Question:
‘Soal Footwear Ltd.’ is known for its high quality athletic shoes and casual sneakers. With increasing competition and changing consumer preferences, it decided to diversify its product range by adding clothing, bags and accessories under the same brand umbrella. This diversification aimed to capture a larger share of the market and increase customer loyalty.
(i) Suggest with reason which type of organisational structure will be suitable for ‘Soal Footwear Ltd.’
(ii) State any two advantages of the organisational structure suggested in (i) above.
‘Soal Footwear Ltd.’ is known for its high quality athletic shoes and casual sneakers. With increasing competition and changing consumer preferences, it decided to diversify its product range by adding clothing, bags and accessories under the same brand umbrella. This diversification aimed to capture a larger share of the market and increase customer loyalty.
(i) Suggest with reason which type of organisational structure will be suitable for ‘Soal Footwear Ltd.’
(ii) State any two advantages of the organisational structure suggested in (i) above.
Show Hint
The firm has diversified into many product lines, so a divisional (product based) structure suits it. Give any two advantages such as skill development of heads and easy expansion.
Updated On: Oct 26, 2026
Show Solution
Verified By Collegedunia
Solution and Explanation
Step 1: Understand the situation:
Soal Footwear Ltd. made athletic shoes and casual sneakers. Now it has added clothing, bags and accessories "under the same brand umbrella".
The firm has moved from one product line to several different product lines. We need a structure that suits many products.
Step 2: Part (i): Suggest the structure with reason:
The suitable structure is the Divisional Structure.
Reason: a divisional structure groups the work by product. Each product line, such as footwear, clothing and bags, becomes a separate division with its own head and resources.
This works well when a firm has diversified and sells a wide variety of products, as Soal Footwear Ltd. has now done.
Step 3: Part (ii): Two advantages of divisional structure:
1. Product specialisation develops varied skills in the divisional head. A head who runs a full product line learns many aspects of business, and this prepares him for higher positions.
2. It facilitates expansion and growth. A new division can be added for a new product line, just by adding a divisional head and staff, without disturbing the existing work.
(Other correct advantages: accountability for profit is easy to fix; faster decisions because each division is an autonomous unit.)
Final Answer:
(i) Divisional structure, because the firm has diversified into many product lines. (ii) Development of varied skills in the divisional head; ease of expansion and growth.
Soal Footwear Ltd. made athletic shoes and casual sneakers. Now it has added clothing, bags and accessories "under the same brand umbrella".
The firm has moved from one product line to several different product lines. We need a structure that suits many products.
Step 2: Part (i): Suggest the structure with reason:
The suitable structure is the Divisional Structure.
Reason: a divisional structure groups the work by product. Each product line, such as footwear, clothing and bags, becomes a separate division with its own head and resources.
This works well when a firm has diversified and sells a wide variety of products, as Soal Footwear Ltd. has now done.
Step 3: Part (ii): Two advantages of divisional structure:
1. Product specialisation develops varied skills in the divisional head. A head who runs a full product line learns many aspects of business, and this prepares him for higher positions.
2. It facilitates expansion and growth. A new division can be added for a new product line, just by adding a divisional head and staff, without disturbing the existing work.
(Other correct advantages: accountability for profit is easy to fix; faster decisions because each division is an autonomous unit.)
Final Answer:
(i) Divisional structure, because the firm has diversified into many product lines. (ii) Development of varied skills in the divisional head; ease of expansion and growth.
Was this answer helpful?
0
0
Top CBSE CLASS XII Business Studies Questions
What is the Planning Process?
- ................ is one of the most important attitudes of an entrepreneur, which is defined as the ability to continue to do something, even when it is difficult.
(A) Decisiveness
(B) Interpersonal skills
(C) Perseverance
(D) Taking initiative - Mention any four most common environmental barriers which an entrepreneur may face while running his/her venture.
- ____is the process of searching for prospective employees and stimulating them to apply for jobs in the organization.
‘Vishesh Constructions’, a construction company, decided to strictly implement ‘No Helmet, No Entry’ and put the following sign at their construction sites :
Identify the type of plan indicated by the above sign :
View More Questions
Top CBSE CLASS XII Organising Questions
- ‘Merely allocating work is not enough. Each individual should also know who he has to take orders from and to whom he is accountable.’ The above statement is related to one of the steps of the organising process. Identify the step from the following:
- Which of the following is an advantage of Informal Organisation?
- Explain the following functions of marketing:
(i) Marketing Planning
(ii) Branding
(iii) Pricing - Explain 'Advertising', 'Sales Promotion', and 'Public Relations' as elements of the promotion mix.
- Preeti started her own cooking channel on 'Youtube Mood Art'. As her subscribers increased, she was not in a position to manage everything on her own. She hired Rahul and Riya to help her with filming editing, lighting and content research. She granted authority to them to operate within prescribed limits. She was thus, able to use her time on high priority activities like developing new recipes and content development etc. As a result, Rahul and Riya were given opportunities to develop and exercise initiative. Preeti was now able to focus on objectives and meet the target of achieving a subscriber base of one million in six months.
(a) Identify the concept of management used by Preeti.
(b) Explain any five points of importance of the concept identified in .
View More Questions
Top CBSE CLASS XII Questions
- 2, b, c are in A.P. and the range of determinant $\begin{vmatrix}1&1&1\\ 2&b&c\\ 4&b^{2}&c^{2}\end{vmatrix}$ is [2, 16]. Then find range of c is
- A boy of mass 50 kg is standing at one end of a, boat of length 9 m and mass 400 kg. He runs to the other, end. The distance through which the centre of mass of the boat boy system moves is
- A capillary tube of radius r is dipped inside a large vessel of water. The mass of water raised above water level is M. If the radius of capillary is doubled, the mass of water inside capillary will be
- A circular disc is rotating about its own axis. An external opposing torque 0.02 Nm is applied on the disc by which it comes rest in 5 seconds. The initial angular momentum of disc is
- A circular disc is rotating about its own axis at uniform angular velocity \(\omega.\) The disc is subjected to uniform angular retardation by which its angular velocity is decreased to \(\frac {\omega}{2}\) during 120 rotations. The number of rotations further made by it before coming to rest is
View More Questions