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OCR June 2007 Business Strategy case study

Link: http://www.ocr.org.uk/Data/publications/pre_release_materials_live_materials/AS_ALevel_GCE_Business_Studies_Jun07_Prerelease_Material_Unit_2880_Case_Study.pdf

Thoughts?

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Reply 1

lodzinski

woulda prefered a manufacturer but doesn't look too tough.lots to get ones teeth into

Reply 2

andy_1989

Seems very similar to OCR unit 9: Strategic decision making

Reply 3

lodzinski

it is the BUSINESS STRATEGY paper.

Reply 4

Karvel

Aye looks decent, really only about 3 pages of text and the rest is numeric data (and a token CPA :wink:

)

Reply 5

lodzinski

its a decision tree, not critical path.

Reply 6

Karvel

*fails exam* :biggrin:

Reply 7

Karvel

How people getting on??? I'm really starting to think it's a very very nice case-study

Reply 8

Karvel

I'm starting to think there's defo gonna be a question on whether they should buy Karma and whether they should proceed with the TBT thing.

Reply 9

Asian89

so what do ppl think about the exam this week, who's prepared.
what do you think is going to come up as i haven't revised yet so i want to focus on some particular areas.

Reply 10

Daren

I hate business exam papers, they are so vague and there's never a definitive answer you should give. Dreading Thursday, I'm just hoping they ask something along the lines of 'Should BBY acquire Karma' and another question on wether to re-locate the call centre. Then a nice final one on the decision to quit or carry on with holidays to Tabakistan.

Am I being too optimistic as those are the 3 main areas within the case? Are they likely to throw in a completely different topic?

Reply 11

Karvel

Aye, I hope there's nowt on "the usefulness to BBY of corporate planning" or "how BBY's success was influenced by different objectives" or summat...

I hope the grade boundaries are low... in January 2007 a Grade A needed 58/80, but in June 2006 you only needed 52/80, which basically means

to get a Grade A in January 2007 would mean getting at least 14/15 on each question
to get a Grade A in June 2006 would mean getting at least 13 on each question

(yeah there's marks for QoWC but... those damn evaluation marks)

Reply 12

ksbnoob

please could someone help me...
ive been stuck for weeks trying to work out the Tabakistan terrorism thing. Im pretty sure that BBY SHOULD NOT pull out of Tabakistan coss i remember my teacher saying so... :cool:

but i forgot to take notes and that was like 4 weeks ago :rolleyes:

i also do not understand the decision tree at all

so what im saying is could one of you smart guys (or girls) give me a paragraph or a few lines saying what they should do and why?

If you have worked out the calculations associated with the decision tree could i please have them :biggrin:

Reply 13

Karvel

Surely the £6 million loss of pulling out is way lower than the potential costs incurred of a bomb/kidnap threat against BBY (regardless of FCO warning) - which would also destroy BBY's brand integrity, damage their aim of becoming 'market leader in worldwide escorted holidays for the 45+ age group' and possibly also their obtaining of Karma Cruising. Sales turnover would likely also suffer, leading to a higher break even point, lower profit margin etc.

BBY could get improved brand reputation from pulling out of Tabakistan as it will show they care about their employees and customers and that they would be willing to suffer a substantial loss in order to do this, leading to increased market share etc.

It would, however, require Isabel/BBY taking a long-terminism view of the situation which they don't seem to have been doing, as seen by the Dividend Covered figures, where dividends paid out increased dramatically from 2005-2006 and most of it is going into Isabel's pocket so she can 'retire in financial comfort' (greedy cow) - holiday packages to Tabakistan have shown a 9% growth and so utilising a short-terminism view you might see it as too lucrative a destination to pull out of, regardless of the potential risks...

I would be interested to see other people's views on this actually, it's SO likely to come up in the exam haha!

Reply 14

Hester-0

Yeah I think they should pull out too - their reputation is built on good customer relations so it isn't worth risking their brand name when the liklihood is that they wont make a long term profit anyway.

The calculations - I've got the percentage x the estimated loss/profit down which seems to support the view that staying in Tabakistan is 'manageable'. I'm not 100% sure how this works though so I'll speak to somebody about it in the morning.

Reply 15

Karvel

My (most likely incorrect) predictions of what's gonna come up;

Should they pull out of Tabakistan?
Financial performance of BBY between 2005-2006
Should they buy Karma Cruising?
Usefulness of corporate planning/how specific objectives contributed to BBY's success

Reply 16

ksbnoob

how about this view -

- politics / terrorism affect all tour providers equally- not just BBY

- The risks seem very pessimistic - just 20% of a nothing happening?

- Tabakistan has good growth - 9%

- I calculated from the decision tree that the overall estimated loss of continuing is 5.2m (could someone confirm this?)

- 5.02m is the amount they stand to lose by continuing so this is pretty much the same as if they pull out - so why pull out of a growing destination to save just £2000???

Am i making sense or is this completly wrong? :s-smilie:

Reply 17

ksbnoob

do you know how for contiuing with FCO warning is -6.1m
continuing with no warning is -3.4m

is their any further calculations? -

do you then work out the overall for continuing -
(6.1m * 0.6) + (-3.4m * 0.4) = 5.02m overall for continuing - is this right?

could someone give us thier actual calculations - common stop being so tight - i gave you what i thought was right :biggrin:

Reply 18

Karvel

The way I read it:

If they leave NOW, it will incur £5 million

If they continue, and THEN leave (whether FCO warning or not) - will cost them £6 million

80% chance of bomb/kidnap - costs incurred from either of those (whether FCO warning or not) range from £4 million to £10 million, but there would also be the damage to brand integrity

If they continue, and nothing happens, it will incur £2 million loss ( :confused:

), but they'd have to be taking a short-terminism risk that things wouldn't get worse, which when the situation is likely fluid...

But it is likely that Alice just cobbled together that Decision Tree with no real knowledge of the situation in Tabakistan

I don't really know how to do "calculations" on the Decision Tree as such, it's too confusing :s-smilie:

Reply 19

ksbnoob

thanks karvel but in school we did some dam confusing calculations for which i cant find the notes and nothing on the net - might have to pop into school to see our business teacher
but apparantly we worked out the overall estimated loss for continuing which was about 5.02m which is the about same as quiting now (5m)

i got 5.02 for chance node 5 :confused:

by doing (-3.4 * 0.4) + (-6.1 * 0.6)