A look into your Operational Case Study Exam
We recently sat down with our Operational Case Study lecturer, Sonia Weston, and had an interesting chat on the upcoming Case Study exam. As one of our first lecturers to achieve a 100% pass rate in her class, Sonia knows how to prepare students for exam success.
So, what are the principal areas to focus on and how should you approach the information in your pre-seen?
According to Sonia, you should begin by thinking of your OCS exam as a job interview and the pre-seen as the research you have conducted ahead of the job interview. The aim of the pre-seen is not to provide you with the questions or answers, but to enable you to supply well informed responses to the tasks set in the exam.
This case study exam will have a strong focus on cost accounting. “Ensure you know how to prepare budgets, and to advise about short-term changes in products, volume and prices,” says Sonia.
“It will be essential for you to understand the structure of the business featured in the case study as you might be required to demonstrate your ability to communicate across various functions involving finance and non-finance staff,” she added.
She suggests you spend time understanding the task required of you in the case study before you attempt to answer.
Below is an overview of the August 2018 Operational Level pre-seen.
The pre-seen - Overview
What is it about?
• Thomas Fine Teas (TFT) is an importer of tea leaves in Deeland, which they then use to produce their own distinctive blends.
• TFT relies on highly skilled tea tasters to create a well-balanced and consistent flavour using the leaves imported from different origins. This is a skill that takes years to develop and so staff retention is key.
• They sell to three major supermarket chains in Deeland as well as two wholesalers, who then go on to sell on to convenience store chains. They also have four corporate customers, one of which is the national government.
What kind of company is featured?
• Thomas Fine Teas (TFT) was established over 200 years ago in 1805, by Joseph Thomas who had developed a liking for and the ability to taste the difference between tea leaves from different regions.
• It is a privately-owned company and is under the control of the descendants of Joseph Thomas with 3 of the 5 directors being related.
• TFT is in the tea blending business, producing a variety of blends of black tea and green tea, as well as infusions. Budgets and standard cost information have been provided for the three blends of tea produced as well as financial statements.
• Sales account for approx. 11.3% of the black tea market and 16.5% of the green tea market in Deeland, a nation where over 87% of the population drink tea daily.
• In a rapidly growing market, TFT have experienced a decline in overall market share over the past five years as consumer demand for black tea decreases and demand for green tea varieties increase.
What problems does it face and what strategies did they use to overcome these problems?
• TFT faces declining market share as they have not responded to changing consumer requirements.
• They must remain relevant and respond to market trend changes to survive, by carefully monitoring the market and responding in the most suitable way.
• Opportunities to expand their customer base and expand their infusions and green tea offerings exist. These should be carefully considered by TFT.
• As an importer, TFT is exposed to movements in exchange rates and import duties.
• Increased competition from Butler Estates, the only tea plantation located in Deeland, who not only grow their own tea, but also package loose-leaf tea is seen as a threat to the operations of TFT.
How IBTC can help you prepare for your case study exam:
Exam Prep Classes for the August sitting begin on 14 July for Sandton and Cape Town. To sign up go to www.ibtc.co.za and click on the book now button and secure a seat in one of our classrooms
IBTC boasts a remarkable pass rate for its Case Study Exam Prep Classes, ranging between 80%-90%.