MGMT 4489 SMU Strategic Management McDonalds Questions
Question Description
(Short answer) Name and explain one company that you know of that pursues a transnational strategy (1.5 points). Name one risk and one benefit that pursuing this type of strategy presents, referring specifically to the company you named. (1 point)
(Short answer)Loblaw acquired Shoppers Drug Mart in 2014. Is this a related or unrelated diversification? (0.5 points).
Justify your answer (1 point).
What does Loblaw gain from this acquisition (1 point)?
(Short answer)Please use the extended Diamond Model to explain the competitiveness of Indias software industry (0.5 point per factor, 2.5 points in total)
(Long answer)What is multidomestic strategy? (1 point)
Please use the Tata Starbucks case to explain 2 potential benefits (2 points) and 2 potential limitations (2 points) of a multidomestic strategy.
Your answers have to be related to the Tata Starbucks case. General descriptions of the benefits and limitations of multidomestic strategy will receive zero point.
(Long answer)What kind of diversification did Cirque du Soleil pursue through creating discrete business units and the acquisition deals? (1 point)
Justify your answer (2 points, please be specific).
Use the Cirque du Soleil case to explain 2 benefits of this kind of diversification (2 points).
Your answers have to be related to the Cirque du Soleil case.
(Long answer)You are the CEO of a privately owned company. Several of your wealthy family members are the biggest shareholders. High competition has forced you to consider expanding into another market to sell your product. Entering this new market requires a large financial commitment. You call in your Chief Financial Officer to review your companys financial situation. The CFO highlights the following Key Financial Ratios.
|
2018 |
2019 |
2020 |
|
|
Current Ratio |
0.7 |
0.6 |
0.5 |
|
Quick Ratio |
0.2 |
0.5 |
0.5 |
|
Cash Ratio |
0.8 |
0.3 |
0.1 |
|
Debt-to-Asset Ratio |
1.0 |
1.0 |
0.7 |
|
Inventory Turnover |
1.0 |
1.2 |
2.5 |
|
Profit Margin |
7% |
5% |
(1%) |
Note that the tax rates do not change between 2018-2020.
a) Using the financial ratios, explain the situation presented by the CFO (1 point).
b) Based on the above information, name two actions you need to do before you can enter the new market. Justify your decision and be as specific as possible about the steps to be taken (2 points).
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