Question Tag: Strategic Management

Search 500 + past questions and counting.

  • Filter by Professional Bodies

  • Filter by Subject

  • Filter by Series

  • Filter by Topics

  • Filter by Levels

  • 30 Marks

FM – Nov 2022 – L3 – Q1 – Mergers and Acquisitions

Evaluating the acquisition of Company K3 in Togo for business expansion purposes.

The following case relates to a business expansion decision for Abayomi Plc (AP):

Abayomi Plc (AP) is a major electrical company in Nigeria. The directors have recently identified Togo as a priority location for business expansion. Togo uses currency T$. Assume today is 30 August 2021.

Company K3, located in Togo, has been identified as a potential acquisition target. AP already manages two business units in Togo, named K1 and K2, and these have shown strong performance under AP’s ownership.

K3 is particularly attractive to AP because it has its own warehouse, distribution, and logistics network, all of which could be used by K1 and K2, if the acquisition goes ahead. Currently, K1 and K2 send goods to customers from AP warehouses located in Ghana. This involves considerable cost and delay in delivery.

K3 is a private company, and 100% of its shares are owned by the family that founded it. Many shareholders are keen to realize their investment by selling the company to AP.

Both companies are working towards an effective date for the sale of K3 to AP on 1 January 2022.

Financial Data for K3 for 2020:

The statement of financial position of K3 as at 31 December 2020 showed the following balances:

T$ Million
Long term borrowings 375
Share capital (T$1 ordinary shares) 90
Total liabilities 465
Net assets 180

Additional Data:

AP aims to maintain the same capital structure as AP. That is, gearing (debt/debt+equity) would be 25% based on market values. AP would guarantee K3’s new debt, which can be assumed to have the same risk profile as AP’s debt.

A proxy company has been identified which is also located in Togo and has a similar business model to K3.

Proxy company data:

  • P/E ratio of 12.
  • Equity beta of 1.7 and debt beta of 0.4.
  • Gearing (debt/debt+equity) based on market values of 35%.

Togo has a risk-free rate of 5% and a market risk premium of 4%.

Financial Data for AP:

Latest data available for AP shows:

  • P/E ratio of 14.
  • Equity beta of 1.5 and debt beta of 0.3.
  • Gearing (debt/debt+equity) based on market values of 25%.
  • AP pays 6.2% interest on its long-term borrowings.
  • Tax rate in Nigeria is 30%.

The spot rate for T$ against Naira today is T$7/₦ (i.e., ₦1 = T$7.00) and is not expected to change in the foreseeable future.

Assume that Nigeria has the same risk-free rate and market risk premium as Togo.

Required:
Assume you are the Finance Director of AP.

a. Advise on:
i. The types of synergistic benefit that might arise from the acquisition of K3. (8 Marks)
ii. Possible reasons why both one-off and ongoing synergistic benefits might not be achieved to the extent expected. (4 Marks)

b. Calculate:
i. A Weighted Average Cost of Capital (WACC) for use in valuing K3 based on the proxy company’s business and country risk and AP’s capital structure. (6 Marks)
ii. A range of values for the equity of K3 in T$ as at 1 January 2022 using the following methods:

  • Asset basis. (2 Marks)
  • P/E (including bootstrapping). (5 Marks)
  • DCF (with and without synergistic benefits). (5 Marks)

(Total 30 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FM – Nov 2022 – L3 – Q1 – Mergers and Acquisitions"

  • 20 Marks

CSME – May 2017 – L2 – SB – Q4 – Strategic Management in the Public Sector

Explain organizational growth through Greiner's model and discuss board diversity benefits and limitations.

a. With the aid of an appropriate diagram, explain how organisations and management structures might change as a business grows using Greiner’s growth model. (10 Marks)

b. Explain briefly the concept of board diversity giving THREE examples of categories of diversity. (5 Marks)

c. Explain THREE benefits of the diversity of the board of a large company. (3 Marks)

d. Discuss TWO limitations of board diversity. (2 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "CSME – May 2017 – L2 – SB – Q4 – Strategic Management in the Public Sector"

  • 20 Marks

CSME – Nov 2015 – L2 – Q4 – Risk Management and Corporate Strategy

Analyzes strengths and weaknesses of Toyin Trust Insurance Plc pre- and post-2000 ownership changes, and suggests strategies for sustaining the company.

Toyin Trust Insurance Company is one of the duly registered insurance companies in Nigeria. Ten years after it started operations in 1990, the company had become a household name in the market. Its strengths included timely payment of claims and introduction of quality products that captured changing customers’ needs.

At inception, the company was 100% foreign-owned, with five of the seven directors being experienced expatriate insurance practitioners. However, by 2000, over 90% of the equity had been transferred to Nigerian investors. In 2009, following reorganization, many experienced senior managers resigned, and inexperienced staff took over key positions, leading to a decline in service quality and a 40% drop in premium collection.

Required:

a. Analyze the strengths of Toyin Trust Insurance Plc before 2000. (5 Marks)
b. Analyze the strengths and weaknesses of Toyin Trust Insurance Plc after 2000. (5 Marks)
c. Suggest essential strategies to sustain Toyin Trust Insurance Plc. (10 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "CSME – Nov 2015 – L2 – Q4 – Risk Management and Corporate Strategy"

  • 30 Marks

CSME – Nov 2020 – L2 – Q1a – Environmental Analysis

Advise Cells Incorporated on the strategic management factors to consider when relocating its manufacturing plant to Dumbura Republic.

Dumbura Republic is reputed for its high population density and the consequent availability of cheap labour. Surprisingly, due to the high premium placed on qualitative education in science and technology-based disciplines, the country has an abundance of highly skilled workforce suited for manufacturing industries. Other features of Dumbura Republic include adequate, accessible and reliable social infrastructure such as electricity, potable water, road and rail network, and an effective security network. Besides, the country also has a variety of tax incentives designed to attract foreign investments. These positive features of the socio-economic environment in Dumbura have attracted a lot of foreign investors, including several computer and mobile phones hardware production companies.

Indeed, the socio-economic environment in Dumbura is very business-friendly. Hence, it is not surprising that a lot of foreign companies have located their industrial plants in the country. Effects of this development include increased employment opportunities, influx of people in search of employment from neighbouring countries, spiralling rent rates for all categories of accommodation, worsening environmental pollution, and a spiking population growth rate, which is beginning to take its toll on available social infrastructure. Besides, the hitherto peaceful country is beginning to experience an increased rate of crimes such as burglary, robbery, cyber theft and kidnap that target expatriates particularly. The local population is becoming increasingly hostile to the expatriates and workers from neighbouring countries, accusing them of denying the local population access to good job opportunities.

You have been employed as a consultant to a computer and mobile phone hardware company, Cells Incorporated, which is considering relocating its major manufacturing plant from an Asian country to Dumbura Republic. This is hoped to bring down the cost of production and provide a ready market for about 20% of its products.

Required:
With the aid of Johnson, Scholes, and Whittington’s position on strategic management, advise Cells Incorporated on the elements of strategic management that must be taken into consideration in deciding whether to relocate its manufacturing plants to Dumbura Republic. Ensure that you make adequate references to the scenario above as might be relevant.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "CSME – Nov 2020 – L2 – Q1a – Environmental Analysis"

  • 20 Marks

PM – Nov 2020 – L2 – Q5 – Balanced Scorecard

Analyze the performance of DAT Air using the Balanced Scorecard approach and propose relevant goals and performance measures for each of the perspectives.

QUESTION 5
Dat Air was founded in January 2010 by Dr. Daniel Taiwo and the airline has been
branded as a low-cost airline in Nigeria. Dat Air‟s strategy is to operate as a low-cost and highly efficient airline, and it does this by:
(i) Operating mostly in cities where other airlines do not fly to reduce landing
cost;
(ii) Using only one aircraft model in order to reduce maintenance and operational
costs. These planes are leased rather than bought outright;
(iii) Having only one category of seat class; there is no pre-allocated seats or in-
flight entertainment; and to
(iv) Focus on e-commerce with customers both booking tickets and checking in
for flights online. Customers who booked well in advance before the flight
date enjoy substantial discount.
The airline was given an „on time arrival‟ ranking of second best by the
Nigerian aviation authority, who rank all 20 airlines operating locally in the
country based on the number of flights which arrive on time at their
destinations. 48 Dat Air flights were cancelled in 2018 compared to 35 in
2017. This increase was due to an increase in the staff absentee rate at Dat
Air from 5 days per staff member per year to 7 days.
The average „ground turnaround time‟ for airlines in Nigeria is 2 hours,
meaning that, on average, planes are on the ground for cleaning, refuelling,
etc for 2 hours before departing again. Customer satisfaction surveys have
shown that 90% of customers are happy with the standard of cleanliness on
Dat Air‟s planes.
The number of passengers carried by the airline has grown from 200,000
passengers on a total of 2,107 flights in 2010 to 650,000 passengers on
5,320 flights in 2018. The overall growth of the airline has been helped by
the limited route licensing policy of the Nigerian government, which has
given DAT Air almost monopoly status on some of its routes. However, the
government is now set to change this policy with almost immediate effect,
and it has become more important than ever to monitor performance
effectively.
This has necessitated the management of Dat Air to examine the airline‟s
performance using the balanced scorecard model. This will enable the
management to discover areas where improvement is needed in its
operations.
Required:
a. Describe each of the FOUR perspectives of the balanced scorecard.
(6 Marks)
b. For each perspective of the balanced scorecard, identify ONE goal
together with a corresponding performance measure which could be
used by DAT Air to measure the company‟s performance. The goals
and performance measures should be specifically relevant to Dat Air.
For each pair of goals and performance measures, explain why you
have chosen them. (9 Marks)
c. Appraise the usefulness of the balanced scorecard as a performance
evaluation technique. (5 Marks)
(Total 20 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "PM – Nov 2020 – L2 – Q5 – Balanced Scorecard"

  • 15 Marks

CSME – Nov 2018 – L2 – Q6 – Corporate Strategy Formulation

Explain the BCG Model with a diagram to analyze a firm's business portfolio, detailing the four product categories.

As part of a training session in strategic management, deploy a diagram to explain how a firm would use the Boston Consulting Group (BCG) model to analyze its business portfolio. Explain each category of products identified in the BCG model.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "CSME – Nov 2018 – L2 – Q6 – Corporate Strategy Formulation"

  • 1 Marks

BMF – May 2016 – L1 – SA – Q10 – Basic Management Functions

This question evaluates the student's knowledge of Porter's Strategic Management Model and which element is not a part of it.

Which of the following is NOT part of Porters’ Model of Strategic Management?
A. The Strategic goal for a company should be to achieve a superior long-term return on investment
B. Strategy must offer a unique value proposition for the customer
C. There should also be a distinctive value chain
D. The selected strategy will not involve some trade-offs
E. There should be continuity of strategic direction

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "BMF – May 2016 – L1 – SA – Q10 – Basic Management Functions"

  • 1 Marks

MI – Nov 2015 – L1 – SA – Q16 – Information Systems and Management

Identifies which management level handles strategic issues and long-term trends.

Strategic issues and long-term trends are handled by:
A. Software system developers
B. Hardware system developers
C. Senior management
D. Middle management
E. System analysts

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "MI – Nov 2015 – L1 – SA – Q16 – Information Systems and Management"

Has Case Study
  • 20 Marks

SCS – May 2020 – L3 – Q1 – Strategy, Stakeholders and Mission

Perform a SWOT analysis of Customer Focused Ltd, highlighting key strengths, weaknesses, opportunities, and threats.

Customer Focused Ltd has updated its management accounts (Exhibit 1) to produce a
forecast for the year 2020 and these have indicated some significant problems. The business
owners are unsure what to do next.
Required:
You are acting as an advisor to the company and they ask you to:

Prepare a SWOT analysis of Customer Focused Ltd. You should list the strengths, weaknesses, opportunities, and threats in the SWOT analysis of Customer Focused Ltd. You should then select from your list the key strengths, weaknesses, opportunities, and threats and explain why they are important.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "SCS – May 2020 – L3 – Q1 – Strategy, Stakeholders and Mission"

  • 1 Marks

BMF – Nov 2021 – L1 – SA – Q20 – The Business Environment

Question about identifying an element not part of the Cultural Web model within an organization.

The cultural web consists of the following inter-related elements of culture within an organisation, EXCEPT:

A. Symbols
B. Interactions
C. Control systems
D. Stories and myths
E. Routine and rituals

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "BMF – Nov 2021 – L1 – SA – Q20 – The Business Environment"

  • 20 Marks

CSEG – Nov 2018 – L2 – Q6 – Strategic alternatives, analysis and selection

Discuss the challenges and strategies involved in Franko Ltd’s acquisition of a Nigerian accounting software company.

Franko Ltd is a producer of accounting software for SMEs. The software is very easy to use, even for a layperson, and has significant functionality for the price level of GH¢4,959 per annum. The package includes all functionality to comply with tax payments, including income tax, (PAYE) and VAT, as well as creditor and debtor accounting and some customer relationship management functions. The firm also has an enhanced package that includes telephone support and free updates for GH¢499 per annum.

Franko Ltd has been very successful, and this has led the firm to expand internationally, after starting and developing a business over the past five years, mostly in Accra, Ghana. Franko Ltd has decided to expand into the African market and has chosen to enter the Nigerian market by acquiring a Nigerian accounting software business as an entry route into that market, as it is perceived to be different from the Ghanaian market.

Required:

a) Explain FOUR (4) challenges Franko Ltd may face in the acquisition. (8 marks)

b) Advise Franko Ltd on how to effectively address the challenges they may face in planning and completing such an acquisition. (12 marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "CSEG – Nov 2018 – L2 – Q6 – Strategic alternatives, analysis and selection"

  • 20 Marks

CSEG – Nov 2018 – L2 – Q4 – Strategy evaluation and control

Discuss how the Balanced Scorecard can assist in delivering the company’s vision and strategy and explain its limitations.

An insurance company has developed a new mission statement following a detailed analysis of the company’s operations and marketplace. The mission statement states: “We want to continually grow through our commitment to quality and delivering quality to customers.”

The management developed the following set of vision statements to complement the mission statement:

  • Provide superior returns to our shareholders
  • Continually improve our business processes
  • Delight our customers
  • Learn from our mistakes and work smarter in the future

Required:

a) Advise on how the Balanced Scorecard can assist the insurance company in delivering its vision and strategy. (12 marks)

b) Explain FOUR (4) limitations of the Balanced Scorecard. (8 marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "CSEG – Nov 2018 – L2 – Q4 – Strategy evaluation and control"

  • 10 Marks

CSEG – May 2019 – L2 – Q6b – Business ethics

Discuss the importance of incorporating business ethics and sustainability into Apusco’s strategic management activities.

Apusco is an indigenous multinational mining company which undertakes a wide range of mining projects around the world. Apusco has to work with many other organizations and government agencies in order to manage pollution and protection of the environment. Apusco’s mission statement states that ‘The basis of our company is built on the values of conducting business in a socially responsible and ethical manner. We respect the law, protect the environment, and embark on developmental projects in the community.’

Apusco’s values are included within its Ethical Code of Conduct. Apusco places high emphasis on its ethical and sustainable business practices. It involves employees, suppliers, and the members of local communities in which it operates in its strategic management processes. All these stakeholders are fully trained by Apusco in the Ethical Code of Conduct and they are expected to adhere to it.

Required:
Discuss FIVE (5) importance to Apusco for incorporating business ethics and sustainability into its strategic management activities.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "CSEG – May 2019 – L2 – Q6b – Business ethics"

  • 4 Marks

CSEG – May 2016 – L2 – Q6b – Strategy evaluation and control

Explain the term stakeholders and identify two groupings of stakeholders, focusing on their importance in corporate strategy formulation.

One of the important tasks in the formulation of corporate strategy is stakeholders’ analysis.

Required: Explain the term stakeholders and identify TWO groupings of stakeholders. (4 marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "CSEG – May 2016 – L2 – Q6b – Strategy evaluation and control"

  • 14 Marks

CSEG – May 2016 – L2 – Q2a – Strategy evaluation and control

Describe the four perspectives of a balanced scorecard and explain three problems associated with its use in strategic management.

 

The Balanced Scorecard approach has been embraced as an effective model for generating information to assist management in formulating and achieving strategic policies. It emphasizes the need to provide management of an organisation with a set of information which addresses all relevant areas of performance in an objective and unbiased fashion.

You are the Management Accountant of McGinate Incorporated, a local printing and publishing house located in the regional capital of Ashanti. Your CEO has asked you to brief him further on the balanced scorecard approach.

Required: In a memo to the CEO: i) Describe FOUR perspectives of a balanced scorecard. (8 marks) ii) Explain THREE problems usually associated with the use of this approach for strategic management. (6 marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "CSEG – May 2016 – L2 – Q2a – Strategy evaluation and control"

  • 5 Marks

MA – Nov 2016 – L2 – Q4b – Performance analysis

Describe the balanced scorecard approach to performance measurement, highlighting its components and importance.

Describe the balanced scorecard approach to performance measurement. (5 marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "MA – Nov 2016 – L2 – Q4b – Performance analysis"

  • 16 Marks

CSEG – May 2017 – L2 – Q6a – Strategy evaluation and control

Discuss strategic issues for Adama Group and explain how the Balanced Scorecard can be used to monitor performance.

The chairman of Adama Group, which is large and diversified, has expressed concern about the inadequacies of the present voluminous monthly reports submitted to the Board. He acknowledges that it compares budget and actual results for all operations, and that it contains extensive reporting of non-financial indicators such as customer satisfaction and factory performance towards Total Quality Management (TQM). However, he regards much of this as operational detail, and considers that the report should place more emphasis on strategic issues.

A strategy consultant is currently assisting the Group to implement a Balanced Scorecard to effectively monitor the performance of managers.

Required:

i) Explain THREE strategic issues that should engage the attention of the Board of Directors of Adama Group. (6 marks)

ii) Explain how Balanced Scorecard can be used to monitor and measure performance in Adama Group. (10 marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "CSEG – May 2017 – L2 – Q6a – Strategy evaluation and control"

  • 10 Marks

CSEG – May 2017 – L2 – Q3a – Strategic alternatives, analysis and selection

Discuss the impact of strategic alliances on companies and how they contribute to competitive advantage.

Strategic alliances have become an important part of the corporate world, with companies joining forces for various strategic reasons. A well-formed alliance can provide a competitive advantage to the companies involved.

Required:

a) Explain FIVE ways in which strategic alliances can impact companies.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "CSEG – May 2017 – L2 – Q3a – Strategic alternatives, analysis and selection"

  • 8 Marks

BMIS – May 2019 – L1 – Q7b – Management and leadership

Explain disadvantages of using a balanced scorecard in strategic management.

A balanced scorecard is a model of strategic planning and management implemented by an organization. It is basically a tool used to measure if the executions are in sync with the vision, policy, and strategy of the company. This tool can be used by different organizations. Though the balanced scorecard method proves to be productive in attaining a balanced review, it still has some disadvantages.

Required:
Explain FOUR (4) disadvantages of a balanced scorecard. (8 marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "BMIS – May 2019 – L1 – Q7b – Management and leadership"

  • 20 Marks

BMIS – Nov 2018 – L1 – Q6 – Introduction to business strategy

Explain the relationship between corporate planning and marketing strategy and identify sections in a marketing plan.

A Marketing Officer who has just been employed by NACAP Ltd has identified the need for a marketing plan for the company although the Managing Director and the wife, who own the business, do not share her view. She is convinced that there should be a corporate strategy to drive the marketing plan.

Required:

a) Explain FOUR (4) relationships between corporate planning and marketing strategy. (10 marks)

b) Identify FOUR (4) sections in the format of a marketing plan and describe the contents of the sections identified. (10 marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "BMIS – Nov 2018 – L1 – Q6 – Introduction to business strategy"

Elevate your professional expertise across key business domains with our comprehensive training programs

Our offerings

Contact Info

  • +233203701923
    +233543919232
  • info@knowsia.com

Customer

Get In Touch

Follow us on our social media and get daily updates.

Facebook-f Twitter Linkedin-in Envelope
Oops!

This feature is only available in selected plans.

Click here to view all plans

Click on the login button below to login if you’re already subscribed to a plan or click on the upgrade button below to upgrade your current plan.

Login
Upgrade Plan

If you’re not subscribed to a plan, click on the button below to choose a plan

Subscribe to a plan