Part 2.

Here is some balance of payments data for a country (in bln USD):

Merchandise export = 200

Merchandise import = 180

Primary income payments from abroad = 50

Primary income payments to non-residents = 70

Unilateral international transfers from abroad = 10

Unilateral international transfers to non-residents = 5

Capital account balance = 0

Change in foreign direct investment to abroad = 15

Change in foreign direct investment from abroad = -25

Balance on portfolio investmenti= 50

Balance on other investmentii= -80

Change in international reservesiii= -10

Net errors and omissions = -30

Find the balance on trade in services for the given period.

Exercise 2.

You have been hired as a Management trainee assisting the Head of Strategy for a multinational Company. Your immediate boss has requested you to brief him on your understanding of the Strategic Management process. In his request to you, he admitted that, there are a number of approaches but he indicated his preference for the one adopted by Pearce and Robinson. You are therefore required to answer the following questions in an attempt to explain the strategic management process;

In one of the definitions used by Pearce and Robinson, Strategic management was described as the "art and science of formulating, implementing and evaluating cross- functional decisions aimed at achieving organizational goals"; Briefly discuss the context in which strategic management could be described as 'an art' and when it also could be described as 'a science'. (4 marks)

Describe the strategy formulation process; clearly explaining three major activities that are undertaken at this stage? (3 marks)

Distinguish between business level strategies and corporate level strategies. (3 marks) Total = (10 marks)

Question Two

Organizations formulate and implement policies and strategies that are shaped by the forces within the external and internal business environment. University of Professional Studies, Accra (UPSA) is one organization that has initiated a number of policies over that past decade. This include the establishment of the Centre for International Education and Collaboration (CIEC), the Law faculty, development of MPhil programmes in Finance and Marketing, development of Open Distant learning programs among others.

You are required to analyse how the following factors/forces within the remote external environment could have influenced these policies that were formulated and implemented by UPSA.

a) The Political environment

b) TheEconomicenvironment

c) The Socio-economic environment

d) TheTechnologyenvironment

e) The legal/regulatory environment

Question Three

(10 marks)

There are a number of techniques employed to conduct an analysis of strategic options from which an organization can choose from to aid its attainment of long term objectives. As staff of

Lecturer - Kwame Fosu - Boateng

1

UT Holdings, co-opted into a business development committee, you have been tasked to do the following;

What is the Boston Consulting Group's Growth-Share-Matrix (BCG-GSM)

Present a well labelled graphical illustration of this model (Boston Box)

Explain each of the four quadrants in this matrix with appropriate strategies that may

work out for each quadrant. (10 marks)

Question Four

The industry environment plays a critical role in the profitability of a company. Hence, companies are to critically examine an industry towards ascertaining how its strategies success could be influenced by the industry factors. With the aid of a diagram, conduct an industry analysis of the carbonated drink industry assuming you are the business strategist working for NESTLE Milo Ghana Limited.

Question Five:

(a) A strategist has two broad approaches from which he/she can approach the development of strategies through the strategic management approach. Discuss the fundamental differences and similarities between "outside-in" and "inside-out" thinking about strategic management, and their influence on strategy. (4 marks)

(b) In examining the competitive dynamics within an industry, we discussed the need to first ascertain "the extent to which a company is a strong competitor" and the three (3) drivers of competitive behaviour. You are required to explain the two elements or basis used to determine the extent of competition from another company in the same industry and further explain the three (3) drivers of competitive behaviour. (6 marks)

Total = 10 marks

Question Six:

Understanding the common vocabulary used in strategic management is important to the application of its concepts.

Required:

There are four general steps in conducting an external environmental analysis starting with scanning of the environment. Briefly, explain all four steps. (2.5 marks)

Choose any organisation of your choice and employ the "SWOT Matrix" to demonstrate the current strategic position of the organization and clearly indicate the strategy options available to help match that organization's internal environmental elements against its external environmental elements. (5 marks)

Compare and contrast "strategic blunder" and "strategic drift"? (2.5 marks) Total = 20 marks

Lecturer - Kwame Fosu - Boateng

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Question Seven:

There are so many avenues through which the concepts of strategic management could be applied in real life.

Required:

With reference to the business model canvas (as discussed in class), illustrate how the nine (9) elements interact in ascertaining how a business can sustainably generate revenues. (3 marks)

Using an organization of your choice, practically demonstrate your understanding of the

organization's business model.

(7 marks).

Task 03.

(1)(a) A company in a competitive market with a cost function C(q) = 100 + 10q- q^2 + (1/3) q^3 has learned that it will now have to face a specific tax of t = $10 (per unit). This specific tax means that for every unit of output the firm sells it has to pay a tax of t dollars. If the firm sells q units, it pays a total tax of qt. (i) What is the firm's cost function including the tax? (ii) What is this firm's short-run profit-maximizing output if the market price is p? (Hint: the solution has to be expressed as a function of p and has to be defined for values that make economic sense, e.g. only positive quantities.) (b) You are given the following information about a particular perfectly competitive industry with identical firms: Market demand: QP = 6500 - 100P Market supply: Q = 1200P Firm total cost function: C(q) = 722 + 9 200 (i) Find the equilibrium in this industry: market price, market quantity, output supplied by each firm, the profit earned by each firm, and the total number of firms. (ii) Would you expect to observe new firms entering this industry in the long run? In what direction would the market equilibrium price and quantity change? (iii) What is the lowest price at which an individual firm would choose to sell output in the long run? What is the firm's profit at this price? (Assume that the short and long run cost curves are the same) (iv) What is the lowest price at which a firm would sell output in the short run? Why? What is the firm's profit at this price