CA Inter SM MTP 1 May 2024

Part I: Objective Questions

Multiple Choice Questions (MCQs): Total 15 Marks
Case Scenario: 10 Marks
Compulsory Application Based Independent MCQs: 5 Marks (Comprising 3 MCQs, First two worth 2 Marks Each and third worth 1 Mark )

Part II: Descriptive Questions

Candidates need to attempt 3 out of the 4 provided questions.
● Question 1: Total 15 Marks, divided into 3 parts:
● Part A: 5 Marks
● Part B: 5 Marks
● Part C: 5 Marks
● Questions 2 to 3: Each structured similarly, divided into 2 sub-parts with the same marking scheme, making each question worth 5
Marks.
● Part A: 5 Marks
● Part B: 5 Marks
● Question 4: Total 10 Marks, with choice.
● Part A: 5 Marks
● Part B: 5 Marks
OR
● Part B: 5 Marks

Focus on Case Scenarios: The inclusion of case scenarios in the objective section with a substantial allocation of 10 marks suggests a
strong emphasis on the application of auditing principles in real-world contexts. This approach tests students' abilities to analyse and solve
complex situations, a crucial skill for a chartered accountant.

A strategic approach to preparation, focusing on case scenarios, practicing writing skills, and effective time management, can significantly
enhance performance.

Chapter wise weightage - MCQ part

S.No Chapter Q.No Marks
1. Introduction to strategic management - -
2. Strategic Analysis : External Environment Case Scenario (1.2), Independent MCQs 3 3 Marks
3. Strategic Analysis : Internal Environment Case Scenario (1.1, 1.3) 4 Marks
4. Strategic Choices Independent MCQs 1, Case Scenario (1.4, 1.5) 6 Marks
5. Strategy Implementation and Evaluation Independent MCQs 2 2 Marks
Total 15 Marks

Case Scenario
In the fiercely competitive automotive industry, Zing, a promising newcomer, set out on a strategic journey with ambitions of making a
substantial impact. Recognizing the significance of a robust distribution network early on, Zing forged partnerships with established
dealerships, offering them attractive margins. This strategic move significantly enhanced Zing's reach, with a presence in 80% of the
nation's dealerships by 2022, expanding its coverage significantly.

To differentiate themselves from competitors, Zing adopted two key strategies. Firstly, they prioritized product design, investing heavily in
aesthetics and incorporating innovative features and environmentally friendly technologies. This focus on design led to their vehicles
receiving excellent reviews and achieving an impressive 15% year-on-year growth in sales.
Secondly, Zing implemented switching costs to discourage customers from switching to other brands. Their vehicles featured branded
software, making it both expensive and cumbersome for customers to transition to alternative brands. This strategic move effectively
protected Zing's market share.

Zing's overarching goal was to position itself as a premium automotive brand, blending luxury with sustainability. However, their execution
fell down as they challenged with maintaining consistent quality and service levels, resulting in mixed customer reviews.
Despite their best efforts, Zing's differentiation strategy fell short due to issues with inconsistent quality and service. Negative
word-of-mouth and declining customer satisfaction scores tarnished their brand image, leading to stagnating sales. This failure to deliver
on their brand promise proved to be a significant setback.

As Zing's reputation suffered from execution failures, securing additional funds for international expansion became challenging.
Consequently, they made the difficult decision to postpone their global ambitions for the next five years, focusing instead on stabilizing their
finances and rebuilding their brand image.

In summary, Zing's strategic journey illustrates the importance of not only crafting a compelling differentiation strategy but also executing it
flawlessly. In the competitive automotive landscape, maintaining consistent quality and service is paramount to sustaining brand loyalty
and achieving long-term success.

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 CA Inter SM MTP 1 May 2024

Based on the above Case Scenario, answer the Multiple Choice Questions.
(5 x 2 = 10 marks)
1.1 What key strategic approach did Zing use to expand its market presence in the automotive industry?
(a) Product innovation and design
(b) Cost leadership strategy
(c) Entering new international markets
(d) Vertical integration

1.2 How did Zing protect its market share from potential competitors?
(a) Price-cutting strategy
(b) Branded software and switching costs
(c) Aggressive marketing campaigns
(d) International expansion

1.3 Why did Zing's differentiation strategy fall short in the market?
(a) Intense price competition
(b) Poor marketing strategy
(c) Inconsistent quality and service
(d) Lack of international expansion

1.4 Forging partnerships with established dealerships to enhance its distribution network falls under which level of strategy?
(a) Corporate level strategy
(b) Business level strategy
(c) Functional level strategy
(d) Competitive level strategy

1.5 How did Zing initially expand its market presence across the nation?
(a) Aggressive marketing campaigns
(b) Developing low-cost vehicles
(c) Partnering with established dealerships
(d) Launching a luxury brand

Answers of Case Scenario

1.1 (a) Product innovation and design

1.2 (b) Branded software and switching costs

1.3 (c) Inconsistent quality and service

1.4 (b) Business level strategy

1.5 (c) Partnering with established dealerships

Explanation

1.1 Answer: (a) Product innovation and design

Explanation: Zing uses differentiation strategy to differentiate themselves from competitors, by adopting two key strategies. Firstly, they
prioritized product design, and invested heavily in aesthetics and incorporating innovative features and environmentally friendly
technologies.

1.2 Answer: (b) Branded software and switching costs

Explanation: Zing implemented switching costs to discourage customers from switching to other brands. Their vehicles featured branded
software, making it both expensive and cumbersome for customers to transition to alternative brands.

1.3 Answer: (c) Inconsistent quality and service

Explanation: Zing's differentiation strategy fell short due to issues with inconsistent quality and service.

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1.4 Answer: (b) Business level strategy

Explanation: Forging partnerships with established dealerships to enhance its distribution network falls under Business level strategy

1.5 Answer: (c) Partnering with established dealerships

Explanation: Zing forged partnerships with established dealerships, offering them attractive margins. This strategic move significantly
enhanced Zing's reach, with a presence in 80% of the nation's dealerships by 2022, expanding its coverage significantly.

Compulsory Application Based Independent MCQs

1 TechMex Inc., a leading technology company, offers a diverse portfolio of products ranging from established cash cows to
promising question marks. As part of its strategic planning process, the company aims to assess its product portfolio's performance
and allocate resources effectively. In which quadrant of the BCG Matrix would TechMex's new innovative product, recently launched
in a rapidly growing market, likely fall into?
(a) Cash Cow
(b) Dog
(c) Question Mark
(d) Star
(2 marks)
2 BlueSky Enterprises, a multinational corporation specializing in renewable energy solutions, is undergoing a strategic transformation
to enhance its competitive position in the market. As part of this initiative, the company is reevaluating its organizational structure,
processes, and culture. Which aspect of the McKinsey 7S Model is most relevant for BlueSky Enterprises during this strategic
transformation?
(a) Strategy
(b) Structure
(c) Systems
(d) Skills
(2 marks)
3 The threat of substitutes is high when:
(a) There are few substitute products available
(b) Switching costs are low
(c) Suppliers have high bargaining power
(d) There is strong brand loyalty
(1 marks)

Answers of General MCQs

1 (c) Question Mark

Explanation: Since, TechMex’s new product is recently launched, it would have less market share but since it's a innovative product
with high growth market, it will fall under Question Mark quadrant of BCG Matrix
2 (b) Structure

Explanation: Since, BlueSky Enterprises is reevaluating its organizational structure, processes, and culture. Therefore, the most
relevant aspect of the McKinsey 7S Model, during this strategic transformation of BlueSky Enterprises is Structure. Deals with the
way the organisation is structured, including the hierarchy, organisational charts, and how departments interact. This is highly
relevant given the focus on reevaluating the organisational structure.
3 (b) Switching costs are low

Explanation: When switching costs are low, consumers can easily switch to the new product, therefore the threat of substitutes is
high when switching costs are low.

Chapter wise weightage - Descriptive part

S.No Chapter Q.No Marks
1. Introduction to strategic management Q1(a), Q2(a) 10 Marks
2. Strategic Analysis : External Environment Q1(b), Q2(b) 10 Marks
3. Strategic Analysis : Internal Environment Q3(a), Q4(b)(i) 10 Marks
4. Strategic Choices Q3(b), Q4(b)(ii) 10 Marks
5. Strategy Implementation and Evaluation Q1(c), Q4(a) 10 Marks
Total 50 Marks

Question 1

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 CA Inter SM MTP 1 May 2024

Qno Questions Topic Covered in QB Remarks

or not?
(a) Swati is the marketing manager at a software company. She is C1 Strategic New question, This concept was covered
responsible for developing and implementing marketing strategies for Levels in not covered in in classes.
the company’s products. Swati leads a team of marketing professionals organisations QB
and works closely with the product development and sales teams to Case-based question, but
ensure that the company's products are effectively promoted in the simple to answer.
market. She also analyzes market trends and customer feedback to
refine the marketing strategies. Which level is she working at, discuss the
roles and responsibilities of this level in organization?
(5 Marks)

Answer -
Swati operates at the functional level of management, specifically as the marketing manager at a software company. Functional
managers like Swati oversee specific departments or functions within an organization, such as marketing, finance, or operations.
Their primary responsibilities include implementing corporate strategies and policies within their area of expertise and ensuring
that daily operations are conducted efficiently and effectively.

In Swati's case, as a marketing manager, her role involves developing and executing marketing strategies for the company's
products. This includes leading a team of marketing professionals, collaborating with product development and sales teams, and
analyzing market trends and customer feedback to refine strategies. By working closely with these teams, Swati ensures that the
company's products are effectively promoted in the market and that marketing efforts align with overall business goals.

Functional managers like Swati play a critical role in the organization by bridging the gap between corporate strategy and daily
operations. They are responsible for translating high-level strategic goals into actionable plans for their departments and ensuring
that these plans are executed effectively. Additionally, they are often key decision-makers within their areas of responsibility,
making strategic choices that impact on the company's success. Overall, Swati's role as a marketing manager exemplifies the
importance of functional managers in driving the success of their organizations.

● Swati operates at the functional level of management

● Works as a marketing manager at a software company
● Functional managers oversee specific departments or functions
● Implement corporate strategies and policies within their area
● Ensure efficient and effective daily operations
● Develop and execute strategies for their department
● Lead a team of professionals within their department
● Collaborate with other departments
● Analyze trends and feedback to refine strategies
● Bridge the gap between corporate strategy and daily operations
● Translate high-level goals into actionable plans
● Make strategic decisions impacting company's success
● Play a crucial role in driving the success of their organizations

(b) ABC Corp, a multinational consumer electronics company, is planning to C2 PESTLE: A New question, This concept was covered
expand its operations into a new country. The company's senior tool to analyse not covered in in classes.
management is evaluating the potential risks and opportunities of Macro QB
entering this new market. As part of their analysis, they decide to use the Environment Easy and Direct Question.
PESTLE framework to assess the external factors that could impact their We expect students to
decision. How can the PESTLE framework help ABC Corp assess the score full marks in this.
external factors affecting its decision to expand into a new country?
(5 Marks)

Answer -
The PESTLE framework can help ABC Corp assess the external factors affecting its decision to expand into a new country by
considering the following aspects:
● Political Factors: These include the stability of the government, government policies on foreign investment, trade
agreements, and regulatory frameworks. By analyzing these factors, ABC Corp can assess the political risks associated
with entering the new market.
● Economic Factors: Economic factors such as GDP growth rate, inflation rate, exchange rates, and economic stability can
impact ABC Corp's decision. By analyzing these factors, the company can understand the economic environment of the
new market and its potential impact on business operations.
● Social Factors: Social factors such as cultural norms, demographics, and lifestyle trends can influence consumer
behaviour and demand for ABC Corp's products. Understanding these factors can help the company tailor its marketing
strategies to the new market.
● Technological Factors: Technological factors such as infrastructure, technological advancements, and the level of
technology adoption in the new market can impact ABC Corp's operations. By assessing these factors, the company can
determine the technological requirements for entering the new market.

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 CA Inter SM MTP 1 May 2024

● Legal Factors: Legal factors such as laws and regulations related to foreign investment, intellectual property rights, and
labour laws can impact ABC Corp's decision. By analyzing these factors, the company can ensure compliance with legal
requirements in the new market.
● Environmental Factors: Environmental factors such as climate change, environmental regulations, and sustainability
practices can impact ABC Corp's operations and reputation. By considering these factors, the company can assess the
environmental risks and opportunities in the new market.
Overall, the PESTLE framework can provide ABC Corp with a comprehensive analysis of the external factors that could impact its
decision to expand into a new country, helping the company make informed and strategic decisions.

(c) Imagine you are a consultant advising a small manufacturing company C5 Change New question, This concept was covered
embarking on a digital transformation journey. The company's Management not covered in in classes.
leadership is concerned about managing the change effectively. Using Strategies for QB
the best practices for managing change in small and medium-sized Digital Easy and Direct Question.
businesses, outline a strategy to help the company navigate this Transformation We expect students to
transformation successfully. score full marks in this.
(5 Marks)

Answer -
To help the small manufacturing company navigate its digital transformation successfully, we would recommend the following
strategy:
1. Begin at the top: The leadership team should be united and committed to the digital transformation. They should
communicate a clear vision for the future of the company and lead by example.
2. Ensure that the change is necessary and desired: Before implementing any changes, the company should assess its
current state and identify areas where digital transformation can add value. It's important to involve employees in this
process to ensure their buyin.
3. Reduce disruption: Employee perceptions of change can vary, so it's important to minimize disruption. This can be done
by communicating early and often about the changes, providing training and support for employees, and empowering
change agents within the organization.
4. Encourage communication: Create channels for employees to ask questions and provide feedback. Encourage
collaboration between departments to share ideas and innovations. Effective communication can help alleviate fears and
keep everyone aligned.
5. Recognize that change is the norm: Digital transformation is not a one-time project but an ongoing process. The company
should be prepared to adapt to new technologies and market conditions continuously.
By following these best practices, the small manufacturing company can successfully navigate its digital transformation and
position itself for future growth and success

Question 2
Qno Questions Topic Covered in QB Remarks
or not?
(a) Imagine you are a strategic consultant advising a retail company that is C1 Concept of New question, This concept was covered
facing increasing competition from online retailers. The company is Strategy not covered in in classes.
considering several strategic options to improve its market position. QB
Using the concept that strategy is partly proactive and partly reactive, Moderate Question
explain how the company can develop a strategic approach to address Expect to score 60 to 80%
this challenge. Marks In this.
(5 Marks)

Answer - The retail company can develop a strategic approach that is both proactive and reactive to address the challenge of
increasing competition from online retailers. To achieve this, the company can:
● Proactive Strategy: The company can proactively analyze market trends and customer preferences to identify
opportunities for growth. For example, it can invest in market research to understand what customers value in a retail
experience and tailor its offerings to meet those needs. This proactive approach can help the company stay ahead of
competitors and attract new customers.
● Reactive Strategy: In addition to proactive measures, the company should also be prepared to react to changes in the
market environment. For example, if a competitor launches a new online shopping platform, the company should quickly
assess the impact on its business and develop a response. This reactive strategy can help the company adapt to changing
market conditions and maintain its competitiveness.
By combining proactive and reactive strategies, the retail company can develop a comprehensive approach to addressing the
challenge of increasing competition from online retailers. This approach will allow the company to capitalize on opportunities for
growth while also mitigating risks and responding to threats in the market.

(b) You are a strategic manager for a tech company launching a new C2 Customer New question, This concept was covered
smartphone model. The company wants to target tech-savvy Behaviour not covered in in classes.
consumers who value innovation and cutting-edge technology. Using QB
Moderate level of

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 CA Inter SM MTP 1 May 2024

the concept of customer behaviour, develop a marketing strategy to question

promote the new smartphone.
(5 Marks)

Answer - To target tech-savvy consumers for the new smartphone model, the tech company can develop a marketing strategy
based on customer behaviour. Consumer behaviour may be influenced by a number of things. These elements can be categorised
into the following conceptual domains:
● External Influences: Utilize online platforms and tech forums to generate buzz around the new smartphone. Partner with
tech influencers and bloggers to review the product and create awareness among tech-savvy consumers.
● Internal Influences: Appeal to the desire for innovation and advanced features among tech-savvy consumers. Highlight
the unique selling points of the new smartphone, such as its cutting-edge technology, performance, and design.
● Decision Making: Recognize that tech-savvy consumers are early adopters who value functionality and performance.
Provide detailed specifications and comparisons with other smartphones to help them make an informed decision.
● Post-decision Processes: Offer excellent customer service and support to address any technical issues or concerns.
Encourage customers to provide feedback and reviews to build credibility and trust among tech-savvy consumers.

By understanding the behaviour of tech-savvy consumers and aligning the marketing strategy with their preferences, the tech
company can effectively promote the new smartphone and attract this demographic.

Question 3
Qno Questions Topic Covered in QB Remarks
or not?
(a) A beverage company is launching a new line of energy drinks targeted C3 Analysing Similar This concept was
at health-conscious consumers. The strategic manager wants to study Industry and Question is covered in classes.
the market position of rival companies in the energy drink segment. Markets covered in QB
Which tool can be used for this analysis, and what is the procedure to Similar question was also
implement it effectively? asked in MTP 1 May
(5 Marks) 2018, SA July 2021, RTP,
May 2019, MTP 2 May
2021, MTP 2 May 2022

Easy and Direct Question.

We expect students to
score full marks in this

Answer - To study the market position of rival companies in the energy drink segment, the strategic manager can use strategic
group mapping. This tool helps identify strategic groups, which consist of rival firms with similar competitive approaches and
positions in the market. The procedure for implementing strategic group mapping effectively is as follows:
1. Identify the competitive characteristics that differentiate firms in the industry typical variables that are price/quality range
(high, medium, low); geographic coverage (local, regional, national, global); degree of vertical integration (none, partial,
full); product line breadth (wide, narrow); use of distribution channels (one, some, all); and degree of service offered
(no-frills, limited, full).
2. Plot the firms on a two-variable map using pairs of these differentiating characteristics.
3. Assign firms that fall in about the same strategy space to the same strategic group.
4. Draw circles around each strategic group making the circles proportional to the size of the group's respective share of
total industry sales revenues.
By following these steps, the strategic manager can gain valuable insights into the competitive landscape of the energy drink
segment and identify potential positioning strategies for the new line of energy drinks targeted at health-conscious consumers.

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(b) The CEO of a textile mill believes that his company, currently operating C4 Strategic Similar This concept was
at a loss, can be turned around. Develop an action plan outlining steps Exits Question is covered in classes.
covered in QB
the CEO can take to achieve this turnaround.
Similar question was also
(5 Marks)
asked in SA July 2021

Easy and Direct Question.

We expect students to
score full marks in this

Answer A workable action plan for turnaround of the textile mill would involve:
• Stage One – Assessment of current problems: In the first step, assess the current problems and get to the root causes and the
extent of damage.
• Stage Two – Analyze the situation and develop a strategic plan: Identify major problems and opportunities, develop a strategic
plan with specific goals and detailed functional actions after analyzing strengths and weaknesses in the areas of competitive
position.
• Stage Three – Implementing an emergency action plan: If the organization is in a critical stage, an appropriate action plan must
be developed to stop the bleeding and enable the organization to survive.
• Stage Four – Restructuring the business: If the core business is irreparably damaged, then the outlook for the entire organization
may be bleak. Efforts to be made to position the organization for rapid improvement.
• Stage Five – Returning to normal: In the final stage of turnaround strategy process, the organization should begin to show signs
of profitability, return on investments and enhancing economic value added.

Question 4
Qno Questions Topic Covered in Remarks
QB or not?
(a) Why Strategic Performance Measures are Essential for organizations? C5 Strategic New This concept was covered
(5 Marks) Performance question, in classes.
Measures not covered
in QB Direct and easy question

Answer - Strategic performance measures are essential for organizations for several reasons:
● Goal Alignment: Strategic performance measures help organizations align their strategies with their goals and objectives,
ensuring that they are on track to achieve their desired outcomes.
● Resource Allocation: Strategic performance measures provide organizations with the information they need to make
informed decisions about resource allocation, enabling them to prioritize their efforts and allocate resources to the areas
that will have the greatest impact on their performance.
● Continuous Improvement: Strategic performance measures provide organizations with a framework for continuous
improvement, enabling them to track their progress and make adjustments to improve their performance over time.
● External Accountability: Strategic performance measures help organizations demonstrate accountability to stakeholders,
including shareholders, customers, and regulatory bodies, by providing a clear and transparent picture of their
performance.

(b) How can Mendelow's Matrix be used to analyze and manage the C3 Mendelow's New This concept was covered
stakeholders effectively? Matrix question, in classes.
(5 Marks) not covered
in QB Direct and easy question

Answer - Mendelow's Matrix can be used effectively to analyze and manage stakeholders through a grid-based approach by the
following steps:
1. Identify Stakeholders: Begin by identifying all relevant stakeholders for your project or organization. This includes
individuals, groups, or organizations that may be impacted by or have an impact on your activities.
2. Assess Power and Interest: For each stakeholder, assess their power to influence your project or organization and their
level of interest in its success. Power can be assessed based on factors such as authority, resources, and expertise, while
interest can be gauged by their level of involvement, expectations, and potential benefits or risks.
3. Plot Stakeholders on the Grid: Create a grid with Power on one axis and Interest on the other. Plot each stakeholder on the
grid based on your assessment. Stakeholders with high power and high interest are placed in the "Key Players" quadrant,
those with high power but low interest are in the "Keep Satisfied" quadrant, those with low power but high interest are in
the "Keep Informed" quadrant, and those with low power and low interest are in the "Low Priority" quadrant.

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4. Develop Strategies for each Quadrant: Based on the placement of stakeholders in the grid, develop specific strategies for
managing each quadrant:
○ Key Players: Fully engage with these stakeholders, seek their input, and keep them informed. They are crucial for
the success of your project, so their needs and expectations should be a top priority.
○ Keep Satisfied: These stakeholders have significant power but may not be as interested in your project. Keep
them satisfied by providing regular updates and addressing any concerns they may have to prevent them from
becoming detractors.
○ Keep Informed: While these stakeholders may not have much power, they are highly interested in your project.
Keep them informed to ensure they remain supportive and to leverage their insights and feedback.
○ Low Priority: These stakeholders have low power and interest. Monitor them for any changes but allocate
minimal resources to managing their expectations.
5. Monitor and Adapt: Continuously monitor the power and interest of stakeholders and adjust your strategies accordingly.
Stakeholders may move between quadrants based on changing circumstances, so it's important to remain flexible and
responsive.
By using Mendelow's Matrix as a grid-based tool, you can effectively analyze and manage stakeholders by tailoring your
engagement strategies to their specific needs and expectations, ultimately increasing the likelihood of project success.

(b) Distinguish between Concentric Diversification and Conglomerate C4 Types of Similar This concept was covered
Diversification. Growth/Expansion Question is in classes.
(5 Marks) strategy covered in
QB Similar question was also
asked in SA May 2022

This is the simplest

question that can be
asked, and we expect
students to get full marks
in it.

Answer - The following are the principal points of distinction between concentric diversification and conglomerate diversification:
i) Concentric diversification occurs when a firm adds related products or markets. On the other hand, conglomerate
diversification occurs when a firm diversifies into areas that are unrelated to its current line of business.
ii) In concentric diversification, the new business is linked to the existing businesses through process, technology or
marketing. In conglomerate diversification, no such linkages exist; the new business/product is disjointed from the
existing businesses/ products.
iii) The most common reasons for pursuing concentric diversification are that opportunities in a firm’s existing line of
business are available. However, common reasons for pursuing a conglomerate growth strategy are that opportunities in a
firm's current line of business are limited or opportunities outside are highly lucrative.

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