SBL*** P3 December 2014 Exam was.. Instant Poll and comments ***

Here is my layout to Section A of todays exam. Really put a lot of effort into it, would appreciate replies. Section A Introduction Boston Box Analysis Financial Analysis For the future strategy, I used Harmon. Case study stated they were going to use the machinery at the rail company at the airport. COnculsion, divest or outsource rail company, and proceed with caution with airline purchase, however talk to shareholders, try to improve ROCE and receivables days. I used Harmon because i thought it was a good one to use. backed it up as well.

sorry, alsopart b for hybrid i used strategic clock, and used apple and ryanair as examples. :)

Thought q1 was extremley long. I spent ages on the first part which resulted in very weak answers from me in q2 & 4 and not answering q1b at all. Did anyone suggest selling the 4m sq mtrs of warehousing and use the money elsewhere. I found the swim lane very confusing with too much going on. Made a mess of the value chain and couldnt do calculation on regression. So overall it isnt looking good.

I suggested that all functions are brought back inhouse as even though they are not core competences they are all related to its core competence which was selling electrical goods. So if the customer wasnt happy about after sales service, which all of these were, then there is a chance that they may lose their customers. So in the long run it is more beneficial to keep inhouse even if costs are higher.

Ryanair is a no frills strategy not a hybrid strategy. But i didnt get time to even answer the question so i cant really comment. Lol

sorry described all of the clock lol

Bcg is specifically for portfolio of sbu's but can be used for products.

It was lengthy, Q1 exhausted me! The case study reminded me of Stobarts. Q1 I used swot and BCG. Then Sfa in the second part of A. I didn't write much for part B as had to move on. For Q2 I used rummler and brache process redesign. I basically said that the calls could be automated more. In part B I said it should not be outsourced because the country had employment problems plus it was an electronics business so they should have the technical resources to problem solve plus develop a website so the customer can do most of the stuff online. I did Q4 which was pretty simple until regression analysis boooooo! Fingers crossed for Feb everyone!

I think you could apply the popit model to Question 2b I used Harmons then thought about this when it was too late!. I wasnt sure if it will run 24 hours a day as the place abroad could be in a different time zone but I guess your probably right with your calculation.

I agree with all on that Q1 was way too long! in the previous years, type of question Q1 b) was a separate question ! and I really dnt understand why we have been put under even more pressure when asked about performance, then few years given and all: change in market share, % of growth/fall in profits, over they years etc...need to be calculated manually, I dnt see anyone preparing such calculations at work manually as Excel does it for you! Q 2 and 3 were ok but who knows what will be scoring marks there, many different approaches were possible i think anyway, we all will know how we did on 8 Feb if i am right so nothing we can do now good luck to all who still have exams to go and enjoy no studies and lots of free time for all those who are done!

I suggested in that instance to double the cost per call. covered the cost of moving back. With a country low unemployment, moving back = good media interest, corporate image.

No it was not star it was cash cow probably providing finance for all acquisitions as its market growth was very low so how can it be star. And part b so thats why asked to apply hybrid strategy to capture more n more slice from fully matured and static market. And acquisition of govida should be gone through as its cost to pay was 7m and it was just providing land for 9m so can be acquired as portfolio manager for asset stripping. Rail was ballast business so need to provide autonomy as even much resources were provided but performance was constantly declining after acquisition. Warehousing was related diversification and so synergies. The question was mix of bcg strategic rationale and to somehow fit.

I don't remember getting a star either as I remembered the increase in relative market share was only 1% over the last 5 years from 8.8% (2009) to 9.8 (2013). Although there was an increase it was more stagnant in nature. Growth was very low and being 9.8% out of the industry sales isnt so significant IMO. q 1 B ) Agree with @Ali, that was why they wanted to adopt the low price and differentiation strategy to capture more slice from a matured market. I discussed abit about it being in a mature stage and how price may very well be the vital factor to attract customers from other competitors. Since it was in mature stage, the company should reduce its marketing costs hence why the need to repaint the news trucks that are replaced every 3 years red and white. The brand was already well known refered the the fan clubs posting videos on the net. And the trucks should have longer life span than 3 years (shouldn't be replaced every 3 years). Reduced costs here may contribute to offering cheaper prices to customers. I discussed how the operating margin of SRRT has been slightly higher than the industry average (cost managed effectively) and it gave them room to cut prices even more to achieve this strategy. How it differentiated itself was using the warehouses for storage as the customers demanded it. They responded to customer's needs. That was why I concluded in q1ai) that the warehouse although it wasnt performaning well it should be kept in the portfolio for this purpose (Hold). Customers valued this service. However for q1 A i) I do not think ashridge was an appropriate model because they were adopting synergy manager parenting style ( not parental developer) so I did alot of ratios commenting, propects, BCG and future strategy about whther to BUILD,HOLD or Divest or Harvest. For Q1 A ii) Here was where I used Ashridge portfolio display since it was stated in the case that the $7m was funded from Retained earnings, The Roam's Group resources and we can conclude that it is indeed using parenting developer. I explained how Roam's Group (Cp) may have low feel as they do not have the experience,knowledge or expertise in steering an Airport company. This was evident from the previous acquisiting of warehouse where SRRT transfer their senior managers but struggled to make significant impacts so chances are that the same may happen. Concluded it being an Alien business and that the $7m invested into the Airport company has indeed proved to be a risky investment to the portfolio. I wrote more cant remember also about how no frills strategy may not be appropriate just as the person in the case said they need atleast 500,000 when only there was only 150,000 of population available. Talked about gearing effects and troubles that could arise. Used SAF format but was more all over the place lol Time constraint was enough, I left quite some number of marks, q4 on regression forecasting left 10marks and diagram q2 for 15 marks I did not answer that well and full. Heres hoping for a >50% finger crossed

hi guys.. in question 4 , part one.. first they summarize by saying value chain can used to analyse a company strength and weaknesses .. but the actual question was " what is the ineffectiveness of the company " isnt it ???

The paper was ok, but question one was very lengthy and time consuming. More than 3 pgs of information we had to read n digest! I had time to do only Q1 & Q4. Q1 took me sme 2hrs! Q1 (a) i. was abt the financial performance of SRRT, SRW & SRR. I used the BCG matrix only and interpreted changes in revenue + changes in markets shares SRRT - cow SRR - Problem child - more investment to acquire more market share as this market has high potentials (adverstising to get more contracts) SRW - Dog - can divest or invest in the mini container system which can allievate a little bit lack of warehousing space + be used for transportation of goods for long distance instead of using trucks ii. Calculated the same ratios, found dat gearing ratio was too high n cash reserve of Godiva low, other ratios were not that attractive also. however acq was for 7m n the 450hectares value was 9m n said dat some land could be used for warehousing + strategically located (b) I cudnt write much n just explain wat are the strategies n gave an example Q4 Explained what is value chained n listed out primary n support activities. Used only inbound, operations, outbound, sales & marketing. for each one i tried to give a strength n weakness + also calculated activity cost and tried to comment on same. Cudnt do well on the regression part. Time was running out and I sort of messed up this question. Don't think ill be able to get 50 marks, iv failed!

can you please tell me what is the exact question in Q4 part 1?? i think they asked only the ineffectiveness. and part 2 those 5 marks questions, did they ask about moist products or dry product? please let me know :-)

q4 a was to evaluate strength and weakness. I focused weaknesses in inbound and outbound logistics and suggested improvements. The strengths was actually their operations with how they handled and cooked raw foodstuff as customers considered Noble Pet's products to be of superior quality to competitors and they had Service too, this was their website where they gave guidance and advice. Although it was strength I also discussed how they can improved further with the site with higher ranking of search engines, creation of forums for interactions, better use of FAQs, suggested emarking, eprocurement, advs of of fully utilising its website basicly. I wrote more cant remember for for 15 marks they wanted quite some number of points.

i dont understand why some people wrote about the other strategies on the lock and even drew the clock..... it specifically asked for hybrid

i think this is why most of us ran out of time ... we are not supposed to explain the theories but to apply it to the case loll

i agree a perfect answer would involve explaining the theories 1st and then applying it to the case as in many proposed answer by the examiner but i dont think hes expecting perfect answers from us since we are under time pressure. @lewinbush im not even sure if the calculation is right haha

The paper was not hard but I bet examiner to sit in strict paper conditions and solve that paper within time, what does he expect from us in 3 hours. I recommend we all should personally email ACCA about yesterday time pressured paper complain, maybe they take this into consideration while marking our answer booklets. Question 1 was damn lenghty...

BCG is for products refer to your BPP kit. A question like this also came years back, here we are talking of SBU's and not products

if any of you are using a bbp exam kit check the question polymats something or shoal pro somthing.... this was the approach expected from the examiner

I didn't use BCG model in Q1 but I did all the ratio analysis e.t.c. I hope I will get a 50%. Q5 please save me. :-(

I'M KEEPING EVERTYTHING CROSSED PEOPLE !! 50% IS ALL IM PRAYING FOR ! IT WAS A LENGTHY PAPER !

Hi guys, I did my best in p3. Q1: a) I wrote about revenue increase as from prior year as well as industry. Same with operating profit and ROCE. Brand: SRRT's brand awareness among customers. Brand loyalty. Market Share: 28% of relative market share which is representing high proportion of total market. Market is stagnat and in its maturity phase. Synergy: There is synergies between roam group and srrt. Roam group core competency is to transfer goods to customers. So roam group can take advantage of srrt brand and trucks. And nearly same with the SRR and SRW. Conclusio : Accordinh to ashridge model, Srr lies in alien territory. Its sales continuously falling which is a alarming situation for the roam group. It should be divested as its a mismatch between roam group and srr. Q1 b) SFA Suitability: -Cultural clash like in SRR -Govida Business. -insufficient roam group mangament experience and skills in air industry. - Complementary modes of transport which is beneficial for roam group. Etc Feasibility: - Lack of mangament skills Q1 C). Price: Srr is on hybrid position on strategic clock. By cutting price, srrt would move to Low price or No frills position which means it would have to lower his quality and price. It seems like srrt couldn't get competitive advantage if it moves to no frills or low price position as it is known for his quality. By moving to low price position, it would damage his brand. So its not a beneficial for srrt to adopt low price strategy. Differentiation: It can be achieved by charging high prices for its better quality. It already dominant in its market. So by charging high prices wouldn't effect on its brand.

How about they improving the transportation by train as its more 'green'. They can connect the lorries and trains which will make the whole process more efficient. Then they wouldn't have to pay fuel charges and road taxes....Also, they can reduce the lorry fleet over the long term. Lorries can be used for only short distance and lorries and trains for long distance- I did mention about loading and unloading can be sometimes challenging (they cover whole country) In the airport case, their strategy was to carry cheap food products by aircraft or giving the opportunity for cargo airliners. If they were to buy aircraft to carry groceries, that wont be a viable business. Supermarkets operate in very competitive market and always look to save a penny or steal a penny form their customers. Therefore Supermarkets won't pay huge sums for deliveries. Supermarkets know what they need, how much they need and when they need it in advance. So not really be looking for faster options. Its sad that no body uses that airport except few tycoons. Also, passenger airliners do use that airport. That airport value was $7.2m (Total Assets from balance sheet) but they managed to get it for $7m. So, it wasn't a bad deal. but running an airport will be costly because of the laws and aviation rules, experienced air traffic controllers and maintenance fees. Looking at the ratios, we had to compare the ratios with an slimier size of that airport. one could argue that just one airport ratios is just not enough to compare (but I forgot to mention that). Overall all their ratios were poor than given ratios. Also, gearing was far too high, staggering 60%. You all know what happens when gearing is high. In my answer I recommended to sell the airport for balance sheet value making $0.2m profit and concentrate more on their core business operation, that is finding more efficient and cheaper way for to deliver foods and drinks for supermarkets. In part (c) they have to get competitive advantage. So I recommended few ways to cut cost and few ways to improve the benefits they provide to supermarkets, making it to fit in hybrid in strategic clock. This is a summary of what I wrote for question 1

@hussein, i considered that too as an opportunity to secure future customers who are environmental enthusiasts but it had been said as well that most customers are far away from the railtracks.

That is the reason why you have to connect lorries with trains. Problem solved!!! Fast, cheap, green and more reliable :-)