• Question 18

• 5 Points

• Competitive (or else named as business) level strategy of Apple is based on superior quality, design, branding and leading innovation. These are core elements of Apples competitive advantage being reflected in all strategic business units (SBUs) such as PCs, Mobile Phones, Wearable Devices etc. This advantage is created through many years of efforts and investing in particular resources and capabilities. At the same time Apple was very careful on its competitive positioning against its competitors. Based on this statement above and your knowledge on competitive strategy, please identify the correct statement below: (choose ONE answer)

  1. Competitive Strategy is the strategy we need to follow for each Strategic Business Unit separately even if it is the same for all of them.

  2. Competitive Strategy should be the same for every business unit, as seen from the example of Apple. All their products follow a differentiation strategy.

  3. The corporate and competitive strategy of Apple are the same. Apple constantly develops and updates their products. Consistency is the key to their success.

  4. Competitive strategy reflects the decision of the corporation to operate in certain markets. For example, Apple constantly tries to expand their product range and attract new customers from new markets. At the same time Apple constantly develops and updates new products and persuades their existing customers to buy the newest gadget.(MANUUUUUUU siuuuuuuu)

  5. Competitive strategy is shaping the purpose and mission of the corporation and for all business units

  6. Apple deals with every unit of the corporation separately and competitive strategy is strategy that the whole corporation must follow.

• Question 3

• 5 Points

• There are many general pressures increasing internationalisation. However, not all these pressures are one way or hold for all industries. Trade barriers still exist for some products, especially those relating to defence technologies. Many countries protect their leading companies from takeover by overseas rivals. One writer, George Yip (2003) at Imperial College Business School provides a framework which sees international strategy potential as determined by market drivers, cost drivers, government drivers, and competitive drivers. Identify TWO of the following statements which indicate a potential dampening (bringing down) effect on the drive towards internationalisation.

  1. Some countries, like South Africa and China, insist on ownership restrictions on companies entering their markets.

2. Similar customer needs exist for the product and a global customer base exists. Transferable marketing allows the product to be marketed in a similar way across the world.

3. A vast market at home does not exist for potential players in smaller countries (Netherlands, Taiwan) and thus they have difficulty in achieving economies of scale.

4. Some countries do not allow content on media platforms to be shared in an unrestricted way.

5. This industry has high product development costs and wants to try and take advantage of country specific differences.

• Question 4

• 5 Points

• Wal-Mart started as a small, American discount retailer in 1945 and now it has become the world's largest retailer that operates more than 11,300 physical stores in more than 27 countries and employs around 2.2 million workers. Its strategy has been characterised by offering a wide range of products at a low price, seeking efficiencies out of their supply chain in order to maximise productivity and reducing outlays, with low operational and overhead costs. Which of the TWO following statements best describes the business / competitive strategy?

  1. Wal-Mart has developed a vertical integration strategy as the company owns a wide range of suppliers.

2. Wal-Mart has developed a vertical integration strategy as the company owns a wide range of suppliers and distributors.

3. Wal-Mart has developed a cost leadership strategy through managing efficiently their costs and as a result their prices are low.

4. Wal-Mart has developed a cost leadership strategy because it has an efficient distribution channel that allows the company to negotiate the best deals.

5. Wal-Mart has developed a differentiation strategy as their prices are low and they offer a unique customer experience.

6. Wal-Mart has developed a diversification strategy as the company has been adding complementary products.

• Question 5

• 5 Points

• GlaxoSmithKline plc (GSK) is a British multinational pharmaceutical company headquartered in Brentford, London. Established in 2000, by a merger of Glaxo Wellcome and SmithKline Beecham, GSK was the world's sixth largest pharmaceutical company according to Forbes as of 2019. Glaxo Wellcome (GW) and SmithKline Beecham (SB) announced their intention to merge in January 2000. The merger was completed in December that year, forming GlaxoSmithKline (GSK). The first (GW) was a huge producer of medicines, with amazing economies of scale in production, distribution, networks and sales. The second (SB) one was mostly a Research and Development (R+D) focused company developing medicines for rare diseases/special treatments. Thinking of the merger between those two companies to create GSK, which of the following statements seems more plausible when it comes to a corporate strategic option? (choose ONE answer)

  1. GW and SB joined forces together, becoming GSK, as an act of horizontal integration even though they were not direct competitors in the same industry. They managed to acquire competences from one to another that they did not have in the past.

  2. GW and SB joined forces together, becoming GSK, as an act of strategic alliance that created a new company of two competitors increasing their monopolistic power and sales.

  3. GW and SB joined forces together, becoming GSK, as an act of market development. These were not direct competitors (but in the same industry) essentially producing /offering different products. Thus, for each of these two companies it was an expansion of products that they did not have before.

  4. GW and SB joined forces together, becoming GSK, as an act of differentiation. These were not direct competitors (but in the same industry) essentially producing /offering different products. Thus, for each of these two companies it was an expansion of products that they did not have before.

• Question 6

• 5 Points

• WatsApp is by far Facebook's largest acquisition and one of the biggest Silicon Valley has ever seen. It is over 20 times larger than Facebooks Instagram acquisition, which made quite the splash in 2012. That begs the $22 billion question: why did Facebook break the bank to buy WhatsApp? The answer is user growth. In 2014, over 500 million people used WatsApp monthly and the service added more than 1 million users per day. 70% of WatsApp users were active daily, compared to Facebooks 62%. Additionally, WatsApp users sent 500 million pictures back and forth per day, about 150 million more than Facebook users. It is then clear that Facebook had the resources to proceed with the acquisition and as well as the competencies to ensure that it will be successful. The app launched in 2009 and as of 2020 has 2 billion users. As of 2019, Facebook has around 1.69 billion monthly active users. With a shared mission and purpose of enhancing global connectivity via internet services, the merging of forces will likely accelerate growth for both companies. For Facebook, user growth comes first and monetisation later. Still, this was clearly a successful move in terms of financial results as proven later on. WatsApp has helped fuel Facebook growth in developing markets where internet connectivity is sparse but where WatsApp is widely used. Facebook then gains access to these mobile user bases. Connecting to WatsApp users in these areas will also aid Facebooks Internet.org initiative, Facebook CEO Mark Zuckerbergs plan to implement internet access to parts of the world not yet online. In evaluating this strategic acquisition using SAF and the above facts, it seems that this move was clearly: (choose ONE answer)

  1. Suitable

  2. Acceptable

  3. Feasible

  4. Suitable, acceptable and feasible

  5. Acceptable and feasible but not suitable

  6. Suitable and acceptable but not feasible

  7. Suitable and feasible but not acceptable

Question 1

• 5 Points

• Mango, which originated in Spain, is one of the pioneers in the fast fashion strategic group within the fashion industry. Mango currently has 1,220 stores in 91 countries. Traditional competitors take approximately 9 months to complete designing and manufacturing, whereas Mango does the same in four months. Mango is quick to react to new trends in fashion and is continuously replenishing its stores with garments. The companys ability to bring out new collections within a short time was attributed to its business model that involved directly managing core activities like design and distribution in-house (which is centralised in Spain), while outsourcing non-core, labour intensive activity like manufacturing. To support distribution a computer platform developed in-house by Mango insures effective and low-cost distribution of the right garments to the right stores. It also enables the analysis of sales patterns and merchandise planning. With demand-controlled production, the manufacturing period is shorter. This also ensures rapid delivery when required. These factors have facilitated rapid international expansion. Mangos business model enables it to be more flexible whenever there is a change in the pattern of demand. When it comes to retailing, the company used a combination of own stores and franchisees. In some markets, especially in developed countries, the company has its own stores. In developing countries and markets which were culturally very different from Spain, Mango chose the franchisee route to expand. In a few countries like the USA, the UK and France, it had its own stores as well as Franchisees. Mango also adopted the practice of adopting celebrity endorsement to enhance its brand image. Which TWO of following statements correctly explain Mangos strategy(ies) and identify what could be considered to be their distinctive capabilities?

  1. Mango is using a hybrid strategy because the combination of speedy feedback from its customers, its quick adaptation and the companys ability to react quickly to changes in fashion contributed towards effective development and cost control. For example, this means that Mango has minimal inventories, optimal range and quantity of fashionable merchandise on display in the stores.

  2. Mango has adopted a pure differentiation strategy because it has developed a bespoke in-house computer platform to support distribution that allows it to design high quality clothes and sell it for a premium price.

3. Mango has adopted a pure differentiation strategy because it demonstrates a core competence of collaborating with renowned celebrities and fashion models in order to enhance its brand image on social media, and this enables it to react quickly to changes in fashion and speed up deliveries to stores.

4. Analysts attributed Mangos rapid global expansion to its business model. It achieved better risk management and also local responsiveness by adopting this model particularly in to developing markets.

• Question 12

• 5 Points

• The mining industry is composed by different companies that operate around the world through mergers and subsidiaries. Mevale INC. is a Brazilian multinational corporation in the mining industry in Brazil and it operates in rural areas of South American countries. As this is a capital-intensive industry, the company is finding ways to reduce costs, so that they could benefit from economies of scale and specialisation. In 2015, they decided to set up a new division within the company that will sell drilling machinery, helmets, shovels, excavators, draglines, trucks, rock dusters and PPE (Personal protective equipment), all the equipment needed in mining operations. The creation of this new division is an example of what type of corporate strategy? Please choose only ONE answer (the one that seems most plausible).

  1. Backward Vertical Integration since they made a step closer to the suppliers side, creating essentially their own supplies.

  2. Horizontal integration since they are trying to increase their market share.

  3. Diversification since they created a new business unit for a new market.

  4. Forward vertical integration since they made a step closer to the final customer.

  5. Cost leadership since they are reducing cost and are able to compete with lower prices