16. Question 16

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RER it an American top eLearning content development company with more than 8 years of experience in the development of online learning modules for different organisations around the world including universities and government. Some examples of the online modules developed by RER are: health and safety, information security, equality and diversity, anti-bribery and other online eLearning modules. In early 2019, the company approved the expansion of their business to other countries in Europe. However, due to the Coronavirus (Covid19) pandemic, the company has put on hold new projects. The company has also stopped recruitment of new staff. It has postponed the investment in training and development, and the expansion in Europe until further notice. If the situation gets worst, RER will evaluate whether they need to stop renting facilities in Central London and promote working from home model for their employees.

The company had to adjust their strategy according to the new scenario. Why this new strategy is SUITABLE according to SAF model? (choose ONE answer)

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1. Because current customers put on hold projects. That is a current trend in this industry, and it does not heavily contradict the previous strategy or the companys mission.

2. Because RER has the economic resources to cover their duties and implement it.

3. Because RER does not have the economic resources to cover their duties and thus implementation is impossible.

4. Because RER has the resources and capabilities to face a new challenging scenario.

5. Because this strategy will bring the economic results that shareholders expect.

17. Question 17

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Nespresso has reinvented the way coffee is prepared with its range of stylish, convenient and easy-to-use machines. Consumers are willing to pay more for Nespresso than for other brands such as Lavazza or Senseo. One key secret to the art of pricing luxury goods is mastering limited editions. In addition to the permanent collections, Nespresso typically introduces several extraordinary and rare creations for a limited period each year. These limited-edition coffees are priced higher than the permanent collections. At the same time, Nespresso has positioned its offerings as unique, high end and luxurious (both coffee and machines). Customers seem to be willing to pay a premium price for a higher perceived value for money supported by stylish design, effective branding and great customer service.

Which of the following statements best describes the companys Business / competitive strategy? (choose ONE answer)

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18. Question 18

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BMW Brilliance Automotive Ltd. is an automobile manufacturing company headquartered in Shenyang, China. The main purpose of BMW Brilliance Automotive is to manufacture, distribute and sell Chinese-made BMW passenger cars within China. The company was set up in 2003 as a result of an agreement between BMW, a local Chinese company and the Shenyang municipal government. For BMW this was the best way to improve its positions in the Chinese market. In 2018, BMW (the German car manufacturing company), spent 3.6bn to up its stake in BMW Brilliance Automotive from 50% to 75% that operates in China. The deal will have a positive impact on BMW Brilliance Automotive (BBA), as its capacity will increase to more than 650,000 units by 2021. This type of strategy seems to be an example of: (choose only ONE correct answer)

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1. Joint venture as BMW is sharing the risk with a local partner but increasing their market share.

2. Foreign Direct Investment as BMW as it allows rapid market entry into a new market.

3. Franchising as BMW has agreed income through sale of production and marketing rights.

4. Licensing as there is an agreed income through sale of production and marketing rights.

5. Exporting as BMW is sharing the risk with a local partner but increases market share.

19. Question 19

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Hyundai Motors is a South Korean multinational automotive manufacturer that started operations in 1967. Initially Hyundai cars were inexpensive. However, over the years Hyundai has expanded their businesses and targeted different markets. One of its recent businesses includes the luxury brand Genesis. The Hyundai Genesis is an executive four-door, five passenger rear or all-wheel-drive sedan car. By creating this product, Hyundai has focused on customer experience and has demonstrated a key capability that involves developing the ability quickly identify and execute customer focused in car improvements and to control costs in their technology and design features.

Which of the following statements best describes the business / competitive strategy of Hyundai Genesis described above? (choose ONE answer)

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1. Hyundai has developed a differentiation strategy with a premium price and unique functionality that differentiates the company from its competitors.

2. Hyundai has developed a differentiation strategy as prices are low and they also offer a unique customer experience.

3. Hyundai has developed a Focus strategy as it focuses on a wide range of markets where it can develop its competitive advantage.

4. Hyundai has developed a Pause Strategy as after investing in different markets the current goal is to achieve stability.

5. Hyundai has developed a diversification strategy as it targets different markets, and their car models range from low cost to more expensive luxury cars.

20. Question 20

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Amazon acquired Whole Foods in Aug 2017. The acquisition, although strategic, was also full of risk. Running a successful brick-and-mortar grocery business is something entirely different form running an online retail business. It is entirely possible that Amazon could "overreach" and discover it is unable to be successful at selling groceries. It appears that Amazon has no intention of being a "grocery retailer", but instead it wants to reimagine the grocery experience. It will take time for Amazon's strategy to be implemented. Most importantly, Amazon is playing an Infinite Game where the goal is to outlast competitors, and not to be ahead of them.

Evaluating this strategic decision Amazon had to understand very well the broader macro environment (PESTEL). For example, it had to analyse the lifestyle of its customers along with their economic situation such as disposable income, employability and job statistics. It also had to analyse the technological aspects that affect the majority of the population, such as having access to internet, and in what way customers interact with technology when they buy groceries online. To Amazon this was also supposed to be an environmentally friendly suggestion to customers since the carbon footprint of getting your groceries delivered will be smaller than selling them in a physical store. Finally, since there were no strong political or important legal issues, Amazon got the green light to make the acquisition.

In evaluating this strategy using SAF, all of the above elements would be considered under the criterion of: (choose ONE answer)

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1. Suitability

2. Acceptability

3. Feasibility

4. Suitability and acceptability

5. Acceptability and feasibility