Strategic Management — DU B.A. (Hons.) Business Economics (BBE) Previous Year Question Papers

Strategic Management B.A. (H) Business Economics (2026) Sub-part marks have been indicated along with the question, wherever applicable. NovaTech Appliances Ltd., an India-based consumer durables company, has grown steadily over the past 15 years. The company is known for producing affordable washing machines, air conditioners, and kitchen appliances targeted at middle-income .households. Its strong dealer network in semi-urban and rural markets, along with cost-efficient production, has helped NovaTech establish a solid domestic presence. However, in recent years, the Indian consumer durables market has become highly competitive. Multinational brands and aggressive pricing strategies by new entrants have reduced NovaTech's margins. Additionally, customers are increasingly demanding technologically advanced and energy-efficient products, an area where NovaTech has limited capabilities. To sustain growth, NovaTech's leadership began exploring international expansion. After evaluating several regions, the company identified Latin America-particularly Brazil and Mexico-as promising markets due to rising urbanization and growing demand for affordable home appliances. To enter the market quickly, NovaTech considered acquiring CasaMundo Appliances, a mid-sized Brazilian company with an established brand name and widespread retail presence. CasaMundo had strong customer loyalty and distribution channels but struggled with outdated manufacturing processes and declining profitability. NovaTech initially proposed a joint venture, aiming to combine its low-cost manufacturing expertise with CasaMundo's market reach. However, CasaMundo's management rejected the proposal, fearing loss of control and brand dilution. In response, NovaTech adopted a more aggressive strategy and began purchasing CasaMundo's shares through the stock market. Within a short period, it acquirecl a 38% stake, signaling its intention to pursue a hostile takeover. This move created tension, as CasaMundo's management opposed foreign ownership and sought support from local investors and government bodies. Meanwhile, NovaTech faced internal disagreements. Some executives supported the acquisition, believing it would provide immediate global exposure and economies of scale. Others argued that NovaTech should instead invest in R&D and organic growth, warning that a hostile takeover in a culturally different market could backfire. As the situation escalated, NovaTech had to decide whether to proceed with the takeover, negotiate a compromise, or withdraw and pursue alternative strategies. The outcome would significantly impact its future as a global competitor. Read the case carefully and answer the following: (i) Identify the strategic option adopted by NovaTech Appliances Ltd. Evaluate its effectiveness in the given scenario. (ii) Examine the internal conflict among NovaTech's management. Which strategic direction would you suggest? Justify your answer. /4 morts/