INTERVIEW PREPARATION KIT

2024
A Comprehensive Guide for Aspirants

Prepared By
Media Relations Committee
(IIM Tiruchirappalli)
 CONTENTS

Sr. No. Topics Pg. No.

1. About IIM Trichy 2

2. Economics by Arthaniti 3

3. Strategy by Consulate 13

4. Finance by Finvest 21

5. Marketing by Mac 33

6. Analytics by Matrix 43

7. Product Managment by Prod-X 55

8. OB & HR by Persona 68

9. Operations by SigmaEta 77

10. Frequently asked PI Questions 85

1
 ABOUT IIM TRICHY

Indian Institute of Management Tiruchirappalli (IIMT) is the eleventh IIM and

was instituted on 4th January 2011. Tiruchirappalli is a city known for its
prominence in education, spirituality, art and culture and IIM Trichy tends to
benefit from this. IIMT is functioning from its sprawling state-of-the-art campus
spread over 175 acres of land on Trichy-Pudukottai highway, about 11 km from
Tiruchirappalli International Airport.

"Knowledge is endless" is a motto that has strongly governed IIM Tiruchirappalli.

IIMT holds strong values which it imparts to its students, primary amongst which
is an unceasing desire to learn. It also firmly believes that the foundation of value
creation lies in the path of continuous learning.

The institute recognizes the fact that its students would be the catalyst of change
for the betterment of future and hence, takes great responsibility in shaping them
into leaders of tomorrow. IIMT understands and gives students complete freedom
to decide upon their academic gradient based on their work experience and
academic background as well as their appetite for challenges, providing them
with an environment conducive in enhancing their learning experience.

2
 ECONOMICS & PUBLIC
POLICY CLUB

3
 What is Economics?

Economics is basically divided into two main branches: Microeconomics and

Macroeconomics.

Microeconomics deals with the behaviour of individual economic units such as

consumers, workers, investors, owners of the land, and business firms—in fact,
any individual or entity that plays a role in the functioning of our economy.
Microeconomics explains how and why these units make economic decisions.

On the other hand, Macroeconomics deals with aggregate economic quantities,

such as the level and growth rate of national output, interest rates,
unemployment, and inflation. In other words, Microeconomics deals with the
demand and supply of an individual and a firm; macroeconomics deals with the
aggregate demand and supply of industries and the economy.

Demand Curve:
The demand curve shows the quantity of goods consumers are willing to buy as
the price per unit of the good changes.

Law of Demand:

It defines the relationship between the demand and price of a product. The
demand for a product is inversely proportional to its price when other factors like
income, price of substitutes, consumer taste and preferences, etc remain the
same. As the price of a good increases, the quantity demanded decreases and vice
versa. This is because consumers will usually be willing to buy more if the price is
lower.

It is downward-sloped as the price and demand are inversely proportional.

4
 Supply Curve:
The supply curve shows the quantity of goods producers are willing to sell as the
price per unit of the good changes.

Law of Supply:
It defines the relationship between the supply and price of a product. The supply
of a product is directly proportional to its price, with other factors like income, the
price of substitutes, consumer taste, and preferences remaining the same. It is
because, when the price of a good increases, the suppliers would want to produce
more to capture more profits. As the price of a good decreases, the quantity
supplied decreases and vice versa.

It is upward-sloped as supply and price are directly proportional.

Equilibrium:
The point of intersection of the demand curve and the supply curve is called the
Equilibrium point. It gives the price at which the market supply meets the market
demand. Equilibrium is the point at which the price has reached the level where
the quantity supplied equals the quantity demanded.

Perfect substitutes:
These are the goods or commodities that consumers view as identical and have no
preference in consumption. This is where the utility of the product is identical and
the consumer is indifferent if he/she has to choose between the two. For instance,
a rupee coin is a perfect substitute for a rupee note.

5
 Perfect complements:
Perfect complements are the goods that can be consumed only along with the
other, and that can’t be consumed individually. For instance, the left and right
shoes form perfect complements as we can’t use one without the other.

Opportunity cost:
The value or benefit that a person forgoes to pursue the current opportunity (or)
the value of the best alternative opportunity an individual would have pursued
had it not been the one he/she is working on is called Opportunity cost.
For example, the benefit associated with the job offer a person has left, to start his
own company will be his opportunity cost.

Sunk Cost:
The amount of money that has already been spent and that cannot be recovered
in the future is called a Sunk cost. The cost spent in R&D by a pharmaceutical
company to develop a new drug but failed to do can be said to be sunk cost as it
cannot be recovered (as we are not selling the drugs)

Price Ceiling and Price Floor:

The price ceiling is the price at which a good or service is capped and thus can’t be
sold beyond. On the other hand, the price floor is the minimum purchase cost for a
good or service. The government sets these prices based on the situation
prevailing in the economy.

Fixed Costs:
These are the costs incurred by a company irrespective of the number of products
produced. The company will have to pay the building rent, salaries to its
employees, interest payments, etc, irrespective of the output, and hence, these
are fixed costs.

Variable Costs:
Costs that vary depending on the number of products produced (output) by the
company are called Variable costs. The manufacturing costs of a shoe-making
company would vary based on its production units, and hence, these are variable
costs.

Total cost is the sum of fixed and variable costs. The Average cost is the total cost
per number of units produced.

6
 Utility:
Utility refers to the total satisfaction the consumer experiences by consuming a
good or service. Marginal utility is the added satisfaction that a consumer gets
from consuming one more unit of a good or service. The law of diminishing
marginal utility states, that as consumption increases, the marginal utility
derived from each additional unit of good declines.

Elasticity:
It is the percentage change in one variable resulting from one percentage increase
in another variable. The percentage change in demand for a one percent change
in price is called as price elasticity of demand. The percentage change in quantity
demanded for a one percent change in income is called income elasticity of
demand. The percentage change in quantity supplied for a one percent change in
price is called price elasticity of supply.

Economies of scale:
It is the cost advantage that firms enjoy due to their scale of operation. The
production becomes efficient and costs less, as the fixed costs can be spread over
a larger amount of goods when companies scale up production. In this case, the
average cost decreases as we scale up the production.

Diseconomies of scale:
After a point of increase in output, the firm can no longer enjoy the cost benefits
and it rather costs more to increase the production of a single unit (this occurs due
to multiple factors). This is called a Diseconomies of scale. In this case, average
cost increases as we scale up the production.

Here in the graph, the company is enjoying Economies of scale until point Q1,
after which scaling up production can only result in increased average costs
leading to diseconomies of scale.

7
 Economies of Scope:
It is a situation where the joint output of a single firm is greater than the output
that can be achieved by two different firms when each firm produces a single
product. This usually happens when a company acquires another, wherein now
they can leverage individual synergies and produce better output jointly than
they would have when isolated. These advantages can result from the joint use of
inputs, production facilities, joint marketing programs, common administration,
etc.

Learning Curve:
A learning curve is a graphical representation of the relationship between how
proficient an individual is at a task and how it changes with the amount of
experience he/she has. Similarly, the firm learns over time as its cumulative
output increases.

Tariff:
It is the tax imposed by the government of a country on the goods and services
that are imported from another country. More tariffs discourage consumption of
foreign goods as the prices increase, and consumers will be forced to consume
domestic goods.

Quota:
The quota is a type of trade restriction wherein the government imposes a limit on
the quantity of goods or the value of a good that can be imported from another
country.

What is Gross National Product (GNP)?

Gross Domestic Product calculates the market value of the total goods and
services produced within the country, whereas Gross National Product value is
the total value of all products and services produced in a year at the means of
production owned by citizens of the country.

GNP = GDP +Net Income

Net Income:
Income Earned by Citizens from Foreign Investments – Income Earned by
foreigners via domestically owned means of production.

8
 Inflation:
Inflation is the gradual loss of a currency's buying value over time. The increase
in the average price level of a basket of selected goods and services in an economy
over time can be used to calculate a quantitative estimate of the rate at which
buying power declines.

Consumer Price Index (CPI):

The Consumer price index (CPI) measures the cost of buying a fixed basket of
goods and services representative of the purchases of the urban consumer.

Wholesale Price Index (WPI):

Like CPI it is also a measure of the cost of a given basket of goods, however the
goods price that they track is at the wholesaler level and not at the retail level, it
is more sensitive as compared to CPI.

Unemployment Rate:
The fraction of work force that is out of work and looking for a job or expecting a
recall from a layoff is the unemployment rate.

Inflation vs Unemployment:
The relation between Inflation and Unemployment is inversely related meaning
the Higher the Inflation lower is the unemployment which is generally observed
under normal conditions and vice versa, this relation was first studied by Mr.
A.W.Phillips, it is also known as the Phillips Curve. This relation creates a policy
tradeoff as ideally the government and the central bank would want both to be
low to ensure long-term stability, however, there is a tradeoff.

Fiscal Policy:
The policy decisions taken by the government to influence the behavior of the
economy by changing Taxes, Government Transfers, and Government
Expenditures all fall under the term of Fiscal Policy.

Monetary Policy:
As the Government makes the Fiscal Policy decisions whereas the Central bank of
the country makes the Monetary Policy decisions, ideally the decisions should be
autonomous and free from any influence from the Government. The Central bank
does this by controlling the money supply in the market by varying it they vary
the interest rates and promoting or creating resistance for businesses to take
loans and make investments in the economy.

9
 REPO Rate:
The repo rate is the rate at which a country's central bank (in India, the Reserve
Bank of India) loans money to commercial banks in the event of a cash shortage.
Monetary authorities use the repo rate to limit inflation. As of 17 December 2021, it
is 4% in India.

Reverse REPO Rate:

The reverse repo rate is the rate at which a country's central bank (in this case,
the Reserve Bank of India) borrows money from domestic commercial banks. It is
a monetary policy tool that can be used to control a country's money supply. The
current Reverse Repo Rate is 3.35%.

Statutory Liquidity Ratio:

Minimum %of the total deposits that the bank is supposed to keep in the form of
gold, cash and other forms of approved securities. The current SLR rate is 18%, the
RBI has the power to increase this rate up to 40%. By varying this RBI can vary
the money supply in the economy.

Cash Reserve Ratio (CRR):

The minimum % of the total deposits that the bank is supposed to keep in the form
of cash with RBI. The lower the CRR, the more money the bank will have to lend.
RBI varies the CRR in order to vary the liquidity level in the banking system.
Currently, the CRR is 4%

Marginal Standing Facility:

In an emergency, when inter-bank liquidity is fully depleted, banks can borrow
from the Reserve Bank of India using the marginal standing facility (MSF).

Government Budget:
There are three types of scenarios possible in the case of a Government Budget,
which are as follows:

1. Deficit Budget: When the budget spending planned is more than what the
government will earn in revenues, it is called the budget in deficit, and to
finance that, the government has to go for deficit financing. This scenario is
mostly there as the Government has many areas to spend but has limited
resources, hence the budget deficit.
2. Surplus Budget: It is when the planned spending is less than the revenues, that
the surplus budget situation
3. Balanced Budget: When the spending of the government is equal to its
revenues, then that budget is called a balanced budget.

10
 The budget of India is presented every year on 1st February by the Finance
Minister; it gives the areas government will do the spending and how much it will
support, what will be the tax structure if there are changes, if any, it gives an idea
about the fiscal policy taken up by Government.

Aggregate Demand:
The total demand at a price level of the finished goods and services produced
in the economy is the aggregate demand. It consists of all the demands like
consumer demand, Private firm demand, Government Demand, exports, and
imports.
Over the long term, Aggregate Demand and GDP become equal.
The Aggregate Demand Curve shows the combination of the price level and
level of output at which the goods and money markets are simultaneously in
equilibrium.
Expansionary policies such as increases in government spending, tax cuts,
and increases in the money supply move the aggregate demand curve to the
right.
The aggregate demand is also dependent on consumer confidence, when
consumer confidence is high the aggregate demand is higher, and hence the
curve shifts right.
The Aggregate demand is a downward-sloping curve that is when the price
decreases, the demand increases.

Aggregate Supply:

Aggregate Supply curve describes, for each given price level the quantity of
output firms are willing to supply.
It is upward-sloping because firms are willing to supply more output at higher
prices.
When there are external changes like changes in oil prices the Supply Curve
shifts left or right depending on the change in Oil Price, if it increases the
supply curve will shift left and vice versa.
When there is a technology upgrade the cost per unit of supply reduces and
hence suppliers are ready to supply more at the same price and hence supply
curve shifts right.
11
 Figure-(a) shows the aggregate supply curve which is in normal case and
Figure-(b) shows the aggregate supply curve which is vertical which is the
long-run supply curve, and the GDP is at the potential output.
Potential Output is the GDP when full capacity is utilized to produce Goods and
Services.
The intersection of the Aggregate Demand Curve and Aggregate Supply curve
will determine the equilibrium point it will give the Price Level and the Real
GDP value at which the Economy currently is at (when at equilibrium).

12
 THE STRATEGY &
CONSULTING CLUB

13
 Strategy

Strategy is creating a unique and valuable position, including a different set of

activities. Strategic position emerges from three distinct sources:

Serving the few needs of many customers

Serving the broad needs of a few customers
Serving the broad needs of many customers in a narrow market (e.g., you
choose to run movie theatres only in cities with a population of less than
500,000)

Strategy requires you to make trade-offs in competing: to choose what not to do.
For instance, Neutrogena soap is positioned more as a medicinal product than a
toilet soap. The company does not sell its products based on fragrance and also
gives up large volume sales.

Strategy also requires creating a 'fit' among company activities. Fit involves how
a company's activities interact and reinforce one another. The activities of the
company should not contradict one another.

SWOT analysis

A SWOT analysis (alternatively SWOT matrix) is a structured planning method

used to evaluate the strengths, weaknesses, opportunities and threats involved in
a project or a business venture. A SWOT analysis can be conducted for a product,
place, industry or person. It involves specifying the objective of the business
venture or project and identifying the internal and external factors that are
favourable or unfavourable to achieving that objective.

Some authors credit SWOT to Albert Humphrey, who led a convention at the
Stanford Research Institute (now SRI International) in the 1960s and 1970s using
data from Fortune 500 companies. However, Humphrey does not claim the
creation of SWOT, and the origins remain obscure. The degree to which the firm's
internal environment matches the external environment is expressed by the
concept of strategic fit.

14
 Strengths: characteristics of the business or project that give it an advantage
over others.

Weaknesses: characteristics that disadvantage the business or project relative to

others.

Opportunities: elements the business or project could exploit to its advantage.

Threats: environmental elements that could cause trouble for the business or
project.

The method of SWOT analysis is to take the information from an environmental

analysis and separate it into internal (strengths and weaknesses) and external
issues (opportunities and threats).

15
 PESTLE analysis

PESTLE analysis is a tool companies use to analyse the environment in which

they operate.

Political: Determines the extent to which a government influences the

economy of any industry.

Economic: Factors in the economy that affect the organisation.

Social: Factors scrutinising the social environment of the market and gauging
determinants like cultural trends, demographics, etc.

Technological: Factors about technological innovations that may affect the

operations of the industry and the market.

Legal: Laws affecting the business environment.

Environmental: Factors include all those that influence or are determined by

the surrounding environment.

16
 BCG MATRIX

The matrix, developed by Boston Consulting Group in the early 1960s, is used to
plan market strategies. The growth rate is determined by reference to market
research, or it can be estimated.

Competitive position' includes an assessment of the firm's overall market

penetration and profitability compared to the other players in that market.
Products are then positioned in the four cells, as shown in the figure.

Cash Cows: Large market share in a mature industry. They require little
investment.

Stars: Larger market share in a growing industry. They may require

investment to maintain lead.

Question Marks: A small market share in a growing market. They require

focus and resources.

Dog: Small market share in a mature industry. There is little prospect for gain.

17
 Porter’s 5 Forces
Porter's five forces Porter's is a valuable tool in helping understand both the
power of the current competitive position and the planned positions' power.

Porter's five forces are:

1. Competition in the industry

2. Potential of new entrants into the industry

3. Power of suppliers

4. Power of customers

5. The threat of substitute products

Key takeaways from Porter's:

Porter's Five Forces is a framework for analysing a company's competitive

environment.

The number and power of a company's competitive rivals, potential new

market entrants, suppliers, customers, and substitute products influence a
company's profitability.

Five Forces analysis can guide business strategy to increase competitive

advantage.

Competitive advantage

In 1980, Porter defined the two types of competitive advantage an organization

can achieve relative to its rivals: lower cost or differentiation. This advantage
derives from attribute(s) that allow an organization to outperform its competition,
such as superior market position, skills, or resources. In Porter’s view, strategic
management should be concerned with building and sustaining competitive
advantage.

18
 Michael Porter's Value Chain

Porter's 1985 description of the value chain refers to the chain of activities
(processes or collections of processes) an organisation performs to deliver a
valuable product or service to the market. These include inbound logistics,
operations, outbound logistics, marketing, sales, and service, supported by
systems and technology infrastructure. A firm can achieve a competitive
advantage by aligning the various activities in its value chain with the
organisation’s strategy. Porter also wrote that strategy is an internally
consistent configuration of activities that differentiates a firm from its rivals. A
robust competitive position cumulates from many activities that should fit
coherently together.

Value chain analysis

Value Chain Analysis describes the activities that take place in a business and
relates them to an analysis of the company's competitive strength. The activities
of a business could be classified as:

Primary Activities - These activities are directly concerned with creating and
delivering a product or service (e.g., component assembly). Primary activities
are broken down further into inbound logistics, operations, outbound logistics,
marketing and sales, and after-sales service.
Support Activities – These activities are not directly involved in production
but may increase effectiveness or efficiency. Support activities include
procurement of inputs, technology and human resources management
development, and general firm infrastructure.

Core competence

Gary Hamel and C. K. Prahalad described the idea of core competency in 1990, the
idea that each organisation has some capability in which it excels and that the
business should focus on opportunities in that area, letting others go or
outsourcing them. Further, core competency is difficult to duplicate, as it involves
the skills and coordination of people across various functional areas or processes
used to deliver value to customers. By outsourcing, companies expand the value
chain concept, with some elements within the entity and others without. Core
competency is part of a branch of strategy called the resource-based view of the
firm, which postulates that if activities are strategic as indicated by the value
chain, then the organization's capabilities and ability to learn or adapt are also
strategic.

19
 MECE (Mutually Exclusive, Collectively Exhaustive)

MECE is a system of problem-solving that helps solve complex problems. It can

help streamline activities and focus on critical data that determine success.
Management consulting firms use MECE to describe a way of organizing
information. The MECE principle suggests that to understand and fix any large
problem, you need to understand your options by sorting them into categories:
Mutually Exclusive – Items can only fit into one category at a time.
Collectively Exhaustive – All items can fit into one of the categories.

General Management

General management is arguably the ultimate realisation of a business career. It

entails complete responsibility, including profit and loss accountability, for the
performance of an entire business or a business unit.

General managers typically have cross-functional responsibility; they make

decisions that involve coordinating and integrating functional areas such as
sales, marketing, human resources, finance and production. They manage
individuals in charge of these various areas and coordinate their activities. The
CFO may know more about finance and the CMO more about marketing, but the
general manager has to know enough about each function to:

Coordinate its activities with the organization's overall strategy

Plan the business's strategy for going forward.

20
 THE FINANCE & INVESTING
CLUB

21
 FINANCE
The term "finance" refers to a broad range of activities, including banking,
borrowing or debt, credit, capital markets, money, and investments. Finance is
essentially the management of money and the process of obtaining needed funds.
The creation and research of money, banking, credit, investments, assets, and
liabilities—all components of financial systems—are also included in the field of
finance.

TYPES OF BUSINESS
There are four types of business organisations: Sole Proprietorship, Partnership,
Company, and Limited Liability Partnership.
Sole Proprietorship - A business owned and run by one person for their own
benefit. The business's existence is entirely dependent on the owner's
decisions.
Partnership - Refers to a business owned by a minimum of 2 and a maximum of
50 people. There are two types: general partnership (does not require a formal
agreement, but all partners' liability is unlimited) and limited partnership
(requires a formal agreement, and partners' liability can be limited).
Company - It's a separate legal entity from its owners. A private limited
company has a minimum of 2 and a maximum of 200 shareholders. A public
limited company offers shares to the general public and has limited liability.
Anyone can acquire its stock privately through Initial Public Offering (IPO) or
trades on the stock market.
Limited Liability Partnership - LLP gives the benefits of limited liability of a
company and the flexibility of a partnership. The LLP is a separate legal entity
and is liable to the full extent of its assets, but the liability of the partners is
limited to their agreed contribution to the LLP.

ACCOUNTING
Accounting is the process of documenting a business's financial transactions.
These transactions are compiled, examined, and reported to oversight
organisations, regulatory bodies, and tax collection organisations as part of the
accounting process. A company's operations, financial condition, and cash flows
are summarised in the financial statements that are used in accounting. They
provide a brief summary of financial transactions across an accounting period.

Accounting principles are the rules and guidelines that companies and other
bodies must follow when reporting financial data. In India, the Accounting
Standards Board (ASB) issues the Indian Accounting Standard (IndAS).
Internationally, the International Accounting Standards Board (IASB) issues
International Financial Reporting Standards (IFRS).

22
 Some of the most fundamental accounting principles include the following:

Accrual Principle: Record the transactions in the time period in which they
occur regardless of when the actual cash flows for the transaction are
received.
Consistency Principle: According to this principle, when an organisation
adopts a specific accounting method of reporting or documentation, then it
should stay consistent with the method. The aim is to make financial
statements comparable across industries and companies.
Conservatism Principle: According to this principle, one should recognise
expenses and liabilities at the early stages, even if there is uncertainty about
the outcome.
Economic Entity Principle: This concept of accounting requires businesses to
be treated as a separate financial and legal entity. This means that the
recorded activities of the business entity must be kept separate from the
recorded activities of the owners.
Matching Principle: The matching principle is a concept in accounting that
states that companies must report their expenses and revenues
simultaneously.
Materiality Principle: As per the materiality principle, any item that may
impact the decision- making process of an investor must be recorded.
Full Disclosure Principle: As per the principle, each piece of information
should be included in the financial statement of an entity. This is necessary
since it might affect the reader’s perspective of understanding the statement.
Going Concern Principle: According to this accounting principle, it is assumed
that the company will continue its operations indefinitely until evidence
suggests otherwise.
Reliability Principle: This principle ensures that financial information is
verifiable, objective, and associated with evidence.
Revenue Recognition Principle: The revenue recognition principle states that
you should only record revenue when earned, not when the related cash is
collected.

23
 BASIC CONCEPTS IN FINANCE

Financial Statements
Financial statements are a collection of documents and reports of the
transactions of an organisation. It helps determine an organisation's financial
health, profitability, and performance. It is useful as it helps:
To determine the ability of a business to generate cash and the sources and
uses of that cash.
To determine whether a business can pay back its debts.
To track financial results on a trend line to spot any looming profitability
issues. To derive financial ratios from the statements that can indicate the
condition of the business.
To investigate the details of certain business transactions, as outlined in the
disclosures that accompany the statements.

There are three major financial statements:

1. Balance Sheet:
The balance sheet summarises a company's liabilities, assets, and equity at a
given point in time. It summarises the financial position of a company. It is based
on:

Assets = Liabilities + Shareholders’ Equity

Assets are of the following types:

• Fixed assets - Assets that are purchased for the long term and cannot be easily
converted into cash. It includes buildings, land, machinery, etc.
• Current assets - Assets that can be quickly converted into cash. It includes
money market instruments, debtors, etc.

Liabilities define what the company owes to other entities. It is usually taken
upon to
fund the activities of the business. It is further classified as a current liability and
long-term liability.

Shareholder’s equity is the residual interest in a company's assets after

subtracting its liabilities. It reflects the net value owned by shareholders and is a
key financial indicator comprising common and preferred stock, additional paid-
in capital, retained earnings, and other comprehensive income.

24
 2. Income statement/ Profit and loss statement:
The income statement reports the revenue generated, expenses incurred and the
profits or losses generated during a period of time. Formula: Revenue – Expenses =
Profit
Revenue is the amount of money the company receives during a particular
period.
Expenses are deductions from the income.
Profit in an income statement represents the residual amount when total
expenses are subtracted from total revenues, indicating the net financial gain
of a business.

3. Cash Flow statement:

Cash flow statements map the cash inflows and outflows of the firm. It has three
major elements:
Operating activities involve day-to-day operations, Investing activities
encompass property and equipment transactions, and Financing activities
involve stock-related transactions.

RATIO ANALYSIS

A few basic things:

One ratio cannot be used for the analysis of the whole company, and several of
them have to be looked at simultaneously to form the whole picture
The ratios vary vastly across different industries. Also, for the purpose of
financial analysis, ratios cannot be looked at in isolation; therefore, they must
be compared to the ratios of their peer companies (cross-sectional analysis) as
well as against its ratios in the previous years (time series analysis) to get a
fair idea about the company’s performance

There are five major types of ratios. They are as follows:

1. Liquidity ratios: These ratios provide information about the ability of the
company to meet its short-term obligations.
2. Solvency ratios: Solvency ratios provide information about a company’s
ability to meet its long-term obligations. They also provide information about
the leverage of the company. Therefore, these ratios are also referred to as
debt ratios (Leverage refers to the use of borrowed money by a company to
fund its operations)
3. Activity ratios: These ratios indicate how efficiently a company uses its
assets, like inventory and fixed assets. These ratios are also referred to as
turnover ratios.

25
 4. Profitability ratios: These ratios provide information on how well a company
generates profits from its sales, assets, capital, etc.
5. Valuation ratios: Valuation ratios are generally used to estimate the
attractiveness of a potential or an existing investment and get an idea of the
company’s valuation in comparison to its peer companies.

26
27
28
 CORPORATE FINANCE

The capital budgeting process entails identifying and assessing capital projects
with extended cash flows, involving calculations of future accounting profit, cash
flow, present value adjusted for the time value of money, payback period, risk
assessment, and other relevant factors.
Note: To make a capital budgeting decision, you can check the following metrics:
NPV, IRR, Payback period, discounted payback period, and profitability index.

Cost of capital:
A company must determine the optimal capital structure by allocating funds to
common equity, debt, and preferred stock to minimise overall capital costs and
maximise firm value, where each component's cost is known as the component
cost of capital.

WACC:
Weighted Average Cost of Capital: It is the cost of financing the firm’s assets.
WACC is the average of the costs of the above sources of financing, each of which
is weighted by its respective use in the given situation.

Formula: WACC = (𝒘𝒅) [𝒌𝒅 (1 – t)] + (𝒘𝒑) (𝒌𝒑) + (𝒘𝒆) (𝒌𝒆)

After-tax cost of debt is the interest rate at which firms can issue new debt net of
the tax savings from the tax deductibility of interest.

Formula: After-tax cost of debt = Interest Rate – Tax savings = 𝒌𝒅 – 𝒌𝒅 (t) = 𝒌𝒅 (1 – t)

Cost of equity is the return a firm theoretically pays its equity investors, i.e.,
shareholders, to compensate for the risk they undertake by investing their
capital.
Two methods have been discussed below to calculate the Cost of Equity: The
Capital Asset Pricing Model (CAPM) and the Dividend Discount Model.

Capital Asset Pricing Model (CAPM)

The most commonly accepted method for calculating the cost of equity comes
from the Capital Asset Pricing Model (CAPM).

Formula: 𝒌𝒆 or 𝒓𝒆 = 𝒓𝒇 + (𝒓𝒎 –𝒓𝒇)*β

29
 Dividend Discount Model Approach
If dividends are expected to grow at a constant rate, g, then the current value of
the company’s stock is given by this model

Formula: 𝑷𝟎 = 𝑫𝟏 / (𝒌𝒆 – g)

Discount Rate/ Time Value of Money: The discount rate is the interest rate used to
calculate the present value of future cash flows. It essentially flows from the
concept of the ‘time value of money’, which says that other things being equal,
due to its potential earning power, a given sum of money has higher worth now
than it would be in future.

Mergers and acquisitions (M&A) involve the consolidation of companies or

significant business assets through financial transactions, encompassing outright
purchases, mergers to form a new entity, acquisition of major assets, tender offers
for stock, or even hostile takeovers. All these activities fall under the umbrella of
M&A.

STOCK MARKET

What is a share? In very simple terms, a share is an ownership of a company. Let’s

suppose the company Oil Drum Mfg. Co is divided into 1000 shares. So, 1 share =
0.1% ownership of a company. In the case of a Public Limited company, the shares
are registered and traded over a stock exchange. In the case of a Private Limited
company, the shares are not freely traded. They can be bought or sold among
existing holders or by the company. Thus, the companies we see being traded
(bought/sold) at various exchanges like NSE and BSE are public companies.

Capital Market
Shares are traded through Primary Offer (IPO/FPO), where a company offers its
shares to the public for the first time, and Secondary Market, where listed stocks
are traded among investors. The primary market involves direct acquisition from
the company, while in the secondary market, securities are bought from other
investors.

SENSEX: India's benchmark index on the Bombay Stock Exchange (BSE)

comprises 30 major stocks, which are reviewed semi-annually, offering a snapshot
of the country's economic health and industry trends.

NIFTY 50: NSE's key index reflects the Indian equity market with 50 stocks across
12 sectors.

30
 SEBI: The Securities and Exchange Board of India (SEBI) is the regulatory body
overseeing India's capital markets, ensuring transparency and protecting
investor interests by enforcing rules and regulations for the systematic
functioning of the market.

IMPORTANT TERMS

1. Spot Price: The price in the cash market for delivery using the standard
market convention.
2. Strike Price: The price at which the holder of a derivative contract exercises
his right.
3. Derivatives: Contracts whose value depends on an underlying asset. (Types:
options, futures, swaps)
4. Option: The right but not the obligation to buy (/sell) some underlying cash
instrument at a specific rate on a particular expiration date. There are 2 types
of options: Call & Put option.
5. In the money: An option whose exercise price is already profitable.
6. Out of the money: An option whose exercise price wouldn't be profitable yet.
7. At the market: An option priced exactly at its intrinsic value.
8. Forward Contracts: An over-the-counter obligation to buy or sell a financial
instrument that is settled privately between the two counterparties.
9. Futures Contracts: An exchange-traded obligation to buy or sell a financial
instrument.
10. Swap: Agreement to exchange future cash flows, e.g., fixed-for-floating
interest rates.
11. Beta: A measure of an asset's volatility relative to the market.
12. Gamma: The degree of curvature in the financial contract’s price curve to its
underlying price.
13. Hedge: A transaction that offsets an exposure to fluctuations in financial
prices of some other contract or business risk.
14. Theta: The sensitivity of a derivative product’s value to changes in the date,
all other factors staying the same.
15. Repo Rate: Repo rate is the rate at which the central bank of a country
(Reserve Bank of India in case of India) lends money to commercial banks in
the event of any shortfall of funds. Repo rate can be used by monetary
authorities to control inflation
16. Reverse Repo Rate: Reverse repo rate is the rate at which the central bank of a
country (Reserve Bank of India in case of India) borrows money from
commercial banks within the country. It is a monetary policy instrument that
can be used to control the money supply in a country.

31
 17. Cash Reserve Ratio: Cash Reserve Ratio (CRR) is the share of a commercial
bank’s total deposit that is mandated by the central bank of a country (Reserve
Bank of India in the case of India) to be maintained with the latter in the form of
liquid cash.
18. Statutory Liquidity Ratio: The ratio of liquid assets to net demand and time
liabilities (NDTL) that is mandated by the central bank of a country (Reserve
Bank of India in the case of India) to be maintained with the latter is called
statutory liquidity ratio (SLR).
19. Non-Performing Assets: A non-performing asset (NPA) is a loan or advance
for which the principal or interest payment remained overdue for 90 days.
Banks are required to classify NPAs further into Substandard, Doubtful and
Loss assets.
20. Bonds: They refer to the unit of corporate debt issued by the company. It is a
long-term debt security that enables firms to borrow money for a fixed period of
time at a fixed rate by multiple lenders.
21. Coupon: It is the annual interest payment that the bondholder receives from
the date of issue of the bond till its maturity.
22. Yield to Maturity: It refers to the total return anticipated on a bond if it is
held until it matures.

32
 THE MARKETING &
ADVERTISING CLUB

33
 MARKETING

Marketing refers to the process of identifying the needs of the customers, creating
a product accordingly, and satisfying the needs better than the competitors. It
involves building strong customer relationships to gain returns from customers in
future.

It starts by identifying a gap in the market and works its way from here to
building a product or a service that meets the gap. The importance of marketing is
that it makes the customers aware of a company’s products or services, engages
them, and influences their buying decisions.

SELLING

Selling is the process of convincing a prospective customer to buy your product or

service. In the sales process, a salesperson sells whatever products the production
department has produced. The sales method is aggressive, and customers’
genuine needs and satisfaction is taken for granted.

SELLING VS MARKETING

Marketing is a holistic process that starts with identifying needs and continues
till after-sales services. Whereas selling is just a small part of marketing.

Marketing Sales

Push Strategy Pull Strategy

Customer centric Product centric

Revenue generated from Revenue generated from

providing right product to the reaching out to as many
right audience at the right time consumers as possible

Focuses on the increasing

Focusses on increasing revenue
revenue by optimizing the
by increasing the volume of sales
processes

Long term planning Short term planning

34
 MARKETING MIX

The four Ps classification for developing an effective marketing strategy was first
introduced in 1960 by marketing professor and author E. Jerome McCarthy.
Marketing Mix is a set of marketing tools or tactics, used to promote a product or
service in the market and sell it. The components of the marketing mix consist of
4Ps: Product, Price, Place, and Promotion.

1. Product

A product is a commodity built to satisfy the needs of an individual or a group. The

product can be intangible or tangible, in the form of services or goods. It should
create an impact in the mind of the customers, which is exclusive and different
from the competitor’s product.
A product has a certain life cycle that includes the growth phase, the maturity
phase, and the sales decline phase. It is important for marketers to reinvent their
products to stimulate more demand once it reaches the sales decline phase.

2. Price

Price is the most critical element of a marketing plan because it dictates a

company’s survival and profit. Adjusting the price of the product, even a little bit,
has a big impact on the entire marketing strategy as well as greatly affecting the
sales and demand of the product in the market. Things to keep on mind while
determining the cost of the product are the competitor’s price, list price, customer
location, discount, terms of sale, etc.

3. Place

Decisions such as where you will sell your product come under place. This is the
location where the product or service can be accessed and where it is used. For a
restaurant, location is everything. For a streaming service, it is the user's home or
the location where they buy computer devices and services.

35
 4. Promotion

It is a marketing communication process that helps the company to publicize the

product and its features to the public. It is the most expensive and essential
component of the marketing mix that helps to grab the attention of the customers
and influence them to buy the product. Most marketers use promotion tactics to
promote their products and reach out to the public or the target audience. The
promotion might include direct marketing, advertising, personal branding, sales
promotion, etc.

7Ps

Apart from the 4- Product, Price, Place or Promotion, there are three other newly
developed Ps which make the 7Ps explained below: -

5. People
The company’s employees are important in marketing because they are the ones
who deliver the service to clients. It is important to hire and train the right people
to deliver superior service to the clients.

6. Process
We should always make sure that the business process is well structured and
verified regularly to avoid mistakes and minimise costs.

7. Physical Evidence
Physical evidence provides tangible clues about the quality of experience that a
company is offering. It can be particularly useful when a customer has not bought
from the organisation before and needs reassurance or is expected to pay for a
service before delivery. It might include testimonials from previous customers,
reviews, and proof of success like certificates, pictures, etc.

36
 MARKETING CONCEPTS

1. Production concept
The idea of the production concept is that “Consumers will favour available and
highly affordable products.” This concept is one of the oldest Marketing
management orientations that guide sellers. The focus is on producing large
amounts of a product with this marketing concept. It also focuses on the product
being readily available to the customer at a low cost.

2. Product Concept
The product concept holds that consumers will favour products that offer the
most quality, performance, and innovative features. In this concept, the emphasis
is on updating and improving the quality of the product. These actions, along with
providing features that are useful and appeal strongly to customers, allow for the
product to be offered at a higher price.

3. Selling Concept
The selling concept holds the idea- that “consumers will not buy enough of the
firm’s products unless it undertakes a large-scale selling and promotion effort.”
Here, the management focuses on creating sales transactions rather than
building long-term, profitable customer relationships. It relies on aggressive
selling and works only in the short run as the customer might try the product once
due to being convinced but not multiple times unless the product is worthy.

4. Marketing Concept
The marketing concept holds- that “achieving organisational goals depends on
knowing the needs and wants of target markets and delivering the desired
satisfactions better than competitors do.” Here, marketing management takes a
“customer first” approach. Under the marketing concept, customer focus and
value are the routes to achieving sales and profits.

5. Societal Marketing Concept

The societal marketing concept holds that “marketing strategy should deliver
value to customers in a way that maintains or improves both the consumer’s and
society’s well-being.” It calls for sustainable marketing socially and
environmentally responsible marketing that meets consumers’ and businesses’
present needs while also preserving or enhancing future generations’ ability to
meet their needs.

37
 STP

Segmentation
The process of defining and dividing a large homogeneous market into clearly
definable parts with similar needs, or desired features. The point of segmentation
is to break a mass market into submarkets of customers who have common needs.
Segmentation might be done on the basis of geography, demographics, behavior,
etc.

Targeting
Once you have divided your audience into different segments, you’ll assess those
segments. This is necessary to determine which segment would be the most
profitable to target based on the size of the segment, how willing this segment
would be to purchase your product, and how well you’ll be able to reach this
segment of the audience with marketing channels available to you.

Positioning
Positioning refers to setting your product in the minds of customers. It involves
creating bespoke messaging designed for the segment you’ve chosen to target.
This messaging should set your product or service apart from your competitors
and push your targeted segment to purchase. Once you’ve determined the target
segment, you can create just the right mixture of marketing activities to turn
them into customers.

ADVERTISING

Advertising is a marketing tactic involving paying for space to promote a product,

service, or cause. The actual promotional messages are called advertisements, or
ads for short. The goal of advertising is to reach people who are most likely to be
willing to pay for a company’s products or services and entice them to buy. The
goal of advertising for a small business may be to build brand awareness, improve
your image, boost engagement, generate leads, or convert potential leads into
sales.

TYPES OF ADVERTISING

1.ATL
Above the Line (ATL) advertising is where mass media is used to promote brands,
create awareness, and reach out to the target consumers. These include
conventional media as we know it, television and radio advertising, print, and the
Internet. It is communication targeted to a wide audience and is not specific to
individual consumers.

38
 2. BTL
Below-the-line, advertising is more one-to-one and involves the distribution of
pamphlets, handbills, stickers, promotions, and brochures placed at the point of
sale, on the roads through banners, placards, product demos, and direct
marketing, such as utilising email and social media, and sponsorship of events.

3. TTL
The Line Marketing, or TTL approach, combines ATL and BTL Marketing to raise
brand awareness, target specific potential customers, and convert these into
measurable and quantifiable sales.

SWOT ANALYSIS

SWOT is an acronym for Strengths, Weaknesses, Opportunities, and Threats.

SWOT Analysis is one of the most used tools to assess a company's internal and
external environments and is part of a company's strategic planning process. In
addition, a SWOT analysis can be done for a product, place, industry, or person. A
SWOT analysis helps with strategic planning and decision making, as it
introduces opportunities to the company as a forward-looking bridge to
generating strategic alternatives.

39
 BCG MATRIX

The BCG Matrix, also known as the Boston Consulting Group Matrix, is a strategic
management tool used to analyze a company's product portfolio. It classifies
products into four categories: Stars, Cash Cows, Question Marks, and Dogs.
1.Stars are high-growth, high-market-share products that require significant
investment.
2.Cash Cows are products with a high market share in a mature market,
generating steady cash flow.
3.Question Marks are products in high-growth markets with low market share,
requiring careful consideration for future investment.
4.Dogs are low-growth, low-market-share products that may be candidates for
divestment.
The matrix helps businesses allocate resources effectively, guiding strategic
decisions based on the relative position of products within the portfolio

ANSOFF MATRIX
The Ansoff Matrix is a strategic planning tool that helps businesses analyze and
plan their growth strategies. It consists of four growth strategies:

1.Market Penetration: This strategy involves focusing on existing products in

existing markets to increase market share. Companies may achieve this through
tactics like marketing campaigns, sales promotions, or improving customer
loyalty.
2.Market Development: Market development entails introducing existing products
to new markets. This could involve entering new geographical areas, targeting
different customer segments, or finding additional uses for the current products.
3.Product Development: In this strategy, businesses aim to create and introduce
new products to existing markets. This might involve innovation, research and
development, and introducing product variations or improvements.

40
 4.Diversification: Diversification involves entering entirely new markets with new
products. This can be either related diversification, where there are some
commonalities with the existing business, or unrelated diversification, where the
new venture is distinct from the current operations.

The Ansoff Matrix provides a framework for companies to assess and choose the
most suitable growth strategy based on their current market position and
objectives.

Porter’s 5 Forces

Porter's Five Forces is a framework that helps analyse competitive forces within
an industry, influencing a company's profitability and competitive strategy. The
five forces are:

1.Threat of New Entrants: This force examines how easy or difficult it is for new
companies to enter the market. Barriers to entry, such as high startup costs,
brand loyalty, and government regulations, can make it challenging for new
players to enter.

2.Bargaining Power of Buyers: This force assesses the power that buyers
(customers) have in the market. Factors like the availability of alternative
products, the importance of the buyer to the seller, and the ability of buyers to
negotiate prices can impact the bargaining power of buyers.

41
 3. Bargaining Power of Suppliers: This force looks at the power suppliers have over
the industry. If there are few alternative suppliers, unique resources, or high
switching costs, suppliers may have more bargaining power.

4.Threat of Substitute Products or Services: This force considers the extent to

which other products or services can replace those offered by companies within
the industry. The availability of substitutes can limit pricing power and affect
industry profitability.

5. Competitive Rivalry: This force examines the level of competition among

existing firms in the industry. Factors such as the number of competitors,
industry growth, and differentiation of products can influence the intensity of
competitive rivalry.

By analyzing these five forces, businesses can gain insights into their industry's
competitive dynamics and make informed strategic decisions to enhance their
competitive position.

42
 TECH AND ANALYTICS CLUB

43
 What is Analytics?
Analytics is the science of analyzing raw data to derive actionable insights and
conclusions. The techniques and processes may involve complex algorithms and
machine-learning concepts. Data Analytics plays a pivotal role in helping
businesses identify patterns and customer trends to make decisions accordingly.

Types of Analytics:

Analytics Lifecycle:
1. Discovery
The objective is to understand the business domain and know the available
resources (people, time, technology and data)
Develop an initial hypothesis to test with the data
2. Data preparation
Understanding the data in detail
→
Performing ETL: Extract Transform Load→
Data visualization to understand nuances, trends and overview of the data

44
 3. Model Planning
Understand relationships between different variables and select the most
appropriate and relevant variables
Determining causal relationships between input and output, if it exists
Shortlisting possible techniques that can be employed: Classification,
Clustering
4. Model Selection
Develop and fit models on training data and evaluate test data
Determine if the model is robust enough to be scaled to a larger dataset
5. Communicate results
Comparing the outcomes with the defined criteria for success and failure
Checking if the results of the model are statistically significant
6. Operationalize
Deploying the model to the production environment
Monitoring of ongoing model deployment

Measures of Central Tendency:

Mean, Median and Mode:
The mean is the average of all the values in the dataset.

The median is the middle value in a dataset. For an odd number of values, the
median is the middle value of the series, i.e. (n+1)/2, while for even numbers of
values, the median is the average of [(n)/2]th and [(n/2)+1]th terms.

The mode is the most frequently occurring value in the dataset. A data set may
have more than one mode or no mode at all.
For example, consider the following dataset:2, 3, 3, 5, 7, 7. The mean of this data
set is 4, the median is 3 and the mode is 3 and 7.

45
 Measures of Dispersion:
Range:
The range is the simplest of all measures of dispersion. It is calculated as the
difference between the maximum and minimum values in the data set.

Standard Deviation (S.D.):

Standard deviation is a measure of the spread of a dataset. It is calculated by
taking the square root of the variance of the dataset. The variance is calculated
by taking the average of the squared differences of the values in the dataset from
the mean of the dataset.

Where:
x is each individual value in the set
μ is the mean of the values
n is the numberof values in the set

For example, if you have a dataset with values {1, 2, 3, 4, 5}, the mean of the data
set is 3. The variance would be calculated as follows:
(1 - 3)2 + (2 - 3)2 + (3 - 3)2 + (4 - 3)2 + (5 - 3)2 = 2 + 1 + 0 + 1 + 2 = 6
The standard deviation is then the square root of the variance. In this case, it will
be the square root of 6, or approximately 2.45. Standard deviation tells about the
spread, i.e., data distribution with respect to the mean. Less S.D. means less
spread, i.e., data set values are relatively close to the mean value.

Quartiles:
Quartiles split the values into four equal parts. The numbers are first sorted in
ascending order. The First Quartile divides the smallest 25% of the values from
the rest that are larger. The Second Quartile, the median, divides 50% of the
values from the others larger or equal to the median. The Third Quartile divides
the smallest 75% of the values from the rest that are larger.
Q1 = 1/4 (n+1)th value in an ordered set
Q2 = 1/2 (n+1)th value in an ordered set
Q3 = 3/4(n+1)th value in an ordered set
Where n = no. of observations
Note:
Percentiles split a variable into 100 equal parts
The First Quartile is equivalent to the 25th percentile
The Second Quartile is equivalent to the 50th percentile
The Third Quartile is equivalent to the 75th percentile

46
 Inter Quartile Range (IQR):
IQR is the range computed on the middle 50% of the observations after eliminating
the highest and lowest 25% of observations in a data set arranged in ascending
order. IQR is less affected by outliers.
IQR =Q3-Q1
Example:
Data Set: 12, 14, 11, 18, 10.5, 12, 14, 11, 9
Arranging in ascending order,the data set becomes 9, 10.5, 11, 11, 12, 12, 14, 14, 18.
IQR = Q3-Q1 = 14-10.75 = 3.25

Variance:
Variance is a measure of how much a set of numbers is spread out from the mean
or average. It is calculated by taking the sum of the squares of the differences
between each number in the set and the mean, then dividing that sum by the
number of items in the set.

Where:
x is each individual value in the set
μ is the mean of the values
n is the number of values in the set

Variance:
Variance is a measure of how much a set of numbers is spread out from the mean
or average. It is calculated by taking the sum of the squares of the differences
between each number in the set and the mean, then dividing that sum by the
number of items in the set.
Where:
x is each individual value in the set
μ is the mean of the values
n is the number of values in the set

Coefficient of Variation:
The Coefficient of Variation is a relative measure to compare distributions with
respect to their standard deviations.

The greater the number, the greater the variability in the data, irrespective of
scale.

47
 Covariance:
Covariance is a measure of how two variables are related to each other. It is
calculated by multiplying the difference between the value of each variable by the
corresponding value of the other variable, then averaging these products over all
pairs of values in the two variables.

Positive covariance indicates that the two variables are positively related,
meaning that as one variable increases, the other also tends to increase. Negative
covariance indicates that the two variables are negatively related, meaning that
as one variableincreases, the othertends to decrease. Covariance is a useful tool
for understanding the relationship between two variables and is an important
concept in statistical analysis.

Where:
X and Y are the two variables being
analyzed
X̄ and Ȳ are the means of the two variables
n is the number of items in the sample
Correlation:
Correlation is a statistical measure of the relationship between two variables. It
measures the strength and direction of the relationship and can be either positive
or negative. A positive correlation means that as one variable increases, the other
variable also tends to increase. A negative correlation means that as one variable
increases, the other variable tends to decrease. The strength of the correlation is
measured by the correlation coefficient, which can range from -1 (perfect negative
correlation) to +1 (perfect positive correlation). A correlation coefficient of 0
indicates no relationship betweenthe two variables. Correlation is preferred over
covariance because it does not get affected by the change in scale.

Random Variables:
A random variable is a variable that can take on different values randomly,
depending on the outcome of some probability distribution. There are two types of
random variables: discrete random variables and continuous random variables.

Discrete random variables take on a finite or countably infinite number of distinct

values. Examples of discrete random variables include the number of heads that
result from flipping a coin, the number of students in a classroom and the number
of cars in a parking lot.

Continuous random variables can take on any value within a specific range.
Examples of continuous random variables include height, weight and
temperature.

48
 Probability:
Marginal Probability
In probability theory and statistics, the marginal probability of a subset of a
collection of events is the probability of the events in the subset occurring without
regard to the probability of any other events in the collection happening. It is
calculated by summing the probabilities of all possible outcomes in the subset. For
example, suppose you have a collection of events A and B. You want to find the
marginal probability of event B. The marginal probability of event B is given by:
P(B) = P(B| A)* P(A) + P(B | A)’ * P(A)’

Where P(B | A) is the probability of event B occurring given that event A has
occurred, and P(A)’ is the probability of event A not occurring.

Joint probability
The joint probability of two events is the probability that both events will occur. It
is calculated by multiplying the probabilities of individual events by one another
when events are independent.
For example, suppose you have two independent events, A and B, with
probabilities P(A) and P(B), respectively. The joint probability of A and B occurring
is given by:
∩
P(A B) = P(A) * P(B)

Conditional Probability
The conditional probability of an event is the probability of the event occurring,
given that one or more other events have already occurred. It is calculated by
taking the probability of the event occurring in combination with the other events
and dividing it by the probability of the other events occurring. For example,
suppose you have two events A and B, with probabilities P(A) and P(B),
respectively. The conditional probability of event A occurring given that event B
has already occurred is given by:
∩
P(A | B) = P(A B) / P(B)

where P(A ∩ B) is the joint probability of events A and B occurring, P(B) is the
probability of event B occurring. It is a useful concept in situations where the
occurrence of one event affects the probability of another event occurring.

Bayes Theorem
The Bayes Theorem is a statistical and probability-based mathematical paradigm
that talks about the probability of an event based on prior knowledge of
conditions that might be related to the event.

49
 Types of Distributions:
Uniform Distribution
Uniform Distribution is a type of probability distribution in which all outcomes are
equally likely. For example, rolling a fair die or tossing a fair coin. In each
scenario, the probability of an outcome is equally likely, as in the case of a fair die,
the probability is 1/6, and in the case of a faircoin, the probability is 1/2.

Exponential Distribution:
The exponential distribution is a continuous probability distribution used to model
the time elapsed before agiven event occurs. The exponential distribution is
frequently used to provide probabilistic answers to questions such as:
How much time will elapse before an earthquake occurs in each region?
How long do we need to wait until a customer enters our shop?
How long will it take before a call center receives the next phone call?
All these questions concern the time we must wait before a given event occurs.

Poisson Distribution
A Poisson distribution helps to predict the probability of certain events when the
average number of times an event has occurred in each time interval is known.

Normal Distribution
The normal distribution is a symmetrical bell-shaped distribution, which suggests
the profile of a bell. Although the values in a normal distribution can range from
negative infinity to positive infinity, most values of the continuous variable will
cluster around the mean. In contrast, extremely large or minimal values will
occur towards the tail.

50
 Bernoulli Distribution
The Bernoulli distribution is a discrete distribution having two possible outcomes
labeled by n = 0 and n = 1 in which n = 1 (‘success’) occurs with probability P and n =
0 (‘failure’) occurs with probability q = 1 - p, where 0 < p < 1.

Binomial Distribution
The binomial distribution gives the discrete probability distribution of obtaining
exactly n successes out of N trials (where the result of each trial is true with
probability p and false with probability q = 1 - p).

Types of Graphs:
Scatter Plot
It is a graphical representation of the relationship between two sets of variables.
The dependent variableis plotted on theY-axis and the independent variable on
the X-axis. The relationship observed from the scatter plot could be:

Hypothesis Testing
Hypothesis testing begins with the formulation of two hypotheses:
Null Hypothesis (H0): This is the default assumption or the status quo. It states
that there is no significant effect, relationship or difference in the population
parameters.
Alternative Hypothesis (Ha): This is the statement to be tested. It represents the
claim or the effect you are trying to establish.

Type I Error (α): Occurs when you reject the null hypothesis when it is true. The
probability of a Type I error is equal to the chosen significance level (α).
51
 Type II Error (β): Occurs when you fail to reject the null hypothesis when it is
false. The probability of a Type II error is denoted by β.

Hypothesis tests can be one-tailed (testing for an effect in one direction) or two-
tailed (testing for an effect in either direction). The choice depends on the
research question and hypothesis.

P-Value: The p-value is the probability of obtaining a test statistic as extreme as,
or more extreme than, the one observed in the sample, assuming that the null
hypothesis is true. A smaller p-value suggests stronger evidence against the null
hypothesis.

Data Mining
What is data mining?
It is the computational process of exploring and uncovering patterns in large data
sets, a.k.a. Big Data. It is a subfield of computerscience that blends many
techniquesfrom statistics, data science, database theory and machine learning.

Where does data mining fit?

Data Mining Phases

52
 Data Mining Techniques

Exploratory Data Analysis :

Exploratory Data Analysis (EDA) is one of the techniques used for extracting vital
features and trends used by machine learning and deep learning models in Data
Science.

The overall objective of exploratory data analysis is to obtain vital insights and
hence usually includes the following sub-objectives:
Identifying and removing data outliers
Identifying trendsin time and space
Uncovering patternsrelated to the target
Creating hypotheses and testing them through experiments

Identifying new sources of data StepsInvolved in EDA:

Data Collection
Finding all Variables and Understanding Them
Cleaning the Dataset
Identifying Correlated Variables
Choosing the RightStatistical Methods
Visualizing and Analyzing Results

Supervised Learning
Supervised learning is the machine learning task that learns by example. In the
training stage, the algorithm is fed with ‘training data’, which consists of inputs
paired with the correct outputs. During training, the algorithm attempts to figure
out patterns in the data that correlate with the desired output.
The efficacy of the algorithm can be measured by making predictions on data of
which the output is not known and subsequently comparing the prediction with
actual values.
A few commonly used supervised learning models are: Linear Regression,
Classification, Logistic Regression, K-nearest neighbor.

53
 Unsupervised Learning:
Unsupervised algorithms belong to a class of algorithms used to derive inferences
from datasets which consist of input data which is not labeled. The most used
unsupervised learningalgorithm is the clustering algorithm, implemented in
exploratory analysis to identify hidden patterns.

Reinforcement learning:
Reinforcement learning is a type of machinelearning where an algorithm learns
by interacting with its environment and receiving rewardsor punishments for
certain actions.The goal of reinforcement learningis to learn a policy that will
maximize the cumulative reward over time.

In reinforcement learning, an agent interacts with an environment, and at each

time step, the agent chooses an action based on its current state. The
environment then transitions to a new state and provides the agent with a reward
or penalty based on the action taken. The agent's goal is to learn a policy to
choose actionsthat will maximize the cumulative reward over time.
Common techniques for reinforcement learninginclude Q-learning and SARSA.

Artificial Intelligence vs. Machine Learning vs. Deep Learning

Artificial Intelligence:
Succinctly put, AI is the ability of computer programs to function like a human. AI
includes algorithms that imitate the intelligence exhibited by humans and can
solve problems in ways that are considered ‘smart’.
E.g., Amazon’s accurate AI provides one of the most accurate predictions.

Machine Learning:
Machine Learning is considered a subset of AI. This comprises algorithms that
parse data, ‘learn’ from it and can apply what the algorithms have learned to
make informed decisions. The machines can learn from the data with the help of
statistical techniques.
E.g., Email filtering, fraud detection and dynamic pricing

Deep Learning
A further subset of Machine Learning is Deep Learning. These techniques aim to
achieve a goal or an artificial intelligence power that teaches computers to
perform tasks and understand anything. The algorithms permit software to train
itself to perform tasks like speech and image recognition.
E.g., Applying Deep Learning to differentiate between dialects, autonomous
vehicles using deep learning to identify pedestrians.

54
 THE PRODUCT DEVELOPMENT
CLUB

55
 What is Product Management?

Product control is a dynamic and strategic discipline that performs a pivotal role
in improving, releasing, and ongoing fulfilment of products or services. At its core,
product management is ready to bring thoughts to lifestyles by overseeing the
complete product lifecycle, from concept to market transport. Product managers
serve as the bridge among various stakeholders, aligning enterprise desires,
personal needs, and technical competencies. They are responsible for defining the
product vision, developing a roadmap, and ensuring that the product meets
consumer expectations and organisational objectives.

The product control system starts with a clean expertise of the marketplace and
consumer needs. Product managers conduct extensive studies to become aware of
opportunities, check opposition, and collect insights that tell the product
approach. This early segment entails defining the vision and value proposition of
the product—a crucial foundation for directing subsequent choices.

Product managers have to identify and validate assumptions and hypotheses

related to the product. This includes a keen knowledge of the target audience and
marketplace dynamics. By placing targets and key consequences, they define
measurable goals that guide the improvement method. Choosing the proper
metrics and experiments is essential in evaluating the product's fulfillment and
iterating on its functions.

PM Concepts

AI (Artificial Intelligence):

Artificial Intelligence (AI) stands at the leading edge of transformative

technological advancements, revolutionising how machines emulate human
intelligence. Rooted in improving algorithms and computational fashions, AI
permits computer systems to carry out obligations that historically required
human cognition. Machine Learning, a subset of AI, empowers structures to learn
and enhance from records, making predictions and choices without explicit
programming. Natural Language Processing (NLP) helps communicate between
humans and machines by enabling computer systems to understand, interpret,
and generate human language.

56
 AI's programs span various fields, from computer vision for photo and speech
popularity to robotics and professional structures that replicate human choice-
making. As AI continues to conform, ethical considerations surrounding
transparency, bias, and privacy become imperative to its accountable
development and deployment. The effect of AI is felt throughout industries, riding
innovation, automation, and the ability to address complicated, demanding
situations. With ongoing improvements, AI holds the promise of reshaping
industries, enhancing productivity, and fundamentally transforming the manner
we engage with generations.

ML (Machine Learning):

Machine Learning (ML) stands as a cornerstone within the realm of artificial

intelligence, empowering computers to learn patterns and make choices with out
explicit programming. In its middle, ML algorithms enable systems to enhance
their overall performance over the years by studying information and iteratively
gaining knowledge from it. Supervised getting to know involves education models
on categorised datasets, while unsupervised studying discovers patterns within
unlabeled statistics. Reinforcement mastering allows machines to examine via
trial and error, receiving remarks based on their moves. The programs of ML are
enormous, starting from predictive analytics and advice structures to image and
speech popularity. The potential of ML models to adapt and evolve makes them
critical in solving complicated problems and riding innovation across industries

As ML continues to develop, moral considerations concerning bias,

interpretability, and responsibility gain prominence. For specialists and
companies, knowledge of the capability and boundaries of gadget learning is
essential for harnessing its abilities effectively, in the long run, reshaping how we
technique records-driven decision-making and technological advancements.

Agile:
The agile technique is a transformative technique to assignment management,
emphasizing flexibility, collaboration, and flexibility. It revolves around iterative
improvement cycles, known as sprints, where cross-functional groups collaborate
carefully to deliver incremental price. Agile prioritizes customer feedback,
enabling brief changes to evolving requirements. This iterative technique
promotes transparency, responsiveness to change, and continuous development.

57
 Agile has turned out to be a cornerstone for product managers, fostering efficient
improvement, improving group verbal exchange, and ensuring merchandise
aligns carefully with consumer desires and marketplace dynamics. Its ideas
empower teams to navigate complexity and deliver awesome, customer-centric
solutions with pace and agility.

Agile for product managers:

Agile methodology is a cornerstone for product managers, imparting a dynamic
framework to navigate the complexities of product development. Emphasizing
iterative cycles and collaboration, Agile lets groups evolve unexpectedly to
changing necessities and purchaser comments. Product managers leverage Agile
principles to streamline development approaches, enhance conversation amongst
move-functional groups, and prioritise delivering incremental price. This iterative
method ensures that products align carefully with evolving marketplace
dynamics and consumer expectations.

IoT (Internet of Things):

The Internet of Things (IoT) is a transformative paradigm that interconnects
regular gadgets, allowing them to exchange records and perform collaboratively.
By embedding sensors, software programs, and connectivity into physical objects,
IoT helps seamless conversation and records change over the internet. This
interconnected community spans from smart home devices to industrial
machinery, developing opportunities for real-time tracking, automation, and
fact-driven selection-making. IoT transforms industries by means of enhancing
efficiency, reducing prices, and introducing modern services. For product
managers, understanding and integrating IoT technologies is essential to growing
present-day, linked merchandise that meets the evolving demands of the present-
day, interconnected global.

IoT for product managers:

IoT (Internet of Things) presents an unparalleled opportunity for product
managers to innovate and create connected solutions. By integrating sensors and
connectivity into products, IoT enables real-time data exchange, remote
monitoring, and automation. Product managers can leverage IoT to enhance user
experiences, gather valuable insights through data analytics, and create products
that seamlessly integrate into the interconnected landscape.

58
 Cloud Computing:
Cloud computing is a modern era that transforms the manner corporations get
entry to, store, and manipulate statistics and programs. By leveraging far off
servers over the internet, cloud computing removes the need for on-website
online infrastructure, offering scalability, flexibility, and value performance. It
enables seamless get right of entry to to resources, from storage to processing
energy, facilitating collaborative work and innovation. With offerings like
Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a
Service (SaaS), corporations can tailor their computing wishes. For corporations
and people, cloud computing represents a dynamic shift in handling IT sources,
fostering agility and permitting focus on center commercial enterprise targets.

Cloud Computing for product managers

Cloud computing is a game-changer for product managers, supplying a scalable
and flexible infrastructure for developing, deploying, and maintaining products.
By leveraging the cloud, product managers can optimize useful resource
utilization, reduce prices, and enhance collaboration among go-practical groups.
Cloud services provide seamless get entry to to computing strength, garage, and
facts analytics, allowing product managers to recognition on innovation rather
than infrastructure management.

Blockchain:
Blockchain, a groundbreaking era, revolutionizes how information is saved and
shared securely. It is a decentralized and allotted ledger that information
transactions across a community of computers, ensuring transparency and
immutability. Each block inside the chain consists of a timestamped and
encrypted record, growing an incorruptible digital trail. Blockchain removes the
want for intermediaries, enhancing agree with in transactions. Beyond
cryptocurrencies like Bitcoin, blockchain finds packages in deliver chain
management, healthcare, finance, and extra. Forging a tamper-resistant and
obvious virtual surroundings, blockchain has the potential to redefine agree with
and authentication, influencing how corporations perform and interact within the
virtual age.

59
 SDLC (Software Development Life Cycle):
The Software Development Life Cycle (SDLC) is a based and systematic technique
to software program development that guides the method from preliminary idea
to very last product. It consists of awesome phases, every serving a selected
purpose in delivering super software. The first section, Planning, includes defining
undertaking desires, scope, and useful resource requirements. Next, the gadget is
designed, thinking about technical specs and structure within the Design phase.
Implementation follows, translating design into code, and is succeeded via
Testing, where software undergoes rigorous examination to pick out and attach
defects. Once accepted, the Deployment phase launches the software program for
users. Post-deployment, the Maintenance phase addresses any issues, contains
updates, and guarantees ongoing gadget performance.

SDLC for product managers

The Software Development Life Cycle (SDLC) is a critical framework for product
managers overseeing software program initiatives. Beginning with task initiation
and necessities accumulating, product managers manual groups thru making
plans, layout, implementation, and testing levels. Continuous collaboration
guarantees alignment with business dreams and person desires. Product
managers play a pivotal position in monitoring improvement development,
dealing with risks, and adapting to modifications.

7 key Mobile app metrics

1. Acquisition:
- Metric: Cost per Acquisition (CPA)
- Definition: The cost associated with acquiring a new user through marketing or
advertising efforts.
- Why It Matters: Helps measure the efficiency of user acquisition campaigns
and marketing channels in terms of cost-effectiveness.

2. Activation:
- Metric: Activation Rate
- Definition: The percentage of newly acquired users who successfully complete
the onboarding process or take a key action within the app.
- Why It Matters: Indicates how well the app engages users early on, leading to a
positive first experience and increased likelihood of retention.

60
 3. Retention:
- Metric: Retention Rate
- Definition: The percentage of users who continue to use the app over a specific
period, typically measured weekly or monthly.
- Why It Matters: Reflects the app's ability to keep users engaged and interested
over time, contributing to long-term success.

4. Engagement:
- Metric: Daily Active Users (DAU) and Session Duration
- Definition: DAU measures the number of users engaging with the app daily,
while session duration tracks the average time users spend in each session.
- Why It Matters: High engagement signifies a strong connection between users
and the app, indicating that users find value and spend meaningful time
interacting with it.

5. Uninstalls:
- Metric: Uninstall Rate
- Definition: The percentage of users who uninstall the app.
-Why It Matters: High uninstall rates may indicate issues such as poor user
experience, dissatisfaction, or unmet expectations. Understanding the reasons
behind uninstalls is crucial for improving the app.

6. Drop-offs:
- Metric: Funnel Drop-off Rates
- Definition: The percentage of users who abandon specific steps in a user flow or
conversion funnel.
- Why It Matters: Identifies points of friction or confusion in the user journey,
helping product managers optimize the flow for better user conversion.

7. Reachability:
- Metric: Active Users by Platform or Device
- Definition: The number of users who can be reached or accessed on different
platforms or devices.
-Why It Matters: Understanding reachability helps tailor marketing and
development efforts to the platforms or devices with the highest user
engagement, ensuring maximum impact.

By tracking these metrics across the user lifecycle, product managers can gain
valuable insights into the mobile app's performance, user experience, and overall
health. Adjusting strategies based on these metrics can contribute to enhanced
user satisfaction, increased retention, and sustainable growth.

61
 Product Design Frameworks

RICE framework

The RICE framework is a product prioritisation method used to determine how

features or initiatives should be tackled based on their potential impact,
confidence in success, and resources required. RICE stands for Reach, Impact,
Confidence, and Effort. Each factor is assigned a numerical value, and the scores
are used to calculate a priority score for each item. This score helps product teams
decide where to allocate their resources.

Here's a brief overview of the RICE framework components:

1. Reach (R):
- Definition: The number of users or customers affected by the feature or
initiative.
- Scoring: Assign a numerical value to represent the potential reach. For
example, if the feature will impact 20% of users, the reach score would be 0.2.

2. Impact (I):
- Definition: The degree of positive impact the feature or initiative will have on
users or business goals.
- Scoring: Assign a numerical value to represent the potential impact. This is
often a subjective measure based on the perceived significance of the feature.

3. Confidence (C):
- Definition: The level of certainty or confidence that the feature or initiative
will have the expected impact.
- Scoring: Assign a percentage value to represent the team's confidence in the
success of the feature. For example, if the team is 80% confident, the confidence
score would be 0.8.

4. Effort (E):
- Definition: The amount of time, resources, and effort required to implement the
feature or initiative.
- Scoring: Assign a numerical value to represent the estimated effort required.
This could be measured in person hours, days, or any other relevant unit.

The higher the RICE score, the higher the priority. This framework is particularly
useful for product managers and teams prioritising their product backlog or
roadmap based on potential impact and feasibility.

62
 Kano Model

The Kano Model is a framework developed by Professor Noriaki Kano in the 1980s
for understanding and prioritising customer needs and preferences in product or
service development. The model classifies features or attributes based on their
impact on customer satisfaction and dissatisfaction. It helps businesses identify
what aspects of a product or service are most critical to customer satisfaction and
how meeting or exceeding those expectations can contribute to overall success.

The Kano Model categorises features into five main types:

1. Basic Needs (Must-haves):

- Characteristics: These are essential features that customers expect to be
present, and their absence leads to dissatisfaction.
- Customer Response: When present, these features do not necessarily increase
satisfaction, but their absence can cause dissatisfaction.

2. Performance Needs (Linear Satisfaction):

- Characteristics: As the level of these features improves, customer satisfaction
also improves linearly.
- Customer Response: The more you have of these features, the more satisfied
customers will be. However, their absence doesn't cause dissatisfaction.

63
 3. Excitement Needs (Delighters or Wow Factors):
- Characteristics: Unexpected or delighting features that, when present,
significantly increase satisfaction.
- Customer Response: Customers may not explicitly expect these features, so
their presence can lead to high satisfaction, but their absence doesn't necessarily
cause dissatisfaction.

4. Indifferent Needs:
- Characteristics: Aspects that neither significantly contribute to satisfaction
nor cause dissatisfaction.
- Customer Response: Customers are generally indifferent to the presence or
absence of these features.

5. Reverse Needs (Dissatisfiers):

- Characteristics: Aspects that, when present, cause dissatisfaction, but their
absence doesn't necessarily lead to increased satisfaction.
- Customer Response: Meeting the basic expectations related to these features is
essential to avoid dissatisfaction.

The Kano Model is often represented graphically, with axes indicating the level of
implementation and customer satisfaction. It helps product teams and businesses
prioritise features and allocate resources effectively by understanding which
features will most impact customer satisfaction and should be emphasised in
product development.

MoSCoW

The MoSCoW framework is a prioritisation technique used in project management

and product development to categorise and prioritise requirements or features.
The term "MoSCoW" represents four categories: Must-haves, Should-haves,
Could-haves, and Won't-haves. This framework helps teams and stakeholders
clarify and communicate their priorities, ensuring everyone is on the same page
regarding the importance of various elements in a project.

Here's a breakdown of the MoSCoW framework categories:

1. Must-haves:
- Definition: Critical features or requirements essential to the project's success.
These are non-negotiable and must be delivered for the project to be considered
successful.
- Alternative term: "Critical" or "Non-negotiable."

64
 2. Should-haves:
- Definition: Important features or requirements that are not as critical as Must-
haves but still significantly contribute to the project's success. These are items
that are highly desirable and should be included if possible.
- Alternative term: "Important" or "High-priority."

3. Could-haves:
- Definition: Features or requirements that are nice but not critical or essential.
These are considered potential additions if time and resources permit.
- Alternative term: "Desirable" or "Optional."

4. Won't-haves:
- Definition: Features or requirements that are explicitly excluded or deferred.
These are items that stakeholders have decided not to include in the project's
current phase.
- Alternative term: "Out of scope" or "Deferred."

The MoSCoW framework is typically used during project planning to facilitate

stakeholder discussions, including the project team, product owners, and clients.
By categorising requirements into these four groups, the team can align priorities,
manage scope, and make informed decisions about resource allocation.

Product Design/Improvements-

In a nutshell, product design encompasses the process of creating a product, from

understanding the problem to creating a solution.

Product design really is the unsung hero of the product world. No one notices if
you do it really well, but everyone notices if you don’t! Instinctively, we all know
what bad design looks like. Which mean your customers know what bad design
looks like.

A product design question, also known as a product improvement question, is

among the most typical kinds of questions asked in a product management
interview. One crucial thing to remember when responding to these inquiries is to
keep the user or consumer in mind. These tests are designed to assess your
inventiveness, user or customer empathy, ability to prioritize features and
solutions, and capacity to propose solutions while keeping company goals in mind.

65
 To answer these questions, it is better to follow a framework. The framework
provides you with a structured way of going through the problem. It is essentially
a checklist of things to keep in mind when attempting a design/improvement
question in an interview.

One such framework you can follow is the CIRCLES method.

The CIRCLES method is a problem-solving framework that helps product

managers (PMs) make a thorough and thoughtful response to any design question.
The seven linear steps of the process form the CIRCLES acronym:

C – Comprehend the situation

I – Identify the customer
R – Report the Customer’s needs
C – Cut through prioritization
L – List the solutions
E – Evaluate the trade-offs
S – Summarize your recommendations

For example, part of a product manager’s role will be to engage with stakeholders
and explain the reasoning behind each of your product feature ideas. The
CIRCLES method allows you to explain why a specific feature can improve the
product experience and help achieve company goals.
If you and your team are feeling lost over which features to prioritize during
development, you can go back to the CIRCLES method. It avoids wasting time on
unimportant tasks and helps you deliver value to the customer much faster.

Improving Existing Products

Product improvement is making changes to a product to make it more effective or

efficient. It can involve changing a product's design, materials, manufacturing
process, or packaging. This process usually aims to increase sales by making the
product more appealing to consumers. However, it can also be done in response to
customer feedback or to address safety or quality concerns.
Product improvement is essential for any business that manufactures or sells
physical products. By constantly striving to improve their products, companies
can stay ahead of the competition and keep their customers happy.
For this we can perform a feature audit which can give us pointers for what may
be great places to run experiments to improve our existing product:

66
 If some/most customers are using a feature, then how can we get them all to use a
feature? Particularly if those customers who do use it use it a lot (i.e. they love the
feature), then there is a good chance that other customers would use it but
perhaps they are not aware of this feature and how great it could be for them?
Perhaps some messaging (an in-app message, an email etc) could explain why this
feature has great value? This could be a quick experiment to run!
If you see many/all customers using the feature at least once but those customers
don't use it a lot, then we know customers are aware of the feature - after all, they
have used it! Although they know the feature exists, they didn't see the value of
using it more often. Therefore, explaining the value of the feature and the related
benefits of using it could be very effective and could make another ideal
experiment.

The core value of your product is in the top right area, up where the star is
because that’s what people are actually using your product for. If you have
features in the top left it’s a sign of features with poor adoption. In other words,
there are a small number of customers depending on this feature, but most rarely
touch it. Well, what do you do with your feature audit?

For any given feature with limited adoption, you have four (4) choices:
• Kill it: you should admit defeat and start to remove it from your product.
• Increase the adoption rate.
• Increase the frequency rate.
• Deliberately improve the product.

67
 THE HR & OB CLUB

68
 Human Resources:
Human Resources is the department within the organisation that deals with the
vital asset of the company – “Employees”.Human resource management is thus;
organising, coordinating, and managing employees within an organization to
accomplish its mission, vision, and goals.

HR FUNCTIONS:

Talent Acquisition:
Identifying and attracting the key people who create a competitive advantage
for the organisation.
Fulfilling the short and long-term requirements according to the
organisation’s strategy in a dynamic labour market.

Learning and Development:

L&D concerns itself with the management of employee training and
development needs to fulfil their roles to the best of their ability.
Identifies the skill gap in an organisation and devises strategies to narrow the
same by designing and developing learning solutions. The function, in general,
develops a training strategy for the whole business.

Employee Engagement:
Employee Engagement relates to the level of an employee's commitment and
connection to an organisation.
An HR in this role is usually expected to develop surveys, run workshops, and
focus group discussions (FGDs) to gauge the mood of the employees.

Rewards and Recognition:

Rewards can include things such as bonuses, raises, or special privileges,
while recognition can come in the form of words of appreciation or awards.
An HR person in this role must numerate and know the legal and regulatory
landscape. A company's organisational strategy can also be linked with
rewards.

Employee Relations:
Employees perform better when they understand the organization's goals and
they'll be more motivated to deliver if there's an opportunity to feed their
views upward.
Managing the organisation’s relationship with its trade unions and resolving
workplace conflict by fostering fairness and equal opportunity is of great
importance.

69
 Organisation Development:
Manages organisational change, overseeing reorganization and increases the
overall effectiveness of the process.
Ensures successful transformation while navigating the associated risks.
HR, in this function, measures the impact of initiatives, providing insights for
refining strategies and enhancing organisational development.

HR Operations:
Decreases HR's dependency on IT and makes it self-sufficient.
Carries out projects which may involve end-to-end implementation of Human
Capital Management (HCM) ERP software for the organisation.

Dave Ulrich's Kev HR Roles:

Strategic Partner / HR Business Partner:

HR professionals work closely with organisational leaders to align HR activities
and initiatives with the organisation’s overall strategy. To effectively serve as
strategic partners, HR professionals must develop a deep understanding of the
organisation’s business, industry, and market dynamics.

Change Agent:
The HR Change Agent plays a crucial role in driving and supporting
organisational change. They help the organisation navigate transitions, such as
mergers and acquisitions. HR change agents possess strong communication,
problem-solving, and project management skills, as they are responsible for
planning and executing change initiatives.

Administrative Expert:
The administrative expert role focuses on delivering efficient and cost-effective
HR services to the organisation. HR professionals are responsible for designing,
implementing, and managing HR processes. This includes areas such as
recruitment, compensation, benefits, and employee relations.

Employee Champions:
As employee champions, HR professionals advocate for employees’ needs and
interests. These employee champions create a positive work environment that
promotes employee engagement, satisfaction, and retention. HR can help create a
culture of trust and inclusivity, ultimately enhancing the organization’s
performance.

70
 The Employee Life Cycle:

ORGANISATIONAL BEHAVIOUR

1. Leadership Theories:
Contingency theories consider different environmental conditions while
explaining leadership. There are three main contingency theories-
Fiedler's Model
Hersey and Blanchard's Situational Leadership Theory
Path-Goal Theory

Fiedler’s Model
It states that for effective leadership, one must change to a leader who fits the
situation or change the situational variables to fit the current leader. It assumes
three Situational Factors-
Leader-member relations: Degree of confidence and trust in the leader.
Task structure: Degree of structure in the jobs.
Position power: Leader's ability to hire, fire, and reward

Application:
To assess the effectiveness of an individual in a particular role and look at the
reasons for one's effectiveness or ineffectiveness.

Hersey and Blanchard's Situational Leadership Theory

This model focuses on follower "readiness". Followers can accept or reject the
leader and effectiveness depends on the followers' response to the leader's
action.
"Readiness" is the extent to which people have the ability and willingness to
accomplish a specific task

71
 Application:
The manager's leadership technique will vary from person to person depending on
their ability to follow orders and their willingness to follow them.
If a person is not able to follow orders or is willing to follow, it means that the
person not only lacks the skill to do the task but has an attitude problem. Thus,
the leader might give precise instructions on how it is to be done and by when. The
leader might have to micro-manage the person. Similarly, every action depends
on the readiness.

Path-Goal Theory:

Leaders provide followers with information, support, and resources to help them
achieve their goals Leaders also help clarify the "path" to the worker's goals and
provide the necessary direction. Four types of leaders are:
Directive: focuses on the work to be done
Supportive: focuses on the well-being of the worker
Participative: consults with employees in decision making
Achievement-Oriented: sets challenging goal
Application:
-Builds agile leaders and team as well as encourages a support network.
-Boosts productivity, motivation and confidence.
-Helps to create a clear leadership plan.

Motivation Theories:

Maslow's Hierarchy of Needs:

Maslow stated that people are motivated to achieve specific needs and some
needs take precedence over others.
Our most basic need is physical survival, which will be the first thing that
motivates our behaviour.
Once that level is fulfilled, the next level up is what motivates us, and so on.

72
 Herzberg's Two-Factor Theory:

The Two-factor theory states that certain factors in the workplace cause job
satisfaction, while a separate set of factors cause dissatisfaction.
Motivators (e.g., challenging work, recognition, responsibility) give positive
satisfaction, arising from intrinsic conditions of the job, such as recognition,
achievement, or personal growth.
Hygiene factors (e.g., status, job security, salary, fringe benefits, work
conditions) do not give positive satisfaction, though dissatisfaction results from
their absence. These are extrinsic to the work itself and include aspects such as
company policies, supervisory practices, or wages/salary.
An employee feels dissatisfied when hygiene factors are not present in an
organization and satisfied when the motivators are present in an organization.

73
 3. McClelland's Need Theory:
David McClelland identified three learned or acquired needs (manifest needs); they
were:
Need for Achievement
Need for Power
Need for Affiliation

Application:
-Self-motivated achievement
-Non-monetary incentives (employee recognition)
-Create a fulfilling work setting

Goal Path Theory:

Goal setting involves establishing specific, measurable, achievable, realistic,

and time-targeted (S.M.A.R.T.) goals
It ensures that participants in a group with a common goal are aware of what is
expected from them without ambiguity.
Setting goals helps people work towards their own objectives—most commonly
with financial or career-based goals.

Adam’s Theory of Inequity:

Inequity is a situation in which a person perceives they are receiving less than
what they are giving or giving less than what they are receiving.
The Structure of equity in the workplace is based on the ratio of inputs to
outcomes.

Application: According to equity theory, an employee's perception of the fairness of

his work's input and outcome influences his motivation

Expectancy Theory:
The expectancy theory explains the behavioural process of why one individual
chooses one behaviour over another. Vroom introduces three variables within the
expectancy theory, which are valence (V), expectancy (E) and instrumentality (l).
Work Motivation= Expectancy x Instrumentality x Valence
1. Expectancy = Effort-performance relationship
2. Instrumentality = Performance-outcome relationship
3. Valence = Strength of the individual’s preference for a particular outcome

Application: Before designing a reward system, it is essential to consider if the

employee holds value for the reward.

74
 Group Development:
Tuckman’s Five stages of Group Development include :
1. Forming
2. Storming
3. Norming
4. Performing
5. Adjourning

Other Important Frameworks:

VRIO -
The VRIO framework is an internal analysis that helps businesses identify the
advantages of the resources that give them a competitive edge.

VUCA -
Understanding how to mitigate these VUCA qualities can greatly improve
the strategic abilities of a leader and lead to better outcomes.

75
 Miles and Snow:
Miles and snow strategy helps companies look at their existing operations and
define their current strategy, cost leadership and plan for future positioning.

Hofstede’s Framework:
Hofstede's Cultural Dimensions Theory is a framework which is used to understand
the differences in cultures across countries and the ways businesses are done
across different cultures.

76
 THE OPERATIONS CLUB

77
 OPERATIONS MANAGEMENT
- AN OVERVIEW
g Coord
nisin ina
Operations Management is a field a t

in
Or
that manages processes, resources,

g
and activities that transform inputs

Controlling
Planning
Operations
into desired outputs, such as
Management
products or services.

Objectives of Operations Management

Efficiency: Operations Management Flexibility: Operations Management

aims to maximise efficiency by seeks to create flexibility in
optimising the use of resources, operations to respond quickly to
such as labour, materials, and changing market demands,
equipment. This involves customer preferences, and
minimising waste, reducing costs, unforeseen events. This requires
and improving productivity. agile production systems, adaptable
processes, and effective supply
Quality: Delivering high-quality chain coordination.
products or services is a
Innovation: Encouraging innovation
fundamental objective of Operations
is a crucial objective of Operations
Management. It involves
Management. It involves
implementing quality control
continuously improving processes,
measures, ensuring adherence to
new technologies, and fostering a
standards, and continuously
culture of creativity and problem-
improving processes to meet or
solving to drive operational
exceed customer expectations.
excellence.
Operations Management focuses
on meeting customer demand
regarding timely delivery, product
availability, and responsiveness.

78
 SUPPLY CHAIN MANAGEMENT
Supply Chain Management (SCM) is the strategic coordination and integration of
sourcing, procurement, conversion, and logistics management activities. The
primary goal of SCM is to optimise the flow of goods, information, and finances
across the supply chain to achieve operational efficiency, customer satisfaction, and
competitive advantage.

“sourcing,
procurement,
conversion, and
logistics”
PROCUREMENT

Providers of raw materials, components,

SUPPLIERS

or services required for production. Sourcing, selecting, and acquiring goods or

Building strong supplier relationships is services from suppliers. It includes
crucial for ensuring timely and reliable supplier evaluation, contract negotiation,
supply. purchasing, and performance
management.
Transforming raw materials into
PRODUCTION

finished products. It includes

LOGISTICS

Managing the physical flow of goods, including

production planning, scheduling,
transportation, warehousing, inventory
quality control, inventory
management, and order fulfillment.
management, and optimising
manufacturing efficiency.

Warehousing, order processing,

DISTRIBUTION

CUSTOMERS

Understanding customer needs, preferences,

transportation management, and
and demands is essential for designing
managing customer relationships.
effective supply chain strategies and
Retailers are crucial in the supply
delivering superior customer value.
chain, acting as the final link between
manufacturers and end customers.

79
 OPERATIONS STRATEGY

What is Strategy? Where is Operations Strategy used?

Strategy is the alignment of an Operations strategy is applied within an
organization's operational resources with its organization, influencing decisions in
overall business goals to achieve desired production, supply chain management, and
outcomes. service delivery.

Why is Strategy important? When is Operations strategy used?

Operations strategy aligns resources with Operations strategy is employed continuously,
business goals, ensuring customer particularly during strategic planning,
satisfaction, optimizing allocation, and resource allocation, and in response to
adapting to market changes. changes in the market, technology, or
competitive landscape.

01 — Cost Leadership
Cost Leadership aims for a competitive edge through lower costs,
achieved by optimizing the value chain. decision-making.

02 — Differentiation
Differentiation focuses on unique features, superior quality, or
innovation to set the organization apart.

03 — Quality Focus
Quality Focus emphasizes exceptional product or service quality
and reliability.

04 — Agility
Agility centers on the ability to respond swiftly to market changes,
customer demands, and unforeseen events through flexible
operations and adaptive

80
 FORECASTING & DEMAND
PLANNING
Analyzing historical data using techniques like
moving averages and exponential smoothing.
TIME
SERIES
APPLICATION: where past patterns, such
as seasonal demand or repetitive cycles,
are expected to persist in the future.
FORECASTING

Causal forecasting links demand EXAMPLE: Coca-Cola may

with influencing factors like use causal forecasting to
CAUSAL economic indicators, market analyze how economic
conditions, and consumer behavior conditions impact soft
FORECASTING using regression analysis and
drink demand, helping
optimize production and
econometric models.
marketing strategies.

Qualitative forecasting Example: Launching a

relies on expert new tech product:
judgment, market Companies rely on
QUALITATIVE
research, surveys, and
expert opinions and
customer feedback.
customer surveys for
FORECASTING
Useful when historical
data is limited. demand predictions.

Demand planning software employs advanced

DEMAND algorithms and machine learning to analyze historical
data, identify patterns, and generate accurate
SOFTWARE forecasts.
Example: A retail company can use software to
FORECASTING predict product demand based on sales history,
market trends, and real-time data.

81
 INVENTORY MANAGEMENT
Inventory management is crucial in supply chain operations due to the following reasons:

01 — Customer Service
Maintaining appropriate inventory levels ensures that products are
available when customers demand them.

02 — Cost Optimization
Effective inventory management helps optimise these costs by minimising
excess inventory while ensuring sufficient stock to meet customer demand.

03 — Supply Chain Efficiency

Well-managed inventory levels enable smooth flow and coordination
across the supply chain.

04 — Demand Variation
Inventory serves as a buffer against demand variability, seasonality, and
fluctuations in supply.

Inventory Control Methods

Economic Order Quantity Safety Stock
EOQ is a method that Safety stock is an
determines the optimal inventory buffer that
order quantity to minimise accounts for demand
total inventory cost. variability, supply
disruptions, or lead time
fluctuations.
Just In Time ABC Analysis
JIT is an inventory control ABC analysis categorises
method that minimises inventory items into three
inventory levels by groups based on their value
receiving and producing and importance. A being
items just in time for use or highest value and C lowest.
sale.

82
 LOGISTICS AND TRANSPORTATION

“Logistics and transportation play vital roles in supply chain management

by ensuring the efficient movement of goods and materials from suppliers
to customers.”

The cost of transportation is a significant consideration. Different modes

COST

have different cost structures, including transportation charges, fuel costs,

handling fees, and surcharges. Organizations must evaluate the total cost of
transportation and select the mode that provides the most cost-effective
solution for their specific needs.

TRANSIT
Transit time requirements are crucial in selecting the appropriate

TIME
transportation mode. Some products may require fast delivery,
while others can afford longer lead times. Air transportation is
typically faster, while ocean transportation tends to have longger
transit times but lower costs.

The characteristics of the products being transported influence the

FEATURES
PRODUCT

choice of transportation mode. Fragile or perishable goods may

require specialized handling or temperature-controlled
transportation. Oversized or heavy goods may necessitate modes
capable of accommodating such shipments.
DISTANCE AND

The distance to be covered and the geographical location of

GEOGRAPHY

the origin and destination points impact transportation

mode selection. Air transportation is suitable for long
distances or international shipments, while road or rail
transportation may be more appropriate for shorter
distances.
AND SERVICE
RELIABILITY

Reliability and service level requirements should be

considered. Some transportation modes may offer more
reliable schedules and tracking capabilities, ensuring on-
time delivery and visibility throughout the transportation
process.

83
 QUALITY MANAGEMENT
Quality management refers to the systematic approach of ensuring that products, services,
and processes meet or exceed customer expectations and organizational standards. It
involves the identification, measurement, control, and improvement of quality throughout
all aspects of operations. The significance of quality management can be understood through
the following points:

Customer Satisfaction
By consistently delivering products or services that meet or exceed
customer expectations, organisations can build customer loyalty,
strengthen their brand reputation, and gain a competitive edge in the
market.
Operational Efficiency
Quality management identifies and eliminates operations' errors, defects, and
inefficiencies. By implementing robust quality control measures, organisations
can streamline processes, reduce waste, improve productivity, and optimise
resource utilisation.

Cost Reduction

Poor quality can lead to increased costs due to rework, scrap, customer
returns, warranty claims, and lost sales opportunities. Quality
management helps organisations minimise such costs by ensuring that
products or services conform to predefined quality standards, reducing
the need for rework or customer dissatisfaction.

Continuous Improvement:
Quality management is closely linked to continuous improvement. It
emphasises the proactive identification of improvement opportunities,
implementing corrective actions, and pursuing excellence in
operations. Continuous improvement efforts enhance efficiency,
productivity, and customer satisfaction.

84
 THE PLACEMENT
PREPARATION TEAM

85
 HR Behavioural Interview Questions
1. Describe a time when you stood up for something you believe in, even if it meant
going against the majority.
2. Who is your role model and what skill would you like to learn from them and
share the action plan to learn the same?
3. Describe a situation where you had to manage a sudden change or an
unexpected obstacle.
4. Can you share an experience where you had to lead a team with varied
opinions?
5. What is the most unconventional thing you've done to step out of your comfort
zone?
6. Describe a situation wherein you had to build a strong relationship with
someone you initially disliked.
7. What has been your most challenging situation so far?
8. How did you overcome it?
9. What impact did it have on you as a person?
10. How did you improve yourself during the two years of the pandemic?
11. What were your significant realisations from this?
12. What discourages you while working in a team?
13. How do you think one can manage conflicts in a group?
14. Why did you opt for a management course?
15. Give an example of when you had to work with others and accept their
viewpoint even though you had a different view no one agreed with.
16. Mention a time when you implemented an innovative idea that changed the
whole process of how something was done.
17. Mention an incident in your life where you convinced a group of people to do a
task. How did you go about it, and what were the problems and learning through
the same?
18. What is your greatest fear, and how did you overcome it?
19. What was your favourite subject, and why?
20. Have you ever not gotten along with your friends? If yes, then why?
21. Describe a situation where you had to work as part of a team to achieve a goal.
How did you contribute to the team's success?
22. Describe a time when you had to handle a high-pressure situation.
23. How did you manage stress and perform effectively?
24. What contributions do you plan to make to the surrounding society?
25. What approach do you employ for managing conflicts?

86
 ALL THE BEST!!

VISIT OUR STUDENT PORTAL:

FOLLOW US ON: