MBA 600 Strategic

Management
Midterm Exam Summer 2020
Marks: 40

Name:
ID:

S tart answering just after the question in this script.

1. Compare Coca-Cola’s Mission Statement to Pepsi Co.’s Mission Statement. 5 marks

C oca-Cola’s Mission Statement

Our mission is to refresh the world in mind, body, and spirit; to inspire everyone with optimism and
happiness through our brands and actions, and to make a positive difference in people’s lives.

P epsi Co.’s Mission Statement

Our mission as one of the largest food and beverage companies in the world is to provide consumers
globally with delicious, affordable, and convenient foods and beverages from wholesome breakfasts to
healthy snacks and beverages and treats. We are committed to investing in our employees and the
communities where we operate to help position PepsiCo for long-term, sustainable growth.

Just write if the component is included or not included in each of the Mission Statement.

Components Coca-Cola Pepsi Co.

Customers
Products
Markets
Technology
Survival/Growth
Philosophy
Distinctive Competence
Public Image
Employees

2. In your opinion, what are the three most important components that should be included when
writing a mission statement? Why? 5 marks (150 words)
 3. You have BDT 1 crore to invest. You need to choose among industry A, B or C. Please
consider the following factors and decide on the industry you should invest in. Justify your
answer. 10 marks (250 words)

Industry Competitive Threat of new Bargaining Bargaining Threat of

rivalry entrants power of power of substitute

consumers suppliers

Industry A HIGH MEDIUM LOW MEDIUM LOW

Industry B MEDIUM LOW HIGH LOW HIGH

Industry C LOW HIGH LOW HIGH LOW

4. Develop an EFE Matrix for Crimson Cup Coffee. 10 marks

5. Explain how Facebook, Twitter, and Instagram can represent a major threat or opportunity for a
company. 5 marks (100 words)
6. Identify a recent economic, social, political, environmental and technological (one for each factor)
trend that significantly affects the local super shop. 5 marks

Answer to Question No.1

Components Coca-Cola Pepsi Co.

Customers Included Included
`Products Not included Included
Markets Included Included
Technology Not included Not included
Survival/Growth Not included Included
Philosophy Included Included
Distinctive Competence Included Included
Public Image Included Included
Employees Not included Included

Answer to Question No.2

There are three most important components that should be included when writing a mission
statement. And these components are the customers, products or services, and philosophy. The main
view of a business is the customer itself. Without them, the organization is nothing. If the public and
potential customers know what products and services are offered, they can grow quite much idea
what the organization has to offer. Once you attract the public and potential customers and let them
know what products and services you will render, the philosophy of the organization ties it all together
by giving the public and potential customers an idea of the organization's morals, values, and ethics.
 Answer to Question No.3

Industry Competitive Threat of Bargaining Bargaining Threat of

rivalry new power of power of substitute
entrants consumers suppliers

Industry A HIGH MEDIUM LOW MEDIUM LOW

(Garments)

Industry B MEDIUM LOW HIGH LOW HIGH

(leather)

Industry C LOW HIGH LOW HIGH LOW

(ICT)

I choose Industry C (ICT) because of industry has low competitive rivalry where that business in this
industry will have higher chance to capture the market share. In contrast, the other industry’s rivalry
competition is high and medium when competition is strong, advertisement and price competition
arises, which can harm the profit margins of a company. The threat of new entrance is high in this
industry, which means that it is so difficult for competitors to join the market. Barriers to entry include
absolute cost advantages, access to inputs, economies of scale and strong brand identity. So, I'm
taking it as an advantage to secure my investment in the future. We know the power of the consumer,
and their effect on pricing and quality. I do not believe that customers or buyers will regulate prices in
this industry. This is an opportunity to take advantage of the investment. Suppliers 'bargaining power
means how much control they have over the capacity to raise their prices, which, in effect, decreases
the competitiveness of a company. Nonetheless, this risk can be tackled by taking few precautions like
purchase bulk amount raw material when the market price is lower. The risks in industry "C" are low
where customers can not easily switch from the product or service of a business to a competitor.
Though in industry 'A' has the same investment potential but I think that amount of investment isn’t
enough for the competition because it has competitive rivalry which increases the risk of investment.
I cannot choose Industry A(Garments) because of Bangladesh garment industry has been facing
multidimensional problems since its establishment. These are uninterrupted power and gas supply,
poor infrastructure, less capacity of sea and airport, political and labor unrest. Price hike for utility
services which is have direct impact to the garment industry as well as backward linkage industry.
Valuable working hour is losing in the road due to traffic.

I cannot choose Industry B(leather) because of leather goods export have been facing trouble over
the last two years due to delays in relocating the tanneries from Hazaribagh to the newly-built leather
estate in Savar to make the industry eco-friendly. While policymakers have earmarked the leather
industry to earn USD 5 Bn by 2021. The relocation process itself was painful for the industry.
Moreover, Gas connections, making available raw materials for preserving cattle hide and inadequate
supply of water make this process an unsatisfactory one. Environment pollution is a major threat to
this industries development. The relocation, in effect, shifted the pollution from Buriganga to the
Dhaleshwari.

Answer to Question No.4

The EFE matrix is the strategic tool used to evaluate firm existing strategies, EFE matrix can be defined
as the strategic tool to evaluate external environment or macro environment of the firm include
economic, social, technological, government, political, legal and competitive information. The external
factor evaluation matrix analyzes the external opportunities and threats of a firm. The EFE matrix in
shows the weight that the opportunities and threats has on Crimson Cup Coffee and then is rated to
obtain each factor’s weighted score. Each weighted score is then added together to obtain a weighted
score, in which Crimson Cup Coffee scored 2.9 and 2.6, which shows how effective Crimson Cup
Coffee is able to respond to their external factors.

Crimson Cup Coffee developing the EFE matrix:

External Factor Evaluation (EFE) Matrix

Key External Factors Weight Rating Weight Score
Opportunities
Lunch items 0.1 4 0.4
Expansion in abroad 0.1 3 0.3
Lounging area 0.2 4 0.8
opening
Diversification of 0.2 2 0.4
Product mix
Partnership with 0.1 4 0.4
other firms
Product innovation 0.2 1 0.2
Potential higher sales 0.1 4 0.4
Total 1 2.9
Threats
Competition of from 0.2 3 0.6
low cost
Specific market 0.2 2 0.4
Increased shipping 0.1 4 0.4
cost

Risk of franchising 0.1 4 0.4

Limitation of 0.1 3 0.3

products
Decrease I supply I 0.1 1 0.1
coffee beans
Price increase of 0.2 2 0.4
coffee beans
Total 1 2.6

Answer to Question No.5

Social networking sites such as Face book, Twitter, and Instagram provide opportunities for many
companies in terms of expand to a wider market like improves user engagement, Social customer
service is the new marketing, can be a driving force of growth tools, boosts your brand loyalty, allows
collecting first hand customer feedback, creates word of mouth, helps to reach out to a bigger
audience, New dimension to channel customer service of company. Besides border free advertising,
low cost for promoting, making a good user review and many more things exists in the social
marketing fields. But overlooking these technological trends or waiting too long to act on them may
represent a threat to a company’s survival. Bad news can spread very fast on social network sites,
representing a major threat to firms. Good news can also spread very fast, representing a major
opportunity to firms.
Answer to Question No.6