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I also passed first time. Thank you all for the support and the resources. That was my final exam, passed them all first time 😀
@caspian087 said:
Friend, Corded Vacuum Cleaner had a lower market share with declining demand. Do you think these are OK for assessing the product as being “cash caw”?Corded Vacuum Cleaner (low share and declining demand)= Cash Cow???
I thought that the corded and cordless both had 20% market share, with their nearest competitor being 18% – 17.5% respectively or something to a similar effect. With only the robot vacuum cleaner not being a market leader.
Also, general query did anyone do any real number crunching? The girl sat next to me seemed to be furiously typing away on her calculator for at least an hour, which I found rather disconcerting given I think I used mine about once in the whole exam for the opening question
Reassuring to see that other people shared my concerns.
As a query did anyone head their answers up with a name, to/from and a title” like the following?“Report
To: JJ
Date: XX/XX/XX
Prepared by: External consultant
Report on XYZ”Q1a)
I did corded Cash Cow (Declining growth; Highest market share),
Cordless as Star with a note about the level of growth potentially making it shift towards Cash Cow (Medium growth; Highest market share)
and, robotics as problem child (High growth; mid-level market share)Along with a recommendation of what should be done, although this was essentially just textbook but modified for the setting. So the cash cow, should in theory have less of a threat of new competition and with less vying for market share the margin could be exploited to fund other products rather than being plowed back.
The star, I wrote about how they need to defend their market lead and how margins are likely to be low and thus, unable to fund other projects with it.
And the problem child, that they essentially needed to go on the attack and promote their product to try and gain market share. Was a snippet of information about how it was best in the market at XYZ, so I wrote about that. (Could have been the quietest or something?)Q1b)
Initially thought this question would be rather simple as what I’ve seen of practise questions and the like the value chain generally has a few differences companies employing a cost-saving element while persuing a differentiating strategy.I thought from reading things that both the current vacuum & the future car strategy would both be differentiation. Initially thought it was rather difficult as almost everything to my eye at least seemed to already be differentiation. As such, I just focused on the differences in this specific car market. So the vacuums use cutting edge tech, I suggested some hand-finished works for the car.
They train people up internally for staff, I suggested that skilled people could be taken on as they attempting to be first to market with the car and this would reduce the setback. Various other points as well, the guarantee for the vacuums were 5 years, I didn’t consider this especially long for a battery of a 60k car where 35% of the cost was the battery, so I suggested an increase, seeing as it stated that the customers wanted that.
Professional marks were awarded for scepticism, and I felt rather sceptical of a lot of things on this list or rather the lack of. I wrote about how some sections had multiple bullet points whilst others had only one or two and wondered if this was because they were only cherry-picking the best elements for the report.
Was also quite sceptical of some of the points they made when they simply wrote a statement as the way they generated value with no further explanation. So for example, they used high tech to generate value in production which is quite logical, but in another section, they wrote that they communicated R&D and production between each other well, with no further explanation of how they did this.
tl;dr sceptical of everything being so rosy.
Q2a) Two external forces for change.
I did the environmental concern for carbon emissions & outlets being a potential limiting factor.Q2b) The slide presentation. Thought this was a pretty difficult one, didn’t really know what they wanted for a “perfect slide”.
I did bullet points for the slide as I didn’t think they would expect witty quotes from James Dyson to be recalled of the top of your head, nor did I see enough data provided to do a graph. So just did bullet points, short and snappy with notes that expanded upon them. Also made a note for JJ to read about sharing his enthusiasm with the group–had seen on a past exam paper that marks were awarded for encouraging the junior member of your team when doing a report and thought this would be of a similar nature(?)
3) I went to town on this, feel it was my strongest question. Was all about which country was better wrote about basically everything in the pestel, along with alot about the other sections. I personally made a recommendation, of the developing country. As I felt the growing pressure for environmental change, rising wages, rising cars per head, the large volume of steel, and the lack of real competition swayed it.
That being said I had a lot going for the developed country as well such as the subsidies, higher min wage etc. Don’t know if anyone else commented on it but I wrote a bit about the wages as a benefit to the developed country, given how skilled the labour required on these cars seemed to be I didn’t think we would be seeking to recruit people for peanuts, but rather that the wages although minimum rather than medium instead reflected how affordable the product was. Not that I expect someone on a min wage of $6 an hour to buy a $60k car.
Q4) Thought and still feel that this was the hardest question, really felt that it was very wishy-washy and struggled to pin down exactly what to do. I wrote about the leadership, culture, and organisational achievements as requested, but putting into an email format I felt like I was simply reiterating information from the case studies and disseminating it to the team with the findings that they should come forward if they have ideas. Struggled to see what else could be rewritten. But I guess marks would be awarded for the dissemination of this information as the members of the team wouldn’t necessarily have the information themselves.
Stuff like “As you may know we promote a culture of not criticising people if their ideas might seem unsuitable. So come forward with your ideas.” type of thing. I felt like basically all of the information provided served to reinforce the fact that JJ and the rest of the gang wanted people to come forward with every suggestion no matter how stupid it might sound to others.
Wrote a bit about the incorporation of the solar tech as well, and how the company said they were constant re-engineering the products in the value chain, so if you had an idea don’t think its to late to include it.
@amirulez said:
Honestly, it is not that hard, but i can’t manage to complete it in time. Got blank on third question calculation part due to have one hour left, and still need to write all the writing part. Section 1 took me 2 hour plus.I get 25.462m hedging amount using forward contract, money market hedge is lesser but marginal. Project Alpha NPV is around 5,562 if i remember correctly. And the duration is 2.6years. Forgot the amount for APV.
The dividend capacity i get for question 2 is 80M.
Got very similar throughout, remember the money market being marginally worse in my answer. And Alpha’s NPV being about what you said. I got 3.02 years for its duration, however, I recommended Beta in the end I don’t know about you guys? My logic being that both projects NPV weren’t that far off each other with respect for the amount of money invested, but as I got the 3.02-year duration compared to Beta’s 2.42 years (?) that Beta was lower risk for a similar return. Can’t recall what I got for dividend capacity
Not the questions I expected at all. Thought there would be more on interest/foreign exchange, options, swaps something of that nature.
For question one I got the forward rate as a higher return than the money market but only marginally. About 26 million for raised by the money with an additional 24 million required for the finance. Think I got the APV component correct, remember doing a practice question that was very similar.
Didn’t expect the subject matter for 2 & 3, wasn’t all that confident on the main technical component but had a go, think I might have recovered marks on the discursive components.
One thing I did wonder about question one, did you do much to the Beta project in the initial NPV?
From my reading/recollection the cashflows were already discounted, just needed the initial 50m. taken off? Per recollection I got 5100 npv. With Alpha higher.
Did wonder if this was correct at the time as both had a positive NPV, from the sample questions I’ve done on APV they almost all ended up with a negative NPV, but are accepted due to the loan component.
Think it will be close to the wire.