4-1.

For Petronas, featured at the beginning of the chapter, give a hypothetical strategy
for each of the following categories: market penetration, related diversification,
divestiture, and retrenchment.

Petronas is a market leader in the energy sector. They have been existing for many decades
and continue to showcase their strengths.
Market penetration
- They have the capability to reduce the prices far low from the competitors. This helps
new market penetration.
Related diversification
- They made significant investment to explores, produces, and monetizes oil and gas
resources
Divestitutre
- They have divested some low hanging business abroad to focus on the fast moving
businesses.
Retrenchment
- They as a company philosophy never focus on retrenchment.
4-2. For Petronas, featured at the beginning of the chapter, give a hypothetical strategy
for each of the following categories: market development, unrelated diversification,
backward integration, and product development.

Backward integration they purchased its own ships for transportation of oil and gas.
Market Development strategies have been achieved through global partnerships including
the countries
For the product development they have focused on the with the adoption of best fuel
technology practices.
And for the unrelated diversification - they never focus. 

4-4. What three strategies defined in the chapter do you feel are most widely used by
small businesses?

For a small business, as you have asked, these three strategies can suit best if you follow how
to implement these.
So, the competitive strategies for small businesses are:

(a) Cost leadership Strategy: this strategy talks about how to offer the lowest price while still
ensuring profitability and a high return on investment (ROI). There are three ways to be the
cost leader:
* Taking advantage of economies of scale – by scaling the production
* Cutting down operational cost – by process innovation and automation
* Controlling & optimizing the value chain (including supply chain) – by bulk buying and
connecting with multiple suppliers (depends on situation)
(b) Differentiation Strategy: it says how to differentiate a business’s offerings from the
competition. There are three ways to differentiate:
* Bring unique features in products & services, and deliver high quality
* Faster delivery of the goods & services
* Providing great customer support
(c) Focus Strategy: as the market share it small for a small business, it is ideal to choose
particular market segments (niches) and serve their needs. Ideally, a small business should
focus on a few niches and tailor its offerings depending on the niches’ needs, business’s
resources & capability. While going with this strategy, tailoring marketing mix according to
the niche will bring better returns.

4-13. Explain how strategic management differs in governmental organizations as

compared to educational institutions.

Strategic management in governmental organizations depends on the need for the particular
financial year. They are more long term plans and the implementation strategy takes ling
time. For educational institutions the size of the organization is small and so it is fast to
implement and change easily based on the requirement

Strategists in governmental organizations operate with less strategic autonomy than their
counterparts in private firms. Strategic issues get discussed and debated in the media and
legislatures. Issues become politicized, resulting in fewer strategic choice alternatives.

4-14. Explain how and why Petronas has been so successful in recent years.

Its successful management of legal and maintenance activities in 2014 enabled PETRONAS
to shift its focus to raising utilization rate by 5 percent in 2015.

Taking advantage of being an integrated chain and its strategic location in South East Asia, a
region with fast growing chemical consumers, it is focusing on three long-term objectives—
operational excellence, marketing and sales excellence, and innovation excellence.

PETRONAS is pursuing backward integration by purchasing its ships to transport its oil and
gas, especially its LNG. This will provide low cost, direct access to LNG shipping capacity.

PETRONAS, operating the world’s first floating LNG facility

These are the reasons why PETRONAS has been so successful in recent years. In 2014,
while profit decreased by 27 percent, the group saw a 4 percent growth in revenue, which was
driven by higher production, higher liquefied natural gas (LNG) sales volume, and favorable
U.S.Dollar exchange rate movement. PETRONAS provides roughly 45 percent of the
Malaysian government’s annual budget

4-20. Give a hypothetical example of retrenchment and divestiture for Wal-Mart.

Students’ answers may vary.

 Walmart's plan is too famous in the world of retail strategy The firm was started by Sam
Walton he started in small southern towns. Walmart is located in 50 states. Walmart's
objective is to offer a lower prices and better services. Walmart sets the pace to make many
changes in competitive retailing in the years ahead. Walmart's impressive track is to track
record and strength. Walmart's strategy is consistently low prices and higher customer
services.

4-21. When would market development generally be the preferred strategy over
backward or forward integration?
 Market development generally is the preferred strategy over the backward market or forward
market following
• When new channels of distribution are available that are
reliable, inexpensive, and of good quality
• When an organization is very successful at what it does
• When new untapped or unsaturated markets exist
• When an organization has the needed capital and human
resources to manage expanded operations
• When an organization has excess production capacity
• When an organization’s basic industry is rapidly becoming
global in scope

4-24. List and describe the five types of bankruptcy. If your college or university had to
declare bankruptcy, which type would be appropriate?

The first type, Chapter 10 bankruptcy, is a liquidation procedure used only when a
corporation sees no hope of being able to operate successfully or to obtain the necessary
creditor agreement. All the organization’s assets are sold in parts for their tangible worth.

Chapter 11 bankruptcy applies to municipalities. It is another repayment plan that allows

towns, cities, school districts, etc. to reorganize and pay back what they owe.

Chapter 2 bankruptcy allows organizations to reorganize and come back after filing a
petition for protection. The court approves a monthly payment plan so you can pay back a
portion of your unsecured debt and all of your secured debt over a period of three to five
years.

Chapter 13 bankruptcy is a reorganization plan similar to Chapter 2, but it is available only

to small businesses owned by individuals with unsecured debts of less than $100,000 and
secured debts of less than $350,000. The Chapter 13 debtor is allowed to operate the business
while a plan is being developed to provide for the successful operation of the business in the
future.

Chapter 12 bankruptcy was created by the Family Farmer Bankruptcy Act of 1986. This law
provides special relief to family farmers with debt equal to or less than $1.5 million. This is a
repayment plan that allows family farmers and fisherman to avoid having to sell all their stuff
or foreclose on their property. While it’s similar to Chapter 13 bankruptcy, Chapter 12 is a
little more flexible and has higher debt limits.

If my college or university had to declare bankruptcy, the type would be appropriate is

chapter 13 or chapter 10. The biggest difference between Chapter 10 and Chapter 13
bankruptcy comes down to the assets and income level of my school. For instance, if an
unsteady income, they might fall into a Chapter 10 bankruptcy. But if the means test says
they make enough money to pay back their debts, they would fall into a Chapter 13 instead.
They might also apply for Chapter 13 if avoiding home foreclosure is a top priority, or they
could go for Chapter 10 if the timing is an issue—since it’s significantly faster than Chapter
13.

4-29. In order of importance, list six potential benefits of two firms merging.
1. To reduce tax obligations
Many governments offer tax cuts or reductions when a merger or acquisition is completed.
2. To gain access to new suppliers, distributors, customers, products, creditors and to
enter global markets
New possibilities offered by a new market. One of the greatest struggles a business owner can
face is related to entering a new market. A merger or acquisition will save time and money
spent on starting a business from scratch.

3.To make better use of the existing sales force, provide improved capacity utilization
and reduce managerial staff. One of the conditions for merging with or acquiring another
company is retaining the staff and integrating them in the new company.

4. To gain market share

You can diversify your portfolio. By joining forces, the portfolio of the new business can
increase even more and gain access to a larger market share.
5. To gain new technology
A merger can be motivated by a desire to acquire certain assets that cannot be obtained using
other methods. For example, access to new technologies is a frequent objective in many
mergers.
6. To gain economies of scale and pricing power
Two companies may undertake a merger to increase the wealth of their shareholders.Mergers
and acquisitions can mean greater financial power and more influence