SBL*** P3 December 2012 Exam *** Instant Poll and comments***

how many marks was the q1a? 35? or 25?

i didn't use BCG for qs one.. purely just performance, i.e Strengths and Weaknesses, with the financial ratios and then how they can or can't contribute to the Parent company in the future- help! would i still get some marks??

25 marks

I think that question 1 was definitely a BCG question as with a BCG the reason for doing it is to assess the future of the group / business's an how they are likely to contribute to future growth. Ie best to divest in a dog as its not contributing much however , I did also mention that there were potential other factors including synergies between the dog and another business.

HOwEVEr, what was question 2 all about the way part a was worded got me all mixed up as I started on a pestle but then got confused as it said in relation to stakeholder expectations! I think I botched this question massively ! However , the website part was slightly better as discussed the need for I interaction, to sort some of the negative survey feedback comments out ! Still don't think I would have passed this question!

Q1 (a) I analysed performance through ratios, such as revenue growth, gross margin and net margin. I also used BCG to state that POTS was a cash cow, Glass was a dog and the third company was a star.
I also stated that the cash cow can be used to support further acquisitions and the existing companies through financing and expertise, the second company provided an essential product for POTS production so should not be divested (even though it is a dog) but should be nurtured. I said the third company should build on their innovative practices and offer further unique products to additional public sector customers. I also said the third company allowed an entry into the private sector market for the EA Group, especially POTS as they have, until then, been primarily public sector orientated.

(b) Contextual factors for change: Time - the contract was exclusive for 10 years, so any change forced on the company may need to wait. Scope - I said the company was basically a one-department company (the IT dept) so any change will impact on the entire business. Capability - I talked about conflicts between staff, manager, unions etc, so they would be used to managing change and conflicts and would have this capability going forward. Readiness - I talked about the backlog of applications to develop and the fact that they would still be dealing with change from the outsourcing so would not be ready for strategic change right now.
(c) I talked about advantages - easy way to measure performance, can measure how close/far from competitors, cheap. disadvantages - difficulty to get like-for-like data (i.e. how do the various councils measure customer satisfaction) and it doesn't tell you why performance is good/far (specifically the number of user faults had gone down but what this due to less faults or users more reluctant to reports faults).

Q2 (a) I talked about the various stakeholders, their expectations and power v interest (mendelow). I also did PESTEL (focussing on political - the reduction in govt grants, legal - employment law and landlord law, environmental - the changing weather was increasing maintenance costs, technological - they need to be aware of developments such as the internet, etc).
(b) I gave various improvements such as: forecast weather, profile volunteers, online communities/forums, provide rules and regulations re roaming on farmlands and dogs, allow visitors to book events in advance on the website, I also gave a few others which I can't remember.

Q3 (a) I talked about advantages v disadvantages of franchising and linked to the scenario, such as increased visibility for the brand as this was something they had failed to do so far, and that Emile wasn't good at people management, but franchising would pass HR to franchisees whilst allowing Emile to focus on strategy. However, there may be a lack of goal congruence, franchisees may harm the brand, may create a future competitor when the patent expires, etc.

(b) I just talked about the advantages and disadvantages of strategic alliances, joint ventures, etc. I forgot about licensing though!

(c) I talked about the low cash balance, too must cash tied up in receivables. However, they were lowly geared and had high interest cover so debt could be an option. I also said equity wasn't suitable as Emile wanted to retain full control of the company.

Hopefully I wrote enough specific points to pass.

i have done the same as the question required to assess the performance of the investment not bcg

Q1.a. Didn't apply a specific model to it, I dicussed the financial and non financial performance of each (applying opps and threats to each) I then summaries the potential to each but only called out the that one was a cash cow - don't know if I picked up enough relevant marks.
Q1.b. Didn't specifically call out the culture web but analysed the impact that each would have on the business and future changes
Q1.c. Benchmarking - just applied adv and dis to differnt types can't even remember if I referred them back to the case study :(
Q2.a. PESTEL and applied each
Q2.b. Gave references to stakholders opinions and improvements etc.
Q3.a.Franchising adv and disadv
Q3.b. Waffled through this one. didn't know the answer.
Q3.c. Liquidity and GP margins etc. didn't agree with the 500K claw back.

Don't know if I did enough to be honest. I have a gut feeling I didn't. My answers weren't as specific as I would have liked. Think I waffled my way through much of the paper. Don't know!!! I'll just have to wait and see now!

I think it was definitely BCG, the information gave us market turnover so we could calculate market growth, and individual company revenue so we would look at market share.

However, the aspects on performance I didn't think there was too much else apart from the financial information, and also small parts on vertical integration (with company 2) and the innovative focussed-differentiation strategy pursued by company 3.

I applied a SWOT analysis to Q1 using financial ratios. I think this will score marks as it gives a current position in Strengths and Weaknesses and also outlines future performance in the portfolio using Opportunities and Threats.

Thoughts?

I only considered BCG half way through my answer and deemed it too late to change!!!

Wasn't impressed to see a decision tree for 10 mks. had been told by lecturer that a decision tree was too large a task and unlikely to be examined. I did see one of the exam tips suggest decision tree so tried to research it last night and its not even in the index of the bpp text !! Thanks bpp

So I did questions 123 like most people
I applied both bcg and ashridge.to q1a as they both seemed applicable and gave you plenty to talk around.

The website question was a gift. Loved that.

In end covered about 93 of the 100 Mks. Hope its enough.

@royyston said:

1b) Contextual features of change - Kaleidoscope of change by Balogun and Hope Hailey. Reference is made to the case study regarding time, scope, readiness and capacity.
.

Yay, I didn't write whose theory that was, but answered correctly, I guess. :)

1a.) I only wrote strengths/weaknesses/financial rations/market share and how they can/can't fit into the Parent for the future, on the basis I didn't use BCG i think i would have got 12/28

b.) probably got half marks for this, just went through the four factors from Balogun Hope and Haley and linked to the case

c.) Adv/Dis of Benchmarking linked to the IT comp/council

2a.) Used Political, Environmental, Social and the stakeholders relevant to these as well as how they can overcome these issues- did not go through Technological because the question asked for factors out of their control - the website is within their control

b.) listed 5 improvements for the website from the survey linking in the 6I's

3a.) Adv/Dis of Franchising and how it is a good idea, yet the man is not willing to make such changes

b.) I just went through advantages of Joint Venture and Acquisitions - but yet again how the man is not willing to adapt to this

c.) Financing - just Adv/Dis - mostly disadvantages as he didn't have much reserves and growing organically would take too long. Did not calculate any ratios though..briefly mentioned gearing!

practically border line I think, keep counting my marks and they are about 49/50!

Regarding Ashridge, it's specifically designed to look at the value that parents can add to business units, not the other way around as the question was asking, so I didn't apply it. I maybe inadvertantly discussed it by talking about how the parent can sustain company 2 (who was close to liquidation), open up new markets (public sector) to company 3 (who were primarily private sector), but I didn't think there was enough and found BCG far more appropriate. Hope I was right.

Did the q1 specifically asked to relate with any model? I just analysed performance and future contributions.. will i loose any mark for not using any model..?

I didn`t consider Glass to be a cash dog... it was growing in a growing market, so it was rather a star.... but i don`t remember exactly so i guess there were some arguments.

I answered the first question using BCG and Ashridge. First was to assess the performance and second to assess the fit between of the companies within the Group...

I am interested if any of you have considered Glass as a Dog

EDIT Now i remember, Glass was growing in a stable/slightly declining market. This sounded more like a cash cow or something...

Why swot analysis cant be applied in evaluating the strategic position?
how to apply pestel in the case as its used for analyze the macro environment.
More over, if using pestel how to measure with reference to the farm capabilities?
Anyway, thanks for sharing everyone :)

Sorry i'm refering to question 2a

I took far too much time reading and responding to Q1. Was left with only 1 hour to read and answer both Q2 and Q3. Ran out of paper in answer book, so could not jot further points down for Q3. Q2 part a - question was very confused; it was unclear what the examiner was actually looking for. Whole paper took too long to read and digest. The 15 mins reading time is insufficient, and I didnt even manage to read and understand all of the Q1 question in that time.,

2a) Did anyone use resources to asses strategic capability i.e factors in their control Money Markets Manpower etc?

I thought glass was a dog as it had low market share in a low growth/ declining market ! I said that ea were investing resource in terms of managers and into the business which was why there market hate had been slightly growing as had the been there net profit margin. I put that ea would need to consider whether the amount of investment and resource they were commuting to glass is worth it just for the synergies between glass and pots( ie it was vertically Integrated )

Hello,

Q1 -
Part A-Evaluated the companies using the financial and non financial info concluding with where the subsid sat in the BGM as the q mentioned 'portfolio' as i associate that with bgm

Part B-mentioned the keliodoscope but doubt theres credit for that then mentioned the impact of the factors have on the success of a change linking it back to whether the factor will hinder / help the change and why

Part C- Benchmarking listed why its usefule, why its not, commented on the benchmarks of the IT co. & how reliable they will be given where they came from

Q2
Part A- Used PEST, Mendelow (took 3 stakeholders from the survey) and briefly Strengths & weaknesses but felt this was quite time pressured so i hop brief answers suffice rather than detail on 1 area.
Part B- Went through the 6 I's best i could but done this one last so was again a touvh brief

Q4
Part A- Felt the decision tree was absolute gift for 10mks, 1 decision and the outcomes are the same (or have i got that wrong (0.4 * 3 * 6) + (0.4 * 0.5 * 6) + (0.2 * (3 * 3) + (.05 * 3)) then deducted the £7m for Amethyst and £8m for Topaz indicating topaz was the best using the decision tree rule.
Then spoke about pro's and con's

Part B - Disagreed with Op's director and listed the non financial benefits of going with Topaz over Amethyst

Part C - Used the risk matrix (coudn't think of the name) impact v likelyhoof, plotted the 2 risks and why high low impact / likelyhood then offered solutions how risks can be avoided and reduced.

Overall i thought the paper was ok but i think some questions are quite open ended which leaves a bit doubt there.

I'm glad reading the comments on here that my answers are along a v. similar theme which gives me hope :)
Just P2 tomorrow now.

Would be nice to get the thoughts of any tutors / potential medal winners out there???

PESTEL can be used for external analysis:

Political- Grants by the government for certain initiatives in the past.
Economic- Costs was going up and this reflected economic activity within the estate.
Social- Looks at the trend and culture of the people living there. Can be inferred that many wished to be involved in the estate due to volunteers and visitors.
Technology- Company's website to create further awareness.
Environment- Climate was ever changing and the estate needs to look at alternatives to tackle this problem.
Legal- SInce it's a charity, it has to comply with certain legislation and charity laws.

I think the way te examiner worded q2 a made it very difficult in reexamine environment , thinking on it now it was a simple pest analysis with perhaps a statement under each that related this back to the stakeholders expectations and internal capabilities! Eg political threats lack of government grants for tree planting etc - this would effect stakeholders as they expect an aesthetically pleasing outdoor environment similar with the mansion maintenance - but under environment as it was the weather effecting this. Strategic capabilities relating to this would have been good staff knowledgable and have land management quals!!! BtW I totally struggling to grasp all of this in the exam situation due to the wording of the question

this is how i approached it...

1a) BCG analysis on first three companies + Gross and Net Margin. Final IT comapany i applied the ashridge model to see how it would fit... said it would be edge of heartland but not heartland due to risks of conglomerate diversification.

c) described types of benchmarking and what would be appropriate + adv diad's

2) Applied PESTLE b) was too easy, just take each comment in turn and give an improvement. was not hard.

3a) adv disad's of franchising applying it to the scenario

b) other strategic alliances - i chose licensing (as per the scenario) but also talkied briefly of a possible joint venture.

c) Said it is possible to raise no debit. 30m in retained earnings, + 230m in receivables which could become immediately available if factored out or improved by better debtor/creditor days, and said that if he used the dividends he took and brought more shares in the company he can avoid debt, but i said without the shares he would be roughly 120m short and then worked out how that would affect gearing by having debt (not by much).

think you need to subtract the 7/8m before multiplying by the probability

@gheorrghe said:
I didn`t consider Glass to be a cash dog... it was growing in a growing market, so it was rather a star.... but i don`t remember exactly so i guess there were some arguments.

I answered the first question using BCG and Ashridge. First was to assess the performance and second to assess the fit between of the companies within the Group...

I am interested if any of you have considered Glass as a Dog

EDIT Now i remember, Glass was growing in a stable/slightly declining market. This sounded more like a cash cow or something...

I said Glass was a dog because it was operating in a stable/declining market (i.e. low market growth) and it only had 9% of the market, which I stated was low, so low and low = dog. POTS was definitely a cash cow as the market was declining but their market share was approximately 25% if not more. The third company was definitely a star as the market was growing quickly and their market share was increasing each year.

I used Swot analysis for ques 2 .. as there were strengths ( motivated volunteer staff ) , threats ( government reduced funding ) ... opportunities ( A old mansion which could be improved ) , Weakness ( website not properly structured ) .

Do you guys remember the mark allocation for Q1?

a) 24 + 4 (professional)
b) ?
c) ?

Thanks!

b) was for 12 i think and c) was for 10

Q1-I used BCG with POTs being a cash cow, ?-Problem child,Econas-star, steeltown-star too cos it had a customer satisfaction rating more than the industry average, which could make it a market leader.
Future contribution of each company
The group should invest in the problem child using the Cash from cash cow and stars.

Q2-It was a bit tough for me cos i was time pressured but attempted it reasonably.

Q3_ Not bad at all.

Q4- was a no go area for me.

Overall everything was ok but believing in God for the best.
I dont see myself re-writing this paper again IJN.