The Business development function recognizes potential fresh coalition partners and also handles previous alliances. They are responsible for market research, recognizing potential customers and preparing the promotion and pricing strategy.

The scope and role of Business Development in Indian Pharma Industry is set for unprecedented change in the next few years. It is imperative that Indian Pharma companies are bound to seek professionals who can meet this demand.

Business Development is the future lifeblood for all the companies in view of present nature of competition and the developing landscape. In order to stand apart from rest of the pack, companies have to re-discover  the functioning, maneuvering and management of their Business Development departments so that they are “Fit as Fiddle”.

Need to Shape-up Strategies

1. Understand the future
2. Formulate
3. Integrate
4. Extegrate
5. Identify the shortcomings
6. Redirect
7. Reorganize

Managing Culture

The word Culture is derived from the Latin words cultura which stems from colere, meaning “to cultivate” and has different meanings.

However, the word “culture” is most commonly used in three basic senses:

• Excellence of taste in the fine arts and humanities, also known as high culture
• An integrated pattern of human knowledge, belief, and behavior that depends upon the capacity for symbolic thought and social learning
• The set of shared attitudes, values, goals, and practices that characterizes an institution, organization or group

The meaning of culture is highly misunderstood and misused. Culture is a Way of Life encompassing language, arts & science, thought, spirituality, social activity and interaction aimed in satisfying the needs.

In 1943, Abraham Maslow outlined the hierarchy of human needs through his Theory of Motivation as follows:

In Business, managing cultures is converging through divergence.

Following are the few tips for effectively managing the cultures.

1. We are all different. Use the differences to satisfy the human needs to achieve organizational convergence.
2. Respect other culture.
3. Understand other culture
4. Never criticize other’s religion. Have tolerance.
5. Respect each other’s food habits and food preferences.
6. Try to match, acclimatize your culture with your partner’s.
7. Never make fun or jeer at the language. If possible try to learn your partner’s language and way of life.

Managing Time:

1. Time is money including your partner’s.
2. If you cannot manage time, you can manage nothing. Schedule your appointments.
3. Work ahead to meet the deadlines.
4. Be punctual. Make it a culture to abide by time.
5. Have a wrist watch that shows local time. Adjust accordingly. Otherwise like Diego Maradonna, have two watches on your two wrists.
6. Be aware of time differences. Follow the local culture. Know when to call and when not to call. Know whether to call office phone or mobile phone.
7. Be flexible to change.
8. Never call at late hours. Do not be a disturbance.
9. Never argue on telephone.
10. Be brief. Brevity is the wit of the soul. Always maintain.
11. It is preferable to be a few minutes ahead of appointment time than being late.
12. Finally, stick to your appointments. Never cancel.

Managing entertainment:

1. Be a good listener. Do not babble.
2. Be able to laugh. Be genuinely interested in your partner.
3. Encourage your guest or partner to talk.
4. Know your partner well. Make efforts. Get to know the likes and dislikes.
5. Never be a miser but it does not mean that you should be a spendthrift.
6. Plan your entertainment based on the returns.
7. Do not drink more than you can swallow. Be within your limits.
8. Never take your guest to a place where you had not been there.
9. Plan, Organize and Control the entertainment event. Be prepared for all eventualities.
10. Follow basic courtesies and table manners.

Definition:

The word “negotiation” comes from the Latin expression, “negotiatus”, which is the past participle of the word negotiare. Negotiare means “to carry on business”. “Negotium” means literally “not leisure”.

Negotiation is the primary method of resolving disputes. Negotiation is a dialogue intended  to produce an agreement for individual or collective advantage, or to skillfully man oeuvre outcomes to satisfy various interests.

Importance of negotiation:

In international Pharma business, negotiation is important to establish the internal system (structure, people, functions, plans, measures, etc), and the organization’s relation to the external system (markets, suppliers, technology, etc). Negotiation is also essential to optimize the performance of activities internally and externally (principally through communication, by people).

Negotiators:

Most of us are either hard negotiators or soft negotiators. The soft negotiator avoids personal conflicts and therefore tends to concede in order to reach a peaceful agreement. However, this generally results in the nasty feeling of being taken advantage of. The hard negotiator considers every situation as a battle of the wills to be won by the more persistent party that takes on the more extreme position. Unfortunately, this often ends in getting an equally harsh response, resources run out and the relations with the other party deteriorate.

The third is “Principled Negotiator”. This technique resolves conflicts based on relevance and factual contents rather than in a haggling process. The approach focuses on mutual benefits and in case of conflicting interests, finding a solution based on fair principles which are independent of the intentions of each of the parties.

Principles of successful negotiation

1.    Separate the problem from the people and people from the problem.

All the negotiations involve human beings. Humans are motivated by emotions and value, have conflicting points of view and are not necessarily predictable. Hence let not your personal relationships interfere with factual debates when negotiating. First understand that your counterpart as a human being. Prevent different ideas, emotions or misunderstandings from standing in the way of a good, appropriate negotiation outcome. When the ideas are not precise, specify them. When emotions boil over, find the ways to lower the level of agitation.

When conflicts occur due to misunderstandings, improve the communication.

1.    Put yourself in the shoes of your counterpart. Try to understand your counterpart’s thinking and point of view.

2.    Discuss the ideas and expectations of the both the parties.

3.    Do not pass on the buck to your counterpart for your problems.

4.    Ensure active participation of your counterpart in the negotiation process.

5.    Base your suggestions on the value system of your partner. Do not let your partner loose face.

6.    Show articulated emotions and justify.

7.    Allow your counterpart to let off steam. Avoid emotional outbursts.

8.    Be careful with your body language. Respect the cultural differences.

9.    Listen carefully to what your counterpart says. Do not interrupt and argue.

10. Speak simple and clearly.

11. Talk about yourself, not about the other party.

12. Know your counterpart well. Strengths, weaknesses, likes, dislikes etc. Keep up active relationship.

2.    Do not focus on positions. Focus on interests.

Look beyond the words your counterpart. Recognize his interests and motives.

Try to answer the question why? Talk about the interests. Find the solution. Talk about your interest. Make your counterpart aware of your problem. Acknowledge your partner’s interests. Look ahead. Not back. Never dwell on the past. Find what your partner wants to achieve in the future and show that the negotiated solution solves the problem.

3.      Develop mutually beneficial alternatives. Take all the partners into account.

Most people are determined that know the answer to the conflict and that their solution to be accepted. Unfortunately this is somewhat premature and often gets into creative resolution that would be potentially benefit all the parties involved.

Keep an open mind always. Be creative to develop options.

1. Separate the process of finding the options from evaluating the options.
2. Find all possible options.
3. Evaluate the options in terms of benefits to all the parties involved.
4. Develop proposals that will make the other party accept the decision easier.
5. Brainstorm. Conceive as many options as possible.
6. Rationalize the assumptions. Drive your partner to make acceptable and beneficial solutions.
7. Adopt and modify solutions of similar conflicts.

1. Identify the objective criteria and procedures.
2. Convert every dispute into facts, evidence and assumptions in search for objective criteria.
3. Produce sound arguments  based on the objective criteria
4. Never give in to any kind of pressure, only accept (sensible) principles.

5. Distinctive negotiation behaviors of 15 cultural groups

Following cultural differences are worthwhile to be taken into consideration.

Japan. Their style of interaction is among the least aggressive (or most polite). Threats, commands, and warnings appear to be de-emphasized. Their polite conversational style is accompanied by infrequent use of no and you and facial gazing, as well as more frequent silent periods.

Korea. Korean negotiators use considerably more punishments and commands than did the Japanese. Koreans used the word no and interrupted more than three times as frequently as the Japanese. Moreover, no silent periods occurred between Korean negotiators.

China (Northern). Remarkable in the emphasis on asking questions (34 percent). Indeed, 70 percent of the statements made by the Chinese negotiators were classified as information-exchange tactics. Other aspects of their behavior were quite similar to the Japanese, particularly the use of no and you and silent periods.

Taiwan. Quite different from that in China and Japan but similar to that in Korea. Exceptional in the time of facial gazing—on the average, almost 20 of 30 minutes. Ask fewer questions and provide more information (self-disclosures) than did any of the other Asian groups.

Russia. The Russians’ style is quite different from that of any other European group and is quite similar in many respects to the style of the Japanese. Use no and you infrequently and use the most silent periods of any group.

Israel. Lowest percentage of self-disclosures and hold their cards relatively closely. Use the highest percentages of promises and recommendations. Use persuasive strategies unusually heavily. The Israeli negotiators interrupt one another much more frequently than negotiators from any other group. They are nonverbal and  “pushy” stereotypes.

Germany. The Germans were exceptional in the high percentage of self-disclosures (47 percent) and the low percentage of questions (11 percent).

United Kingdom. British people believe that most British negotiators have a strong sense of the right way to negotiate and the wrong. Protocol is of great importance. Some cultures may consider the British negotiation style as extremely cold and arrogant.

Spain. Spaniards use the highest percentage of commands (17 percent) of any of the groups and gave comparatively little information (self-disclosures, only 34 percent). Moreover, they interrupted one another more frequently than any other group, and they use the terms no and you very frequently.

France. The style of the French negotiators is perhaps the most aggressive of all the groups. In particular, they use the highest percentage of threats and warnings (together, 8 percent). They also use interruptions, facial gazing, and no and you very frequently compared with the other groups,

Brazil. The Brazilian business people, like the French and Spanish, are quite aggressive. They use the second-highest percentage of commands of all the groups. On average, the Brazilians say the word no 42 times, you 90 times, and touch one another on the arm about 5 times during 30 minutes of negotiation. Facial gazing is also high.

Mexico. Both verbal and nonverbal behaviors are quite different than those of their Latin American (Brazilian) or continental (Spanish) cousins. Indeed, Mexicans answer the telephone with the much less demanding bueno (short for “good day”). In many respects, the Mexican behavior is very similar to that of the negotiators from the United States.

French-Speaking Canada. The French-speaking Canadians behave quite similarly to their continental cousins. Like the negotiators from France, they too use high percentages of threats and warnings, and even more interruptions and eye contact. Such an aggressive interaction style would not mix well with some of the more low-key styles of some of the Asian groups or with English speakers, including English-speaking Canadians.

English-Speaking Canada. The Canadians who speak English as their first language use the lowest percentage of aggressive persuasive tactics (threats, warnings, and punishments totaled only 1 percent) of all 15 groups. With respect to international negotiations, the English-speaking Canadians used noticeably more interruptions and no’s than negotiators from either of Canada’s major trading partners, the United States and Japan.

United States. Like the Germans and the British, the Americans fall in the middle of most continua. They do interrupt one another less frequently than all the others, but that was their sole distinction.

“The Mediterranean culture is altogether warmer. Warm greetings and social aspects. Exuberant uses of postures and gestures. Difficulty in pinning discussions down to particular deals or particular phases of negotiation.

In some regions, deals need to be ‘lubricated’. Indeed, this question of ‘lubrication’ is central to the cultures of some Mediterranean countries. It is seen as a normal practice and does not have the repulsive character of ‘bribery’.

In Pharma Business, like in any other business communication skills are very important to be successful.

In Pharma business we must be capable to aptly encode the message we want to convey and understand the messages we receive and decode. Following are the steps in the communication process:

We shall also discuss about the following communications skills.

1. Critical Reasoning
2. Reading apprehension
3. Problem solving
4. Business English

We start with a look at some of the key ideas behind successful communication, and offer a brief quiz that helps you evaluate how effectively you communicate, so that you can identify the areas you should focus on for improvement.

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Score Interpretation

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Critical Reasoning

In carrying out business development functions, we often come across statements, arguments, facts, assumptions conveyed through reports, emails, oral communication etc. Here are the few skills we need to acquire to critically evaluate these statements.

1. Identify the key words as they highlight author’s opinion and logic and may indicate contrast, illustration, continuation and sequence.
2. Understand the proposition, statement, argument.
3. Identify the evidence in the form of data, statistics, surveys, facts. Understand and solve if needed.
4. Arrive at the gist of the statement or identify the conclusion as to what the statement finally wants to convey.
5. Most of the times, the evidence and conclusions are visible. Conclusions are based on the evidences. In business we need to understand what are not visible. These are assumptions and inferences.
6. Dig deeper to understand the right assumptions. Try to fathom what could strengthen or weaken the conclusion. Some time the assumptions could be flawed. If the assumptions are correct, then the conclusions are right.
7. Sometimes there could be a paradox between the assumption and the conclusion. Find the explanation for the paradox.
8. When there is a flaw, determine the conclusion, evidence and central assumption. Then predict an answer taking the error in author’s assumption.
9. In explanatory type of arguments with paradox, identify the paradox and predict an answer that addresses the paradox but do not contradict the evidence at hand.
10. In inference statements, complete the train of thought.
11. To weaken “X Y”, think either “Z Y” or “Y X”
12. When an argument is based on the findings of a study, equipment, or analogy, compare the evidence with that of conclusion.
13. In case of statement about the future identify assumptions about the feasibility, usefulness and relevance of the future conditions.

Following are few examples:

Question 1

The purpose of the proposed law requiring a doctor’s prescription for obtaining hypodermic needles is to lower the incidence of drug-related deaths, both accidental and intentional, involving hypodermic needles. But even knitting needles can be lethal if they fall into the wrong hands; yet everyone would agree that imposing legal restrictions on obtaining knitting needles would be preposterous. Hence the proposed law involving hypodermic makes no sense and should not be enacted.

Which of the following, it true, would provide most support for the argument above?

(A)        Knitting needles have been known to cause injury and death.

(B)        The benefits of hypodermic needles outweigh those of knitting needles.

©          The proposed law would not deter the sort of activity known to result in drug-related deaths.

(D)        The proposed law could not be effectively enforced.

(E)        Knitting needles are not readily available to anybody who wants to obtain them.

Analysis

The correct response is (A). The argument is essentially that the proposed law makes no sense because knitting needles are dangerous as well. The argument relies explicitly on an analogy between hypodermic and knitting needles. Thus, the two must be similar in all respects relevant to the argument. Otherwise, the argument is unconvincing.

(A) Affirms that knitting needles are in fact dangerous, thereby affirming the analogy between the two types of needles.

(B), (C) and (D) each in its own way supports the bare assertion that the proposed law might not be effective. However, none of these answer choices affirms the argument’s essential reasoning.

(E) Actually weakens the argument, by providing a reason why hypodermic needles and knitting needles are not relevantly similar. 

Question 2 

Six weekends each year, Alpha Show grounds are used exclusively for public horse shows. During all other weekends, the grounds are used exclusively as a public market. For its revenues, Alpha depends entirely on admission fees, and revenue from a typical weekend horse show is far greater than from a typical weekend market. However, Alpha’s annual revenues from the market far exceed its annual revenues from horse shows.

Which of the following strategies, if implemented, would likely provide the greatest boost to Alpha’s revenues?

(A)        Increase the fee for admission to the public market, but leave the admission fees for horse shows unchanged.

(B)       Increase the fees for admission to the horse shows, but leave the admission fee for the public market unchanged.

©  Discontinue use of the grounds for horse shows, and schedules the public market for   each and every weekend of the year.

(D)       Schedule some horse shows for weekdays instead of weekends; and during those weekends, use the grounds as a public market instead.

(E)       Schedule some weekend markets for weekdays instead of weekends; and during those weekends, use the grounds for horse shows instead.

Analysis

The correct response is (E). A typical weekend horse show generates more revenue than a typical weekend market. Hence, increasing the number of weekend horse shows is the surest way, among the five choices, for Alpha to maximize revenue, especially if the number of days per year that the grounds are used as a market would at least remain the same—as (E) suggests.

(A) And (B) are incorrect choices for essentially the same reason. By increasing an admission fee, Alpha might either enhance or reduce its total revenues, depending on the decrease in attendance (if any) due to the fee increase. Besides, neither plan (A or B) would add to the number of days during which one nor the other type of event takes place. Hence, neither plan (A or B) is as likely to succeed as the one that (E) suggests.

© is the worst of the five choices, and the easiest one to eliminate; replacing an event with one that generates significantly less revenue can only serve to reduce revenues.

(D) Suggests a course of action that is unlikely to be as effective as the one that (E) suggests. Increasing the number of weekend markets might boost revenues. However, since a weekend market generates less revenue than a weekend horse show, the boost would be less than if the number of weekend horse shows were increased instead—which is what (E) suggests.

Question 3

 During the past week, 120 RamTech Corporation employees have reported symptoms of a strain of food poisoning known as disporella, but only eight of these employees have tested positive for the strain. A RamTech spokesperson claims that the apparent outbreak of disporella can be attributed to contaminated food served two weeks ago at the company’s annual employee picnic.

Which of the following, if true, would most support the claim made by the RamTech spokesperson above?

(A)    Disporella symptoms generally last only a few days.

(B)    RamTech’s cafeteria facilities provide lunch to Ram-Tech employees during every workday.

©       People with disporella do not generally test positive for disporella until at least one week after disporella symptoms begin to occur.

(D)    People with disporella often do not exhibit disporella symptoms until more than a week after contracting disporella.

(E)      A person can test positive for disporella without exhibiting symptoms of disporella.

Analysis

The correct response is (D). The argument relies on the unstated assumption that no other event since the picnic could have caused the outbreak instead. Statement (D) provides some evidence that the employees who have reported disporella symptoms in fact contracted disporella at least one week ago. Accordingly, (D) helps support the claim that it was the food served at the picnic two weeks ago that caused the outbreak. Admittedly, (D) would provide even stronger support if it indicated that symptoms never appear until one week after contamination. Nevertheless, (D) is the best of the five answer choices.

(A)    Has no effect on the argument. It is the time after contamination that symptoms begin to occur, not the duration of those symptoms, that is key to identifying the source of contamination.

(B)    Actually weakens the claim, by providing another possible explanation for the outbreak. Specifically, (B) provides for the possibility that the outbreak can be attributed to food served in the company’s cafeteria rather than at the picnic.

©       provides some support for the argument, insofar as it helps to explain why only a few of those reporting symptoms have tested positive so far. However, the spokesperson’s claim is not just that the 120 employees have disporella but that it was the picnic food that caused the outbreak. © helps show that the 120 employees have disporella, but does not help explain how they contracted disporella. For this reason (D) is a better choice than ©.

(E)     has no effect on the argument, at least as (E) stands. Additional statistical information would be required to assess whether (E) supports the argument. For example, assume for the moment that several thousand employees—including the 120 later reporting disporella symptoms—attended the picnic. In this event (E) would strengthen the spokesperson’s claim, by providing an explanation for how the picnic food could have been contaminated if only a small percentage of attendees have reported disporella symptoms. Or assume on the other hand that the only employees attending the picnic were the 120 later reporting disporella symptoms. In this event (E) would have no effect on the argument. Thus, without any additional data it is impossible to assess the effect of (E) on the argument.

Question 4

In 1998, more citizens from the country of Monrovia migrated from Monrovia to neighboring Abstania than during any prior year. In 1998, the number of reported violent crimes in Abstania increased dramatically over 1997. The unavoidable conclusion is that Monrovians who migrated from Monrovia to Abstania were responsible for this increase.

Which of the following statements, if true, would most seriously weaken the claim that Monrovians were responsible for the increase in violent crime in Abstania during 1998?

(A)    Each year more violent criminals are apprehended in Abstania than in Monrovia.

(B)    During 1998 more violent crimes were reported in Abstania than in Monrovia.

©       In 1998 no Monrovians migrated from either Monrovia or Abstania to any country other than Monrovia or Abstania.

(D)    In 1998 the number of unreported violent crimes in Abstania increased as well.

(E)     In 1998 fewer Monrovians migrated from Monrovia to Abstania than from Abstania to Monrovia.

Analysis

The correct response is (E). The argument relies on the unstated assumption that Abstania’s Monrovian population either remained stable or increased during 1998. However, (E) provides that this population actually declined in 1998, despite the influx of Monrovians. Given that the number of Monrovians residing in Abstania decreased while the crime rate increased, (E) reduces the likelihood that it was Monrovians who were responsible for the increase in violent crime in 1998.

(A)    Would appear to weaken the argument, by providing ostensible evidence that Abstanians are more likely than Monrovians to commit violent crimes. However, (A) does not account for the possibility that in Monrovia far more violent criminals go unapprehended than in Abstania. In fact, the argument’s explicit reference to “reported” violent crimes underscores this possibility, which prohibits us from drawing any firm conclusion as to which group is more likely responsible for violent crimes.

(B)    Provides no information useful in evaluating the argument. Whether (B) strengthens the argument depends on addition considerations as well, such as: the total population of Monrovia compared to Abstania; whether the Monrovian population increased or decreased in each country during the year; and whether the crime rate in Monrovia increased or decreased during 1998.

©       Actually strengthens the argument. By providing evidence that number of Monrovians residing in Abstania increased in 1998, (B) makes it more likely that Monrovians were responsible for the increase in violent crime that year.

(D)    Actually strengthens the argument, by affirming the essential premise that the number of violent crimes in Monrovia increased dramatically during 1998.

Question 5

During each of the past five years, the total demand for paper on the part of manufacturers who produce paper packaging for consumer products has declined. During the same time period, the cubic volume of freshly cut timber that is used to produce paper packaging has also declined. However, reliable reports from recycling facilities across the country indicate that the amount of paper-based packaging material that they provide to paper-packaging companies for reuse has been increasing steadily.

The information provided best supports which of the following conclusions with respect to the last five years?

(A)    The amount of packaging using paper from freshly cut trees has decreased.

(B)    The amount of paper-based packaging that has been recycled for the same uses has exceeded the amount that has not.

©       Recycled  paper-based packaging has been used only for new packaging.

(D)    The total amount of packaging material made of non-paper materials has increased.

(E)      Consumers have increased the portion of paper products that they recycle after using.

Analysis

The correct answer is (A). According to the passage, the total paper demand for packaging has been decreasing, while the amount of paper packaging recycled for the same purpose has been increasing. These two facts, considered together, lend strong support to the conclusion that manufacturers have substituting recycled paper-packaging for “fresh” paper to meet their demand for paper packaging.

(B)    is not strongly inferable from the passage, which provides information only about changes in numbers from one year to the next, not total numbers. Without any numbers, it is impossible to compare the total amount of recycled packaging to the total amount of “fresh” packaging.

©       is incorrect because the passage provides no information permitting the sweeping inference that the all recycled paper packaging has been used to meet the paper-packaging demands of manufacturers. For example, it’s entirely possible (even probable) that some used paper packaging has been recycled as office paper or bathroom tissue.

(D)    is not strongly inferable. The only information in the passage about the demand for packaging material involves paper packaging. It is impossible to draw any strong conclusions about the demand for non-paper packaging material.

(E)     is not strongly inferable. Just because the amount of recycled paper packaging has increased, it is unfair to conclude that the amount of paper from products has also increased.

Question 6

As any economist knows, healthy people pose less of an economic burden to society than unhealthy people. Not surprisingly, then, every dollar our state government spends on prenatal care for undocumented immigrants will save taxpayers of this state three dollars.

Which of the following, if true, would best explain why the statistics cited above are not surprising?

(A)    The state’s taxpayers pay for prenatal care of all immigrants.

(B)    Pregnant women who do not receive prenatal care are more likely to experience health problems than other pregnant women.

©       State benefits for prenatal care serve to promote undocumented immigration.

(D)    Babies whose mothers did not receive prenatal care are just as healthy as other babies.

(E)     Babies born in this state to undocumented immigrant parents are entitled to infant care benefits from the state.

Analysis

The correct response is (B). The argument relies on the unstated assumption that prenatal care results in better health and therefore less cost to society. (B) helps affirm this assumption.

(A)    is irrelevant to the argument, which makes no distinction between undocumented immigrants and other immigrants.

©       Actually renders the statistics more surprising, by providing evidence that prenatal care will add to society’s economic burden.

(D)    Also renders the statistics more surprising, by providing evidence that the cost of the prenatal care program will not be offset by a particular health benefit—a benefit which would lessen the taxpayers’ economic burden.

(E)     Describes benefits that might decrease the overall tax burden, but only if the prenatal care program serves to reduce the amount of infant-care benefits paid. The argument does not inform us whether this is the case. Thus it is impossible to assess the extent to which (E) would explain how the prenatal care would save the taxpayers’ money.

Question 7

Beautiful beaches attract people, no doubt about it. Just look at this city’s beautiful beaches, which are among the most overcrowded beaches in the state.

Which of the following exhibits a pattern of reasoning most similar to the one exhibited in the argument above?

(A)    Moose and bear usually appear at the same drinking hole at the same time of day. Therefore, moose and bear must grow thirsty at about the same time.

(B)    Children who are scolded severely tend to misbehave more often than other children. Hence if a child is not scolded severely that child is less likely to misbehave.

©       This computer program helps increase the work efficiency of its users. As a result, these users have more free time for other activities.

(D)    During warm weather my dog suffers from fleas more so than during cooler weather. Therefore, fleas must thrive in a warm environment.

(E)     Pesticides are known to cause anemia in some people. However, most anemic people live in regions where pesticides are not commonly used.

Analysis

The correct response is (D). The original argument bases a conclusion that one phenomenon causes another on an observed correlation between the two phenomena. The argument boils down to the following:

Premise: X (beautiful beach) is correlated with Y (crowd of people).

Conclusion: X (beautiful beach) causes Y (crowd of people).

Answer choice (D) demonstrates the same pattern of reasoning:

Premise: X (warm weather) is correlated with Y (fleas).

Conclusion: X (warm weather) causes Y (fleas).

(A)    Demonstrates a different pattern of reasoning than the original argument:

Premise: X (moose at the drinking hole) is correlated with Y (bears at the drinking hole).

Conclusion: X (moose) and Y (bear) are both caused by Z (thirst).

(B)    demonstrates a different pattern of reasoning than the original argument:

Premise: X (scolding children) is correlated with Y (misbehavior among children).

Assumption: Either X causes Y, or Y causes X.

Conclusion: Not X (no scolding) will be correlated with not Y (no misbehavior).

©       demonstrates a different pattern of reasoning than the original argument:

Premise: X (computer program) causes Y (efficiency).

Assumption: Y (efficiency) causes Z (free time).

Conclusion: X (computer program) causes Z (free time).

(E)     demonstrates a different pattern of reasoning than the original argument. In fact, (E) is not a complete argument; it contains two premises but no conclusion:

Premise: X (pesticides) causes Y (anemia).

Premise: Not X (pesticide-free regions) is correlated with Y (anemia).

Question 8

For several consecutive years, poultry prices at each of three statewide grocery-store chains have exceeded the national average by about fifty percent. Also, the per-pound difference in poultry prices among the three stores never amounted to more than a few pennies, while among grocery stores in other states, the prices varied by nearly a dollar over the same period. The three chains must have conspired to not compete amongst themselves and to fix their poultry prices at mutually agreed-upon levels.

The claim that the three grocery-store chains conspired to fix poultry prices rests on which of the following assumptions for the time period referred to above?

(A)    No other grocery store charged higher prices for poultry than the three chains.

(B)    Average poultry prices in the state where the three chains operate exceeded the national average.

©       The price that grocery stores paid for poultry did not vary significantly from state to state.

(D)    Consumers in the state where the three chains operate generally prefer poultry over other meats even if poultry is more expensive than other meats.

(E)     Other grocery stores operating in the same state as the three chains also sell poultry to consumers.

Analysis

The correct answer is ©. The argument relies on the assumption that all other possible factors in the price grocery stores charge for poultry were essentially the same in the state where the three chains operate as in other states. One such factor is wholesale price (the price grocery stores pay suppliers for poultry). A higher wholesale price generally leads to higher prices for consumers. Answer choice © expressly eliminates this factor. Admittedly, an “ideal” answer choice would provide a more sweeping statement—that all factors possibly affecting poultry price were the same from state to state. Nevertheless, © is the only answer choice that serves to affirm the assumption; thus © is the best choice.

(A)    admittedly provides some support for the argument. Higher poultry prices at another store would weaken the argument that the three chains conspired to fix prices; thus given the inverse—that no other store charges higher poultry prices—the argument’s conclusion becomes more probable. However, (A) is not a necessary assumption. Even if a certain grocery store charged higher prices for poultry during the period, this fact would probably not be statistically significant in light of the much lower national average—especially if that store were located in another state and therefore did not compete with the three chains.

(B)    actually serves to weaken the argument. Given (B), the greater the number of other grocery stores in the same state the more likely that these other stores also charged high prices for poultry. This fact would in turn help refute the claim that the three chains were motivated by any concern other than to compete effectively against other stores in the state.

(D)    is not relevant to the argument, which is concerned with poultry prices charged by the three chains compared to poultry prices in other states, not compared to prices of other meats.

(E)     actually serves to weaken the argument. The more competitors, the less likely these three chains together hold a statewide poultry monopoly. (Monopolists are more likely to charge whatever price they wish for their products.)

Question 9

Newspaper publishers earn their profits primarily from advertising revenue, and potential advertisers are more likely to advertise in newspapers with a wide circulation—a large number of subscribers and other readers—than with other newspapers. But the circulation of the newspaper that is currently the most profitable one in this city has steadily declined during the last two years, while the circulation of one of its competitors has steadily increased.

Any of the following, if true, would help explain the apparent discrepancy between the two statements above EXCEPT:

(A)    Advertisers generally switch from the most widely circulated newspaper to another one only when the other one becomes the most widely circulated newspaper instead.

(B)    Advertising rates charged by the most profitable newspaper in the city are significantly higher than those charged by its competitors.

©       The most profitable newspaper in the city receives revenue from its subscribers as well from advertisers.

(D)    The circulation of the most profitable newspaper in the city is still greater than of any of its competitors.

(E)     The number of newspapers competing viably with the most profitable newspaper in the city has increased during the last two years.

Analysis

The correct response is ©. The correct response is (E). Assuming the number of viable competitors has increased during the last two years, the likely result would be to draw circulation away from already viable newspapers, including the most profitable one. Given that profitability depends primarily on advertising revenues and therefore on circulation, (E) actually exacerbates the discrepancy between the two statements.

(A)    and (D) help explain why the most profitable newspaper remains most profitable even though its circulation is declining: Advertisers have not yet begun to switch because the most profitable newspaper is still the most widely circulated.

(B)    Helps explain the discrepancy. Although the argument provides that advertisers are more likely to advertise with widely circulated newspapers than with others, it is entirely possible that other factors, such as advertising rates that a newspaper charges, also affect which newspapers advertisers choose.

©       Helps explain the discrepancy, by identifying another source of revenue and therefore another means of enhancing profitability. Simply stated, the more sources of revenue the more profitable a newspaper is likely to be. This in turn helps explain why the most profitable newspaper in the city remains the most profitable one, despite declining circulation. Admittedly, as circulation decreases so does subscriber revenue, and thus overall profitability. Yet the newspaper’s profitability is still greater than it would be without revenue from its subscribers.

Question 10

People should be held accountable for their own behavior, and if holding people accountable for their own behavior entails capital punishment, then so be it. However, no person should be held accountable for behavior over which he or she had no control.

Which of the following is the most logical conclusion of the argument above?

(A)        People should not be held accountable for the behavior of other people.

(B)        People have control over their own behavior.

©          People cannot control the behavior of other people.

(D)        Behavior that cannot be controlled should not be punished.

(E)        People have control over behavior that is subject to capital punishment.

Analysis

The correct response is (B). The argument includes the following two premises:

Premise: People are accountable for their own behavior.

Premise: People are not accountable for behavior they cannot control.

Here’s the logical conclusion based on these two premises:

Conclusion: People can control their own behavior.

(A)    would require that people never have control over the behavior of other people. Yet the argument does not provide this premise.

©       would require that people should not be held accountable for the behavior of other people. Yet the argument does not provide this premise.

(D)    is not a conclusion; (D) simply reiterates one of the argument’s premises (the second sentence).

(E)     is not inferable. The argument allows for the possibility that a person might not have control over another person’s behavior which is subject to capital punishment.

Reading comprehension

In business apprehending the information given in the form of passages, reports in various forms is very important to understand and communicate with the author effectively.

In such situations, adopt the following:

1. Identify the topic on which the passage or report is written.
2. Understand the scope of the topic covered.
3. Summarize the purpose of the passage.
4. Channel your thoughts to understand the evidence, assumptions of the author and the conclusions drawn.
5. Read strategically. Map the passage.
6. Determine the structure of the passage.

Questions 1-3 are based on the following passage:

In nearly all human populations a majority of individuals can taste the artificially synthesized chemical phenylthiocarbamide (PTC). However, the percentage varies dramatically—from as low as 60 percent in India to as high as 95 percent in Africa. That this polymorphism is observed in non-human primates as well indicates a long evolutionary history which, although obviously not acting on PTC, might reflect evolutionary selection for taste discrimination of other, more significant bitter substances, such as certain toxic plants.

A somewhat more puzzling human polymorphism is the genetic variability in earwax, or cerumen, which is observed in two varieties. Among European populations 90 percent of individuals have a sticky yellow variety rather than a dry, gray one, whereas in northern China these numbers are approximately the reverse. Perhaps like PTC variability, cerumen variability is an incidental expression of something more adaptively significant. Indeed, the observed relationship between cerumen and odorous bodily secretions, to which non-human primates and, to a lesser extent humans, pay attention suggests that during the course of human evolution genes affecting body secretions, including cerumen, came under selective influence.

Question 1

It can be inferred from the passage that human populations vary considerably in their

(A)        Sensitivity to certain bodily odors

(B)        Capacity for hearing

©          Ability to assimilate artificial chemicals

(D)        Vulnerability to certain toxins found in plants

(E)        Ability to discern bitterness in taste

Analysis

The correct response is (E). In the passage’s first paragraph the author points out that the ability to taste PTC varies among human populations, then in the final sentence of that paragraph refers to “other, more significant bitter substances….” It can reasonably be inferred from these two statements, considered together, that PTC is a bitter substance.

(A)    is unsupported in the passage; in the second paragraph the author points out a correlation between earwax and odorous secretions, but neither states nor suggests that either has any affect on the sense of smell.

(B)    is unsupported in the passage; in the second paragraph the author indicates that human populations vary in earwax type, but neither states nor implies that earwax type has any effect on hearing.

©       Grossly distorts the first sentence of the passage, which refers to the ability to taste one particular artificial chemical.

(D)    finds some support in the passage, but this support is very weak. (D) relies on the unsubstantiated inference that since human populations varies considerably in their ability to taste bitterness; they must also vary considerably in their vulnerability to certain toxins in bitter-tasting plants. Moreover, without explicit support in the passage (D) is ambiguous in the use of “vulnerability,” which might refer just to the body’s vulnerability to toxins once they are ingested, or also to one’s vulnerability to ingest a toxic plant—for lack of tasting the bitterness that warns of the plant’s toxicity.

Question 2

Which of the following provides the most reasonable explanation for the assertion in the first paragraph that evolutionary history “obviously” did not act on PTC?

(A)     PTC is not a naturally occurring chemical but rather has been produced only recently by scientists.

(B)     Most humans lack sufficient taste sensitivity to discriminate between PTC and bitter chemicals occurring naturally.

©        Variability among humans respecting PTC discrimination, like variability respecting earwax, cannot be explained in terms of evolutionary adaptivity.

(D)     The sense of taste in humans is not as discriminating as that in non-human primates.

(E)      Unlike non-human primates, humans can discriminate intellectually between toxic and non-toxic bitter substances.

Analysis

The correct response is (A). In the first sentence the author points out that PTC is an artificially synthesized chemical; thus, PTC has clearly not existed long enough to play any part whatsoever in the evolution of taste discrimination among primates.

(B)    is entirely unsupported by the passage, which provides no information comparing human sensitivity to the bitter taste of PTC with that of other bitter chemicals. In any case, as a response to the question (B) makes little sense.

©       runs contrary to the passage, which in fact offers an evolutionary explanation for human variability with respect to both PTC discrimination and earwax type. In any case, as a response to the question © is nonsensical.

(D)    provides an assertion that, although probably factual, finds no direct support in the passage. is consistent with common knowledge, but it does not respond to the question. Moreover, in the context of the portion of the passage that the question cites, (D) makes little sense as an explanation.

(E)     provides a vague assertion about the role of “intellect” in discerning between toxic and non-toxic substances. Whether or not this assertion accords with fact, it is unsupported in the passage.

Question 3

Which of the following best expresses the main idea of the passage?

(A)     Artificially synthesized chemicals might eventually serve to alter the course of evolution by desensitizing humans to certain tastes and odors.

(B)     Some human polymorphisms might be explained as vestigial evidence of evolutionary adaptations that still serve vital purposes in other primates.

©        Sensitivity to taste and to odors have been subject to far greater natural selectivity during the evolution of primates than previously thought.

(D)     Polymorphism among human populations varies considerably from region to region throughout the world.

(E)      The human senses of taste and smell have evolved considerably over the course of evolutionary history.

Analysis

The correct response is (B). In the first paragraph the author’s main concern is to point out that the variability among human populations regarding sensitivity to PTC might be a trace of the evolutionary process of natural selectivity. Then, in the second paragraph the author offers a similar suggestion about variability in earwax type. To support these assertions the author infers that both characteristics still serve useful purposes among non-primates—from whom humans presumably evolved. This inference is especially clear with respect to identifying bitter substances that might be toxic. (B) Accurately reflects the author’s main assertion and supporting evidence.

(A)    is entirely off the topic. Nowhere in the passage does the author discuss the future course of human evolution, let alone whether artificially synthesized chemicals will alter that course.

©       finds some support in the passage, insofar as the author argues that certain human polymorphisms involving taste and, indirectly, bodily odors are the result of the evolutionary process of natural selection. However, the author makes no claim that the impact of natural selection on the human senses is greater than previously thought.

(D)    Is a poor response in two respects. First, (D) distorts the meaning of “polymorphism.” It is the extent of certain polymorphic disparities, not certain polymorphisms themselves, that varies from region to region. Second, (D) is too narrow in that it overlooks the author’s ultimate concern with explaining those polymorphisms.

(E)     Finds some support in the passage, and (E) accords with everyday knowledge. However, (E) is far too broad and vague; it overlooks the author’s specific objective—to provide a common explanation for two particular human polymorphisms.

Questions 4-6 are based on the following passage:

The poetic expressiveness and creativity of Japanese women poets of the Manyoshu era is generally regarded as a manifestation of the freedom and relatively high political and economic status women of that era enjoyed. During the Heian period (A.D. 794-1185) which followed, Japanese women became increasingly relegated to domestic roles under the influence of Buddhism and Confucianism, which excluded women from the political and economic arenas. Yet, since poetry of the period came to be defined solely as short lyrical poetry, known as waka, and became the prevailing means of expressing love, women continued to excel in and play a central role in the development of classical Japanese poetry. Moreover, while official Japanese documents were written in Chinese, the phonetic alphabet kana was used for poetry. Also referred to as onna moji (“women’s letters”), kana was not deemed sufficiently sophisticated for use by Japanese men, who continued to write Chinese poetry, increasingly for expressing religious ideas and as an intellectual pastime. Chinese poetry ultimately yielded, then, to waka as the mainstream of Japanese poetry.

Question 4

Based on the passage, mainstream Japanese poetry of the Heian period can best be described as

(A)     Philosophical in its concern

(B)     More refined than the poetry of the Manyoshu era

©        An outgrowth of Buddhism and Confucianism

(D)     Sentimental in nature and lyrical in style

(E)      Written primarily for a female audience

Analysis

The correct response is (D). The passage indicates that during the Heian period poetry came to be defined as “lyrical” and became the “prevailing means of expressing love”—that is, for expressing personal sentiment. The passage then indicates, in the final sentence, that this type of poetry (waka) became the mainstream Japanese poetry of that period.

(A)    Confuses waka with poetry of the period written by Japanese men, which poetry was typically concerned with religious and intellectual ideas.

(B)    is unsupported in the passage, which neither states nor implies that Japanese poetry of one period was more refined than that of the other period.

©       is unsupported in the passage, which makes no attempt to trace the influence of Buddhism and Confucianism on the development of mainstream Japanese poetry during the Heian period.

(E)     Finds no explicit support in the passage, which indicates that waka (mainstream Japanese poetry of the Heian period) was written by women, but not that it was written primarily for women.

Question 5

Which of the following statements about kana finds the LEAST support in the passage?

(A)     It was based on the sound of the Japanese language.

(B)     It was used primarily by Japanese women.

©        It was used for Japanese poetry but not for Japanese prose.

(D)     It was used in Japan after A.D. 793.

(E)      It was considered inappropriate for austere subject matter.

Analysis

The correct response is ©. The passage neither states nor implies that kana was used exclusively for poetry—and not for prose.

(A)    Finds explicit support in the passage, which indicates that kana is a “phonetic” (based on pronunciation) alphabet.

(B)    Finds explicit support in the passage, which refers to kana as “women’s letters,” and which indicates that Japanese men continued to use the Chinese alphabet rather than kana.

(D)    Finds explicit support in the passage, which makes clear that the use of kana in Japanese waka poetry occurred during the Heian period, which began in A.D. 794.

(E)     is strongly inferable from the passage information. According to the passage, Japanese men did not use kana because they did not consider it “sufficiently sophisticated.” The passage then indicates that poetry written by Japanese men dealt primarily with religious and intellectual topics—topics which are reasonably regarded as austere (difficult to comprehend) compared to the simpler, sentimental concerns expressed in waka poetry (written in kana).

Question 6

The author’s primary purpose in the passage is to

(A)     Refute a commonly accepted explanation for the role of women in the development of Japanese poetry

(B)     Identify the reasons for the popularity of a distinct form of literary expression in Japan

©        distinguish between the Japanese poetry of one historical period with that of another

(D)     Trace the influence of religion on the development of Japanese poetry

(E)      Provide an explanation for the role of women in the development of Japanese poetry

Analysis

The correct response is (E). Of the five answer choices, (E) best reflects the thrust of the passage as a whole, which is as follows: The reason why women played a large role in Japanese poetry prior to the Heian period fails to account for the significant role of women in Japanese poetry during that period. The significance of that role is explained by the use of a phonetic alphabet, which only women used for the type of poetry that ended up appealing to the Japanese mainstream more so than other types.

(A)    is unsupported by the passage, which makes no explicit attempt to refute or oppose any particular explanation for the role of women in the development of Japanese poetry during either the Manyosho era or the Heian period.

(B)    is off the focus of the passage, in which no attempt is made to explain why waka poetry appealed to the mainstream during the Heian or any other time period.

©       distorts the passage’s focus. Presumably, the two historical periods to which © refers are the Manyosho era and the Heian period. But the passage contains no information about the poetry of the former period, nor does the passage provide any comparison between poetry of the two periods.

(D)    is unsupported by the passage. The passage does suggest that the tenets of Buddhism and Confucianism influenced the societal roles of Japanese women during the Heian period. But the passage provides no explanation as to how those roles account for the type of poetry that emerged during that period.

Questions 7-10 are based on the following passage:

In the past century Irish painting has changed from a British-influenced lyrical tradition to an art that evokes the ruggedness and roots of an Irish Celtic past. At the turn of the twentieth century Irish painters, including notables Walter Frederick Osborne and Sir William Orpen, looked elsewhere for influence. Osborne’s exposure to “plein air” painting deeply impacted his stylistic development; and Orpen allied himself with a group of English artists, while at the same time participated in the French avant-garde experiment, both as painter and teacher.

However, nationalist energies were beginning to coalesce, reviving interest in Irish culture—including Irish visual arts. Beatrice Elvery’s Éire (1907), a landmark achievement, merged the devotional simplicity of fifteenth-century Italian painting with the iconography of Ireland’s Celtic past, linking the history of Irish Catholicism with the still-nascent Irish republic. And, although also captivated by the French plein air school, Sir John Lavery invoked the mythology of his native land for a 1928 commission to paint the central figure for the bank note of the new Irish Free State. Lavery chose as this figure Éire, with her arm on a Celtic harp, the national symbol of independent Ireland.

In Irish painting from about 1910, memories of Edwardian romanticism coexisted with a new sense of realism, exemplified by the paintings of Paul Henry and Seán Keating, a student of Orpen’s. Realism also crept into the work of Edwardians Lavery and Orpen, both of whom made paintings depicting World War I, Lavery with a distanced Victorian nobility, Orpen closer to the front, revealing a more sinister and realistic vision. Meanwhile, counterpoint to the Edwardians and realists came Jack B. Yeats, whose travels throughout the rugged and more authentically Irish West led him to depict subjects ranging from street scenes in Dublin to boxing matches and funerals. Fusing close observations of Irish life and icons with an Irish identity in a new way, Yeats changed the face of Irish painting and became the most important Irish artist of his century.

Question 7

With respect to which of the following painters does the passage provide LEAST support for the assertion that the painter was influenced by the contemporary art of France?

(A)     Walter Frederick Osborne

(B)     Sir William Orpen

©        Beatrice Elvery

(D)     Seán Keating

(E)      Sir John Lavery

Analysis

The correct response is ©. The passage indicates that Elvery was influenced by fifteenth-century Italian art, but neither states nor suggests that she was influenced by her French contemporaries.

(A)    finds explicit support in the first paragraph, which indicates that Osborne’s exposure to plen aire painting impacted his style. (The second paragraph makes clear that plen aire was a French school.)

(B)    finds explicit support in the first paragraph, which indicates that Orpen participated in France’s avant-garde experiment.

(D)    is not explicitly supported in the passage. However, in the third paragraph the author indicates that Keating was a student of Orpen. The fact that Orpen participated in the French avant-garde experiment as a teacher lends strong support to the assertion that Keating was also influenced by the avant-garde movement.

(E)     finds explicit support in the second paragraph, which indicates that Lavery was captivated by the French plen aire school.

Question 8

Which of the following best explains the author’s use of the word “counterpoint” in referring to Yeats?

(A)     Yeats’ paintings differed significantly in subject matter from those of his contemporaries in Ireland.

(B)     Yeats reacted to the realism of his contemporary artists by invoking nineteenth-century naturalism in his own painting style.

©        Yeats avoided religious and mythological themes in favor of mundane portrayals of Irish life.

(D)     Yeats’ paintings suggested that his political views departed radically from those of the Edwardians and the realists.

(E)      Yeats built upon the realism painting tradition, elevating it to unprecedented artistic heights.

Analysis

The correct response is (A). Although the passage does not indicate the subject matter of the paintings of realists Henry and Keating, the author discusses Lavery and Orpen as depicting in their paintings somewhat romanticized scenes of politically charged subject matter. Yeats’ focus on everyday Irish life is set against, yet complements, (i.e., provides a “counterpoint to”) the cynosures of Lavery and Orpen.

(B)    is unsupported in the passage, which provides no information about Yeats’ painting style, only about his background and the subject matter of his paintings.

©       is in all likelihood true, based upon the passage, but wrongly implies that the paintings of the realists and Edwardians primarily involved religious and mythological themes. Although in the second paragraph the author does suggest that Lavery incorporated Celtic mythology into his work, the passage provides no such suggestions regarding Orpen, Henry, or Keating. Nor does the passage suggest that either Lavery, Orpen, Henry, or Keating incorporated religious themes into his paintings.

(D)    is unsupported in the passage, which provides no information about the political views of Lavery, Orpen, Henry, Keating, or Yeats—let alone any comparison between the political views of these painters.

(E)     finds support in the passage only insofar as Yeats’ preeminence among Irish artists does suggest that he achieved great artistic heights. However, in stating that Yeats provided counterpoint to the Edwardians and the realists the author strongly suggests that Yeats was not a realist. In any event, (E) does not explain the use of the term “counterpoint,” which suggests a complementary contrariness or opposition—perhaps in style or subject matter.

Question 9

The author points out the coexistence of romanticism and realism most probably in order to show that

(A)     Irish painters of the early twentieth century often combined elements of realism with those of romanticism into a single painting

(B)     Irish painters of the early twentieth century tended to romanticize the harsh reality of war

©        For a time painters from each school influenced painters from the other school

(D)     Yeats was influenced by both the romantic and realist schools of Irish painting

(E)      The transition in Irish painting from one predominant style to the other was not an abrupt one

Analysis

The correct response is (E). The passage’s main concern, expressed in the passage’s first sentence, is with the transition in Ireland from art that was influenced primarily by Britain’s lyrical tradition to art that reflected Ireland’s distinct national character. Of the five answer choices, (E) is most consistent with this overall concern.

(A)    Finds only scant support in the passage. Lavery’s approach to the subject of war might be characterized as combining Edwardian romanticism with realism. However, the pas sage does not suggest that any other Irish painters combined either subject matter or style of the two schools in the same painting.

(B)    is incorrect for essentially the reason as (A). Although Lavery’s approach to the subject of war might be characterized as romanticizing war’s harsh reality, the passage suggests no general tendency among Irish painters to romanticize war.

©       finds some support in the passage. The statement that realism “crept into” the work of Orpen and Lavery suggests that the realists influence the Edwardians. Conversely, since Keating (a realist) was a student of Orpen (an Edwardian), presumably influenced Keating. However, (E) explains the author’s point in mentioning the coexistence of the two schools far more effectively than © does.

(D)    is a poor response in two respects. First, the assertion that Yeats was influenced by romanticism finds no support in the passage. Secondly, (D) does not respond to the question, which seeks to understand the author’s purpose in pointing out the coexistence of romanticism and realism.

Question 10

Which of the following is the most likely title of a longer article in which the passage might have appeared?

(A)     “20^th Century Irish Masterpieces: A Coalescence of Painting Styles”

(B)     “Who Deserves Credit for the Preeminence of Yeats among Irish Painters?”

©        “Realism vs. Romanticism: Ireland’s Struggle for National Identity”

(D)     “Irish Paintings: Reflections of an Emerging Independent State”

(E)      “The Role of Celtic Mythology in Irish Painting”

Analysis

The correct response is (D). As a whole, the passage involves the increasing role that Irish tradition and nationalism played in the subject matter of Irish painting, beginning at the turn of the twentieth century. The first sentence strongly suggests that the article would continue in this vein.

(A)    Fails to embrace the passage’s main concern with how an increasing sense of Irish nationalism was reflected in Irish painting.

(B)    Finds scant support in the passage. Although the article might go on discredit Yeats or to otherwise identify which of Yeats’ predecessors had the greatest influence on him, the passage itself does not suggest that the article might proceed in this direction. In fact, the first sentence of the passage, which appears to be a possible thesis statement for the article, suggests a different direction.

©       is far too broad in that it fails to limit its scope to the subject of painting. © is also distorted in its focus on two particular schools (realism and romanticism), rather than on the overall impact of the emerging Irish state on Irish painting. Moreover, the term “vs.” suggests that realism and romanticism were competing against each other, yet the passage suggests no such competition, indicating only that the two schools “coexisted.”

(E)     is too narrow in scope, failing to embrace the overall role of Ireland’s nascent independence on Irish painters and paintings.

Business English

English language is the most preferred language for conducting the business. Most of the communication either verbal or written is done in English language. Hence it is imperative that we use English correctly so as to communicate effectively and efficiently.

Often the errors are in:

1. English grammar
2. Style of usage
3. Idioms

We must avoid the following errors:

1. Verbs:
   1. The verb must agree with the subject of the sentence. Plural subjects take plural verbs and singular subjects take singular verbs.
   2. The verb tense must match the meaning of the sentence as a whole.

1. Pronouns:
   1. Pronoun must refer unambiguously to a specific noun.
   2. Pronoun must agree in number with the noun it replaces.

1. Modification:
   1. Adjectives modify nouns. Adverbs modify verbs, adjectives or even other adverbs.
   2. A modifying phrase must clearly refer to what it modifies. It should be placed close as possible to what it modifies.

1. Parallel structure:
   1. Items in a list must have a parallel form.
   2. Many two-part constructions set up parallel elements. Examples: “not only A but also B”, “from A to B” and “either A or B”
   3. Parallel structures must be consistent.

1. Comparisons:
   1. Compared items must have parallel form.
   2. Items being compared must be both grammatically and logically comparable.
   3. Ensure that the comparisons are correct and avoid any ambiguity.

1. Usage and style:
   1. Avoid unnecessary wording and redundancy.
   2. Avoid passive verbs wherever possible.
   3. Avoid clunky, choppy or awkward sounding sentences.
   4. Use correct idioms.

1. Miscellaneous Errors:
   1. Two clauses should be connected by one, and only one, connector (because, although, as, but, etc.,)
   2. The connector used should make sense with the rest of the sentence.

Following are some of the exercises:

Question 1

Upon appearing first as a tiny speck in the night sky, some comets can eventually grow quite large in appearance.

(A)        Upon appearing

(B)        Appearing

(C)        The appearance of

(D)        When appearing

(E)        To appear

Analysis

The correct response is (B). In the original version (A), the word upon confuses the meaning of the sentence, by suggesting nonsensically that comets grow large in appearance immediately—as soon as they appear as a tiny speck. (B) is concise and clears up the confusion created by upon in the original version.

(C)    is nonsensical.

(D)    is no better than the original version. The word when, like upon, confuses the meaning of the sentence.

(E)     is nonsensical.

Question 2

Because global warming is increasing the sea level, alternative ways to utilize waterfront land ought to be explored.

(A)        Alternative ways to utilize

(B)        Alternative ways of utilization of

(C)        Alternatives to using

(D)        Alternatives of use of

(E)        Alternative utilizations for

Analysis

The correct response is (A). The original version (A) is grammatically correct and is the best version.

(B) is wordy and awkward.

(C) Alters the meaning of the original version by suggesting not using waterfront land at all.

(D) is nonsensical.

(E) Contains utilizations, which is not a word.

Question 3

Job applicants for computer programming jobs are at times asked to demonstrate their programming skills on the spot.

(A)        Job applicants for computer programming jobs are at times

(B)        Job applicants are sometimes for computer programming jobs

(C)        For some computer programming jobs, job applicants at times are

(D)        In some cases some applicants for computer programming jobs are

(E)        Applicants for computer programming jobs are sometimes

Analysis

The correct response is (E). The original version (A) is redundant in its use of job twice; the first occurrence is unnecessary. Also, at times is idiomatically improper here. Two proper idioms here would be sometimes and occasionally. (E) corrects both problems by omitting job from the beginning of the sentence and by replacing at times with sometimes.

(B) and (C) each fails to correct the redundancy, and each is awkwardly constructed.

In (D), the phrase [i]n some cases is awkward. Moreover, this phrase alters the meaning of the original version by going too far in limiting the situations in which a demonstration is requested.

Question 4

The need to foster allegiances between all the states was recognized by Madison and Hamilton, among others, during its burgeoning independence from England by the United States.

(A)    The need to foster allegiances between all the states was recognized by Madison and Hamilton, among others, during its burgeoning independence from England by the United States.

(B)    The need to foster allegiances was recognized by Madison and Hamilton, among others, between all the states during the United States’ burgeoning independence from England.

(C)   During a burgeoning independence from England by the United States, among others, Madison and Hamilton recognized the need to foster allegiances among all the states.

(D)     During the United States’ burgeoning independence from England, Madison and Hamilton, among others, recognized the need to foster allegiances among all the states.

(E)     The need recognized by Madison and Hamilton, among others, was to foster allegiances among all the states during the United States’ burgeoning independence from England.

Analysis

The correct response is (D). The original version (A) is flawed in three respects. First, its use of the passive voice (…was recognized by…) is a bit awkward. Secondly, between is incorrectly used to refer to more than two states; among should be used instead. Thirdly, the pronoun its (in the final clause) does not refer clearly to its intended antecedent United States. The sentence should be reconstructed so that its follows United States. (D) revamps the sentence, remedying all three problems with the original version.

(B)    is no better than the original version. It splits the grammatical element allegiances between, resulting in a confusing sentence. Also, between should be replaced with among. Finally, (B) uses the passive voice awkwardly.

(C)   remedies the problems with the original version, but the position of among others confuses the meaning of the sentence—by suggesting that the states’ independence was from not just England but other countries as well. Also, the first clause is not as succinct and clear as the first clause in (D).

(E)     is grammatically correct, but the first portion (The need recognized by…was to foster) is not only awkward in its passive construction but also distorts the sentence’s meaning—by implying that Madison and Hamilton recognized only one need.

Question 5

Contrary to popular myth, war heroes rarely earn their status by acting as if they themselves are invincible.

(A)        if they themselves are invincible

(B)        though they are invincible

(C)        being invincible

(D)        invincible

(E)        if they were invincible

Analysis

The correct response is (E). The original version (A) intends to express a contrary-to-fact situation, using the subjunctive mood; thus were (instead of are) is appropriate here. Also, the reflexive pronoun themselves is improper here. (Compare the phrase consider themselves invincible, which uses the reflexive form properly.) (E) corrects both problems with the original version.

(B)    does not use the subjunctive form.

(C)    uses an improper idiom (as being).

(D)    does not use the subjunctive form, and the phrase as invincible makes no sense in the sentence’s context (as invincible as what?).

Question 6

There is a gene that causes hemophilia, and if paired with a healthy gene the individual will not develop the disease’s symptoms.

(A)    There is a gene that causes hemophilia, and if paired with a healthy gene the individual will not develop

(B)    If the gene that causes hemophilia is paired with a healthy gene, then the individual will not develop

(C)    If paired with a healthy gene, the gene that causes hemophilia will prevent the individual from developing

(D)    Hemophilia is caused by a gene that, if paired with a healthy gene, will not develop in the individual

(E)     The gene that causes hemophilia, if paired with a healthy gene, causes the individual not to develop

Analysis

The correct response is (B). In the original version (A), [t]here is sets up an awkward and unnecessarily wordy sentence. Also, the sentence’s grammatical construction implies a pairing of a gene with the individual, thereby distorting the sentence’s intended meaning. The sentence should be reconstructed to make clearer that it is the pairing of two genes that prevents hemophilia. (B) remedies both problems with the original version without creating any new problems.

(C)    remedies both problems with the original version and contains no grammatical errors. However, © obscures the sentence’s intended meaning—by implying that the gene that causes hemophilia also prevents it. © would need to be reconstructed to more clearly convey the idea that it is the pairing of two particular types of genes that serves to prevent hemophilia.

(D)    remedies both problems with the original version. However, the last clause in (D) is awkwardly constructed. The subject of the verb develops is individual (the individual develops symptoms), but (D) improperly suggests that the gene develops the symptoms.

(E)     contains no grammatical errors. However, the phrase causes the individual not to develop is awkward and confusing. 

Question 7

Improved sonar technology, together with less stringent quotas, account for the recent increase in the amount of fish caught by commercial vessels.

(A)     account for the recent increase in the amount of

(B)     would account for a recent increase in

(C)     accounts for the recent increase in the number of

(D)     account for recent increases in amounts of

(E)      is accounted for by the recent increase in

Analysis

The correct response is ©. The original sentence (A) contains a subject-verb agreement error. The plural verb account does not agree in number with its singular subject technology. The intervening clause (set off by commas) should not affect the verb’s case, which should be plural (accounts). (C) corrects this error. Notice that (C) changes amount to number; either word is acceptable here since in this context fish could be considered either by number or by weight—for example, tonnage.

Although (B) seems to correct the agreement error by using the subjunctive verb form would account (this form could be either singular or plural), this subjunctive form alters the meaning of the original sentence, transforming it into a hypothetical, or conditional, statement.

(D) fails to correct the subject-verb agreement error. Also, the plural amounts is misused here. (The singular amount or number is proper here.)

Although (E) is grammatically correct, by using the passive voice without reconstructing the sentence, (E) completely distorts the meaning of the original sentence. (E) suggests that the increase in fish caught by commercial vessels is responsible for improved solar technology—instead of the other way around.

Question 8

Through careful examination, competent diagnosing and successful treatment, patients grow to trust their physicians.

(A)        diagnosing and successful treatment, patients grow to trust their physicians

(B)        diagnosis and treatment, if successful, lead patients to trust their physicians

(C)        and successful diagnosing and treatment, physicians develop trust in their patients

(D)        diagnosis and successful treatment, physicians help their patients grow to trust them

(E)        diagnosis and successful treatment, physicians develop in their patients growing trust

Analysis

The correct response is (D). The original sentence (A) suffers from faulty parallelism. The words examination, diagnosing, and treatment are not all grammatically parallel. One solution is to replace diagnosing with diagnosis. Also, notice that the first clause seems to refer nonsensically to patients because of this word’s proximity to the clause. The solution is to reconstruct the sentence so that the clause is closer to physicians than to patients. (D) corrects both errors without creating any new ones.

(B)    Creates an awkward, nonsensical sentence.

(C)    fails to correct the faulty parallelism. © also alters the meaning of the original sentence; competent and successful refer in © to both diagnosis and treatment. Also, the final clause in © is ambiguous. Are physicians trusting their patients, or vice versa?

(E)     corrects both errors in the original sentence. However, the grammatical element develop growing trust is split; the resulting clause is unclear and awkward.

Question 9

Because oil prices are declining, demand for alternative energy products is lessening.

(A)     Because oil prices are declining, demand for alternative energy products is lessening.

(B)     Because of declining oil prices, alternative energy products are lower in demand.

(C)     In view of the decline of oil prices, demand for alternative energy products is also declining.

(D)    Being that oil prices are lessening in amount, so too is the demand for alternative energy products.

(E)     Considering the fact that oil prices are declining, demand for alternative energy products is lessening.

Analysis

The correct response is (A). The original version (A) is the best one.

(B)    is nonsensical; lower appears to refer to energy products rather than to demand.

(C)    The phrase in view of is inappropriate to express the meaning of the original version. Also, the idiom decline in is preferred over decline of.

(D)    Includes the awkward phrase being that. Also, prices are not said to lessen in amount, but rather decline or lower.

(E)     The phrase considering the fact that is wordy, and it distorts the meaning of the original version, unfairly suggesting that the lessening demand for alternative energy products is surprising.

Question 10

People in the north central region of the United States use certain utterances that distinguish their speech from other regions.

(A)        distinguish their speech from

(B)        distinguishes their manner of speaking from

(C)       distinguish their speech from that of

(D)        distinguish the way they speak from

(E)        distinguishes their speech from those of

Analysis

The correct response is ©. The original sentence (A) makes an illogical comparison between speech and region. (C) corrects the problem in the original version by adding that of.

(B) and (D) each fail to correct the illogical comparison between speech and region. Also, (B) incorrectly uses the singular verb distinguishes instead of the plural form.

(E) corrects the illogical comparison. However, (E) incorrectly uses the singular verb distinguishes. The verb must agree with its plural subject utterances. (E) also incorrectly uses those instead of the correct relative pronoun that (to refer to the singular speech).

(Adopted from http://www.west.net)

Project

A project is a temporary endeavor involving a connected sequence of activities and a range of resources, which is designed to achieve a specific and unique outcome and which operates within time, cost and quality constraints and which is often used to introduce change

Characteristic of a project

• A unique, one-time operational activity or effort
• Requires the completion of a large number of interrelated activities
• Established to achieve specific objective
• Resources, such as time and/or money, are limited
• Typically has its own management structure
• Need leadership
• constructing houses, factories, shopping malls, athletic stadiums or arenas
• developing military weapons systems, aircrafts, new ships
• launching satellite systems
• constructing oil pipelines
• developing and implementing new computer systems
• planning concert, football games, or basketball tournaments
• introducing new products into  market
• The application of a collection of tools and techniques to direct the use of diverse resources towards the accomplishment of a unique, complex, one time task within time, cost and quality constraints.
• Its origins lie in World War II, when the military authorities used the techniques of operational research to plan the optimum use of resources.
• One of these techniques was the use of networks to represent a system of related activities
• Project planning
• Project scheduling
• Project control
• Project team
  • made up of individuals from various areas and departments within a company
  • Matrix organization

Examples

What is project management

Project Management Process

–        a team structure with members from functional areas, depending on  skills required

• Project Manager

–        most important member of project team

• Scope statement

–        a document that provides an understanding, justification, and expected result of a project

• Statement of work

–        written description of  objectives of a project

• Organizational Breakdown Structure

–        a chart that shows which organizational units are responsible for work items

• Responsibility Assignment Matrix

·         Shows who is responsible for work in a project

Project Scheduling and Control Techniques

• Gantt Chart
• Critical Path Method (CPM)
• Program Evaluation and Review Technique (PERT)

Gantt chart

• Graph or bar chart with a bar for each project activity that shows  passage of time
• Provides visual display of project schedule

Situations in network diagram

Concurrent Activities

Network example

Illustration of network analysis of a minor redesign of a product and its associated packaging.

The key question is: How long will it take to complete this project?

For clarity, this list is kept to a minimum by specifying only immediate relationships that is relationships involving activities that “occur near to each other in time”.

Questions to prepare activity network

• Is this a Start Activity?
• Is this a Finish Activity?
• What Activity Precedes this?
• What Activity Follows this?
• What Activity is Concurrent with this?

Path

• A connected sequence of activities leading from the starting event to the ending event
• The longest path (time); determines the project duration
• All of the activities that make up the critical path
  • Earliest Start Time (ES)
  • earliest time an activity can start
  • ES = maximum EF of immediate predecessors
    • Earliest finish time (EF)
      • earliest time an activity can finish
      • earliest start time plus  activity time

Critical Path

Critical Activities

Forward Pass

EF= ES + t

Backward Pass

• Latest Start Time (LS)
  • Latest time an activity can start without delaying critical path time

LS= LF – t

• Latest finish time (LF)
  • latest time an activity can be completed without delaying critical path time

LS = minimum LS of immediate predecessors

PERT

• PERT is based on the assumption that an activity’s duration follows a probability distribution instead of being a single value
• Three time estimates are required to compute the parameters of an activity’s duration distribution:
• pessimistic time (t_p ) – the time the activity would take if things did not go well
• most likely time (t_m ) – the consensus best estimate of the activity’s duration
• optimistic time (t_o ) – the time the activity would take if things did go well

• A Linear Programming model seeks to maximize or minimize a linear function, subject to a set of linear constraints.
• The linear model consists of the following
  components:
  •  A set of decision variables.
  •  An objective function.
  •  A set of constraints.
• The Importance of Linear Programming
• There are efficient solution techniques that solve linear programming models.
• The output generated from linear programming packages provides useful “what if” analysis.
• Assumptions of the linear programming model
  • The parameter values are known with certainty.
  • The objective function and constraints exhibit constant returns to scale.
  • There are no interactions between the decision variables (the additively assumption).
  • The Continuity assumption: Variables can take on any value within a given feasible range
  • Galaxy manufactures two toy doll models:
    • Space Ray.
    • Zapper.
    • Resources are limited to
      • 1000 pounds of special plastic.
      • 40 hours of production time per week.

The Galaxy Industries Production Problem – A Prototype Example

• Marketing requirement
  • Total production cannot exceed 700 dozens.
  • Number of dozens of Space Rays cannot exceed number of dozens of Zappers by more than 350.
  • Technological input
    • Space Rays requires 2 pounds of plastic and 3 minutes of labor per dozen.
    •  Zappers requires 1 pound of plastic and 4 minutes of labor per dozen.

The Galaxy Industries Production Problem – A Prototype Example

• The current production plan calls for:
  • Producing as much as possible of the more profitable product, Space Ray ($8 profit per dozen).
  • Use resources left over to produce Zappers ($5 profit per dozen), while remaining within the marketing guidelines.

• The current production plan consists of:
  • Space Rays  = 450 dozen
  • Zapper = 100 dozen
  • Profit = $4100 per week [8(450) + 5(1000]
  • Decisions variables:
    • X₁ = Weekly production level of Space Rays (in dozens)
    • X₂ = Weekly production level of Zappers (in dozens).
    • Objective Function:
      • Weekly profit, to be maximized
        • Max  8X₁ + 5X₂         (Weekly profit)

Management is seeking a production schedule that will increase the company’s profit.

A linear programming model can provide an insight and an intelligent solution to this problem.

The Galaxy Linear Programming Model

Subject to

• 2X₁ + 1X₂ ≤ 1000      (Plastic)
• 3X₁ + 4X₂ ≤ 2400      (Production Time)
• X₁ +   X₂  ≤ 700         (Total production)
• X₁  -   X₂  ≤ 350         (Mix)
• X_j> = 0,  j = 1,2          (No negativity)

The Graphical Analysis of Linear Programming

• The set of all points that satisfy all the constraints of the model is called a FEASIBLE REGION
• Using a graphical presentation we can represent all the constraints, the objective function, and the three types of feasible points.

Graphical Analysis – the Feasible Region

Graphical Analysis – the Feasible Region

Graphical Analysis – the Feasible Region

The search for an optimal solution

Summary of the optimal solution

• Space Rays  = 320 dozen
• Zappers       = 360 dozen
• Profit            =  $4360
• This solution utilizes all the plastic and all the production hours.
• Total production is only 680 (not 700).
• Space Rays production exceeds Zappers production by only 40 dozens.
• If a linear programming problem has an optimal solution, an extreme point is optimal.

Extreme points and optimal solutions

The Role of Sensitivity Analysis of the Optimal Solution

• Is the optimal solution sensitive to changes in input parameters?
• Possible reasons for asking this question:
• Parameter values used were only best estimates.
• Dynamic environment may cause changes.
• “What-if” analysis may provide economical and operational information.
  • Range of Optimality
  • The optimal solution will remain unchanged as long as
    • An objective function coefficient lies within its range of optimality there are no changes in any other input parameters.
    • The value of the objective function will change if the coefficient multiplies a variable whose value is nonzero.

Sensitivity Analysis of Objective Function Coefficients

• Reduced cost
• Assuming there are no other changes to the input parameters, the reduced cost for a variable X_j that has a value of “0” at the optimal solution is:
• The negative of the objective coefficient increase of the variable X_j (-C_j) necessary for the variable to be positive in the optimal solution
• Alternatively, it is the change in the objective value per unit increase of X_j.
  • Complementary slackness
  • At the optimal solution, either the value of a variable is zero, or its reduced cost is 0.
  • In sensitivity analysis of right-hand sides of constraints we are interested in the following questions:
  • Keeping all other factors the same, how much would the optimal value of the objective function (for example, the profit) change if the right-hand side of a constraint changed by one unit?
  • For how many additional or fewer units will this per unit change be valid?
    • Any change to the right hand side of a binding constraint will change the optimal solution.
    • Any change to the right-hand side of a non-binding constraint that is less than its slack or surplus, will cause no change in the optimal solution.

Sensitivity Analysis of Right-Hand Side Values

Shadow Prices

• Assuming there are no other changes to the input parameters, the change to the objective function value per unit increase to a right hand side of a constraint is called the “Shadow Price”

Range of Feasibility

• Assuming there are no other changes to the input parameters, the range of feasibility is
• The range of values for a right hand side of a constraint, in which the shadow prices for the constraints remain unchanged.
• In the range of feasibility the objective function value changes as follows:
  Change in objective value = [Shadow price][Change in the right hand side value]

Using Excel Solver – Optimal Solution

Using Excel Solver –Answer Report

Using Excel Solver –Sensitivity Report

Models without Unique Optimal Solutions

• Infeasibility:   Occurs when a model has no feasible point.
• Unboundness: Occurs when the objective can become infinitely large (max), or infinitely small (min).
• Alternate solution: Occurs when more than one point optimizes the objective function

Unbounded solution

Solver – An Alternate Optimal Solution

• Solver does not alert the user to the existence of alternate optimal solutions.
• Many times alternate optimal solutions exist when the allowable increase or allowable decrease is equal to zero.
• In these cases, we can find alternate optimal solutions using Solver by the following procedure:
• Observe that for some variable X_j the
  Allowable increase = 0, or
  Allowable decrease = 0.
• Add a constraint of the form:
  Objective function = Current optimal value.
  • If Allowable increase = 0, change the objective to Maximize X_j
  • If Allowable decrease = 0, change the objective to Minimize X_j

Cost Minimization Diet Problem

• Mix two sea ration products: Texfoods, Calration.
• Minimize the total cost of the mix.
• Meet the minimum requirements of Vitamin A, Vitamin D, and Iron.

Cost Minimization Diet Problem

• Summary of the optimal solution
• Texfood product  = 1.5 portions (= 3 ounces)

Calration product = 2.5 portions (= 5 ounces)

• Cost =$ 2.15 per serving.
• The minimum requirement for Vitamin D and iron are met with no surplus.
• The mixture provides 155% of the requirement for Vitamin A.

 

 

 

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12.    COUNTRY WISE RELATIVE COMPETITIVE ANALYSIS

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Market Attractiveness Matrix                        Attractiveness Results

13.    PORTERS FIVE FORCES

Description:

Michael Porter’s innovative research in the 1980’s changed managers’ perceptions of their own industry’s importance as a factor for their company’s strategy. Business unit managers would now have to study their industry’s characteristics since an industry’s structure determines its relative economic attractiveness and hence, the profit potential of all companies within that particular industry.

Prior to Porter’s publication, economists studying Industrial Organisation explained varying levels of profitability between industries on their structural differences. Porter focused on private policy rather than on public policy, that is, how to maximize profits instead of how to locate excess profits. Industry as a factor changed almost overnight from a given to an important variable in a firm’s strategic decision-making process. Porter made it clear that choosing a firm’s relative competitive position within a selected industry is a decision of secondary importance.

Porter’s framework consists of five fundamental competitive forces:

1. Entry of competitors

Assessing the ability of new entrants to start operations and the structural barriers they must overcome;

2. Threat of substitutes

Assessing the ability of new products with superior characteristics to replace existing product(s) or service(s);

3. Bargaining power of buyers

Assessing the relative strength and number of buyers;*

4. Bargaining power of suppliers

Assessing the relative strength and number of sellers;*

5. Rivalry among the existing players

Assessing the relative competitive strength of rival firms.*

• Concentration ratio (CR): the percent of market share held by the four largest firms within an industry is frequently used as a leading measure. A high CR means that few firms hold a large market share, are less competitive, and create a less competitive, more monopolistic landscape. Less competition leads to higher profit margins. A low concentration ratio indicates that an industry is characterized by many rivals, none of which has a significant market share. These fragmented markets are said to be competitive.

Pros:

• The model helps to understand how value is shared among actors, and provides insight into redistribution of profits.
• The model takes a broader view on competition than only a firm’s existing competing firms.
• The business unit level provides a context beyond a single product or range of products.
• Porter’s model emphasizes an outside analysis of the organization’s environment over an internal focus.

Cons:

• The model assumes a given state of affairs, and does not apply well to industries in turmoil.
• The analysis is reactive and does not include other perspectives such as the resource based view in which organizations can reshape an industry based on existing core competences and intrinsic will power.
• The analysis is based on the assumption that firms strive only for a competitive advantage over their rivals and exclude other motivations.
• The analysis is based on the assumption that firms strive only for a competitive advantage over their rivals and exclude other motivations.
• Buyers, suppliers and (new) competitors are assumed unrelated and do not operate in networks outside of the industry under observation.

References:

Michael E. Porter 1980 Free Press United States ISBN 0684841487

• Strategy and the business landscape

Pankaj Ghemawat 2001 Prentice Hall United States ISBN 0130289760

BOSTON CONSULTING GROUP (BCG) MATRIX is developed by BRUCE HENDERSON of the BOSTON CONSULTING GROUP IN THE EARLY 1970’s.

According to this technique, businesses or products are classified as low or high performers depending upon their market growth rate and relative market share.

To understand the Boston Matrix you need to understand how market share and market growth interrelate.

Market share is the percentage of the total market that is being serviced by your company, measured either in revenue terms or unit volume terms.

WHY BCG MATRIX?
To assess:

• Profiles of products/businesses
• The cash demands of products
• The development cycles of products
• Resource allocation and divestment decisions

Relative Market Share RMS = Business Unit sales this year / leading rival sales this year

The higher your market share, the higher proportion of the market you control.

Market growth is used as a measure of a market’s attractiveness.

MGR = Individual sales this year -  individual sales last year

Individual sales last year

It is a portfolio planning model which is based on the observation that a company’s business units can be classified in to four categories:

• Stars
• Question marks
• Cash cows
• Dogs

It is based on the combination of  market growth and market share relative to the next best competitor.

Markets experiencing high growth are ones where the total market share available is expanding, and there’s plenty of opportunity for everyone to make money.

STARS
High growth, High market share

• Stars are leaders in business.
• They also require heavy investment,    to maintain its large market share.
• It leads to large amount of cash consumption and cash generation.
• Attempts should be made to hold the market share otherwise the star will become a CASH COW.

CASH COWS

Low growth, High market share

• They are foundation of the company and often the stars of yesterday.
• They generate more cash than required.
• They extract the profits by investing as little cash as possible
• They are located in an industry that is mature, not growing or declining.

DOGS

Low growth, Low market share

• Dogs are the cash traps.
• Dogs do not have potential to bring in much cash.
• Number of dogs in the company should be minimized.
• Business is situated at a declining stage.

QUESTION MARKS

High growth, Low market share

• Most businesses start of as question marks.
• They will absorb great amounts of cash if the market share remains unchanged, (low).
• Question marks have potential to become star and eventually cash cow but can also become a dog.
• Investments should be high for question marks

MAIN STEPS OF BCG MATRIX

Identifying and dividing a company into SBU.

• Assessing and comparing the prospects of each SBU according to two criteria :
• SBU’S relative market share.
• Growth rate OF SBU’S industry.
• Classifying the SBU’S on the basis of BCG matrix.
• Developing strategic objectives for each SBU

Delphi method

A panel of experts, each of whom is physically separated from the others and is anonymous, is asked to respond to a sequential series of questionnaires.  After each questionnaire, the responses are tabulated and the information and opinions of the entire group are made known to each of the other panel members so that they may revise their previous forecast response.

The process continues until some degree of consensus is achieved.

Nominal group technique

The Nominal Group Technique (NGT), or multi-voting technique, is a methodology for achieving team consensus quickly when the team is ranking several options or alternatives or selecting the best choice among them.  The method basically consists of having each team member come up with his or her personal ranking of the options or choices, and collation of everyone’s rankings into the team consensus.

Jury of executive opinion

These techniques are often used by committees or panels seeking to develop new ideas or solve complex problems. They often involve “brainstorming sessions”.

It is important in such sessions that any ideas or opinions be permitted to be presented without regard to its relevancy and without fear of criticism.

Scenario projection

Scenario writing consists of developing a conceptual scenario of the future based on a well defined set of assumptions.  After several different scenarios have been developed, the decision maker determines which is most likely to occur in the future and makes decisions accordingly.

Top-Down : Where international and national events affect the future behaviour of local variables.

Bottom-Up: Where local events affect the future behaviour of local variables

7.    SWOT analysis:

Strengths

• Business strengths are its resources and capabilities that can be used as a basis for developing a competitive-advantage. Examples of such strengths include:
• Patents
• Strong brand names.
• Good reputation among customers.
• Cost advantages from proprietary know-how.
• Exclusive access to high grade natural resources.
• Favorable access to distribution networks.

Weaknesses

The absence of certain strengths may be viewed as a weakness. For example, each of the following may be considered weaknesses:

• Lack of patent protection
• A weak brand name
• Poor reputation among customers
• High cost structure
• Lack of access to the best natural resources
• Lack of access to key distribution channels

Opportunities

The external environmental analysis may reveal certain new opportunities for profit and growth. Some examples of such opportunities include:

• An unfulfilled customer need.
• Arrival of new technologies.
• Loosening of regulations.
• Removal of international trade barriers.

THREATS

Changes in the external environmental also may present threats to the firm. Some examples of such threats include:

• Shifts in consumer tastes away from the firm’s products
• Emergence of substitute products
• New regulations
• Increased trade barriers

3.    Multiple regressions:

The Multiple Regression Analysis and Forecasting model provides a solid basis for identifying value drivers and forecasting business plan data. While it utilizes a range of commonly employed statistical measures to test the validity of the analysis, results are summarized in text for ease of use. Once relationships have been identified, forecasting can be accomplished based on a range of available methodologies.

Sales as a function of both time and marketing costs

1.    Compound Annual Growth Rate (CAGR)

The Compounded Annual Growth Rate (CAGR) measures a market’s annual growth over a period of time (usually several years). This measure is a constant percentage rate at which a market would grow or contract year on year to reach its current value . CAGR is a formula used to express the rate of growth in sales, earnings, units or some other measure over a number of years. The CAGR is a more representative measure of annual growth over a number of years.

The CAGR is calculated as follows:

CAGR = ( ( Y / X ) ^ (1 / N ) ) – 1

Where: ( “ ^ “ ) denotes “to the power of “

Where: Y is the value in the final year

Where: X is the value in the first year

Where: N is the number of years included in the calculation

CAGR-based forecasts do not show the effects of inflation that would impact the overall dollar value in the future. CAGR -based forecasts are based on projected market volume and price per unit measures.

Case Studies

Suppose Mach Corp. wants to know the growth rate of sales between the years of 1997 through 2003. In 1997, sales were $245 million dollars. In 2003, due to growth in the company’s electronic transistor business, the firm had sales $445 million dollars. As general manager, you’ve been asked to compute the compounded annual growth rate in sales for the years between 1997 through 2003.

What is Mach Corp. Compounded Annual Growth Rate in sales between the years 1997 through 2003. ?

Formula

CAGR = ( $445 ) / ($245) ^ (1/ N-1 ) – 1

N = Total Years

^ = To the power of

Therefore,

10.45 % = ( $445 ) / ($245) ^ (1/ 6 ) – 1

Mach Corp. compounded growth rate in sales were 10.45 % per year since 1997.

Forecasting

Forecasting is the establishment of future expectations by the analysis of past data, or the formation of opinions.

Forecasting Techniques & Routes

Quantitative

Quantitative methods are based on an analysis of historical data concerning one or more time series. A time series is a set of observations measured at successive points in time or over successive periods of time. If the historical data used are restricted to past values of the series that we are trying to forecast, the procedure is called a time series method. If the historical data used involve other time series that are believed to be related to the time series that we are trying to forecast, the procedure is called a causal method.  Quantitative approaches are generally preferred. Time Series Data is usually plotted on a graph to determine the various characteristics or components of the time series data. There are 4 Major Components: Trend, Cyclical, Seasonal, and Irregular Components.

2.    Simple regression

In statistics, simple linear regression is the least squares estimator of a linear regression model with a single predictor variable. In other words, simple linear regression fits a straight line through the set of n points in such a way that makes the sum of squared residuals of the model (that is, vertical distances between the points of the data set and the fitted line) as small as possible.