MBA: Analysis of Business Situation (Sample Paper)
PART - 1
Section - I
Directions for questions 1 – 20:
This section comprises two passages. After each passage questions consisting of
items relating to the
preceding passage are given. Evaluate each item separately in terms of the
respective passage and choose
your answer
PASSAGE – I (Questions 1 – 10)
The Shop-O-shelf Company's supermarkets are situated in Bangalore, Coimbatore
and Vellore. The company
is dynamic and aggressive having grown from 8 stores ten years ago to 26 today.
Kanchipuram is a town 60 miles from Vellore. It has not shown the spectacular
growth of other suburbs, but its
population has increased from around 56,000 to 1, 30,000 in the past decade.
With no other Shop-O-Self
supermarket within 20 miles of the area, Shop-O-Self Company is considering
opening a store in
Kanchipuram.
The Arguments against: some Shop-O-Self executives oppose the project as
a poor risk. They point to the
proposed site, which is in a shopping centre three miles from Kanchipuram
business district. Two other food
chains have failed on this site because they claim; most new residences are on
the other side of the
community.
Moreover, the shopping centre owners demand a five year lease. Shop-O-Self would
have to try to find
another business to take over the lease should its own store fail before the end
of that time.
If a Shop-O-Self market must be opened in Kanchipuram, it would be far better,
these executives argue, to
build it in the heart of the community. But they point out, another supermarket
is already there.
The Arguments for: The Majority of the executives maintain that the site has
great potential. A new east-west
highway is being built which will pass Kanchipuram to the north and force the
car commuters to Kanchipuram
to pass by the shopping centre. A housing project of 3, 000 units is going to be
constructed nearby. The
average household is expected to consist of five people with over Rs. 30,000 of
income to dispose of
annually.
They also argue that the centre of Kanchipuram is now congested with traffic and
has extremely poor parking
facilities, while there is excellent parking in the shopping centre. Investment
in a new building in Kanchipuram,
proper than a five year lease should the store fail.
They are not too concerned about the other supermarket in Kanchipuram. There is
enough business for both.
Besides, the competitor's prices are higher than shop-o-self.
They also discount past supermarket failures in the shopping certre. They claim
these were caused more by
poor management than by the shopping centre's being slightly off the beaten
path.
The Decision: The board of directors listens to both sides and then votes
to open a Shop-o-self store at the
Kanchipuram shopping centre.
1. The residents at the projected residential
development will shop in the Kanchipuram store
(1) If the item is a Major Objective in making the decision: that is, the
outcome or result sought by
the decision maker
(2) If the item is a Major Factor in arriving at the decision; that is
consideration, explicity mentioned
in the passage that is basic in determining the decision
(3) If the item is a Minor Factor in making the decision: a less important
element bearing on or
affecting a Major Factor, rather than a Major Objective directly.
(4) If the item is a Major Assumption made deliberately; that is a supposition
or projection made by
the decision maker before considering the factors and alternatives.
(5) If the item is an unimportant issue in getting to the point; that is a
factor that is insignificant or not
immediately relevant to the situation.
2. Poor management causing past supermarket failures.
(1) If the item is a Major Objective in making the decision: that is, the
outcome or result sought by
the decision maker.
(2) If the item is a Major Factor in arriving at the decision; that is
consideration, explicity mentioned
in the passage that is basic in determining the decision.
(3) If the item is a Minor Factor in making the decision: a less important
element bearing on or
affecting a Major Factor, rather than a Major Objective directly.
(4) If the item is a Major Assumption made deliberately; that is a supposition
or projection made by
the decision maker before considering the factors and alternatives.
(5) If the item is an unimportant issue in getting to the point; that is a
factor that is insignificant or not
immediately relevant to the situation.
3. New east-west highway.
(1) If the item is a Major Objective in making the decision: that is, the
outcome or result sought by
the decision maker.
(2) If the item is a Major Factor in arriving at the decision; that is
consideration, explicity mentioned
in the passage that is basic in determining the decision.
(3) If the item is a Minor Factor in making the decision: a less important
element bearing on or
affecting a Major Factor, rather than a Major Objective directly.
(4) If the item is a Major Assumption made deliberately; that is a supposition
or projection made by
the decision maker before considering the factors and alternatives.
(5) If the item is an unimportant issue in getting to the point; that is a
factor that is insignificant or not
immediately relevant to the situation.
4. Expansion of dynamic company.
(1) If the item is a Major Objective in making the decision: that is , the
outcome or result sought by
the decision maker.
(2) If the item is a Major Factor in arriving at the decision; that is
consideration, explicity mentioned
in the passage that is basic in determining the decision.
(3) If the item is a Minor Factor in making the decision: a less important
element bearing on or
affecting a Major Factor, rather than a Major Objective directly.
(4) If the item is a Major Assumption made deliberately; that is a supposition
or projection made by
the decision maker before considering the factors and alternatives.
(5) If the item is an unimportant issue in getting to the point; that is a
factor that is insignificant or not
immediately relevant to the situation.
5. Failure of two supermarkets due to poor site selection.
(1) If the item is a Major Objective in making the decision: that is , the
outcome or result sought by
the decision maker.
(2) If the item is a Major Factor in arriving at the decision; that is
consideration, explicity mentioned
in the passage that is basic in determining the decision.
(3) If the item is a Minor Factor in making the decision: a less important
element bearing on or
affecting a Major Factor, rather than a Major Objective directly.
(4) If the item is a Major Assumption made deliberately; that is a supposition
or projection made by
the decision maker before considering the factors and alternatives.
(5) If the item is an unimportant issue in getting to the point; that is a
factor that is insignificant or not
immediately relevant to the situation.
6. Establishing a new store
(1) If the item is a Major Objective in making the decision: that is, the
outcome or result sought by
the decision maker.
(2) If the item is a Major Factor in arriving at the decision; that is
consideration, explicity mentioned
in the passage that is basic in determining the decision.
(3) If the item is a Minor Factor in making the decision: a less important
element bearing on or
affecting a Major Factor, rather than a Major Objective directly.
(4) If the item is a Major Assumption made deliberately; that is a supposition
or projection made by
the decision maker before considering the factors and alternatives.
(5) If the item is an unimportant issue in getting to the point; that is a
factor that is insignificant or not
immediately relevant to the situation.
7. New housing development.
(1) If the item is a Major Objective in making the decision: that is , the
outcome or result sought by
the decision maker.
(2) If the item is a Major Factor in arriving at the decision; that is
consideration, explicity mentioned
in the passage that is basic in determining the decision.
(3) If the item is a Minor Factor in making the decision: a less important
element bearing on or
affecting a Major Factor, rather than a Major Objective directly.
(4) If the item is a Major Assumption made deliberately; that is a supposition
or projection made by
the decision maker before considering the factors and alternatives.
(5) If the item is an unimportant issue in getting to the point; that is a
factor that is insignificant or not
immediately relevant to the situation.
8. Car commuters will shop at Kanchipuram supermarket.
(1) If the item is a Major Objective in making the decision: that is, the
outcome or result sought by
the decision maker.
(2) If the item is a Major Factor in arriving at the decision; that is
consideration, explicity mentioned
in the passage that is basic in determining the decision.
(3) If the item is a Minor Factor in making the decision: a less important
element bearing on or
affecting a Major Factor, rather than a Major Objective directly.
(4) If the item is a Major Assumption made deliberately; that is a supposition
or projection made by
the decision maker before considering the factors and alternatives.
(5) If the item is an unimportant issue in getting to the point; that is a
factor that is insignificant or not
immediately relevant to the situation.
9. High disposable income of expected new residents.
(1) If the item is a Major Objective in making the decision: that is, the
outcome or result sought by
the decision maker.
(2) If the item is a Major Factor in arriving at the decision; that is
consideration, explicity mentioned
in the passage that is basic in determining the decision.
(3) If the item is a Minor Factor in making the decision: a less important
element bearing on or
affecting a Major Factor, rather than a Major Objective directly.
(4) If the item is a Major Assumption made deliberately; that is a supposition
or projection made by
the decision maker before considering the factors and alternatives.
(5) If the item is an unimportant issue in getting to the point; that is a
factor that is insignificant or not
immediately relevant to the situation.
10. Kanchipuram's prices are lower than those of competitors.
(1) If the item is a Major Objective in making the decision: that is, the
outcome or result sought by
the decision maker.
(2) If the item is a Major Factor in arriving at the decision; that is
consideration, explicity mentioned
in the passage that is basic in determining the decision.
(3) If the item is a Minor Factor in making the decision: a less important
element bearing on or
affecting a Major Factor, rather than a Major Objective directly.
(4) If the item is a Major Assumption made deliberately; that is a supposition
or projection made by
the decision maker before considering the factors and alternatives.
(5) If the item is an unimportant issue in getting to the point; that is a
factor that is insignificant or not
immediately relevant to the situation.
PASSAGE II (Questions 11 – 20)
In 1997 Mr. Deepak, a chemical engineer, began experimenting in his spare time
with a new method for
processing fresh orange juice. By 2000, he had perfected the process to such an
extent that he was ready to
begin production in a small way. His process enabled him to extract 18 percent
more juice from oranges than
was typically extracted by a pressure juicer of the type currently used in
cafes. His process also removed
some of the bitterness, which got into the juice from the peelings when oranges
were squeezed without
peeling them.
Since many of the better quality restaurants preferred to serve fresh orange
juice instead of canned or frozen
juice, Mr. Deepak believed he could find a ready market for his product. Another
appeal of his product would
be that he could maintain more consistent juice flavor than haphazard restaurant
juicing usually produced.
Mr. Deepak patented the process and then started production. Since his capital
was limited, he began
production in a small building, which previously had been a woodworking shop.
With the help of his brother,
Mr. Deepak marketed the juice through local restaurants. The juice was
distributed in glass bottles, which
proved to be rather expensive because of high breakage. The new product was
favourably accepted by the
public and the business proved to e a success.
Mr. Deepak began to receive larger and more frequent orders from his customers
and their business
associates. In 2002, he quit his regular job in order to devote full time to his
juice business. He soon reached
his capacity because of his inability to personally over a larger area with his
pickup truck. Advertising was on a
small scale because of limited funds. Faced with the problems of glass bottle
breakage and limited
advertisement and distribution, Mr. Deepak approached a regional food
distributor for a solution Mr. Deepak
was offered a plan where by the distributor would advertise and distribute the
product on the basis of 25
percent of gross sales. The distributor would assist Mr. Deepak in securing a
loan from the local bank to
expand the production.
Before he had an opportunity to contact the bank to borrow money, Mr. Deepak was
introduced to Mr. Sunil, a
plastics engineer, who produced plastic containers. Mr. Deepak mentioned his own
problems in the expansion
of his business. Mr. Sunil wanted to finance expended juice production with the
understanding that plastic
containers would be used for marketing the orange juice. He would lend the money
interest free, but he was
Answer Keys
