QUESTION 1

United Products was formed 46 years ago by the merger of two large commercial organizations: Bulk Foods and Rowbotham Enterprises. Over the years it has acquired and disposed of several businesses and now has operations in Europe and North America. It has wholly owned subsidiaries operating in flour milling; vineyards; grocery retailing; agricultural machinery manufacturing and distribution; chemicals (particularly fertilizers); publishing; film production; and forestry. It is also involved via joint ventures and partnerships in quarrying, electronics design and clothes retailing

The company is regarded by investors as fairly safe but dull. Its growth has not kept pace with its competitors and some of its divisions' performance is distinctly poor

UP is organised into divisions, some of which are product based and some geographically based. Control is devolved to the CEOs of each division, subject to the compilation and submission of detailed monthly performance reports to the corporate Head Quarters in Fazackerley. Corporate HQ requires that each division has identifiable managers responsible for production, sales and finance. These managers are frequently visited by senior members of the relevant head office staff. It is corporate policy to promote from within, and all divisional CEOs must have experience of working both at corporate HQ and in at least three divisions

There has been a history of disputes between HQ and the divisions. Many have complained about the complexity of the monthly reports and the cost of compiling them. Some have said that they find HQ requirements and visits to be disruptive and counter-productive. However the corporate CEO is very concerned about the tendency of the divisions to go their own way

Required

(a) Do you believe the way in which UP is currently organized a sensible one?

(b) What is a virtual organization? Would such an approach be suitable for any UP's operations?

QUESTION 2

The marketing manager of Juicy Drinks Ltd has invited you in for a chat. Juicy Drinks Ltd provides fruit juices to a number of supermarket chains, which sell them under their own label. We've got a large number of products, of course. Our freshly squeezed orange juice is doing fine - it sells in huge quantities. Although margins are low, we have sufficient economies of scale to do very nicely in this market. We've got advanced production and bottling equipment and long term contracts with some major growers. No problems there. We also sell freshly squeezed pomegranate juice: customers loved it in the tests, but producing the stuff at the right price is a major hassle: all the seeds get in the way. We hope it will be a winner, once we get the production right and start converting customers to it. After all the market for exotic fruit juices generally is expanding fast

Required

(a) Identify the types products, according to the Boston classification, described here?

(b) Discuss the usefulness of using the BCG matrix in situation of Juicy Drinks Ltd

QUESTION 3

What is the role of effective corporate governance in improving a firm's performance? Discuss some of the key governance mechanisms that are used to ensure managerial and shareholder interests are aligned?

QUESTION 4

Describe briefly the three generic strategies

(i) cost leadership

(ii) differentiation and

(iii) focus

Some firms use a combination of the three generic strategies.' Discuss whether you agree or disagree with this statement