Positioning Strategies Adopted by Edible Oil Companies Assignment for SMU MB0030

“Positioning Strategies Adopted by Edible Oil Companies” is another assignment question of SMU MBA assignments for MB0030. It is in the continuation of business portfolio of a beverage company using BCG matrix and Process and Bases of Automobile Market Segmentation.

Each firm needs to develop a distinctive positioning for its market offering. Positioning is the act of designing the company’s offering and image to occupy a distinctive place in the target market’s mid. Each company must decide how much deference to promote to its target customers. Many marketers advocate promoting only one central benefit and rosser reeves called it is “a unique selling proposition” some of the USP’s includes “best quality”. “best service”, “Lowest price”, “best value” “safest”, “more advanced technology” etc. If a company hammers a way at one of these positioning and delivers on it, it will probably be best known and recalled for this strengths.

Not everyone agrees that single – benefit positioning is always best. Double – benefit positioning may be necessary if two or more firms claim to be best on the same attribute. There are even cases of successful triple – benefit positing.

As the companies increase the number of claims for their brand, they risk disbelief and a loss of clear positioning. In general, a company must avoid four major positioning errors.

a. Under positioning: Some companies discover that buyers have only a vague idea of the brand. The brand is seen as just another entry in a crowded marketplace.

b. Over Positioning: Buyers many have too narrow image of the brand.

c. Confused positioning: Buyers might have a confused image of the brand resulting from the company’s making too many claims or changing the brand’s positioning too frequently.

d. Doubtful positioning: Buyers may find it hard to believe the brand claims in view of the product’s features, price or manufacturer.

Positioning maps:

Two dimensional graphs of how a product, brand or company is perceived versus competition.

Before identifying the positioning strategies for the product, marketer prepares its perceptual maps. These maps are drawn an important buying dimensions of consumer for company products as well as competitor products.

Process and Bases of Automobile Market Segmentation for MB0030 SMU Assignment

This is the next assignment question of SMU MBA assignments for MB0030. It is in the continuances of business portfolio of a beverage company using BCG matrix.

In the market process segmentation, we can include – Identify existing and future wants in the current market. Examine the attributes that distinguish among segments and evaluate the proposed segment attractiveness on the basis of measurability, accessibility and size.

Now, we will discuss about market segmentation bases: -

Geographical segmentation: - Dividing the market into different geographical units such as nations, states, regions, cities or neighborhoods. The company can operate in one or a few geographical areas or operate in all out play attention do local variations.

Demographic segmentation: - In demographic segmentation the market is divided into groups on the basis of variable such as age, family size, family life-cycle, gender, income, occupation, education, religion race, generation, nationality and social class. Demographic variables are the most popular bases for distinguishing customer groups. One reason is that customer’s wants, preferences and usage rates are often associated with demographic variables.

Psychographic Segmentation: In psychographic segmentation, buyers are classified into different groups on the basis of life – style or personality and values. People within the same demographic group can exhibit very different psychographic profiles.

The Eight VALStm Group: Using the self-orientation and resources dimensions. VALS defines eight segments of adult consumers who have different attitudes and exhibit distinctive behaviour and decision making patterns.

Innovators are successful, sophisticated, active, take-charge people which high self-esteem and abundant resources. They are leaders in business and government and are interested in growth, innovation, and change. They seek to develop, explore and express themselves in a variety of ways, sometimes guided by principles and sometimes by a desire to have an effect or to make a change. They seek to develop, explore and express themselves in a variety of ways, sometimes guided by principle and sometimes by a desire to have an effect or to make a change.

Bases for posting the product overcome the positioning the product overcome the positioning difficulties enables the company to solve the marketing – mix problem. Thus seizing the “high-quality position” requires the firm to produce high quality products, charge a high price, distribute through high-class dealers advertise in high – quality media vehicles.

Automotive: Hyandai Santro

Headline: India’s best-loved family car is now also India’s simplest car to drive.

Subhead: Hyundai Introduces Santro Zip Plus Automatic.

No Shifting gears, no clutch, no problems.

Analysis of business portfolio of a beverage company using BCG matrix - MB0030 Assignment

This is Marketing Management MBA assignment of SMU. The subject code is MB0030 which is related to marketing management assignment. Question of assignment is – “Analyze the business portfolio of a beverage company using BCG matrix”.

Now, follow to the answer for “Analyze the business portfolio of a beverage company using BCG matrix” below -

The current business portfolio of the company is analyzed by the business in which it operates. To make it clearer, let me take an example of ITC group. The company operates in FMCG, hotels, paper boards, specialty papers and packaging and agribusiness. These business are independent from each other and here their mission and objectives separately. These subsidiaries of organization or called as strategic business units (SBU).

Strategic business unit: The unit of the company that has separate mission and objectives and that can be planned independently from other business.

Strategic planning models used in assessing the existing business.

BCG matrix: (Boston Consultancy Group) BCG matrix: This model is used to identify company’s SBU’s position in the market.

This model identifies the SBU’s strength, weakness, opportunities and threats on the basis of market growth rate and relative market share.

The model is also known as growth share matrix.

Axis components:

1. Market growth rate: The rate at which market is growing
2. Relative market share: Market share of the SBU divided by the market share of the largest competitor.

Model Components:

Star: This category represents the high market share and high industry growth. SBU’s in this category require large investment to defend their position. SBU will return as cash cow after some time.

Cash Cows: This category represents the low growth rate and high market share which is the characteristic of SBU operating in mature industry. Here company needs less investment to hold their position. Hence it generates more cash or in management terms we say cash cow can be milked.

Question Mark: This category represents high market growth and low market share. SBU’s in this category has tow options, either to invest heavily and bring them to star position or divest/liquidates from that position.

Dogs: SBU’s in this category less cash for the company as it operates in low growth and low market share usually companies will not invest is this category and try to liquidates or divest.

BCG Matrix

Industry growth rate: 24%
Company growth rate: 50%

Name the different steps needed in OR approach of problem solving – MB0032 Assignment

It is Operation Research MBA Assignments of SMU M0032. Check Linear Programming Problems for MB0032 SMU MBA Assignments also.

“Describe the broad classification of operations research models in details. Name the different steps needed in OR approach of problem solving?”

Solution:

A model is known as the representation of the reality. It is known as an idealized representation or abstraction of a real life system. The main objective of this model is to identify significant factors and their interrelationship. A model is helpful is decision making as it provides a simplified description of complexities and uncertainties of a problem in logical structure.

A broad classification of OR models:

a) Physical modes include all form of diagrams, graphs and charts. They are designed to deal with specific problems. They bring out significant factors and inter-relationship in pictorial firm so as to facilitate analysis.

There are two types:

1) Ieonic models and 2) Analog models

Iconic model is known as an image of an object or system that is represented on a small scale. We can say that these models can simulate the actual performance of a product.

On the other hand analog models are small physical systems that have similar characteristics and work like an object. For example- Toy.

b) Mathematical Model or Symbolic models represent the decision variable of the system. The model employs a set of mathematical symbols also. The variables are related by mathematical system also. For example - Allocation, sequencing, replacement models etc.
c) It is by nature of Environment

We have 1) Deterministic model in which every thing is defined and the results are certain. Eg: EOQ model 2) Probabilistic models in which the input and output variables follow a probability distribution Eg: Games Theory.

d) By the extent of Generality: The tow models belonging to this class are 1) General model can be applied in general and does not pertain to one problem only. Eg: Linear Programming 2) Specific model is applicable under specific condition only. For example - Sales can response curve or equation which can be known as a function of advertising that is applicable in the marketing function alone.

The scientific method translates a real given problem into a mathematical representation which is solved and retransformed into the original context. The OR approach to problem solving consists of the following steps:

1) Definition of the problem

The first and the most important requirement is that the root problem should be identified and understood. The problem should be identified properly, this indicates three major aspects:

1) A description of the goal or the objective of the study, 2) an identification of the decision alternative to the system, and 3) a recognition of the limitations, restrictions and requirements of the system.

2) Construction of the model

Depending on the definition of the problem, the operations research team should decide on the most suitable model for representing the system. Such a model should specify quantitative expressions for the objective and the constraints of the problem in terms of its decision variables.

3) Solution of the model

Once an appropriate model has been formulated the next stage in the analysis calls for its solution and the interpretation of the solution in the context of the given problem – A solution to a model implies determination of a specific set of decision variables that would yield on optimum solution. An optimum solution is one which maximizes or minimizes the performance of any measure in a model subject to the condition and constraints imposed on the model.

4) Validation the model

A model is a good representative of a system, and then the optimal solution must improve the system’s performance. A common method for testing the validity of a model is to compare its performance with some post data available for the actual system.

5) About Implementation of the final result

The optimal solution obtained from a model should be applied practice to improve the performance of the system and the validity of the solution should be verified under changing conditions.

What are the causes and remedies for over capitalization and under capitalization? – MB0029 Assignment

Financial Management MBA Assignments for SMU MB0029

Question - What are the causes and remedies for over capitalization and under capitalization?

Answer – Overcapitalization

A company is said to be overcapitalized, when its total capital (both equity and debt) exceeds the true value of its assets. It is wrong to identify overcapitalization with exess of capital because most of the overcapitalized firms suffer from the problems of liquidity.

Causes of overcapitalization:

1. Decline in the earnings of the company.
2. Fall in dividend rates.
3. Market value of company’s share falls, and company loses investors confidence.
4. Company may collapse at any time because of anemic financial conditions – it will affect its employees, society, consumers and its shareholders.


Remedies for overcapitalization

Restructuring the firm is to be executed avoid the situation of company becoming sick.

It involves

1. Reduction of debt burden
2. Negotiation with term lending institutions for reduction in interest obligation.
3. Redemption of preference share through a scheme of capital reduction.
4. Reducing the face value and paid-up value of equity shares.
5. Initiating merger with well managed profit making companies interested in talking over ailing company.

Undercapitalization

Under-capitalization is just the reverse of over-capitalization. A company is considered to be under-capitalized when its actual capitalization is lower than its proper capitalization as warranted by its earning capacity.

Causes of under- capitalization

1. Under estimation of future earnings of the time of promotion of the company.
2. Abnormal increase in earnings from new economic and business environment.
3. Under estimation of total funds requirements.
4. Maintaining very high efficiency through improved means of production of goods or rendering of services.
5. Companies which are set up during recession start making higher earning capacity as soon as the recession is over.
6. Use of low capitalized rate.
7. Companies which follow conservative dividend policy will achieve a process of gradually rising profits.
8. Purchase of assets at exceptionally low prices during recession.

Remedies of undercapitalization

1. Splitting up at the shares – This will reduce the dividend per share
2. Issue of bonus share: this will reduce both the dividend per share and earning per share.
3. Both over-capitalization and under – capitalization are detrimental to the interests of the society.

Wealth Maximization & Functions of Finance – Financial Management Assignment of MB0029

MBA assignments of Financial Management for MB0029:

Offer your arguments in favor of wealth maximization of one of the goals of financial Management and Functions of Finance.

Wealth Maximization:

Wealth maximization has been accepted by the finance managers, because it overcomes the limitations of profit maximization. Wealth maximization means maximizing the net wealth of the company’s share holders. Wealth maximization is possible only when the company pursues policies that would increase the market value of shares of the company.

There are some arguments which are superior in wealth maximization:

Wealth maximization is based on the concept of cash flows. Cash flows are a reality and not based on any subjective interpretation. On the other hand there are many subjective elements in the concept of profit maximization.

It considers time value of money translates cash flows occurring of different periods into a comparable value of cash flows is considered critically in all decisions as it incorporates the risk associated with the cash flow stream.

An example of Wealth maximization:

X LTD is listed company engaged in the business of FMCG (fast moving consumer goods). Listed means the company’s share are allowed to be traded the officially on the portals of the stock exchange, the board of directors of X LTD.

Take a decision in one of the bond meeting to enter into the business of power generation. When the company informs the stock exchange of the conclusion of the meeting of the decision taken the stock market reacts unfavorably with result that the next days’ closing of quotation was 30% less than of the previous day.

The question now is why the market reacted in this manner. Investors in this FMCG Company might have thought that the risk profile of the new business (power) that the company wants to take up is higher compared to the risk profile of the existing FMCG business as X LTD. when they want a higher return, market value of company’s share declines. Therefore the risk profile of the company gets translated into a time value factor. The time value factor so translated becomes the required rate of return. Required rate of return is the return that the investors want for making investment in that sector.

Any project which generates positive net present value creates wealth to the company. When a company creates wealth from a course of action it has initiated the share holders benefit because such a course of action will increase the market value of the company’s share.

Goals of financial Management:

Goals means - financial objective of a firm. Experts in financial management have endorsed the view that the goal of financial management of a firm is maximization of economic welfare of its shareholders. Maximization of economics welfare means - maximization of wealth of its shareholders. Shareholders’ wealth maximization is reflected in the market value of the firms’ shares. A firm’s contribution to the society is maximized when it maximizes its value. There are two versions of the goals of financial management of the firm which are profit maximization and wealth maximization.

Functions of finance:

Finance functions are closely related to financial decisions. The functions performed by a finance manager are known of finance functions. In the course of performing these functions finance manager takes the following decisions:

Financial decision:

To survive and grow, all organizations must be innovative. Innovation demands managerial proactive actions. Projective organizations continuously search for innovative ways of performing the activities of the organization. Innovation is wider in nature.

Investment decision:

Investment decisions are also know as capital budgeting decisions. Capital budgeting decisions lead to investment in real assets.

Dividend Decisions:

Dividend yield is an important of an investor’s attitude towards the security (stock) in his portfolio management decisions. But dividend decision is a major decision made by a fiancé manager. Dividend policy influences the dividend yield on shares. Since company’s range in the capital market have a major impact on its ability to procure funds by issuing securities in the capital markets, dividend policy.

Liquidity Decision:

Liquidity decisions are concerned with working capital management. It is concerned with the day-to-day financial operation that involves current assets and current liabilities.

The important element of liquidity decisions are:

Formulation of inventory policy
Policies an receivable management
Formulation of cash management strategies
Policies on utilization of spontaneous finance effectively

Thus, wealth maximizations are primary goal of any firm.

What are the Seven Principles of SCM? – Assignment-2 of MB0028

In the previous posts we have already dealt about various phases in project management for those students who are preparing the MBA assignments of MB0028. Now, to proceed with that chapter we are going to publish one more assignment questions which will deal about principle of SCM. Below is the question:

Question.4. What are the seven principles of SCM?

Answer: Seven principles of SCM are:

Group customer by needs- Effective SCM groups, customer by distinct service needs, regardless of industry and then tailors services to this particular segment.

Customize the logistic network- In designing their logistics network; companies need to focus on the service requirement and profit of the customer segments identified.

Listen to signals of market demand and plan accordingly- Sales and operations planners must monitor the entire supply chain to detect early warning signals of changing customer demand and needs. This demand driven approach leads to more consistent forecast and optimal resource allocation.

Differentiate the product closer to the customer- companies today no longer can afford to stock pile inventory to compensate for possible forecasting errors. Instead, they need to postpone product differentiation in the manufacturing process closer to actual consumer demand. This strategy allows the supply chain to respond quickly and cost effectively to change in customer needs.

Strategically manage the sources of supply- by working closely with their key suppliers to reduce the overall costs of owning materials and services; SCM maximizes profit margins both for themselves and their suppliers.

Develop a supply chain wide technology strategy- as one of the cornerstones of successful SCM information technology must be able to support multiple levels of decision making. It also should afford a clear view and ability to measure the flow of products, services and information.

Adopt channel spanning chain performance measures- Excellent supply chain performance measurement system do more than just monitor internal functions. They apply performance criteria to every link in the supply chain-criteria that embrace both service and financial metrics.