 per cent and closed at $14; Revlon rose about 6.6 percent to close at $33.25.

In January 2017, Revlon decided to divide and organize the business into four categories: the Revlon brand, Elizabeth Arden, fragrances and portfolio brands, (which included Almay, Mitchum, Gatineau, Sinful Colors and Pure Ice cosmetics. Each Revlon team was required to prepare a three-year growth plan and set priorities and strategies for their labels. The core corporate functions including finance, human resources, supply chain, research and development, legal, communications, and corporate social responsibility departments were to be reorganized to provide better support to the new brand-centric and regional structures.

 

 

 

1. In this case study, What strategy was adopted by Revlon for the purpose of Growth in the Market ?

Acquisition as growth strategy

Industry Analysis as growth Strategy

Leadership strategy

Competitor analysis strategy

 

2. This case study is about which two major companies ?

Revlon International & Mac

Maybelline & MAC

Elizabeth Arden Inc & Revlon Inc

Mayabelline & Revlon

 

3. In order to serve the customers better ,what strategy was adopted by Revlon ?

adapt to the changing behaviors & preferences of consumers

adapt to the changing Market conditions

adapt to the changing Political environment

adapt to the latest Technology

 

 

4. The case study discusses Revlon’s plans of____?

Restructuring the business

Closing the business

Both A& B

None of the options

 

5. This case study , highlights __?

the better condition of Elizabeth Arden Inc prior its acquisition

the journey of both the businesses and also the tough time they faced prior to the merger

the downfall of Revlon Inc . before the acquisition

None of the options

 

6. Revlon headed towards shifting to a brand-centric structure aimed at identifying investment areas quicker and reacting faster to _____?

consumer needs in the domestic and international markets

consumer needs in the domestic market only

consumer needs in the international markets

None of the options

 

7. As per this case study , Initially Arden was known for ?

Nail enamel

Face Creams

fragrances

Both A & B

 

8. Revlon decided to adopt restructural strategies - to divide and organize the business into categories, what were these categories ?

the Revlon brand

Elizabeth Arden brand

fragrances and portfolio brands

All of the options

 

9. In this case study , each Revlon team was required to prepare a _____ growth plan and set priorities and strategies for their labels?

three-year

Five Year

Ten years

seven Years

 

10. Main Motive behind the acquisition& merger strategy adopted in this case study was related to ?

Increasing the sales

attracting More & More customers

Capturing Major Market Share

All of the Options

 

 

 

4th Block Assessment

 

CASE STUDY

 

When a new technology comes along that is capable of improving dramatically the products of a whole industry, every firm in that industry has vital strategic decisions to make. It must ask itself:

• How far and how quickly should we amend or abandon our present products?
• How far and how quickly should we embrace the new technology?
• Are we big enough and capable enough to accomplish all the

essential changes on our own?

• How can we come out of this time of change stronger than we went in?

Once taken, these key decisions have to be implemented.

Technological change > Strategic decisions > Strategic Implementation

All this makes for exciting times within the industry, for producers and also for consumers, who also have some adjusting to do.

Imaging is one of the world’s growth markets and new technology is making its mark; imaging has ‘gone digital’. It is not a complete transformation. Analogue imaging has not been abandoned and still has millions of satisfied consumers. However, the industry will move on. This is because the new technology:

• is genuinely innovative
• has undeniable advantages in some key aspects
• has been shown to work
• is proving reliable
• is capable of further development
• will become cheaper in the long run.

The pace of change is accelerating. Abandoning former practices and establishing new ways of working is generating not only excitement, but also stresses and tensions. The new technology requires new skills, new attitudes and new approaches from both producers and consumers.

This case study looks at how AGFA, a leading player, is taking full advantage of the digital revolution. The company is using the new technology as:

• an engine for growing its business
• a means of providing its customers with better product possibilities and with greater flexibility and choice.

Agfa

Agfa is a leading name in the imaging industry. The Agfa-Gevaert Group de-velops, produces and distributes an extensive range of analogue and digital imaging systems. Agfa has divided its operations into three segments.

Segment: Consumer imaging.    

Activity/Products: Wide range of products using both digital and analogue technologies for taking, processing and manipulating photographs.

Segment: Graphic systems.    

Activity/Products: A wide range of electronic and photographic systems for the graphics industry, including workflow management systems, scanners and laser image setters.

Segment: Technical imaging.

Activity/Products: Medical uses eg X-ray equipment; non-destructive fault-testing eg in aircraft and pipelines; industrial imaging for motion pictures; document management systems and micrographics.

Agfa’s operations involve a high level of innovation. The company’s willingness and ability to work at the leading edge of technology help to make it a leader in its field.

 

For Agfa to remain a market leader, its managers must concern themselves with the future and ask themselves:

• Where is the industry heading?
• What are our competitors likely to do next?
• Where do we go from here?

With imaging, the answers currently are:

• The industry is heading towards greater use of digital imaging.
• Our competitors will invest in research and development aimed at enhancing quality at affordable prices.
• We look to get there first, with better products to sell to customers who are prepared for using them.

This approach requires a willingness to invest heavily in new projects that maximise the benefits of new technology.

- Every proposed project undergoes investment appraisal. This procedure establishes whether a particular project is worth taking forward. Managers will ask key questions about a proposal, including:

• How expensive are the initial outlay and the final total outlay likely to be?
• For how long are we likely to be spending money without any financial return?
• How long is it likely to be before we recover, from sales, all the money we have invested?
• What return can we reasonably expect from our investment in the long term?
• How big are the risks? What events over which we have little or no control could cause this project to falter or fail? How likely are they?

Risks for the imaging industry include:

• a significant rise in the cost of borrowing to finance investment
• a downturn in business activity worldwide that persuades industrial customers to postpone their own purchase of new plant and equipment
• poorer job prospects for the general public that deter private consumers from spending on the latest products.

Agfa must consider these factors as it contemplates large scale investment in new digitally based technologies.

During 2000 Agfa invested around 224 million Euros (equivalent to 4% of its sales revenue) in research and development. Part of this involved working with external partners eg universities and leading research centres. Much of the work reflected the need to move forward in:

• developing the transition from analogue to digital solutions
• meeting a wider variety of customer needs
• helping Agfa to create new market sectors and to enter them profitably.

Digital technologies are changing the way in which people take, process and use images. New processes allow customers to work with images quickly and efficiently, without requiring extensive expertise and knowledge. Take, for example, the newspaper world. With newspapers, speed is vital and editors want the best pictures to go with the latest stories.

• Digital technology is transforming newspaper production. For example, sports photographers no longer have to dash back to the office to develop prints, wondering anxiously what they have captured. They know immediately the quality of the image they have and they can despatch it immediately too. As a result, the publisher soon has on sale a comprehensive local Saturday night ‘sports special’ carrying action photos of spectacular moments that occurred hundreds of miles away just a short time earlier.
• The new technology is also transforming photography for the general public. For example, crystal clear photos of a baby can now be available to proud, anxious grandparents thousands of miles away within a few minutes of an infant’s birth.
• Technological advance does have a downside, in that demand for new products affects sales of older ones. As a market, analogue photography has almost reached maturity. It is still

significant in size with almost 70% of the market. However, with plenty of scope for further product developments and for repeat business. The growth of digital technology has not deterred Agfa and its competitors from bringing out new, improved products for use with ‘old’ technology.

• The real difference between analogue and digital lies in how images are recorded and processed. Analogue photography uses traditional cameras to expose silver-halide film. This still remains the most widely used way to capture images. Customers are well served with a variety of excellent products, from traditional slide and print films to Advanced Photo Systems (APS) films and single-use cameras with enhanced capability.
• Compared with digital systems, recent analogue advances are ‘low tech’, but so too is their cost. Image quality is excellent, and represents optimum value. The technology can also be applied widely; even single-use cameras take good pictures. However, analogue images cannot be viewed instantly, take time to enlarge or reduce and are on prints or negatives that cannot be re-used. Negatives need optimum storage conditions to remain in good condition long term. The chemicals used in processing also raise some environmental issues. Digital technology represents a genuine advance because it removes many of these difficulties.
• Digital images
• Digital images are based upon a grid or matrix. They vary in the quality of their resolution, which is expressed in pixels or dots per inch (dpi) or millimetre. The higher the resolution, the better the picture, and the more expensive the equipment producing it.
• There is a wide range of affordable digital cameras on the market now, offering varying levels of quality, capabilities and prices. There are also thousands of commercially available CD-ROMs offering images, graphics and more, all at different quality, sophistication and price levels. Consumers can also turn to the Internet, where millions of images are available for downloading to a PC.
• Digital offers some real advantages. Images are held in a digital file and are available for use immediately. They can be transferred immediately from camera to PC, where they can be compressed, amended, altered and despatched using e-mail, fast ISDN lines and the internet. They can be downloaded and printed or transferred to CDs using recently developed copying equipment that retains image quality at a high level.
• Consumers can take CDs to an Agfa Image Center where the quality, format and resolution can be chosen. Digital images have transformed access, ease of use and transmission of images to provide a flexible series of solutions for customer needs. With instantaneous image capture, digital images require only minimal storage facilities. Images can also be manipulated and altered and only the chosen images need to be put into print format.
• However, at the present stage of development, really high quality digitally produced images do not come cheap; the equipment required is expensive. Professional users face high set-up costs, but in industries where speed, quality, and flexibility in use really matter, the price is worth paying. Imaging is an industry where copyright is jealously guarded, and ease of transfer brings with it problems of security and copyright protection. Digital files can also be lost or become corrupted, so some form of back-up is vital. Agfa is aware of these additional consumer and business needs and continues to work on ways of meeting them.
• The imaging industry now has two main product markets: analogue and digital. Each product has strengths and weaknesses, the importance of which varies according to customer needs and requirements.
• There remains a need for both analogue and digital imaging, depending upon the requirements of client groups. For example, during construction, gas and oil pipelines need their joints X-rayed with periodical follow-up checks so that cracks and defects can be detected. This is a job for tried and tested analogue systems.

 

On the other hand, digital technologies have helped to transform the work of hospital radiologists. For example, a software package developed by Agfa called MUSICA (Multiscale Image Contrast Amplification) enables radiologists to manipulate X-ray images in various ways. Edges can be sharpened up to reveal key details, and images can be rotated to offer alternative perspectives. Users can zoom in on details, and select and sort images in a search for recurring patterns. Images can be shared across a number of hospital workstations and can also be transmitted for immediate expert analysis elsewhere.

The best investment programmes are supported by painstaking research: market research into what consumers require and product research to establish what the new technology can and cannot do for them. Agfa is at the heart of changes in imaging brought about by new technology. It is leading. It is also listening and learning. In a highly competitive industry, Agfa’s thorough approach is enabling it to retain important competitive advantages over its closest and fiercest rivals.

 

1. Some of the Vital strategic decisions in respect of new technology can be ?

How far and how quickly should we embrace the new technology

"Are we big enough and capable enough to accomplish all the essential changes on our own "

How far and how quickly should we amend or abandon our present products

All

 

 

2. Techonological Factors are related to which type of Environment ?

External Environment

Internal Environment

Competitive Environment

Structural environment

 

3. The product market related to Imaging industry is/ are ?

analogue only

Analogue and digital

digital only

none of the options

 

 

4. What is /are the reason/s , that the company adopts to new technology ?

Is innovative

Is reliable

good scope in long run

All

 

5. The downside of Technological advancement can be ___?

New technology becomes immediately popular

sale of older technology is not at all affected

sale of older technology is affected

All of the above

 

6. In the context of this case study , Adoption of New technology requires investment . is the statement true ?

Yes, Investment is required

Investment is not at all required

Both A & B

None of the options

 

7. Market Research for the Investment Purposes in context of the consumers is related to ?

Identification of their needs or wants

identification of Competitors

Both A& B

None of the Options

 

8. In a competitive industry , Agfa’s main approach is to gain ____________ over its competitors ?

technological Advantage

Competitive advantage

Economic Advantage

None of the Options

 

9. Advantages of using Digital Images according to this case study are ?

available for use immediately

can be transferred immediately from camera to other devices

can be downloaded and printed or transferred to CDs

ALL

 

10. As per this case study , the Organisational Structure Adopted by Afga is ?

Divisional Structure

Bureaurocratic structure

Line structure

Line & Staff Structure

 

90/100

 

5th Block Assessment

CASE STUDY

 

This case discusses how Beijing-based multinational technology giant, Lenovo Group Limited (Lenovo), emerged as a global brand from China. After becoming a market leader in the Chinese PC market, several international acquisitions helped the company establish a presence in global markets. The company’s 2005 acquisition of the PC division of US-based multinational technology giant International Business Machine (IBM) gave the Lenovo brand global recognition. Lenovo’s 2011 acquisition of German electronics manufacturer, Medion, in 2011 and a joint PC venture with Japanese multinational technology company NEC Corporation helped the company transform from a small Chinese electronics company into the world’s largest PC maker by shipping over 53 million units in 2013.

 

After some initial success with its ‘Protect and Attack’ strategy, Lenovo started to face reverses. In 2017, it lost its PC crown i.e. market leadership in the global personal computers (PCs) market, to its arch rival Hewlett-Packard (HP). Lenovo also found the going tough in the smartphone business that it entered in 2010 as part of its ‘PC Plus strategy’. Lenovo’s gamble of acquiring Motorola Mobility from Google failed to pay off, according to some analysts. By the end of 2015, Lenovo’s fortunes in the mobile market had dipped dramatically. It slipped to eighth position in China’s smartphone market as new and nimbler Chinese competitors such as Huawei, Xiaomi, Oppo, and Vivo continued to grow rapidly. Critics stated that Lenovo lacked innovation at a time when its rivals were upping their game in both the PC and smartphone markets. The challenge before Yang Yuanqing (Yang), CEO of Lenovo, was how to orchestrate a turnaround in the fortunes of the company and restore it to its past glory.

 

In August 2017, Beijing-based multinational technology giant, Lenovo Group Limited (Lenovo), reported a quarterly loss of US$ 72 million for the quarter ended June 30, 2017. It had made a profit of US$ 173 million for the same quarter of 2016. Lenovo also lost its market leadership in the global personal computers (PCs) market to its arch rival Hewlett-Packard (HP). HP led the global PC market with a 22.8% market share for the second quarter of 2017 while Lenovo stood second with a market share of 21.6%, according to International Data Corporation (IDC). Analysts attributed Lenovo’s troubles to the maturing PC market where demand was falling with consumers shifting to smart phones and tablets for daily activities including surfing the Internet. Critics opined that Lenovo’s products, be it PCs or smart phones, lacked innovation while HP had taken over the PC crown by launching a series of cool products targeted at gamers. In the smart phone market too, analysts felt that Lenovo had failed to read the market signals, while its competitors such as Huawei Technologies Co. Ltd. (Huawei), Xiaomi Inc. (Xiaomi), Oppo Electronics Corp. (Oppo), and Vivo Electronic Corp. (Vivo) were rolling out stylish and inexpensive smart phones and gaining market share in China.

The history of Lenovo dates back to 1984 when it was started as New Technology Developer Inc., the predecessor of the Legend Group Ltd. (Legend), by Founder and Chairman, Liu Chuanzhi (Liu), along with ten colleagues at the government-owned Computing Institute of the Chinese Academy of Sciences (CAS) with US$ 25,000. The company was started with the aim of commercializing the research and development (R&D) activities conducted at CAS. In 1985, as its first business deal, the company took over the responsibility of receiving, checking, and maintaining IBM computers imported by CAS and of training CAS staff.

 

The company invested the profits of US$ 146,583 it had received from servicing IBM computers in the design, production, and marketing of its first product – the Chinese character card – HanCard. The Chinese character card, which translated English operating software into Chinese characteristics, was based on the original concept developed by the Institute of Computer Technology (ICT) of CAS. At that time, foreign vendors were not able to come out with such an operating system for PCs in China. The successful launch of the Chinese card boosted Lenovo’s growth in the early 1990s.

In the 1990s, Lenovo was the first company to introduce the home computer concept in China and it grew into a national company cornering a market share of 27% in the domestic market. Lenovo’s competency was its deep understanding of the domestic market and its quick response to the demands of local consumers. The success of Lenovo and other domestic computer makers in China confounded the predictions made by several market analysts. According to Business Week , “It wasn’t supposed to happen this way. A few years ago, most analysts were convinced that the global players would gobble up the Chinese market, with locals like Lenovo stuck in second tier status – at best.”

 

Lenovo believed that to become a global brand, it was not enough just to be identified as a global firm. Establishing a presence in more developed and highly globalized markets such as the US and Europe was essential for its overall strategy. By 2001, though Lenovo’s market share had reached 30% in China, it realized that it would not be able to grow much more given the stiff competition in the country. In addition to this, the domestic market for home PCs was shifting toward laptops rather than desktop PCs. This posed a challenge to Lenovo despite its recording profits of US$ 130 million for the FY 2002-2003, as laptops were not just costly to manufacture but also involved tough competition from rivals such as Dell and HP. In a bid to combat these challenges the company decided to step into international markets.

 

The global economic slowdown in mid-2008 led to Lenovo posting a loss of US$ 226 million. During this time, the company’s CEO William Amelio stepped down in favor of Yang, while Liu returned to assume the role of Chairman.

Lenovo’s Protect and Attack strategy helped the company taste success in China as well as in other global markets. For the FY ended 2013, the company also emerged as the number one PC company in global emerging markets, as well as three of the seven largest PC markets in the world – China, Japan, and Germany. For the quarter ended June 30, 2013, Lenovo’s smartphone business.

With the acquisition of Motorola, Lenovo had ambitious plans to capture a portion of the pie in the global smartphone market. However, the company’s fortunes declined when its smartphone shipments decreased by 53% in China with Lenovo maintaining a meager 3% market share for the Q4 of 2015, according to Canalys. In the global market for smartphones, the company stood at fifth position with a market share of 5.7%.

In a bid to arrest the decline in sales in its smart phone market, Lenovo planned to focus on its Moto brand. According to Yang, “Singular branding will benefit the business.” Stating that the new strategy might not bring in much success to Lenovo, Steven Tseng, an analyst at Daiwa Capital Markets, said, “Customers are also really confused by the company’s strategy.”

Despite the challenging outlook in the global smartphone market, Yang remained optimistic about turning around Lenovo’s struggling mobile business. He stated that there was a US$ 110 million sequential improvement in operational pretax income, attributable to improvements in the mobile and data center businesses in the quarter ended June 30, 2017. Yang added, “Not only did this gave me more confidence we will turn around our mobile business in the second half of FY2018, I think the entire Lenovo is entering a new phase of growth.” .

 

 

1. As per this Case Study, Strategy adopted by Lenovo ,after some initial success was ?

Protect Strategy

Protect and Attack strategy

Merger Strategy

None of the Options

 

2. According to this case Study , Lenovo lost its market Leadership in 2017, to which of its Rivals ?

Apple

Samsung

Hewlett-Packard (HP)

Sony

 

3. Lenovo lacked ____ , when its rivals were upping their game in both the PC and smart phone markets.?

Innovation

strategic Decisions

Acquisition Strategy

Both B& C

 

4. What strategy was adopted by Lenovo , that contributed to its success in the global PC market ?

Retrenchment Strategy

Internal Restructuring Strategy

Internationalization Strategy

Functional Level Strategy

 

5. what strategical change/s in respect of the products,  was/were adopted by the Lenonovo’s competitors to attract the customers ?

Group of answer choices

Making product more stylish

attractive pricing strategies

Both A& B

Only B

 

6. As per this Case study, The main Objective of the company Lenovo as New Technology Developer Inc. in the start was ?

Commercialization Of Research & Development activities

To beat the competitors

Both A& B

None of the Options

 

7. In the starting Phase of the company, What was Lenovo’s Competency ?

deep understanding of the domestic market

quick response to the demands of local consumers

Both A& B

Only B

 

8. According to Lenovo to become a global brand - Apart from being identified as a global firm , what other strategy was also required ?

Establishing a presence in more developed and highly globalized markets

Improvement in Client servicing

adherence to International Standards

Both B& C

 

9. What challenge Lenovo had to face , despite of its recording profits ?

Shifting of Domestic Market from Home PC’s to Laptop’s

Shifting of Domestic Market from Laptops to Home PC’s

Shifting of Market Demand to Other Electronic Items

None of the Options

 

10. In a bid to arrest the decline in sales in its smart phone market, Lenovo planned to focus on which brand ?

Samsung Brand

VIVO Brand

Sony brand

Moto brand

 

 

Full Syllabus Assessment

 

 

CASE STUDY

 

Aggregate minerals are an important resource and their use is essential to national prosperity. They are vital for building new or improved housing, hospitals, schools, factories, roads and leisure facilities. Everything from a garden path to the Channel Tunnel. The processing of aggregates also provides materials for a whole range of non-construction uses: in agriculture, water purification, medicines, paint, toiletries, paper, plastics and steel making. Mineral working can have a significant effect on the landscape and on the living conditions of the people. It is essential that the industry operates to high environmental standards and manages its operations in a manner which minimises their impact on the environment. Business managers have to take these matters seriously as public awareness and concern has significantly increased over the last decade.

Companies are judged on the achievement of their “traditional” business objectives, such as return on investment, growth, market share etc. and now on their environmental performance and this is often looked for in specific statements, objectives and strategies set by a company. It is not only environmental campaigning groups or concerned consumers who realise the importance of the environment. Research has shown that three-quarters of managers feel that more emphasis should be placed on these issues. Where does this attitude spring from? There are a number of important influences and these include UK and EU environmental legislation, public opinion, pressure groups, influence of employees’ families and friends, the company’s own sense of social responsibility and, last but not least, market pressure from customers and end-users. These pressures are expected to grow, so a well managed company should prepare itself to respond to the concerns and take appropriate action.

The RMC Group has become the world’s largest producer of ready mixed concrete, also diversifying into a number of other construction material sectors. It employs the principle of vertical integration to secure raw materials - sand, gravel and crushed rock - required to sustain the production of ready mixed concrete and other added value finish

 

 

1st Block Assessment

 

CASE STUDY

Financial system refers to a set of complex and closely connected or interlinked

financial institutions or organised and unorganised financial markets, financial instruments

and services which facilitate the transfer of funds.

Financial institutions are the intermediaries which facilitate smooth functioning of the

financial system by making investors and borrowers meet. They mobilize savings of the

surplus units and allocate them in productive activities promising a better rate of return.

Financial institutions also provide services to entities seeking advice on various issues

ranging from restructuring to diversification plans.

Financial reforms of the 1990s were initiated with an objective to eliminate the

financial despotism and create an efficient, productive and profitable financial sector. The

Economic reforms best describe the post - 1991 consequences of various economic

practices, as it ushered in substantial transformation and liberalization of the Indian

financial system.

In November 2009, India purchased 200 tonnes of gold valued at Rs $6.7 billion (Rs

31, 380 crore) from the International Monetary Fund (IMF) . RBI bought nearly half of the

gold sold by IMF under the latter's limited gold sales programme. By purchasing the gold,

RBI now has more gold than the European Central Bank, thus becoming the 11th largest

gold holder among various Central Banks, marking a remarkable turnaround from the crisis

of 1991, when India had to airlift its gold to pledge for a loan. In 1991, when India faced

its worst ever balance of payment (BoP) crisis, it had no alternative but to pledge 67 tonnes

of gold to the Union Bank of Switzerland and Bank of England to raise a loan of $605

million. It intended to shore up its dwindling foreign exchange reserves, which were at

a low of $1.2 billion in January 1991.

The stabilization component in the 90's was aimed at reducing the balance of

payment deficit. The steps were towards reducing the rate of fiscal growth, monetary

tightening and curbing the excess demand on Indian foreign exchange reserves, which

was supported by devaluation of India currency.

Reforms in the Banking Sector During the early 1970s and 1980s, monetary policy

had become almost non-existent. India followed a system of credit allocation, administered

and differential interest rates for different purposes and automatic monetization of fiscal

deficit. Also, financial repression was through pre-emption of banks' resources - both in

terms of the statutory holding of Government Securities (Statutory Liquidity Ratio (SLR)

and Cash Reserve Ratio (CRR)). These mechanisms distorted the interest rate mechanism

and adversely affected the profitability of the banks by the end of 1980 and also their

viability.

 

 

 

What is the science that describes the management, creation and study of money, banking, credit, investments, assets and liabilities?

Group of answer choices

 

Finance

 

System

 

Market

 

All the above

 

 

 

Financial institutions are the intermediaries which facilitate smooth functioning of the financial system by ………..

Group of answer choices

 

Making investors

 

Borrowers meet

 

Both a and b

 

Perform a duty

 

 

 

A merchant bank is a financial institution conducting money market activities and:

Group of answer choices

 

Lending

                                                                                                   

Underwriting and financial advice

 

Investment service

 

All of the above

 

 

 

Formal merchant banking activity in India was originated in______.

Group of answer choices

 

1978

 

1969

 

1769

 

1987

 

 

Developmental activities of merchant banking:

Group of answer choices

 

Sources of funds forever

 

Expanding industry and trade

 

Leaving a widening gap unbridged between supply and demand of investible funds.

 

All of the above

 

 

when India faced its worst ever balance of payment (BoP) crisis.

Group of answer choices

 

1991

 

1978

 

1987

 

1998

 

 

 

 

 

India pledge ………….  of gold to the Union Bank of Switzerland and Bank of England to raise a loan of $605 million.

Group of answer choices

 

167 tonnes

 

7 tonnes

 

67 tonnes

 

17 tonnes

 

 

 

Which of the following are correct regarding growth during the reform period? 1. The growth of agriculture declined. 2. The service sector reported fluctuation.  3. The growth of industrial sectors has gone up. 4. The growth during this phase was mainly driven by the growth in the service sector.

Group of answer choices

 

1, 2 and 3 only

 

2 and 4 only

 

1 and 4 only

 

1 and 3 only

 

 

Consider the below statements: 1. The foreign investment, which includes foreign direct investment (FDI) and foreign institutional investment (FII), has increased from about US $ 100 million in 1990-91 to US $ 467 billion in 2012-13. 2. There has been an increase in the foreign exchange reserves from about US $ 6 billion in 1990-91 to about US $ 304 billion in 2013-14. 3. India is one of the largest foreign exchange reserve holders in the world.

Group of answer choices

 

1 and 2 only

 

2 and 3 only

 

1 and 3 only

 

All are correct

 

 

 

Which of the following are correct with reference to economic reforms (LPG reforms) and public policies? 1. Economic reforms have placed limits on the growth of public expenditure especially in social sectors. 2. The reform policies involving tariff reduction have curtailed the scope for raising revenue through customs duties. 3. In order to attract foreign investment, tax incentives were provided to foreign investors which further reduced the scope for raising tax revenues.

Group of answer choices

 

1 and 2 only

 

2 and 3 only

 

1 and 3 only

 

All are correct

 

 

 

 

2nd Block Assessment

 

 

CASE STUDY

 

Issue management refers to managing issues of corporate securities like equity shares, preference shares and debentures or bonds. It involves marketing of capital issues, of existing companies including rights issues and dilution of shares by letter of offer. Management of issue also involves other issues. The decisions concerning size and timing of the public issue in the light of the market conditions are advised by the merchant bankers.

The public issues are managed by the involvement of various agencies i.e., under writers, brokers, bankers, advertising agencies, printers, auditors, legal advisers, registrar to the issue and merchant bankers providing specialized services to make the issue a success. However, merchant bank is the agency at the apex level, who plans, coordinates and controls the entire issue activity and directs different agencies to contribute to the successful marketing of securities.

Issue managers play vital role in fund raising through public issue of securities. Whether through book building (discussed later) or otherwise, their role is catalytic for the making of the issue a success. They are involved from cradle to grave in the issue. Hence companies coming with new issue of capital decide about Issue managers after due diligence and carefully analysing the competence and capabilities of the merchant banker to handle the issue.

 

 

Issue management is an important function of ______ and ______.

Group of answer choices

 

Merchant banker, lead manager

 

Public banker, Merchant banker

 

Lead banker, Private banking

 

None of the above

 

 

 

 

In simple terms, the management of issues for raising funds through various types of instruments by companies is known as:

Group of answer choices

 

Lead management

 

Merchant banking

 

Issue management

 

Public management

 

 

Categories of securities issue:

Group of answer choices

 

Public issue

 

Rights issue

 

Private placement

 

All of the above

 

 

Companies raise funds for the purposes of: 1. Financing new projects 2. Expansion of existing units 3. Modernization & diversification of existing units 4. Organizing long term resources for working capital purposes

Group of answer choices

 

1, 2, 3

 

2, 3, 4

 

1, 2, 3, 4

 

1, 3, 4

 

 

Private placement covers

Group of answer choices

 

Shares

 

Preference shares

 

Debentures

 

All of the above

 

 

Equity funding is preferable especially when the project is________.

Group of answer choices

 

Fund intensive

 

Finance intensive

 

Capital intensive

 

Application intensive

 

 

 

 

The _______ has to manage the post-issue activities.

Group of answer choices

 

Merchant banker

 

Lead manager

 

Bank promoter

 

All of the above

 

 

It is a process by which a demand for the securities proposed to be issued by a body corporate is elicited.

Group of answer choices

 

Book building

 

Share certificate

 

Promoter issue

 

Circular

 

 

Post issue management activities include:

Group of answer choices

 

Analysis of collection

 

Processing of data

 

Issue of refund orders

 

All of these.

 

 

 

Pre‐issue management activities include;

Group of answer choices

 

Lead manager

 

Underwriting

 

Overall supervision

 

None of these.

 

100/100

 

 

 

 

 

 

3rd Block Assessment

 

 

 

CASE STUDY

 

Fee income is the revenue taken in by financial institutions from account-related

charges to customers. Charges that generate fee income include non-sufficient funds fees,

overdraft charges, late fees, over-the-limit fees, wire transfer fees, monthly service charges,

account research fees and more.

Financial intermediaries provide services on the basis of non-fund activities also. This can also be called “fee based” activity. They expect more from financial service companies. Hence, a wide variety of service, are being provided under this head they including the following:

(i) Making arrangements for the placements of capital and debt instruments with investments institutions.

(ii) Arrangements of fund from financial institutions for the clients‟ project cost or his working capital requirements.

 (iii) Assisting in the process of getting all government and other clearances.

Modern activities

Besides the above traditional services, the financial intermediaries render innumerable service in recent times. Most of them are in the nature of non-fund based activity. In view of the importance, these activities have been discussed in brief under the head „New financial products and services‟. However, some of the modern services provided by them are given in

brief here under:

(i) Rendering project advisory services right from the preparation of the project report till the raising of funds for starting the project with necessary government approval.

(ii) Planning for mergers and acquisitions and assisting for their smooth carry out.

(iii) Guiding corporate customers in capital restructuring.

(iv) Acting as trustees to the debenture-holders.

(v) Recommending suitable changes in the management structure and management style with a view to achieving better result.

 

 

 

 

Which of the following is not a fee‐based financial service?

Group of answer choices

 

Corporate counseling

 

Lease financing

 

Profit management

 

Issue management.

 

 

 

‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐ covers the entire range of services provided by a merchant banker.

Group of answer choices

 

Project counseling

 

Corporate counseling

 

Credit syndication

 

Market makers

 

 

 

 

Functions of financial services exclude ‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐.

Group of answer choices

 

Mobilization of savings

 

Allocation of fund

 

Specialized services

 

Collection of tax.

 

 

 

Fee income is the revenue taken in by financial institutions from account related charges to………

Group of answer choices

 

Banker

 

Customers

 

Government

 

All the above

 

 

 

In India Merchant banking along with management of public issues and loan syndication covering activities like- 1. Project counseling, 2. Portfolio management, 3. Investment counseling, 4. Mergers and amalgamation of the corporate firms, 5. Securities and exchange

Group of answer choices

 

1, 2, 4, 5

 

1,2, 3, 5

 

1, 2, 3, 4

 

2, 3, 4, 5

 

 

 

An acquisition is the same thing as:

Group of answer choices

 

a spin-off

 

a takeover

 

an amalgamation

 

a merger

 

 

 

he ways in which mergers and acquisitions (M&As) occur do not include:

Group of answer choices

 

vertical integration

 

diversification

 

horizontal integration

 

conglomerate takeover

 

 

 

 

Most favourable portfolio is proficient portfolio with the………..

Group of answer choices

 

lowest risk

 

highest risk

 

highest utility

 

least investment

 

 

 

which of the following service are fee based

Group of answer choices

 

Underwriting

 

Issue of Demand Draft

 

Credit Card

 

Education loan

 

 

 

which of the following service are fund based

Group of answer choices

 

Locker facility

 

Project preparation

 

Consultancy

 

None of the above

 

 

 

70/100

 

 

 

 

 

 

4th Block Assessment

 

 

CASE STUDY

 

Leasing is a process by which a firm can obtain the use of a certain fixed assets

for which it must pay a series of contractual, periodic, tax deductible payments. Leasing

is an alternative to purchase that’s used for apartments and houses, automobiles and

light trucks, and many types of equipment and machinery.

Hire purchase (HP) or known as installment plan in the United States is an

arrangement whereby a customer agrees to a contract to acquire an asset by paying

an initial installment (e.g. 40% of the total) and repays the balance of the price of the

asset plus interest over a period of time. Other analogous practices are described as

closed-end leasing or rent to own.

Operating Lease is where the asset is not wholly amortized during the noncancellable

period, if any, of the lease and where the lessor does not rely for is profit

on the rentals in the non- cancellable period. In this type of lease, the lessor who bears

the cost of insurance, machinery, maintenance, repair costs, etc. is unable to realize

the full cost of equipment and other incidental charges during the initial period of lease.

 

 

 

 

Leasing is a process by which a firm can obtain the use of a certain fixed assets for which it must pay a series of ……

Group of answer choices

 

Contractual payment

 

Periodic payment

 

Tax deductible payment

 

All the above

 

 

 

What is an arrangement whereby a customer agrees to a contract to acquire an asset by paying an initial installment?

Group of answer choices

 

Hire Purchasing

 

Contract

 

Leasing

 

All the above

 

 

 

What is an agreement enforceable by law?

Group of answer choices

 

Hire Purchasing

 

Contract

 

Leasing

 

All the above

 

 

 

The essential elements of a valid contract are …………….

Group of answer choices

 

Legal obligation

 

Lawful consideration

 

Free consent

 

All the above

 

 

Securitization is the financial practice of pooling various types of contractual debt such as………..

Group of answer choices

 

Residential mortgages

 

Commercial mortgages

 

Auto loans or credit card debt obligations

 

All the above

 

 

 

 

A refrigerator is priced at $10,000. A deposit of 16% on simple interest of 11% per year over 2 year and repayments paid monthly then the amount of deposit made is

Group of answer choices

 

$2,000

 

$2,150

 

$1,950

 

$1,600

 

 

The television is priced at $10,000. A deposit of 16% on simple interest of 11% per year over 2 year and repayments paid monthly then the additional amount to pay in 24 monthly installments after deposit is

Group of answer choices

 

$10,248

 

$11,248

 

$13,248

 

$14,248

 

 

 

One difference between a financial lease and operating lease is that:

Group of answer choices

 

there is a often a call option in a financial lease.

 

there is often an option to buy in an operating lease.

 

an operating lease is often cancellable by the lessee.

 

a financial lease is often cancellable by the lessee.

 

 

 

The principal reason for the existence of leasing is that:

Group of answer choices

 

intermediate-term loans are difficult to obtain.

 

this is a type of financing unaffected by changes in tax law.

 

companies, financial institutions, and individuals derive different benefits from owning assets.

 

leasing is a renewable source of intermediate-term funds.

 

 

 

A way to analyze whether debt or lease financing would be preferable is to:

Group of answer choices

 

compare the net present values under each alternative, using the cost of capital as the discount rate.

 

compare the net present values under each alternative, using the after-tax cost of borrowing as the discount rate.

 

compare the payback periods for each alternative.

 

compare the effective interest costs involved for each alternative.

 

 

 

100/100

 

 

 

 

5th Block Assessment

 

 

CASE STUDY

 

Consumer finance refers to the division of retail banking that deals with lending money

to consumers. This includes a wide variety of loans, including credit cards, mortgage

loans, and auto loans, and can also be used to refer to loans taken out at either the

prime rate or the subprime rate.

A credit rating is an evaluation of the credit risk of a prospective debtor (an individual,

a business, company or a government), predicting their ability to pay back the debt, and

an implicit forecast of the likelihood of the debtor defaulting.

Factoring is a financial transaction whereby a business sells its accounts receivable

(i.e., invoices) to a third party (called a factor) at a discount. Factoring is a method used

by some firms to obtain cash.

Forfeiting is a means of financing used by exporters that enables them to receive

cash immediately by selling their medium-term receivables (the amount an importer owes

the exporter) at a discount.

 

 

 

What refers to the division of retail banking that deals with lending money to consumers?

Group of answer choices

 

Consumer finance

 

Credit card

 

Hard money

 

All the above

 

 

 

What is a plastic card issued by a financial institution that allows its user to borrow pre-approved funds at the point of sale in order to complete a purchase?

Group of answer choices

 

Consumer finance

 

Credit card

 

Hard money

 

All the above

 

 

What is the trading or selling a bill of exchange prior to the maturity date at a value less than the par value of the bill?

Group of answer choices

 

Vehicle financing

 

Hard money

 

Credit card

 

Bills Discounting

 

 

 

Which of the following is not a reason for international investment?

Group of answer choices

 

To provide an expected risk-adjusted return in excess of that required.

 

To gain access to important raw materials.

 

To produce products and/or services more efficiently than possible domestically.

 

International investments have less political risk than domestic investments.

 

 

 

A trade agreement in which a domestic firm accepts whiskey for full payment on a sale of computer equipment is an example of __________.

Group of answer choices

 

export factoring

 

forfeiting

 

a scene from the classic movie "Animal House"

 

counter trade

 

 

Amer is an exporter who has sold outright their accounts receivable to another institution. This is an example of __________.

Group of answer choices

 

export factoring

 

forfeiting

 

striding

 

counter trade

 

 

The person who is having goods in his/her possession known as

Group of answer choices

 

brokers

 

middlemen

 

factors

 

agents

 

 

 

Credit management is an important tool used by finance managers. Credit management means

Group of answer choices

 

Managing the cash of the organization for the operational activities

 

To lend money to the borrower for more than a year

 

Granting money on credit basis while considering all the terms on which it is being granted on

 

Managing the credit system

 

 

 

A factor affecting the growth of Venture Capital (VC) finance

Group of answer choices

 

Culture and environment

 

Interest rates

 

Easing stock market barriers

 

Increased business banking finance

 

 

60/100

 

 

 

Full Syllabus Assessment

 

 

CASE STUDY

 

Before beginning the services of merchant bankers in India, the capital issues were managed and controlled by the managing agency houses as “Issue Houses”. The services included were managing issue of securities, advising on the capital restructuring, providing underwriting activities, arranging finance from various institutions, preparing prospectus and listing of issues in the stock exchanges* 2. Though merchant banking activity was initiated in about three decades ago, it was only in 1992 when SEBI was formed and the rules and regulations regarding merchant banking activities were redesigned for a more disciplined performance of these entities. The concept merchant banking assumed a serious concern only after SEBI thought it positively as a very important intermediary in the functioning of the capital markets and also performing other financial services.

The merchant banks in India basically have concentrated their activities on the following services:

1- Corporate counselling

2- Project counselling and pre-investment studies.

3- Credit syndication and project finance.

4 -Capital issue management.

5 -Underwriting of capital issues.

6- Portfolio management.

7 -Venture capital financing.

8 -Lease finance.

 

 

1. A merchant bank is a financial institution conducting money market activities and?

Group of answer choices

 

Lending

 

Underwriting and financial advice

 

Investment service

 

All of the above

 

 

 

In India Merchant banking along with management of public issues and loan syndication covering activities like?

Group of answer choices

 

Project counseling

 

Portfolio management

 

Investment counseling

 

All of the above

 

 

 

Formal merchant banking activity in India was originated in______?

Group of answer choices

 

1978

 

1969

 

1769

 

1987

 

 

 

 In India, merchant-banking activity was originated with the merchant banking division set up by the __________?

Group of answer choices

 

Barclays bank

 

Grind lays bank

 

Yes bank

 

None of the above

 

 

 

The early growth of merchant banking in the country is assigned to the_______?

Group of answer choices

 

FEMA

 

Foreign Exchange Regulation Act, 1973

 

Securities Contracts Act

 

Income-tax Act

 

 

 

The term ‘Merchant Bank’ is used in?

Group of answer choices

 

United Kingdom

 

United States

 

India

 

Non of the above

 

 

 

Banks implement the RBI’s _______ policies.

Group of answer choices

 

Monetary

 

Credit

 

Commercial

 

Both a and b

 

 

 

 

The criteria for authorization of merchant bankers includes: 1. Professional qualification in finance, law or business management 2. Infrastructure like adequate office space, equipment and manpower 3. Employment of two persons who have the experience to conduct business of merchant bankers 4. Capital adequacy 5. Past track record, experience, general expectation and fairness in all transaction

Group of answer choices

 

1, 2, 4, 5

 

2, 3, 4, 5

 

1, 2, 3, 4, 5

 

None of the above

 

 

The four categories of merchant bankers issued by SEBI: Minimum net worth for first category is ______, second category is ______ and third category is ______.

Group of answer choices

 

Rs.1 crore, Rs. 50 lakhs, Rs.20 lakhs

 

Rs.20 lakhs, Rs.1 crore, Rs.50lakhs

 

Rs.2 crore, Rs.50lakhs, Rs.25lakhs

 

None of the above

 

 

Financial services through the network of elements such as ________, serve the needs of individuals, institutions and Corporate.

Group of answer choices

 

Financial institutions

 

Financial markets

 

Financial instruments

 

All of the above

 

 

 

1st Block Assessment

 

  CASE STUDY

 

In November 2017, China’s largest online travel agent (OTA), Shanghai-based Ctrip.com International Limited (Ctrip), announced the acquisition of the US-based travel recommendation service, Trip.com (Trip), for an undisclosed sum. This was the latest among several moves by Ctrip that signaled its ambitions to expand beyond Asia. Earlier in 2016, Ctrip bought Skyscanner, a Scotland-based flight Search Company, for about US$1.74 billion, making the travel industry sit up and take notice. The Trip deal was expected to help Skyscanner leverage Trip.com’s capabilities on its own platform. Travis Katz, CEO and founder of Trip, said, “The idea of this deal is for Skyscanner to marry in-destination reviews content in Trip’s arsenal to Skyscanner’s platform. The aspiration is not to only add static details, such as about the opening times of restaurants or museums, but to also enable Skyscanner users to see and eventually add social reviews within Skyscanner’s website and apps,”

 

Founded in June 1999 by James Liang, Neil Shen, Min Fan, and Qi Ji, Ctrip started out as a trip advisor service provider. The company aggregated information on hotels and flights and enabled customers to make informed and cost-effective hotel and flight bookings. Its inception and growth coincided with the travel boom in China and its revenues increased from Renminbi (RMB)6.9 million in 2000 to RMB105.3 million (US$12.7 million) in 2002.

 

Even the outbreak of the Severe Acute Respiratory Syndrome (SARS) in 2003 did not have a significant impact on Ctrip’s business. By October 2003, Ctrip had established room supply relationships with over 1,700 hotels in China and over 450 hotels internationally. It went public in December 2003, with its IPO soaring on the debut day. On Nasdaq, the shares opened at US$24.01, and at one point went up to US$37.35, thereby making Ctrip’s first IPO double its US$18 offer price on day one of trade.

 

COMPETING WITH TECHNOLOGY

 

Ctrip had constantly been acquiring new technologies to serve its customers. Artificial Intelligence, big data, and intelligent hardware employed by Ctrip were crucial in providing a superior travel experience. Jane Sun (Jane), Ctrip’s Chief Executive Officer, said, “For the user interface, we want to make sure that we know every customer who has purchased or searched on the Ctrip website. So when we list our products for them, it’s not millions of items that they have to search through -- the user experience wouldn’t be maximized. Hopefully we can personalize the display. All of that is in our design. When the customer purchases with us, they (may not) know what they want, but we know what would fit them. That’s a way technology will help us” .

 

CTRIP’S STRATEGIC INVESTMENTS AND ACQUISITIONS

 

Ctrip maintained its leading position through a series of strategic investments and acquisitions. From 2013, the company began expanding aggressively expanding internationally. Feifei Xu, Director of Brand Strategy, Labbrand, said, “Their international expansion aims to offer Chinese out-bound travelers or foreign companies in China an extension of their value-chain platform of tourism. By international expansion, they are mostly targeting outbound Chinese travelers.” In 2013, Ctrip invested in travel search engine Kuxun, hotel app Economy Hotel Manager, social trip sharing platform Chanyouji, and car rental services Yongche and eHi Car Services

 

CHALLENGES AND OPPORTUNITIES

 

The acquisition of Skyscanner, while contributing substantially to Ctrip’s growth, intensified both domestic and international competition. To compete effectively with Ctrip, other OTAs in China made attempts to attract large investments. Meituan Dianping raised US$4 billion in a funding round led by Tencent Holdings . Interestingly, Priceline, which was Ctrip’s largest shareholder, also participated in the funding round. Agoda.com, owned by the Priceline Group, established a strategic partnership with Meituan Dianping. This strategy of Priceline investing in Ctrip’s domestic competition indicated that it perhaps saw Ctrip as a potential threat and thus made an investment in Meituan Dianping that could lead to hedging its bets against Ctrip. However, analysts felt that Ctrip was strong enough to take a further share of the Chinese OTA market and its long-term growth prospects in China remained strong.

 

Adding Skyscanner’s revenue to Ctrip’s total boosted Ctrip’s Q3 2017 transportation-ticketing revenue by 41 percent to US$515 million. Cindy Wang, Chief Financial Officer, Ctrip, said, “The total number of transactions made by direct booking increased almost three-fold since May (2017), the month we launched the engine on Skyscanner, through September.”

 

 

 

 

1. For expansion of C Trip International Ltd. , what strategy was adopted ?

Acquisition of US based Trip .com

Selling of Trip .com

Becoming a Parter of Trip.com

None of the options

 

 

2. To enable customers to make informed and cost-effective hotel and flight bookings , The company aggregated information on ?

On hotels and flights

on budget hotels

on international flights

both a & b

 

3. Ctrip had continously been acquiring new _____ to serve its customers?

Customers

Technology

Offers

None of the options.

 

4. what technological tools were employed by Ctrip in providing a superior travel experience ?

Artificial Intelligence, big data, and intelligent hardware

Excellent Software

Market Research

Both B&C

 

5. Co. adopted a strategy of using technological tools and make customer purchase easier by?

Knowing what would fit customers , as customers (may not) know what they want

Giving promotional offers

Giving discounts, customers always know what they want

None of the options

 

6. Ctrip maintained its leading position through ?

series of strategic investments only

a series of strategic investments and acquisitions

Focussing on Industry Competition

Focussing on Attracting maximum customers

 

7. Investment strategy adopted by Ctrip was into field of?

Car rentals , Hotel Apps & travel search engines

Car rentals only

hotel app Economy Hotel Manager only

Both B & C

 

8. The strategy adopted for acquisition of Skyscanner, by Ctrip  helped in?

growth of international market

Growth in Foreign Lands

growth of both domestic and international markets

growth of domestic market

 

9. Main investment strategies adopted by the Companies in this case study were related to ?

Selling of a Product Line

Competitor analysis

Scanning Environment

Acquisitions

 

10. ______ has played a major role in this case study , and for capturing a wide market share by the company ?

Technology

Competitors

International Markets

Both B& C

 

2nd Block Assessment

 

 CASE STUDY

 

Navroze Godrej (Navroze), the young executive director for Strategy and Innovation at Godrej and Boyce, the holding company of the India-based Godrej Group, is a fourth generation scion of the Godrej family. Keen on bringing about a major change in his company’s design thinking, he set himself the goal of changing the Godrej Group’s old-world, engineering driven mindset into a forward looking design driven mindset. He aimed to shape the Godrej Group into a company that inculcated a culture of open collaboration between different work groups and businesses. As part of his efforts to fulfill this aim, he created a suitable ambience and office infrastructure to break down the organizational hierarchies. He also started the Godrej Design Lab to encourage young designers to showcase their work. The selected designers were mentored and their designs displayed at national level exhibitions. The case discusses whether the initiatives taken by Navroze to bring about organizational transformation to make the Godrej Group design, innovation, and consumer focused can succeed. The case gives enough scope to analyze whether the influx of young talent is capable of bringing in novel ideas to shape the company’s future.

 

In 2005, Navroze Godrej (Navroze) was inducted as a management trainee into Godrej & Boyce (G&B), the holding company of the Godrej Group. Navroze, a fourth generation-scion of the Godrej family which owned the Godrej Group, was all of 23 years old when he joined Godrej. He was quite different from the previous generations of the family in terms of being more agile and wanting to bring in change within the company. When Navroze was in his early twenties, he met Professor Hemmant Jha, (Jha) of the Institute of Design, Chicago, US. It turned out to be a momentous meeting and was a turning point for Navroze as it kindled in him a love for design, which soon turned into a lasting passion. Navroze was so impressed after chatting with Jha that he persuaded the professor to join G&B. Analysts said this was a smart move by Navroze – one that drove G&B toward innovation. After hiring Jha, Navroze and his team at G&B brought out novel designs and innovations which were patented under Godrej.

Godrej, one of the largest Indian privately-held diversified industrial companies, was founded by Ardeshir Godrej (Ardeshir) in 1897. Ardeshir, a lawyer by profession, gave up his career in law to pursue his passion for making high quality locks and safes. The business was expanded further by Ardeshir’s youngest brother, Pirojsha Godrej (Pirojsha), who joined the company in 1906. In 1909, Godrej secured its first patent for spring-less locks which Ardeshir sold under the Anchor brand. During the 1920s, Ardeshir manufactured the first of Godrej’s sturdy steel cupboards branded as ‘Storwel,’ that became a trend in Indian homes. Ardeshir launched a washing soap as well and the world’s first vegetable oil based toilet soap. The toilet soap was considered to be the best in its time, as it revolutionized the manufacturing process. Up till then, soaps were made from animal fat. Godrej earned a name for itself with the superior quality of locks and soaps it sold. In 1952, Godrej bagged a contract to manufacture ballot boxes for India’s first general elections. Every day, 15,000 ballot boxes were made at its Vikhroli factory in Mumbai, to supply the target of 1.2 million boxes.

In 2013, after Navroze graduated with a Master’s in design, he returned to join G&B and spearheaded a pilot project on a disruptive business model. One of the things he changed was the layout of the (office) shop-floor. Unlike the previous directors who worked from their closed office space, he preferred to sit with his project teams around a big table and discuss matters with them. The new furniture layout was intended to support both individual and group work. Navroze felt traditional desk arrangements created a barrier and prevented openness and collaboration.

GODREJ INNOVATION CENTER

In 2013, Navroze took the bold move of setting up a 25,000 square foot ‘Innovation Center’ in Vikhroli, Mumbai. This was a research and development center to conduct explorative study in areas involving security, lifestyle, well-being, energy, productivity, and connectivity. The innovation center had a fixed 20-member full-time team, while at any given time there were at least a 100 other employees who belonged to other departments deputed to accomplish time-bound projects. As Navroze believed in diversity, the members in the teams came from different backgrounds such as, design, marketing, research, business, engineering, and others. The center had enough space for meetings and lectures, and the furniture was such that it could be reorganized for display of prototype product designs, a collection of material types, and for any other informal interaction as well.

SPRINT PROGRAM

Navroze led the Sprint program that caused a cultural transformation in the company. He facilitated a bottom-up approach, where he invited all the employees of Godrej to submit ideas at the innovation center. Based on their ideas, Navroze set up work groups. For the first time, people with 20 years of experience and those who had joined just six months earlier began working together. The groups came up with ideas that ranged from cooking appliances to recycling of waste, to looking at resources and services for transit population.

GODREJ DESIGNLAB

In 2013, Navroze set up the Godrej DesignLab, (GDL), which was established in collaboration with a Mumbai-based design studio, Elle Décor. GDL was a platform for designers to co-create, experiment, innovate, and challenge the boundaries of product design. GDL aimed at providing a holistic support system to designers who could give a whole new level of futuristic designs. GDL was a forum where designers could submit their work in four categories of furniture, furnishings, lighting and home décor, & accessories.

THE HUBBLE

In April 2014, Navroze spearheaded the development of a second innovation center, the Hubble. It was conceived to serve as a hub where people could interact informally to encourage the culture of creative thinking. The Hubble was built on a spacious 25,000 square foot space in the Vikhroli office itself, to function as an eat, work, and play space with a coffee-shop-kind-of-atmosphere. It encouraged both private and collaborative work among the employees.

REINFORCING THE DESIGN TRADITION

The Chief Design Officer, of GPL, Anubhav Gupta (Gupta), said that though there was no vertical on design in the Godrej group of companies, design was considered a business horizontal as it had become omnipresent in all aspects of the Godrej Group. He said innovation at GPL was not about playing it safe but it required an ability to tolerate failure before earning superlative success. Innovation, according to Gupta, was finding the best possible or the most optimal design.

 

 

1. A smart strategy adopted by Navroz in the starting phase ,after getting impressed with professor Jha was ?

Strategy related to innovation

strategy related to acquisitions

Strategy related to controlling systems

strategy related to diversifications

 

2. The first patent secured by godrej , was related to which product?

spring-less locks

Almirah’s

Safe’s

Refregirator’s

 

3. The strategy adopted by godrej in respect of innovation , was done in respect of ?

achieving greater market share

to attract more & more customers

Both A& B

None of the options

 

4. Godrej revolutionised the manufacturing process, and created world’s first _______?

Animal fat based toilet soap

vegetable oil based toilet soap

Herbal Soaps

All

 

5. It was felt that old structure of traditional desk arrangements created _______?

efficient working environment

Prevented positive work culture

Barrier ,prevented openness and collaboration

All

 

6. On what kind of activities godrej majorly focussed in the innovation centre ?

Research & Development

cost cutting strategies

strategies to attrat customers

None of the options

 

7. Godrej earned a name for itself in the starting phase for which of the following products ?

Refrigerators

superior quality of locks and soaps

Soaps Only

Electronic Appliances

 

8. People/ employees in Godrej were allowed to interact informally which lead to encouragement of ___?

the culture of creative thinking

collaborative work among the employees

Both A & B

None of the options

 

9. In order to breakdown the organisational hierarchies , what basic strategy was adopted ?

Creation of a suitable ambience and office infrastructure

Creation of a friendly environment

Creating a competitive Environment

Both b & C

 

 

10. for India’s first general elections , what kind of contract was bagged by Godrej ?

to manufacture Lockers

to manufacture Soaps

to manufacture both ballot boxes & soaps

to manufacture ballot boxes

 

 

3rd Block Assessment

 

CASE STUDY

 

This case discusses about the acquisition of Florida-based Elizabeth Arden Inc, (Arden), a cosmetics, skin care, and fragrance major by Revlon Inc. (Revlon) another cosmetic giant. Post-merger, Revlon reported a 21.9% increase in its net sales in 2016. The case highlights the journey of both the businesses and also the tough time they faced prior to the merger. While Revlon had been weighed down by its debt, the sales of celebrity fragrances, a key part of Arden's portfolio, had declined. Arden's losses and increasing debt load left the company with few options to survive as a stand-alone business. Revlon pursued the deal largely in order to achieve scale.

 

Revlon bought Arden in a $870 mn deal in June 2016. The merger brought together the two cosmetics majors amidst hopes that a combined distribution network and marketing strategy could broaden their appeal. The industry showed a mixed response to the union. While some experts felt the synergy was not very realistic few other opined that it would revive the fortunes of Arden.

 

The case also discusses Revlon’s plans of restructuring the business. It headed towards shifting to a brand-centric structure aimed at identifying investment areas quicker and reacting faster to consumer needs in the domestic and international markets.

 

In March 2017, New York-based cosmetics, skin care, fragrance, and personal care company Revlon Inc, (Revlon) reported its net sales rose to $2.3 billion in 2016, a 21.9 percent increase compared to 2015. Revlon witnessed growth across all segments. This growth in sales came amidst Revlon’s plans to shift to a brand-centric structure after initiating a restructuring plan in 2016. The restructuring followed Revlon’s acquisition of Elizabeth Arden Inc, (Arden), a Florida-based, cosmetics, skin care, and fragrance major, for $ 870 million. The merged company was expected to leverage the strength of its brands and adapt to the changing behaviors and preferences of consumers to serve them better. In addition to expanding categories, channels, and geographies, Revlon expected to hit $5 billion in sales in the next five years. As part of the integration, it announced the elimination of 350 positions worldwide and streamlining of certain operations. In addition, project integration-related restructuring activities were estimated to cost between $65 million and $75 million by 2020.

THE JOURNEY OF ELIZABETH ARDEN

Born as Florence Nightingale Graham (Graham) in 1878 in Ontario, (Canada), Graham was the youngest of five children in a poverty stricken family. She dropped out of school due to a lack of finances and began training as a nurse. During nursing training she met a chemist experimenting with a facial cream that could help acne sufferers. The idea fascinated her, leading to her believing that most women would give anything for beauty. Graham took up a number of odd jobs that gave her an opportunity to display her salesmanship. While working briefly as a bookkeeper for the E R Squibb Pharmaceuticals Company in 1908, she spent hours in their lab learning about skincare. This further inspired her to fashion a small lab for beauty products of her own. To pursue her dream, she quit her job at Squibb and joined as an assistant in a newly established beauty parlor. Graham later worked for beautician Eleanor Adair as a “treatment girl” and gained valuable industry experience. In 1910, Graham borrowed money from her brother William and started ‘Red Door Salon’ with a partner, Elizabeth Hubbard . The first shop was opened on Fifth Avenue. The partnership soon dissolved and Graham became the sole proprietress. She decided to name her salon ‘Elizabeth Arden’. The name was derived from her former partner’s name and from Alfred, Lord Tennyson's poem ‘Enoch Arden’. The new name raised the prestige and glamor of not only the business but Graham as well. Thus, Graham changed her name to Elizabeth Arden (Arden) in 1915.

THE JOURNEY OF REVLON

The history of Revlon Inc, one of the world's leading cosmetics companies based in New York, can be traced back to 1932. Two brothers, Joseph Revson and Charles Revson, conceived of the idea of creating a nail enamel using pigments instead of the normal dyes. They collaborated with a local chemist named Charles Lachman (who contributed the ‘L’ to the Revlon name), to come up with their first product. Revlon developed a variety of new shades of nail polish. Seeing the booming beauty salons and the growing popularity of manicures they targeted beauty salons as a market to sell their nail polishes.

Arden was known for its fragrances including those licensed from celebrities like Marilyn Monroe, Catherine Zeta-Jones, Britney Spears, Justin Bieber, Taylor Swift, and many more. However, in 2014, the company posted the biggest ever quarterly loss in its history, a 28 per cent drop in revenue. The company was hit hard mainly because of a fall in the sales of its celebrity perfumes. The company statement said, “While the company had expected weaker sales comparisons due to the lower level of fragrance launch activity in fiscal 2014 versus fiscal 2013, the decline in sales of celebrity fragrances, particularly the Justin Bieber and Taylor Swift fragrances.

In June 2016, mired in financial woes, Revlon decided to pick up Arden. The company agreed to buy Arden in an $870 million deal. The wager was expected to create a beauty business with annual sales of $3 billion along with creating a platform in categories like mass, prestige, professional, color cosmetics, skin care, and fragrances. In addition to greater purchasing power, the merged entity was expected to benefit from cost savings of nearly $140 million by eliminating overlaps, integrated manufacturing, and distribution networks of both companies. Garcia said, “We see great opportunities for growth where they are strong and we are not.”

Some analysts expected a negative outcome from the union. They felt that Revlon was buying a troubled competitor with an elevated debt load. Although Revlon pointed to the expected synergies, experts found this unrealistic and opined that it could possibly result in higher leverage ratios. Wendy Liebmann, CEO of WSL Strategic Retail, stated, “There’s so little other business synergy. Arden is a fragrance and skin care house. Revlon is a color cosmetics and hair-color business. Different price points and distribution.

The deal not only marked a turnabout for investors, it also put an end to speculations that Revlon would be an acquisition target – rather than a buyer. Before the acquisition was announced, Arden's market capitalization was $280 million. Shares had fallen 40 percent off their 52-week high. But as soon as the news of the acquisition came in, Arden’s shares soared by as much as 50 per cent and closed at $14; Revlon rose about 6.6 percent to close at $33.25.

In January 2017, Revlon decided to divide and organize the business into four categories: the Revlon brand, Elizabeth Arden, fragrances and portfolio brands, (which included Almay, Mitchum, Gatineau, Sinful Colors and Pure Ice cosmetics. Each Revlon team was required to prepare a three-year growth plan and set priorities and strategies for their labels. The core corporate functions including finance, human resources, supply chain, research and development, legal, communications, and corporate social responsibility departments were to be reorganized to provide better support to the new brand-centric and regional structures.

 

 

 

1. In this case study, What strategy was adopted by Revlon for the purpose of Growth in the Market ?

Acquisition as growth strategy

Industry Analysis as growth Strategy

Leadership strategy

Competitor analysis strategy

 

2. This case study is about which two major companies ?

Revlon International & Mac

Maybelline & MAC

Elizabeth Arden Inc & Revlon Inc

Mayabelline & Revlon

 

3. In order to serve the customers better ,what strategy was adopted by Revlon ?

adapt to the changing behaviors & preferences of consumers

adapt to the changing Market conditions

adapt to the changing Political environment

adapt to the latest Technology

 

 

4. The case study discusses Revlon’s plans of____?

Restructuring the business

Closing the business

Both A& B

None of the options

 

5. This case study , highlights __?

the better condition of Elizabeth Arden Inc prior its acquisition

the journey of both the businesses and also the tough time they faced prior to the merger

the downfall of Revlon Inc . before the acquisition

None of the options

 

6. Revlon headed towards shifting to a brand-centric structure aimed at identifying investment areas quicker and reacting faster to _____?

consumer needs in the domestic and international markets

consumer needs in the domestic market only

consumer needs in the international markets

None of the options

 

7. As per this case study , Initially Arden was known for ?

Nail enamel

Face Creams

fragrances

Both A & B

 

8. Revlon decided to adopt restructural strategies - to divide and organize the business into categories, what were these categories ?

the Revlon brand

Elizabeth Arden brand

fragrances and portfolio brands

All of the options

 

9. In this case study , each Revlon team was required to prepare a _____ growth plan and set priorities and strategies for their labels?

three-year

Five Year

Ten years

seven Years

 

10. Main Motive behind the acquisition& merger strategy adopted in this case study was related to ?

Increasing the sales

attracting More & More customers

Capturing Major Market Share

All of the Options

 

 

 

4th Block Assessment

 

CASE STUDY

 

When a new technology comes along that is capable of improving dramatically the products of a whole industry, every firm in that industry has vital strategic decisions to make. It must ask itself:

• How far and how quickly should we amend or abandon our present products?
• How far and how quickly should we embrace the new technology?
• Are we big enough and capable enough to accomplish all the

essential changes on our own?

• How can we come out of this time of change stronger than we went in?

Once taken, these key decisions have to be implemented.

Technological change > Strategic decisions > Strategic Implementation

All this makes for exciting times within the industry, for producers and also for consumers, who also have some adjusting to do.

Imaging is one of the world’s growth markets and new technology is making its mark; imaging has ‘gone digital’. It is not a complete transformation. Analogue imaging has not been abandoned and still has millions of satisfied consumers. However, the industry will move on. This is because the new technology:

• is genuinely innovative
• has undeniable advantages in some key aspects
• has been shown to work
• is proving reliable
• is capable of further development
• will become cheaper in the long run.

The pace of change is accelerating. Abandoning former practices and establishing new ways of working is generating not only excitement, but also stresses and tensions. The new technology requires new skills, new attitudes and new approaches from both producers and consumers.

This case study looks at how AGFA, a leading player, is taking full advantage of the digital revolution. The company is using the new technology as:

• an engine for growing its business
• a means of providing its customers with better product possibilities and with greater flexibility and choice.

Agfa

Agfa is a leading name in the imaging industry. The Agfa-Gevaert Group de-velops, produces and distributes an extensive range of analogue and digital imaging systems. Agfa has divided its operations into three segments.

Segment: Consumer imaging.    

Activity/Products: Wide range of products using both digital and analogue technologies for taking, processing and manipulating photographs.

Segment: Graphic systems.    

Activity/Products: A wide range of electronic and photographic systems for the graphics industry, including workflow management systems, scanners and laser image setters.

Segment: Technical imaging.

Activity/Products: Medical uses eg X-ray equipment; non-destructive fault-testing eg in aircraft and pipelines; industrial imaging for motion pictures; document management systems and micrographics.

Agfa’s operations involve a high level of innovation. The company’s willingness and ability to work at the leading edge of technology help to make it a leader in its field.

 

For Agfa to remain a market leader, its managers must concern themselves with the future and ask themselves:

• Where is the industry heading?
• What are our competitors likely to do next?
• Where do we go from here?

With imaging, the answers currently are:

• The industry is heading towards greater use of digital imaging.
• Our competitors will invest in research and development aimed at enhancing quality at affordable prices.
• We look to get there first, with better products to sell to customers who are prepared for using them.

This approach requires a willingness to invest heavily in new projects that maximise the benefits of new technology.

- Every proposed project undergoes investment appraisal. This procedure establishes whether a particular project is worth taking forward. Managers will ask key questions about a proposal, including:

• How expensive are the initial outlay and the final total outlay likely to be?
• For how long are we likely to be spending money without any financial return?
• How long is it likely to be before we recover, from sales, all the money we have invested?
• What return can we reasonably expect from our investment in the long term?
• How big are the risks? What events over which we have little or no control could cause this project to falter or fail? How likely are they?

Risks for the imaging industry include:

• a significant rise in the cost of borrowing to finance investment
• a downturn in business activity worldwide that persuades industrial customers to postpone their own purchase of new plant and equipment
• poorer job prospects for the general public that deter private consumers from spending on the latest products.

Agfa must consider these factors as it contemplates large scale investment in new digitally based technologies.

During 2000 Agfa invested around 224 million Euros (equivalent to 4% of its sales revenue) in research and development. Part of this involved working with external partners eg universities and leading research centres. Much of the work reflected the need to move forward in:

• developing the transition from analogue to digital solutions
• meeting a wider variety of customer needs
• helping Agfa to create new market sectors and to enter them profitably.

Digital technologies are changing the way in which people take, process and use images. New processes allow customers to work with images quickly and efficiently, without requiring extensive expertise and knowledge. Take, for example, the newspaper world. With newspapers, speed is vital and editors want the best pictures to go with the latest stories.

• Digital technology is transforming newspaper production. For example, sports photographers no longer have to dash back to the office to develop prints, wondering anxiously what they have captured. They know immediately the quality of the image they have and they can despatch it immediately too. As a result, the publisher soon has on sale a comprehensive local Saturday night ‘sports special’ carrying action photos of spectacular moments that occurred hundreds of miles away just a short time earlier.
• The new technology is also transforming photography for the general public. For example, crystal clear photos of a baby can now be available to proud, anxious grandparents thousands of miles away within a few minutes of an infant’s birth.
• Technological advance does have a downside, in that demand for new products affects sales of older ones. As a market, analogue photography has almost reached maturity. It is still

significant in size with almost 70% of the market. However, with plenty of scope for further product developments and for repeat business. The growth of digital technology has not deterred Agfa and its competitors from bringing out new, improved products for use with ‘old’ technology.

• The real difference between analogue and digital lies in how images are recorded and processed. Analogue photography uses traditional cameras to expose silver-halide film. This still remains the most widely used way to capture images. Customers are well served with a variety of excellent products, from traditional slide and print films to Advanced Photo Systems (APS) films and single-use cameras with enhanced capability.
• Compared with digital systems, recent analogue advances are ‘low tech’, but so too is their cost. Image quality is excellent, and represents optimum value. The technology can also be applied widely; even single-use cameras take good pictures. However, analogue images cannot be viewed instantly, take time to enlarge or reduce and are on prints or negatives that cannot be re-used. Negatives need optimum storage conditions to remain in good condition long term. The chemicals used in processing also raise some environmental issues. Digital technology represents a genuine advance because it removes many of these difficulties.
• Digital images
• Digital images are based upon a grid or matrix. They vary in the quality of their resolution, which is expressed in pixels or dots per inch (dpi) or millimetre. The higher the resolution, the better the picture, and the more expensive the equipment producing it.
• There is a wide range of affordable digital cameras on the market now, offering varying levels of quality, capabilities and prices. There are also thousands of commercially available CD-ROMs offering images, graphics and more, all at different quality, sophistication and price levels. Consumers can also turn to the Internet, where millions of images are available for downloading to a PC.
• Digital offers some real advantages. Images are held in a digital file and are available for use immediately. They can be transferred immediately from camera to PC, where they can be compressed, amended, altered and despatched using e-mail, fast ISDN lines and the internet. They can be downloaded and printed or transferred to CDs using recently developed copying equipment that retains image quality at a high level.
• Consumers can take CDs to an Agfa Image Center where the quality, format and resolution can be chosen. Digital images have transformed access, ease of use and transmission of images to provide a flexible series of solutions for customer needs. With instantaneous image capture, digital images require only minimal storage facilities. Images can also be manipulated and altered and only the chosen images need to be put into print format.
• However, at the present stage of development, really high quality digitally produced images do not come cheap; the equipment required is expensive. Professional users face high set-up costs, but in industries where speed, quality, and flexibility in use really matter, the price is worth paying. Imaging is an industry where copyright is jealously guarded, and ease of transfer brings with it problems of security and copyright protection. Digital files can also be lost or become corrupted, so some form of back-up is vital. Agfa is aware of these additional consumer and business needs and continues to work on ways of meeting them.
• The imaging industry now has two main product markets: analogue and digital. Each product has strengths and weaknesses, the importance of which varies according to customer needs and requirements.
• There remains a need for both analogue and digital imaging, depending upon the requirements of client groups. For example, during construction, gas and oil pipelines need their joints X-rayed with periodical follow-up checks so that cracks and defects can be detected. This is a job for tried and tested analogue systems.

 

On the other hand, digital technologies have helped to transform the work of hospital radiologists. For example, a software package developed by Agfa called MUSICA (Multiscale Image Contrast Amplification) enables radiologists to manipulate X-ray images in various ways. Edges can be sharpened up to reveal key details, and images can be rotated to offer alternative perspectives. Users can zoom in on details, and select and sort images in a search for recurring patterns. Images can be shared across a number of hospital workstations and can also be transmitted for immediate expert analysis elsewhere.

The best investment programmes are supported by painstaking research: market research into what consumers require and product research to establish what the new technology can and cannot do for them. Agfa is at the heart of changes in imaging brought about by new technology. It is leading. It is also listening and learning. In a highly competitive industry, Agfa’s thorough approach is enabling it to retain important competitive advantages over its closest and fiercest rivals.

 

1. Some of the Vital strategic decisions in respect of new technology can be ?

How far and how quickly should we embrace the new technology

"Are we big enough and capable enough to accomplish all the essential changes on our own "

How far and how quickly should we amend or abandon our present products

All

 

 

2. Techonological Factors are related to which type of Environment ?

External Environment

Internal Environment

Competitive Environment

Structural environment

 

3. The product market related to Imaging industry is/ are ?

analogue only

Analogue and digital

digital only

none of the options

 

 

4. What is /are the reason/s , that the company adopts to new technology ?

Is innovative

Is reliable

good scope in long run

All

 

5. The downside of Technological advancement can be ___?

New technology becomes immediately popular

sale of older technology is not at all affected

sale of older technology is affected

All of the above

 

6. In the context of this case study , Adoption of New technology requires investment . is the statement true ?

Yes, Investment is required

Investment is not at all required

Both A & B

None of the options

 

7. Market Research for the Investment Purposes in context of the consumers is related to ?

Identification of their needs or wants

identification of Competitors

Both A& B

None of the Options

 

8. In a competitive industry , Agfa’s main approach is to gain ____________ over its competitors ?

technological Advantage

Competitive advantage

Economic Advantage

None of the Options

 

9. Advantages of using Digital Images according to this case study are ?

available for use immediately

can be transferred immediately from camera to other devices

can be downloaded and printed or transferred to CDs

ALL

 

10. As per this case study , the Organisational Structure Adopted by Afga is ?

Divisional Structure

Bureaurocratic structure

Line structure

Line & Staff Structure

 

90/100

 

5th Block Assessment

CASE STUDY

 

This case discusses how Beijing-based multinational technology giant, Lenovo Group Limited (Lenovo), emerged as a global brand from China. After becoming a market leader in the Chinese PC market, several international acquisitions helped the company establish a presence in global markets. The company’s 2005 acquisition of the PC division of US-based multinational technology giant International Business Machine (IBM) gave the Lenovo brand global recognition. Lenovo’s 2011 acquisition of German electronics manufacturer, Medion, in 2011 and a joint PC venture with Japanese multinational technology company NEC Corporation helped the company transform from a small Chinese electronics company into the world’s largest PC maker by shipping over 53 million units in 2013.

 

After some initial success with its ‘Protect and Attack’ strategy, Lenovo started to face reverses. In 2017, it lost its PC crown i.e. market leadership in the global personal computers (PCs) market, to its arch rival Hewlett-Packard (HP). Lenovo also found the going tough in the smartphone business that it entered in 2010 as part of its ‘PC Plus strategy’. Lenovo’s gamble of acquiring Motorola Mobility from Google failed to pay off, according to some analysts. By the end of 2015, Lenovo’s fortunes in the mobile market had dipped dramatically. It slipped to eighth position in China’s smartphone market as new and nimbler Chinese competitors such as Huawei, Xiaomi, Oppo, and Vivo continued to grow rapidly. Critics stated that Lenovo lacked innovation at a time when its rivals were upping their game in both the PC and smartphone markets. The challenge before Yang Yuanqing (Yang), CEO of Lenovo, was how to orchestrate a turnaround in the fortunes of the company and restore it to its past glory.

 

In August 2017, Beijing-based multinational technology giant, Lenovo Group Limited (Lenovo), reported a quarterly loss of US$ 72 million for the quarter ended June 30, 2017. It had made a profit of US$ 173 million for the same quarter of 2016. Lenovo also lost its market leadership in the global personal computers (PCs) market to its arch rival Hewlett-Packard (HP). HP led the global PC market with a 22.8% market share for the second quarter of 2017 while Lenovo stood second with a market share of 21.6%, according to International Data Corporation (IDC). Analysts attributed Lenovo’s troubles to the maturing PC market where demand was falling with consumers shifting to smart phones and tablets for daily activities including surfing the Internet. Critics opined that Lenovo’s products, be it PCs or smart phones, lacked innovation while HP had taken over the PC crown by launching a series of cool products targeted at gamers. In the smart phone market too, analysts felt that Lenovo had failed to read the market signals, while its competitors such as Huawei Technologies Co. Ltd. (Huawei), Xiaomi Inc. (Xiaomi), Oppo Electronics Corp. (Oppo), and Vivo Electronic Corp. (Vivo) were rolling out stylish and inexpensive smart phones and gaining market share in China.

The history of Lenovo dates back to 1984 when it was started as New Technology Developer Inc., the predecessor of the Legend Group Ltd. (Legend), by Founder and Chairman, Liu Chuanzhi (Liu), along with ten colleagues at the government-owned Computing Institute of the Chinese Academy of Sciences (CAS) with US$ 25,000. The company was started with the aim of commercializing the research and development (R&D) activities conducted at CAS. In 1985, as its first business deal, the company took over the responsibility of receiving, checking, and maintaining IBM computers imported by CAS and of training CAS staff.

 

The company invested the profits of US$ 146,583 it had received from servicing IBM computers in the design, production, and marketing of its first product – the Chinese character card – HanCard. The Chinese character card, which translated English operating software into Chinese characteristics, was based on the original concept developed by the Institute of Computer Technology (ICT) of CAS. At that time, foreign vendors were not able to come out with such an operating system for PCs in China. The successful launch of the Chinese card boosted Lenovo’s growth in the early 1990s.

In the 1990s, Lenovo was the first company to introduce the home computer concept in China and it grew into a national company cornering a market share of 27% in the domestic market. Lenovo’s competency was its deep understanding of the domestic market and its quick response to the demands of local consumers. The success of Lenovo and other domestic computer makers in China confounded the predictions made by several market analysts. According to Business Week , “It wasn’t supposed to happen this way. A few years ago, most analysts were convinced that the global players would gobble up the Chinese market, with locals like Lenovo stuck in second tier status – at best.”

 

Lenovo believed that to become a global brand, it was not enough just to be identified as a global firm. Establishing a presence in more developed and highly globalized markets such as the US and Europe was essential for its overall strategy. By 2001, though Lenovo’s market share had reached 30% in China, it realized that it would not be able to grow much more given the stiff competition in the country. In addition to this, the domestic market for home PCs was shifting toward laptops rather than desktop PCs. This posed a challenge to Lenovo despite its recording profits of US$ 130 million for the FY 2002-2003, as laptops were not just costly to manufacture but also involved tough competition from rivals such as Dell and HP. In a bid to combat these challenges the company decided to step into international markets.

 

The global economic slowdown in mid-2008 led to Lenovo posting a loss of US$ 226 million. During this time, the company’s CEO William Amelio stepped down in favor of Yang, while Liu returned to assume the role of Chairman.

Lenovo’s Protect and Attack strategy helped the company taste success in China as well as in other global markets. For the FY ended 2013, the company also emerged as the number one PC company in global emerging markets, as well as three of the seven largest PC markets in the world – China, Japan, and Germany. For the quarter ended June 30, 2013, Lenovo’s smartphone business.

With the acquisition of Motorola, Lenovo had ambitious plans to capture a portion of the pie in the global smartphone market. However, the company’s fortunes declined when its smartphone shipments decreased by 53% in China with Lenovo maintaining a meager 3% market share for the Q4 of 2015, according to Canalys. In the global market for smartphones, the company stood at fifth position with a market share of 5.7%.

In a bid to arrest the decline in sales in its smart phone market, Lenovo planned to focus on its Moto brand. According to Yang, “Singular branding will benefit the business.” Stating that the new strategy might not bring in much success to Lenovo, Steven Tseng, an analyst at Daiwa Capital Markets, said, “Customers are also really confused by the company’s strategy.”

Despite the challenging outlook in the global smartphone market, Yang remained optimistic about turning around Lenovo’s struggling mobile business. He stated that there was a US$ 110 million sequential improvement in operational pretax income, attributable to improvements in the mobile and data center businesses in the quarter ended June 30, 2017. Yang added, “Not only did this gave me more confidence we will turn around our mobile business in the second half of FY2018, I think the entire Lenovo is entering a new phase of growth.” .

 

 

1. As per this Case Study, Strategy adopted by Lenovo ,after some initial success was ?

Protect Strategy

Protect and Attack strategy

Merger Strategy

None of the Options

 

2. According to this case Study , Lenovo lost its market Leadership in 2017, to which of its Rivals ?

Apple

Samsung

Hewlett-Packard (HP)

Sony

 

3. Lenovo lacked ____ , when its rivals were upping their game in both the PC and smart phone markets.?

Innovation

strategic Decisions

Acquisition Strategy

Both B& C

 

4. What strategy was adopted by Lenovo , that contributed to its success in the global PC market ?

Retrenchment Strategy

Internal Restructuring Strategy

Internationalization Strategy

Functional Level Strategy

 

5. what strategical change/s in respect of the products,  was/were adopted by the Lenonovo’s competitors to attract the customers ?

Group of answer choices

Making product more stylish

attractive pricing strategies

Both A& B

Only B

 

6. As per this Case study, The main Objective of the company Lenovo as New Technology Developer Inc. in the start was ?

Commercialization Of Research & Development activities

To beat the competitors

Both A& B

None of the Options

 

7. In the starting Phase of the company, What was Lenovo’s Competency ?

deep understanding of the domestic market

quick response to the demands of local consumers

Both A& B

Only B

 

8. According to Lenovo to become a global brand - Apart from being identified as a global firm , what other strategy was also required ?

Establishing a presence in more developed and highly globalized markets

Improvement in Client servicing

adherence to International Standards

Both B& C

 

9. What challenge Lenovo had to face , despite of its recording profits ?

Shifting of Domestic Market from Home PC’s to Laptop’s

Shifting of Domestic Market from Laptops to Home PC’s

Shifting of Market Demand to Other Electronic Items

None of the Options

 

10. In a bid to arrest the decline in sales in its smart phone market, Lenovo planned to focus on which brand ?

Samsung Brand

VIVO Brand

Sony brand

Moto brand

 

 

Full Syllabus Assessment

 

 

CASE STUDY

 

Aggregate minerals are an important resource and their use is essential to national prosperity. They are vital for building new or improved housing, hospitals, schools, factories, roads and leisure facilities. Everything from a

 

1st Block Assessment

 

  CASE STUDY

 

In November 2017, China’s largest online travel agent (OTA), Shanghai-based Ctrip.com International Limited (Ctrip), announced the acquisition of the US-based travel recommendation service, Trip.com (Trip), for an undisclosed sum. This was the latest among several moves by Ctrip that signaled its ambitions to expand beyond Asia. Earlier in 2016, Ctrip bought Skyscanner, a Scotland-based flight Search Company, for about US$1.74 billion, making the travel industry sit up and take notice. The Trip deal was expected to help Skyscanner leverage Trip.com’s capabilities on its own platform. Travis Katz, CEO and founder of Trip, said, “The idea of this deal is for Skyscanner to marry in-destination reviews content in Trip’s arsenal to Skyscanner’s platform. The aspiration is not to only add static details, such as about the opening times of restaurants or museums, but to also enable Skyscanner users to see and eventually add social reviews within Skyscanner’s website and apps,”

 

Founded in June 1999 by James Liang, Neil Shen, Min Fan, and Qi Ji, Ctrip started out as a trip advisor service provider. The company aggregated information on hotels and flights and enabled customers to make informed and cost-effective hotel and flight bookings. Its inception and growth coincided with the travel boom in China and its revenues increased from Renminbi (RMB)6.9 million in 2000 to RMB105.3 million (US$12.7 million) in 2002.

 

Even the outbreak of the Severe Acute Respiratory Syndrome (SARS) in 2003 did not have a significant impact on Ctrip’s business. By October 2003, Ctrip had established room supply relationships with over 1,700 hotels in China and over 450 hotels internationally. It went public in December 2003, with its IPO soaring on the debut day. On Nasdaq, the shares opened at US$24.01, and at one point went up to US$37.35, thereby making Ctrip’s first IPO double its US$18 offer price on day one of trade.

 

COMPETING WITH TECHNOLOGY

 

Ctrip had constantly been acquiring new technologies to serve its customers. Artificial Intelligence, big data, and intelligent hardware employed by Ctrip were crucial in providing a superior travel experience. Jane Sun (Jane), Ctrip’s Chief Executive Officer, said, “For the user interface, we want to make sure that we know every customer who has purchased or searched on the Ctrip website. So when we list our products for them, it’s not millions of items that they have to search through -- the user experience wouldn’t be maximized. Hopefully we can personalize the display. All of that is in our design. When the customer purchases with us, they (may not) know what they want, but we know what would fit them. That’s a way technology will help us” .

 

CTRIP’S STRATEGIC INVESTMENTS AND ACQUISITIONS

 

Ctrip maintained its leading position through a series of strategic investments and acquisitions. From 2013, the company began expanding aggressively expanding internationally. Feifei Xu, Director of Brand Strategy, Labbrand, said, “Their international expansion aims to offer Chinese out-bound travelers or foreign companies in China an extension of their value-chain platform of tourism. By international expansion, they are mostly targeting outbound Chinese travelers.” In 2013, Ctrip invested in travel search engine Kuxun, hotel app Economy Hotel Manager, social trip sharing platform Chanyouji, and car rental services Yongche and eHi Car Services

 

CHALLENGES AND OPPORTUNITIES

 

The acquisition of Skyscanner, while contributing substantially to Ctrip’s growth, intensified both domestic and international competition. To compete effectively with Ctrip, other OTAs in China made attempts to attract large investments. Meituan Dianping raised US$4 billion in a funding round led by Tencent Holdings . Interestingly, Priceline, which was Ctrip’s largest shareholder, also participated in the funding round. Agoda.com, owned by the Priceline Group, established a strategic partnership with Meituan Dianping. This strategy of Priceline investing in Ctrip’s domestic competition indicated that it perhaps saw Ctrip as a potential threat and thus made an investment in Meituan Dianping that could lead to hedging its bets against Ctrip. However, analysts felt that Ctrip was strong enough to take a further share of the Chinese OTA market and its long-term growth prospects in China remained strong.

 

Adding Skyscanner’s revenue to Ctrip’s total boosted Ctrip’s Q3 2017 transportation-ticketing revenue by 41 percent to US$515 million. Cindy Wang, Chief Financial Officer, Ctrip, said, “The total number of transactions made by direct booking increased almost three-fold since May (2017), the month we launched the engine on Skyscanner, through September.”

 

 

 

 

1. For expansion of C Trip International Ltd. , what strategy was adopted ?

Acquisition of US based Trip .com

Selling of Trip .com

Becoming a Parter of Trip.com

None of the options

 

 

2. To enable customers to make informed and cost-effective hotel and flight bookings , The company aggregated information on ?

On hotels and flights

on budget hotels

on international flights

both a & b

 

3. Ctrip had continously been acquiring new _____ to serve its customers?

Customers

Technology

Offers

None of the options.

 

4. what technological tools were employed by Ctrip in providing a superior travel experience ?

Artificial Intelligence, big data, and intelligent hardware

Excellent Software

Market Research

Both B&C

 

5. Co. adopted a strategy of using technological tools and make customer purchase easier by?

Knowing what would fit customers , as customers (may not) know what they want

Giving promotional offers

Giving discounts, customers always know what they want

None of the options

 

6. Ctrip maintained its leading position through ?

series of strategic investments only

a series of strategic investments and acquisitions

Focussing on Industry Competition

Focussing on Attracting maximum customers

 

7. Investment strategy adopted by Ctrip was into field of?

Car rentals , Hotel Apps & travel search engines

Car rentals only

hotel app Economy Hotel Manager only

Both B & C

 

8. The strategy adopted for acquisition of Skyscanner, by Ctrip  helped in?

growth of international market

Growth in Foreign Lands

growth of both domestic and international markets

growth of domestic market

 

9. Main investment strategies adopted by the Companies in this case study were related to ?

Selling of a Product Line

Competitor analysis

Scanning Environment

Acquisitions

 

10. ______ has played a major role in this case study , and for capturing a wide market share by the company ?

Technology

Competitors

International Markets

Both B& C

 

2nd Block Assessment

 

 CASE STUDY

 

Navroze Godrej (Navroze), the young executive director for Strategy and Innovation at Godrej and Boyce, the holding company of the India-based Godrej Group, is a fourth generation scion of the Godrej family. Keen on bringing about a major change in his company’s design thinking, he set himself the goal of changing the Godrej Group’s old-world, engineering driven mindset into a forward looking design driven mindset. He aimed to shape the Godrej Group into a company that inculcated a culture of open collaboration between different work groups and businesses. As part of his efforts to fulfill this aim, he created a suitable ambience and office infrastructure to break down the organizational hierarchies. He also started the Godrej Design Lab to encourage young designers to showcase their work. The selected designers were mentored and their designs displayed at national level exhibitions. The case discusses whether the initiatives taken by Navroze to bring about organizational transformation to make the Godrej Group design, innovation, and consumer focused can succeed. The case gives enough scope to analyze whether the influx of young talent is capable of bringing in novel ideas to shape the company’s future.

 

In 2005, Navroze Godrej (Navroze) was inducted as a management trainee into Godrej & Boyce (G&B), the holding company of the Godrej Group. Navroze, a fourth generation-scion of the Godrej family which owned the Godrej Group, was all of 23 years old when he joined Godrej. He was quite different from the previous generations of the family in terms of being more agile and wanting to bring in change within the company. When Navroze was in his early twenties, he met Professor Hemmant Jha, (Jha) of the Institute of Design, Chicago, US. It turned out to be a momentous meeting and was a turning point for Navroze as it kindled in him a love for design, which soon turned into a lasting passion. Navroze was so impressed after chatting with Jha that he persuaded the professor to join G&B. Analysts said this was a smart move by Navroze – one that drove G&B toward innovation. After hiring Jha, Navroze and his team at G&B brought out novel designs and innovations which were patented under Godrej.

Godrej, one of the largest Indian privately-held diversified industrial companies, was founded by Ardeshir Godrej (Ardeshir) in 1897. Ardeshir, a lawyer by profession, gave up his career in law to pursue his passion for making high quality locks and safes. The business was expanded further by Ardeshir’s youngest brother, Pirojsha Godrej (Pirojsha), who joined the company in 1906. In 1909, Godrej secured its first patent for spring-less locks which Ardeshir sold under the Anchor brand. During the 1920s, Ardeshir manufactured the first of Godrej’s sturdy steel cupboards branded as ‘Storwel,’ that became a trend in Indian homes. Ardeshir launched a washing soap as well and the world’s first vegetable oil based toilet soap. The toilet soap was considered to be the best in its time, as it revolutionized the manufacturing process. Up till then, soaps were made from animal fat. Godrej earned a name for itself with the superior quality of locks and soaps it sold. In 1952, Godrej bagged a contract to manufacture ballot boxes for India’s first general elections. Every day, 15,000 ballot boxes were made at its Vikhroli factory in Mumbai, to supply the target of 1.2 million boxes.

In 2013, after Navroze graduated with a Master’s in design, he returned to join G&B and spearheaded a pilot project on a disruptive business model. One of the things he changed was the layout of the (office) shop-floor. Unlike the previous directors who worked from their closed office space, he preferred to sit with his project teams around a big table and discuss matters with them. The new furniture layout was intended to support both individual and group work. Navroze felt traditional desk arrangements created a barrier and prevented openness and collaboration.

GODREJ INNOVATION CENTER

In 2013, Navroze took the bold move of setting up a 25,000 square foot ‘Innovation Center’ in Vikhroli, Mumbai. This was a research and development center to conduct explorative study in areas involving security, lifestyle, well-being, energy, productivity, and connectivity. The innovation center had a fixed 20-member full-time team, while at any given time there were at least a 100 other employees who belonged to other departments deputed to accomplish time-bound projects. As Navroze believed in diversity, the members in the teams came from different backgrounds such as, design, marketing, research, business, engineering, and others. The center had enough space for meetings and lectures, and the furniture was such that it could be reorganized for display of prototype product designs, a collection of material types, and for any other informal interaction as well.

SPRINT PROGRAM

Navroze led the Sprint program that caused a cultural transformation in the company. He facilitated a bottom-up approach, where he invited all the employees of Godrej to submit ideas at the innovation center. Based on their ideas, Navroze set up work groups. For the first time, people with 20 years of experience and those who had joined just six months earlier began working together. The groups came up with ideas that ranged from cooking appliances to recycling of waste, to looking at resources and services for transit population.

GODREJ DESIGNLAB

In 2013, Navroze set up the Godrej DesignLab, (GDL), which was established in collaboration with a Mumbai-based design studio, Elle Décor. GDL was a platform for designers to co-create, experiment, innovate, and challenge the boundaries of product design. GDL aimed at providing a holistic support system to designers who could give a whole new level of futuristic designs. GDL was a forum where designers could submit their work in four categories of furniture, furnishings, lighting and home décor, & accessories.

THE HUBBLE

In April 2014, Navroze spearheaded the development of a second innovation center, the Hubble. It was conceived to serve as a hub where people could interact informally to encourage the culture of creative thinking. The Hubble was built on a spacious 25,000 square foot space in the Vikhroli office itself, to function as an eat, work, and play space with a coffee-shop-kind-of-atmosphere. It encouraged both private and collaborative work among the employees.

REINFORCING THE DESIGN TRADITION

The Chief Design Officer, of GPL, Anubhav Gupta (Gupta), said that though there was no vertical on design in the Godrej group of companies, design was considered a business horizontal as it had become omnipresent in all aspects of the Godrej Group. He said innovation at GPL was not about playing it safe but it required an ability to tolerate failure before earning superlative success. Innovation, according to Gupta, was finding the best possible or the most optimal design.

 

 

1. A smart strategy adopted by Navroz in the starting phase ,after getting impressed with professor Jha was ?

Strategy related to innovation

strategy related to acquisitions

Strategy related to controlling systems

strategy related to diversifications

 

2. The first patent secured by godrej , was related to which product?

spring-less locks

Almirah’s

Safe’s

Refregirator’s

 

3. The strategy adopted by godrej in respect of innovation , was done in respect of ?

achieving greater market share

to attract more & more customers

Both A& B

None of the options

 

4. Godrej revolutionised the manufacturing process, and created world’s first _______?

Animal fat based toilet soap

vegetable oil based toilet soap

Herbal Soaps

All

 

5. It was felt that old structure of traditional desk arrangements created _______?

efficient working environment

Prevented positive work culture

Barrier ,prevented openness and collaboration

All

 

6. On what kind of activities godrej majorly focussed in the innovation centre ?

Research & Development

cost cutting strategies

strategies to attrat customers

None of the options

 

7. Godrej earned a name for itself in the starting phase for which of the following products ?

Refrigerators

superior quality of locks and soaps

Soaps Only

Electronic Appliances

 

8. People/ employees in Godrej were allowed to interact informally which lead to encouragement of ___?

the culture of creative thinking

collaborative work among the employees

Both A & B

None of the options

 

9. In order to breakdown the organisational hierarchies , what basic strategy was adopted ?

Creation of a suitable ambience and office infrastructure

Creation of a friendly environment

Creating a competitive Environment

Both b & C

 

 

10. for India’s first general elections , what kind of contract was bagged by Godrej ?

to manufacture Lockers

to manufacture Soaps

to manufacture both ballot boxes & soaps

to manufacture ballot boxes

 

 

3rd Block Assessment

 

CASE STUDY

 

This case discusses about the acquisition of Florida-based Elizabeth Arden Inc, (Arden), a cosmetics, skin care, and fragrance major by Revlon Inc. (Revlon) another cosmetic giant. Post-merger, Revlon reported a 21.9% increase in its net sales in 2016. The case highlights the journey of both the businesses and also the tough time they faced prior to the merger. While Revlon had been weighed down by its debt, the sales of celebrity fragrances, a key part of Arden's portfolio, had declined. Arden's losses and increasing debt load left the company with few options to survive as a stand-alone business. Revlon pursued the deal largely in order to achieve scale.

 

Revlon bought Arden in a $870 mn deal in June 2016. The merger brought together the two cosmetics majors amidst hopes that a combined distribution network and marketing strategy could broaden their appeal. The industry showed a mixed response to the union. While some experts felt the synergy was not very realistic few other opined that it would revive the fortunes of Arden.

 

The case also discusses Revlon’s plans of restructuring the business. It headed towards shifting to a brand-centric structure aimed at identifying investment areas quicker and reacting faster to consumer needs in the domestic and international markets.

 

In March 2017, New York-based cosmetics, skin care, fragrance, and personal care company Revlon Inc, (Revlon) reported its net sales rose to $2.3 billion in 2016, a 21.9 percent increase compared to 2015. Revlon witnessed growth across all segments. This growth in sales came amidst Revlon’s plans to shift to a brand-centric structure after initiating a restructuring plan in 2016. The restructuring followed Revlon’s acquisition of Elizabeth Arden Inc, (Arden), a Florida-based, cosmetics, skin care, and fragrance major, for $ 870 million. The merged company was expected to leverage the strength of its brands and adapt to the changing behaviors and preferences of consumers to serve them better. In addition to expanding categories, channels, and geographies, Revlon expected to hit $5 billion in sales in the next five years. As part of the integration, it announced the elimination of 350 positions worldwide and streamlining of certain operations. In addition, project integration-related restructuring activities were estimated to cost between $65 million and $75 million by 2020.

THE JOURNEY OF ELIZABETH ARDEN

Born as Florence Nightingale Graham (Graham) in 1878 in Ontario, (Canada), Graham was the youngest of five children in a poverty stricken family. She dropped out of school due to a lack of finances and began training as a nurse. During nursing training she met a chemist experimenting with a facial cream that could help acne sufferers. The idea fascinated her, leading to her believing that most women would give anything for beauty. Graham took up a number of odd jobs that gave her an opportunity to display her salesmanship. While working briefly as a bookkeeper for the E R Squibb Pharmaceuticals Company in 1908, she spent hours in their lab learning about skincare. This further inspired her to fashion a small lab for beauty products of her own. To pursue her dream, she quit her job at Squibb and joined as an assistant in a newly established beauty parlor. Graham later worked for beautician Eleanor Adair as a “treatment girl” and gained valuable industry experience. In 1910, Graham borrowed money from her brother William and started ‘Red Door Salon’ with a partner, Elizabeth Hubbard . The first shop was opened on Fifth Avenue. The partnership soon dissolved and Graham became the sole proprietress. She decided to name her salon ‘Elizabeth Arden’. The name was derived from her former partner’s name and from Alfred, Lord Tennyson's poem ‘Enoch Arden’. The new name raised the prestige and glamor of not only the business but Graham as well. Thus, Graham changed her name to Elizabeth Arden (Arden) in 1915.

THE JOURNEY OF REVLON

The history of Revlon Inc, one of the world's leading cosmetics companies based in New York, can be traced back to 1932. Two brothers, Joseph Revson and Charles Revson, conceived of the idea of creating a nail enamel using pigments instead of the normal dyes. They collaborated with a local chemist named Charles Lachman (who contributed the ‘L’ to the Revlon name), to come up with their first product. Revlon developed a variety of new shades of nail polish. Seeing the booming beauty salons and the growing popularity of manicures they targeted beauty salons as a market to sell their nail polishes.

Arden was known for its fragrances including those licensed from celebrities like Marilyn Monroe, Catherine Zeta-Jones, Britney Spears, Justin Bieber, Taylor Swift, and many more. However, in 2014, the company posted the biggest ever quarterly loss in its history, a 28 per cent drop in revenue. The company was hit hard mainly because of a fall in the sales of its celebrity perfumes. The company statement said, “While the company had expected weaker sales comparisons due to the lower level of fragrance launch activity in fiscal 2014 versus fiscal 2013, the decline in sales of celebrity fragrances, particularly the Justin Bieber and Taylor Swift fragrances.

In June 2016, mired in financial woes, Revlon decided to pick up Arden. The company agreed to buy Arden in an $870 million deal. The wager was expected to create a beauty business with annual sales of $3 billion along with creating a platform in categories like mass, prestige, professional, color cosmetics, skin care, and fragrances. In addition to greater purchasing power, the merged entity was expected to benefit from cost savings of nearly $140 million by eliminating overlaps, integrated manufacturing, and distribution networks of both companies. Garcia said, “We see great opportunities for growth where they are strong and we are not.”

Some analysts expected a negative outcome from the union. They felt that Revlon was buying a troubled competitor with an elevated debt load. Although Revlon pointed to the expected synergies, experts found this unrealistic and opined that it could possibly result in higher leverage ratios. Wendy Liebmann, CEO of WSL Strategic Retail, stated, “There’s so little other business synergy. Arden is a fragrance and skin care house. Revlon is a color cosmetics and hair-color business. Different price points and distribution.

The deal not only marked a turnabout for investors, it also put an end to speculations that Revlon would be an acquisition target – rather than a buyer. Before the acquisition was announced, Arden's market capitalization was $280 million. Shares had fallen 40 percent off their 52-week high. But as soon as the news of the acquisition came in, Arden’s shares soared by as much as 50 per cent and closed at $14; Revlon rose about 6.6 percent to close at $33.25.

In January 2017, Revlon decided to divide and organize the business into four categories: the Revlon brand, Elizabeth Arden, fragrances and portfolio brands, (which included Almay, Mitchum, Gatineau, Sinful Colors and Pure Ice cosmetics. Each Revlon team was required to prepare a three-year growth plan and set priorities and strategies for their labels. The core corporate functions including finance, human resources, supply chain, research and development, legal, communications, and corporate social responsibility departments were to be reorganized to provide better support to the new brand-centric and regional structures.

 

 

 

1. In this case study, What strategy was adopted by Revlon for the purpose of Growth in the Market ?

Acquisition as growth strategy

Industry Analysis as growth Strategy

Leadership strategy

Competitor analysis strategy

 

2. This case study is about which two major companies ?

Revlon International & Mac

Maybelline & MAC

Elizabeth Arden Inc & Revlon Inc

Mayabelline & Revlon

 

3. In order to serve the customers better ,what strategy was adopted by Revlon ?

adapt to the changing behaviors & preferences of consumers

adapt to the changing Market conditions

adapt to the changing Political environment

adapt to the latest Technology

 

 

4. The case study discusses Revlon’s plans of____?

Restructuring the business

Closing the business

Both A& B

None of the options

 

5. This case study , highlights __?

the better condition of Elizabeth Arden Inc prior its acquisition

the journey of both the businesses and also the tough time they faced prior to the merger

the downfall of Revlon Inc . before the acquisition

None of the options

 

6. Revlon headed towards shifting to a brand-centric structure aimed at identifying investment areas quicker and reacting faster to _____?

consumer needs in the domestic and international markets

consumer needs in the domestic market only

consumer needs in the international markets

None of the options

 

7. As per this case study , Initially Arden was known for ?

Nail enamel

Face Creams

fragrances

Both A & B

 

8. Revlon decided to adopt restructural strategies - to divide and organize the business into categories, what were these categories ?

the Revlon brand

Elizabeth Arden brand

fragrances and portfolio brands

All of the options

 

9. In this case study , each Revlon team was required to prepare a _____ growth plan and set priorities and strategies for their labels?

three-year

Five Year

Ten years

seven Years

 

10. Main Motive behind the acquisition& merger strategy adopted in this case study was related to ?

Increasing the sales

attracting More & More customers

Capturing Major Market Share

All of the Options

 

 

 

4th Block Assessment

 

CASE STUDY

 

When a new technology comes along that is capable of improving dramatically the products of a whole industry, every firm in that industry has vital strategic decisions to make. It must ask itself:

• How far and how quickly should we amend or abandon our present products?
• How far and how quickly should we embrace the new technology?
• Are we big enough and capable enough to accomplish all the

essential changes on our own?

• How can we come out of this time of change stronger than we went in?

Once taken, these key decisions have to be implemented.

Technological change > Strategic decisions > Strategic Implementation

All this makes for exciting times within the industry, for producers and also for consumers, who also have some adjusting to do.

Imaging is one of the world’s growth markets and new technology is making its mark; imaging has ‘gone digital’. It is not a complete transformation. Analogue imaging has not been abandoned and still has millions of satisfied consumers. However, the industry will move on. This is because the new technology:

• is genuinely innovative
• has undeniable advantages in some key aspects
• has been shown to work
• is proving reliable
• is capable of further development
• will become cheaper in the long run.

The pace of change is accelerating. Abandoning former practices and establishing new ways of working is generating not only excitement, but also stresses and tensions. The new technology requires new skills, new attitudes and new approaches from both producers and consumers.

This case study looks at how AGFA, a leading player, is taking full advantage of the digital revolution. The company is using the new technology as:

• an engine for growing its business
• a means of providing its customers with better product possibilities and with greater flexibility and choice.

Agfa

Agfa is a leading name in the imaging industry. The Agfa-Gevaert Group de-velops, produces and distributes an extensive range of analogue and digital imaging systems. Agfa has divided its operations into three segments.

Segment: Consumer imaging.    

Activity/Products: Wide range of products using both digital and analogue technologies for taking, processing and manipulating photographs.

Segment: Graphic systems.    

Activity/Products: A wide range of electronic and photographic systems for the graphics industry, including workflow management systems, scanners and laser image setters.

Segment: Technical imaging.

Activity/Products: Medical uses eg X-ray equipment; non-destructive fault-testing eg in aircraft and pipelines; industrial imaging for motion pictures; document management systems and micrographics.

Agfa’s operations involve a high level of innovation. The company’s willingness and ability to work at the leading edge of technology help to make it a leader in its field.

 

For Agfa to remain a market leader, its managers must concern themselves with the future and ask themselves:

• Where is the industry heading?
• What are our competitors likely to do next?
• Where do we go from here?

With imaging, the answers currently are:

• The industry is heading towards greater use of digital imaging.
• Our competitors will invest in research and development aimed at enhancing quality at affordable prices.
• We look to get there first, with better products to sell to customers who are prepared for using them.

This approach requires a willingness to invest heavily in new projects that maximise the benefits of new technology.

- Every proposed project undergoes investment appraisal. This procedure establishes whether a particular project is worth taking forward. Managers will ask key questions about a proposal, including:

• How expensive are the initial outlay and the final total outlay likely to be?
• For how long are we likely to be spending money without any financial return?
• How long is it likely to be before we recover, from sales, all the money we have invested?
• What return can we reasonably expect from our investment in the long term?
• How big are the risks? What events over which we have little or no control could cause this project to falter or fail? How likely are they?

Risks for the imaging industry include:

• a significant rise in the cost of borrowing to finance investment
• a downturn in business activity worldwide that persuades industrial customers to postpone their own purchase of new plant and equipment
• poorer job prospects for the general public that deter private consumers from spending on the latest products.

Agfa must consider these factors as it contemplates large scale investment in new digitally based technologies.

During 2000 Agfa invested around 224 million Euros (equivalent to 4% of its sales revenue) in research and development. Part of this involved working with external partners eg universities and leading research centres. Much of the work reflected the need to move forward in:

• developing the transition from analogue to digital solutions
• meeting a wider variety of customer needs
• helping Agfa to create new market sectors and to enter them profitably.

Digital technologies are changing the way in which people take, process and use images. New processes allow customers to work with images quickly and efficiently, without requiring extensive expertise and knowledge. Take, for example, the newspaper world. With newspapers, speed is vital and editors want the best pictures to go with the latest stories.

• Digital technology is transforming newspaper production. For example, sports photographers no longer have to dash back to the office to develop prints, wondering anxiously what they have captured. They know immediately the quality of the image they have and they can despatch it immediately too. As a result, the publisher soon has on sale a comprehensive local Saturday night ‘sports special’ carrying action photos of spectacular moments that occurred hundreds of miles away just a short time earlier.
• The new technology is also transforming photography for the general public. For example, crystal clear photos of a baby can now be available to proud, anxious grandparents thousands of miles away within a few minutes of an infant’s birth.
• Technological advance does have a downside, in that demand for new products affects sales of older ones. As a market, analogue photography has almost reached maturity. It is still

significant in size with almost 70% of the market. However, with plenty of scope for further product developments and for repeat business. The growth of digital technology has not deterred Agfa and its competitors from bringing out new, improved products for use with ‘old’ technology.

• The real difference between analogue and digital lies in how images are recorded and processed. Analogue photography uses traditional cameras to expose silver-halide film. This still remains the most widely used way to capture images. Customers are well served with a variety of excellent products, from traditional slide and print films to Advanced Photo Systems (APS) films and single-use cameras with enhanced capability.
• Compared with digital systems, recent analogue advances are ‘low tech’, but so too is their cost. Image quality is excellent, and represents optimum value. The technology can also be applied widely; even single-use cameras take good pictures. However, analogue images cannot be viewed instantly, take time to enlarge or reduce and are on prints or negatives that cannot be re-used. Negatives need optimum storage conditions to remain in good condition long term. The chemicals used in processing also raise some environmental issues. Digital technology represents a genuine advance because it removes many of these difficulties.
• Digital images
• Digital images are based upon a grid or matrix. They vary in the quality of their resolution, which is expressed in pixels or dots per inch (dpi) or millimetre. The higher the resolution, the better the picture, and the more expensive the equipment producing it.
• There is a wide range of affordable digital cameras on the market now, offering varying levels of quality, capabilities and prices. There are also thousands of commercially available CD-ROMs offering images, graphics and more, all at different quality, sophistication and price levels. Consumers can also turn to the Internet, where millions of images are available for downloading to a PC.
• Digital offers some real advantages. Images are held in a digital file and are available for use immediately. They can be transferred immediately from camera to PC, where they can be compressed, amended, altered and despatched using e-mail, fast ISDN lines and the internet. They can be downloaded and printed or transferred to CDs using recently developed copying equipment that retains image quality at a high level.
• Consumers can take CDs to an Agfa Image Center where the quality, format and resolution can be chosen. Digital images have transformed access, ease of use and transmission of images to provide a flexible series of solutions for customer needs. With instantaneous image capture, digital images require only minimal storage facilities. Images can also be manipulated and altered and only the chosen images need to be put into print format.
• However, at the present stage of development, really high quality digitally produced images do not come cheap; the equipment required is expensive. Professional users face high set-up costs, but in industries where speed, quality, and flexibility in use really matter, the price is worth paying. Imaging is an industry where copyright is jealously guarded, and ease of transfer brings with it problems of security and copyright protection. Digital files can also be lost or become corrupted, so some form of back-up is vital. Agfa is aware of these additional consumer and business needs and continues to work on ways of meeting them.
• The imaging industry now has two main product markets: analogue and digital. Each product has strengths and weaknesses, the importance of which varies according to customer needs and requirements.
• There remains a need for both analogue and digital imaging, depending upon the requirements of client groups. For example, during construction, gas and oil pipelines need their joints X-rayed with periodical follow-up checks so that cracks and defects can be detected. This is a job for tried and tested analogue systems.

 

On the other hand, digital technologies have helped to transform the work of hospital radiologists. For example, a software package developed by Agfa called MUSICA (Multiscale Image Contrast Amplification) enables radiologists to manipulate X-ray images in various ways. Edges can be sharpened up to reveal key details, and images can be rotated to offer alternative perspectives. Users can zoom in on details, and select and sort images in a search for recurring patterns. Images can be shared across a number of hospital workstations and can also be transmitted for immediate expert analysis elsewhere.

The best investment programmes are supported by painstaking research: market research into what consumers require and product research to establish what the new technology can and cannot do for them. Agfa is at the heart of changes in imaging brought about by new technology. It is leading. It is also listening and learning. In a highly competitive industry, Agfa’s thorough approach is enabling it to retain important competitive advantages over its closest and fiercest rivals.

 

1. Some of the Vital strategic decisions in respect of new technology can be ?

How far and how quickly should we embrace the new technology

"Are we big enough and capable enough to accomplish all the essential changes on our own "

How far and how quickly should we amend or abandon our present products

All

 

 

2. Techonological Factors are related to which type of Environment ?

External Environment

Internal Environment

Competitive Environment

Structural environment

 

3. The product market related to Imaging industry is/ are ?

analogue only

Analogue and digital

digital only

none of the options

 

 

4. What is /are the reason/s , that the company adopts to new technology ?

Is innovative

Is reliable

good scope in long run

All

 

5. The downside of Technological advancement can be ___?

New technology becomes immediately popular

sale of older technology is not at all affected

sale of older technology is affected

All of the above

 

6. In the context of this case study , Adoption of New technology requires investment . is the statement true ?

Yes, Investment is required

Investment is not at all required

Both A & B

None of the options

 

7. Market Research for the Investment Purposes in context of the consumers is related to ?

Identification of their needs or wants

identification of Competitors

Both A& B

None of the Options

 

8. In a competitive industry , Agfa’s main approach is to gain ____________ over its competitors ?

technological Advantage

Competitive advantage

Economic Advantage

None of the Options

 

9. Advantages of using Digital Images according to this case study are ?

available for use immediately

can be transferred immediately from camera to other devices

can be downloaded and printed or transferred to CDs

ALL

 

10. As per this case study , the Organisational Structure Adopted by Afga is ?

Divisional Structure

Bureaurocratic structure

Line structure

Line & Staff Structure

 

90/100

 

5th Block Assessment

CASE STUDY

 

This case discusses how Beijing-based multinational technology giant, Lenovo Group Limited (Lenovo), emerged as a global brand from China. After becoming a market leader in the Chinese PC market, several international acquisitions helped the company establish a presence in global markets. The company’s 2005 acquisition of the PC division of US-based multinational technology giant International Business Machine (IBM) gave the Lenovo brand global recognition. Lenovo’s 2011 acquisition of German electronics manufacturer, Medion, in 2011 and a joint PC venture with Japanese multinational technology company NEC Corporation helped the company transform from a small Chinese electronics company into the world’s largest PC maker by shipping over 53 million units in 2013.

 

After some initial success with its ‘Protect and Attack’ strategy, Lenovo started to face reverses. In 2017, it lost its PC crown i.e. market leadership in the global personal computers (PCs) market, to its arch rival Hewlett-Packard (HP). Lenovo also found the going tough in the smartphone business that it entered in 2010 as part of its ‘PC Plus strategy’. Lenovo’s gamble of acquiring Motorola Mobility from Google failed to pay off, according to some analysts. By the end of 2015, Lenovo’s fortunes in the mobile market had dipped dramatically. It slipped to eighth position in China’s smartphone market as new and nimbler Chinese competitors such as Huawei, Xiaomi, Oppo, and Vivo continued to grow rapidly. Critics stated that Lenovo lacked innovation at a time when its rivals were upping their game in both the PC and smartphone markets. The challenge before Yang Yuanqing (Yang), CEO of Lenovo, was how to orchestrate a turnaround in the fortunes of the company and restore it to its past glory.

 

In August 2017, Beijing-based multinational technology giant, Lenovo Group Limited (Lenovo), reported a quarterly loss of US$ 72 million for the quarter ended June 30, 2017. It had made a profit of US$ 173 million for the same quarter of 2016. Lenovo also lost its market leadership in the global personal computers (PCs) market to its arch rival Hewlett-Packard (HP). HP led the global PC market with a 22.8% market share for the second quarter of 2017 while Lenovo stood second with a market share of 21.6%, according to International Data Corporation (IDC). Analysts attributed Lenovo’s troubles to the maturing PC market where demand was falling with consumers shifting to smart phones and tablets for daily activities including surfing the Internet. Critics opined that Lenovo’s products, be it PCs or smart phones, lacked innovation while HP had taken over the PC crown by launching a series of cool products targeted at gamers. In the smart phone market too, analysts felt that Lenovo had failed to read the market signals, while its competitors such as Huawei T