[roro]

– It will improve your business knowledge/awareness.
– It will improve your business writing/ vocabulary
– FT articles have good comparative and provides arguments from various angles of debate. Reading it regularly will eventually improve your analytical and articulation skills.

It will help to shape your thinking which will assist you in becoming good at business management.

Some can pass P5 paper without doing any of what I have advised, but they wont necessarily be here reading these articles as they wouldn’t need to!

[roro]

llmage,

I would recommend reading 25 mins any business news paper daily, instead of reading sports or celebrity news. If you want to take further interest into commercial companies, then log into “Google Finance” with your Google account and add 10 of your favourite listed companies in virtual portfolio . Then over time track their share performance, ratios and relevant news of those companies.

All this tools are readily available on Google Finance, it will take you less than 2-3 hours how to use the site and choose those company’s that differ in industry .

Let me know if you struggle understanding Google Finance.

R

[roro]

Steven,

Yes all markers/tutors I have heard from have recommended starting from Question 1, however optional questions you can be done in any order once you have attempted the first question.

Best of luck
R

[roro]

Hi Eva,

The calculations werent worth many marks. I did quick and obvious calculations with information given in scenario and got easy 3 or so marks ..provided a brief comment and grabed 3-4 marks in 5-6 mins and moved on.

A newly qualified acca manager is expected to become senior manager soon .Senior managers dont get involved in low level calculations all the time. Infact their juniors and accounting systems produce this info for them. They are paid so much for the expertise in decision making !! You have to think similarly in exam. Therefore the examiner puts in difficult calculations to distract students who are not thinking big!! Focus more on evaluation of the issues the company is dealing with and strategising in your 50 mark case study. When the examiner gets to see that your approach is high level and like a senior manager rather than a student ..only then you will be credited.

Good Luck

[roro]

I have further elaborated my advise with an example :-

Question: There is an issue around systems not being adequate for the company. CEO is thinking of implementing new system . Evaluate the situation and impact on organisation if decision is pursued (12 marks)

Technique for answering would be to apply Mckinseys 7s model to identify an point/issue and then elaborate by answering – [ How, why, impact, solution, example…whichever is more easily justified in case study and depending on marks allocated)

Answer
Change of systems will affect:

1) Strategy- This will affect long term- short term strategy. [Point identified] (0.5 mark)

[How}- Implementation will take 3- 4 years therefore cost must embedded in budget . (1 mark)
[Solution] – Communicate to ensure all budget holders are aware of this strategy change. (1 mark)

2) Staff- Morale might be affected [Point identified] 0.5mark

[Why] – pressure to learn. Panic of change. 1 mark
[solution]- involve staff in change management by communicating effectively 1mark
[solution] – provide non financial reward for participation. Example – recognition , awards , prizes.

3) Skills- Training will be required.

[How] -Bring consultants. Arrange training programs.
[Impact] -Costly………
[Solution]…..

4) Structure- Need to suit new systems
[what / why] –
[Solution] – Bring restructuring consultants

5) Style- Does business have right attitude and culture that will benefit overall business?
[what/why]……….
[Solution/example] Survey staff, assess current controls and processes.

By using the 2 techniques I have scored 12 full marks!!! Most of the students don’t answer this way . Use can replace Mckinseys model with other relevant model for example PEST or Pyramid or Building Blocks depending on question and case study(industry)! then elaborate it with [How,why,impact,risks , solution,example]. Alex wants you to interpret and analyse like a real business man! Write like one and you will soon find out that you have passed your exam with score of 70-75.

[roro]

Hello guys,

I passed at 74 too in my 4th attempt. My score was 47, 38, 48 and then 74! The question is how??

Let me ask you a simple question- how many of you know exactly what’s going on with Sony, Twitter, Nokia, Tesco’s, Rio Tinto , Unilever in terms of their financial performance and strategy?? Most of you don’t, most of you can’t define what’s happening in real world and thats why you are here.as you are not fit to be a qualified ACCA and neither did I because I never cared enough about developing myself as a business professional. Senior managers and qualified accountants read business newspapers every day and if you ask them then they will be able to give you answers to my questions. I have full sympathy for those who don’t have guidance. Because best training providers fail to train candidates on most important aspects of P5.

Well guys let’s think this way.. Tesco is doing really bad – which it is at the very moment. CEO wants you as an advisor to evaluate how the business can turn around with an aim to maintain market share, profitability and customer satisfaction. (8 marks)

I use to answer and I know most of you guys would answer along the lines of 4 points mentioned below. I have then mentioned in brackets what examiner would want to see in your answer and why you don’t get 50%!

– Reduce cost. This will improve profitability.—— (But how? Where? What impact will this have?)
-Better marketing. This will improve market awareness amongst consumers and brand loyalty.—–(To target what/whom? What about cost implication? Is it necessary?)
-Improved stocks on shelves. To maintain customer satisfaction.—-(How? Do we have systems to do this? Will it improve customer satisfaction and if so why??
– Improve pricing, perhaps reduce the price. (What about margins? DO we have a plan to reduce costs too? What models can be used to close the gap? Should we source better cheaper supplier? If so will it reduce quality)

If you answer all those questions in brackets above then you will be scoring at least 12-13 marks if questioned wasn’t capped at 8 marks. But instead majority of students give basic answers without a solution or further analysis into other things that affect businesses. The 4 points mentioned above will hardly fetch me 3 marks because all I have done is identified a strategy or solution to the problem. I haven’t analysed it . I haven’t provided how we can achieve it , neither have I given an example in relation to the company !!!
Now look at the model answer below( its brief but mentions all the points required to score full marks.

Answer:

– Reduce Cost
[What]-Focus on cutting costs in areas not adding enough value in supply chain (0.5 mark). Example can be suppliers, logistics , staff , systems.(0.5 marks)
[How] There might be a need for an organisational restructure in reducing costs (0.5marks). Perhaps bring restructuring consultants specialised in the area (0.5marks)
[Risks/implications] Staff morale might reduce due to panic. Exercise to reduce cost might be costly in itself. (0.5marks) Perhaps involve staff in change management to avoid any demotivation.(0.5 marks)

– Improved Marketing
[What] Target loyal customer in order to maintain market share. [0.5marks].Advertise more on loyalty cards and current offers through right channels of communication or maintain current client base. Advertise should be focused on comparisons of prices if new customers are to be attracted in order to improve or maintain market share.(0.5-1 mark).
[How]- We need to ensure that we have budgets for it or savings within other budgets of overall marketing budget.(0.5-1mark)
[Implication] There is always a risk that marketing might not be effective and might fail to win customers. To forecast check previous results and effectiveness of similar marketing campaigns.(1mark)

– Improved stocks
[What] Improve stock positioning to push improved volumes. 0.5 mark
[How]. Improve stock positioning of items that are easy to sell (consumable like chocolates and drinks). Stop stocking slow moving brands as they might be a burden on supply chain.
Use better stocking systems or models that gives detailed analysis to purchasing manager.(1 mark)
[Implication] purchase items from better suppliers who provide good value for money. Stop stocking lower margin products. Improve the MI systems that give detailed view of stock and ensure that costs of this process improvement don’t exceed the benefits. 1 mark

Guys I have only spoken about 3 main points and applied simple elaboration rules (How, What, Why, Implications, Example) and I am already scoring 9-10 marks or more.

Sometimes students go blank during answering questions and can’t think of any ideas. The best thing to do is think of Mckinseys 7s( Systems , strategy , structure, staff , skills and style) They are all inter related. Changing one will have impact on all other S’s. For example change in systems means 1) u need to train staff for “skills”2) You might need a “restructure” and employ more people. 3) “Staff” will be worried of change etc. You will notice that similarly I have used many “S” in my answer on Tesco.

Final advise, please do enough questions 20-30 and just use your basic business sense but write slightly more sophisticated business language to explain simple points.

Don’t get too nervous. Nervousness is a killer! Use proper noise cancellation ear buds(not cotton buds!). It should be available online or pharmacy. Spend enough time reading questions and not giving an answer to different question.

When you start your exam just try to forget theory of every topic you learned instead try to plan answer in a way as if you own that business. Then think of models or techniques to apply , if you cant then its fine , just apply your common sense and you will notice that even without thinking of a model you actually applied a model unknowingly in your answer.

Best of Luck guys.
Rohan

[roro]

In examination hall there were 2 girls , one on left and one on right and seemed like they both started doing calculations for Q1 (i) and they both moved on to Section B in less than an hour which means they possibly didn’t attempt VBM. Which is a sign of nervousness, not reading scenario thoroughly, poor preparation! I think examiner tries to design the paper to catch this weaknesses rather than just trying to test your knowledge of syllabus. He probably doesn’t even think for a minute what area or model he will test us on, but he probably spend 99.9% time on designing how can he catch / trick those students who didn’t read scenario properly, didn’t balance his studies between numbers, theory and application, don’t have commercial knowledge (its imp to have commercial knowledge such as how management reports looks, how shareholders react, stock markets etc). 40% of this paper was tailored to be for those who work in good organisations with enough knowledge on reports, business change , organisational structure and reward system.

This is what I did for my exam

Qus 1(i) was about evaluating the report and not any calculations. There were many flaws with the report..such as no comparison to previous year , no variance(actual minus budget), information overload, no narratives, 2nd subsidiary numbers were presented to management of first company which is not relavant – again info overload, staff costs were presented before/above operating costs. no detailed comparison on non-qualitative issue, no price or volume variance . However it had good elements to it such as comparison to industry averages. Conclusion should be to revise the standard of report file to accommodate flaws I mentioned and design it to be more relevant to right subsidiary. Also, had to explain some details with elaboration of few examples here and there.

For 1(ii) I discussed the main issue around controllability of staff costs and property costs. ( which is variable and fixed cost). The hint of staff cost and property cost was given in case study on first page. The manager of division (subsidiary) should have had negotiation, controlling and ownership of this 2 costs , or else it would be unfair to allocate costs by head office( parent) to either subsidiary. I concluded with some calculation of linearity of average staff costs calculation against the number of staff per subsidiary from Apendix 3( again in case study CEO asked to use Appendix 3 for this part)

(iii) I did EVA calculation of Parent company and provided a brief 2 paragraph comment .however after exam I was double minded about whether EVA had to be done for both subsidiary as well because 9 marks seemed a lot for such an easy calculation just for parent co.

(iv) Asked about VBM usefulness as a tool and then its impact on implementation to the company. I spoke about VBM which is setting performance management around EVA, Market value analysis and shareholder value analysis. I then spoke about its relevance to this group – its relevant because the group was a listed company and in order to get future funding ( right issue) and investors’ confidence( EPS , PE and share price) its important to align performance management that achieves highest value to shareholders. Therefore performance should revolve mainly around achieving shareholder value to satisfy investors under VBM. I then discussed the impact on business – which is consideration of change on Systems, Costs, Management (targets and reward system) , Strategy alignment.

Q3 – I then completed Q3 – Maximax, Minimax , maximin regret , payoff table, their relevant to each company , the possible risk approaches each partnering company would like to take due to their current internal and external circumstances ( related to info given in case study) as well as the interest of owners( institutional investors vs family owners).
I then evaluated ( +/-) Joint Ventures on more general basis with explanation of each +/- and with some possible examples of company from scenario here and there.

Q4- I then attempted b and c in last 30 minutes , which were pretty straightforward ( as many points were mentioned in scenario). I left out (a) because it was numerical and therefore time consuming!

I think I attempted it fairly well , I completed 90% and I hope to pass. However I did all calculations and payoff table in very beginning of question three and labelled it Workings but also labelled it 3a. Which I think was a mistake but I hope I get some marks for calculations as no one seems to have found it easy, but I found it straightforward.

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