BUSINESS STRATEGY

Time allowed – 2½ hours

Total Marks – 100
[N.B. - The figure in the margin indicate full marks. Questions must be answered in English.Examiner will take account of
the quality of language and of the way in which the answeres are presented.Different parts,if any,of the same
question must be answered in one place in order of sequence)
Marks

1. (a) What is a SWOT analysis and how does it lead to an understanding of realistic market opportunities? 7
(b) You are a Senior Manager in the internal audit department of Ferry Ltd.
In July 20X0, Ferry Ltd. purchased exclusive rights to operate a car and passenger ferry route until December
20X9. This offers an alternative to driving an additional 150 KM via the nearest bridge crossing.There have
been several ambitious plans to build another crossing but they have failed due to lack of public support and
government funds.
Ferry Ltd. refurbished two 20 years old ‘roll on, roll off’ boats to service the route.The boats do not yet meet
the emission standards of Enviormental Protection regulation which come into force in two years time in 20X6.
Each boat makes three return crossings every day of the year, subject to weather conditions, and has the
capacity to carry approximately 250 passengers and 40 vehicles. The ferry service carried 70,000 vehicles in
the year to 31December 20X3.
Hot and cold refreshment and travel booking facilities are offered on the one hour crossing. These services are
provided by independent business on a franchise basis.
Ferry Ltd. currently receives a subsidy from the local transport authority as an incentive to increase market
awareness of the ferry service and its efficient and timely operation.The subsidy increases as the number of
vehicles carried increases and is based on quarterly returns submitted to the authority. Ferry Ltd. employs 20
full time crew members who are trained in daily operations and customer service, as well as pessanger safety in
the event of personal accident, collision or breakdown.
The management of Ferry Ltd. is planning to apply for a recognised Safety Management Certificate (SMC).
This will require a ship audit including the review of safety documents and evidence that activities are
performed in accordance with documented procedures. A SMC valid for five years will be issued if no major
non conformities have been found.
Requirerments:
i) Identify and explain the business risks facing Ferry Ltd. which should be assessed. 8
ii) Describe the process by which the risks identified in (a) could be managed and maintained at an acceptable
level by Ferry. 8

2. (a) Discuss how the management of information might differ from the management of knowledge. 5
(b) After a difficult few years trading, a new Chief Executive, Brain Parsons has been appointed by the board of
Timebermate Ltd. a large divisionalised company,it specialises in the production of wood based products, from
plywood and chip board,to kitchen and conservatory windows.
Parsons in his initial press interview made it clear that the costs incurred by the business were far too high and that
efficiency and productivity were unacceptably low. He has made clear his intention to turn the business
around.However, there have already been rumblings from the union to which most of the workers belong . They are
not prepared to negotiate over wages or working condition.
Timbermate is a major importer of wood.Russian and Scandinavian joinery redwood, together with spruce from
North America, make up a high percentage of imports. They also import from the Baltic States. Although sterling is
strong against the dollar it has been struggling lately against the other currencies. There have been signs that some of
Timbermate’s overseas supplies are considering expanding into Bangladesh directly. There also have been an
increase in the popularity of UPVC alternatives in a number of Timbermate’s core business areas.
A number of operational issues need addressing. Recently, complaints about quality and product specification
have become more common. Additionally the delivery fleet has become less reliable and several key customers
have been let down. However many of the senior managers do not seem unduly concerned. They often talk of
the Timber crisis of 1992 and how these problems are just part of the nature of the industry. They rarely stay at
their desks after 5 pm. There is little in the way of knowledge sharing and it is unusal for staff in any one
division to even know the names of staff in the others.
One key pillar of Parson’s plan is to introduce a fully integrated information system, covering stock control and e-
procurement, computer aided design and manufacture, resource planning and management accounting. The system
is to operate across all the divisions and allow potential cross-selling and better customer management.
[Please turn over]
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Requirements:
a) Analyse the forces for and against change at Timbermate Ltd. 6
b) Recommend to Brian Parsons how he might best manage the change process. 6
c) Suggest how the implementation of the information system could best be managed by the project team at
Timbermate Ltd. 5

3. (a) Explain the importance of marketing planning for a new customer product to be launched in your country.
Using examples, identify the main steps involved in the marketing planning process. 10
(b) Five years ago Elliott Davis established a firm to provide accounting services to small business. It has grown
rapidly and today has over 100 clients, mainly coming to Elliott by personal recommendations. Many of them
employ ten or fewer people, and as small business were receiving less than satisfactory service from their
current accountants or spending time trying to do their own accounts and getting into defiiculties. Elliott has
deliberately kept the costs of his business down. He is responsible for dealing with all the clients, he employs
three accountants part time to do work for clients and his wife runs the office.
Elliott has recently met Saima Ahmed who runs her own similar sized accounting firm. A business partnership has been
proposed, Davis & Ahmed Associates.They need funding to launch the business.
They have been asked by their bank to provide it with a business plan setting out how the partnership intends
to grow and develop.

Requirerment:
Write a short report for Davis & Ahmed Associates giving the key features that you consider to be important
and that you would expect to see in the business plan for the business. 15

4. RTF is an architectural practice firm owned by 3 partners and employing 20 other staff. Its vision has been stated
as: ‘Your future designed by RTF: Today!’ Its business is focused on designing housing schemes for local
governments and also individual houses for wealthy clients. The emphasis in the housing schemes has been to
produce high-quality homes to standard designs and ensuring that the schemes were completed on time and within
budget. RTF has established a library of designs which it has successfully used and which can be reused. The
relationships which RTF has established with local government employees have been important for the successful
completion of its contracts. RTF has a corporate contacts database where every local government employee it has
dealt with, is recorded. This has proved invaluable to RTF.
RTF’s other main income stream comes from the design of individual, ‘one-off’, houses for wealthy clients. The partners
have always enjoyed this work as it gives them the opportunity to express their professional talents. However, the
recently appointed Management Accountant has concerns about this business as she believes the partners spend a
disproportionate amount of their time on this work. One fundamental control system within a professional practice is the
system for recording time which forms the basis for costing work. Unlike most of its industry which uses proprietary
software, RTF relies upon a manual system for recording time spent on each project and the results are often inaccurate.
The partners have always believed that a staff development policy is important for success. They have invested in
improving the educational and technical background of their staff. RTF has a strong relationship with its local
university. One result of this relationship is a computerized design package, ‘2020 Design’, which RTF and the
university jointly developed and own. The package speeds up the design process and offers the possibility of
significant cost savings. If this package is applied within RTF it could result in either a greater throughput of work
from the existing staff, staff reductions or some combination of both of these.
RTF has carried out market research regarding the potential demand for 2020Design. This research indicates that
2020Design will be a viable commercial product. In what will be a significant strategic and cultural change for RTF
it intends to market 2020Design and has employed a Marketing Manager. The Marketing Manager intends to
license agents to sell 2020Design in RTF’s home country and abroad. RTF does not have any systematic way of
relating its operations to its vision or of measuring performance. However, one of the partners has heard of the
Balanced Scorecard and has suggested that this might be an appropriate model for RTF to use.

Requirements:
(a) Explain the four different perspectives of the Balanced Scorecard model. 5
(b) For each of the four perspectives, discuss and recommend two appropriate measures which would assist RTF. 10
(c) Recommend how RTF could introduce and use the Balanced Scorecard to help it achieve the required changes
in strategy and culture. 15

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