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

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.,

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 )

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.

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).

@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.

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

@athey83

I thought Q4 had two calculations for the decision tree as there were different savings for each option depending on demand.

Option A
(0.4 * $3m * 6yrs) +
(0.4 * $0.5 * 6yrs) +
(0.2 * ($3m * 3 yrs)+($0.5m * 3yrs) – $7m invest

Option B
(0.4 * $4m * 6yrs) +
(0.4 * $0.1 * 6yrs) +
(0.2 * ($4m * 3 yrs)+($0.1m * 3yrs) – $8m invest

From my calculations i think option B was best.

I hope I will get 50%

Tough exam….It’s my first level 3 exam and I didn’t manage my time well.Now I know better…..

Q1
Used BCG Matrix and determined that POTS Cash cow (harvest, extra cash could go to entity that may need capital), NEACH Dog (but dont sell) important because it supplies major component that POTS need. ENCO STAR( build)

Didn’t mention anything about Steeltown Technology.

Mentioned other performance measures to evaluate performance eg balanced scorecard.

(b) Actually mixed up this question and thought they acquired the City Council!! Silly.. Had to start over. Discussed the Time, Scope, etc in the context of Steeltown Technology but barely!
Time – they knew about the acquisition for 2 years, but would still need participation and collaboration in the actual changes that would take place.
Capability – Mentioned that senior managers had left.

Q2
(a)Utilized both SWOT and PESTEL and mentioned Stakeholder Power Interest Matrix. Villagers (High Power High Interest) Major influence by having park limits since they provide the steady revenues through rent. Visitors (High Interest Low Power) Keep Informed via web Government (High Power Low Interest), Volunteers (High Power High Interest) Keep motivated since they are responsible for maintaining the gardens the main attraction. Tried with this one! But know I messed up in a few areas.

Question didn’t ask for it but mentioned that based on the SWOT, the Estate should repurpose and sell more of the land to private individuals to get lost revenue from Govt funding. And utilize the mansion for events like weddings, corporate functions etc.

(b) Mentioned that web could be used for (1)Informational, Testimonials, Bookings, Gateway for new business.bookings, gateway for reaching international visitors interested in eco/historical tourism, to provide park map to show areas restricted for hiking, cycling and dog walking
Q3 Ran out of time and had only 10mins to mention one advantage and one disadvantage of Franchise. Also mentioned that based on the nature of the competence it probably wouldn’t have been a good idea to expand the business via Franchise (after 10 years franchisee might become competitor since they had his formulation) However since the owner didn’t want other share holders, and didn’t want to be in the day to day administration and preferred to be morei n the “lab” and want to draw down via dividends (franchise fees could replace this) that a franchise could work out to be a good option.

Really shoot in the dark to suggest Vertical and Horizontal alliances. Good idea to go in business with the Emporium and provide training as alternate income generator. Horizontal Alliance, with a similar entity in the “cleaning” business by utilizing same equipment but changing formulation for maybe cleaning mold.
Long shot, but I tried.

I used Product Life cycle and BCG for the Q1 Part A. I missed part B of Q1 and did Part C.
Q2 Part A was Pestel and SWOT for me. Part B was about improving the website which was easy.
Q3 was the easiest. I just hope to pass