August Strategic Case Study: Here is a look at the pre-seen
We spoke to our Strategic Case Study lecturer, Nicky Brouwer, about the upcoming Strategic Case Study Exam and the recently released pre-seen. She was more than happy to share her insights and expertise on the pre-seen and Case Study. This is what she had to say.
Insight on the pre-seen
Zoom is a very relevant case study modelled on Uber.
Interestingly, due to an ankle injury, I needed to spend the past few weeks using Uber to get around. Initially I was quite nervous, but then found the app easy to use, drivers friendly and enjoyed the experience.
If your writing this ICS I recommend catching some Zoom (Uber) rides in the near term (if you don’t already) to enable you to start experiencing the business. Remember though to refer to Zoom in the exam…In fact start calling it Zoom.
The commuter services offered by Zoom are sorely needed services, whether this be visitors to a city or locals commuting. It is one way that Government, in partnership or agreement with the likes of a Zoom, can possibly achieve goals of reducing traffic and pollution in cities while also feeding into the overall well-being of the population.
Zoom plays a potentially highly social and integrative function within the community. This is through bringing people of all walks of life together and providing a safe, reliable transport solution in cities with inadequate or over crowded public transport. Zoom is in essence an innovative supported IT platform that allows drivers to operate as independent contractors and links them to commuters.
When you’re next sitting in gridlock traffic expand your thoughts to think of solutions to alleviate the problem. Could a large company like Zoom be able to contribute to a solution?
I recommend that you research Uber, its financials, driver issues, growth path and funding solutions. You may be able to use some of this research in your exam.
Insight on the Case Study Exam
This case study has many potential avenues that can be followed in the exam. Which sitting you end up in does depend on the day. The major themes that come to light, include:
• Corporate governance – specifically introduction of non-executives, dilution of family dominance.
• Losses – what is behind the losses? How much is due to research & development that might not continue? What salaries have been paid? What are the future cash flow prospects? New companies do make losses for the initial years, but then profits start to come through. What is Zoom’s situation here, this may be expanded in an ICS question.
• Exit of Venture Capital partners at an acceptable return. Will this be via a stock market listing, debt, sale to purchaser (maybe competitor)? Note that debt and losses don’t go together.
• Intangibles – How to value them? Is there scope to capitalise any of the development costs? How can they be recorded (or not) in the financial statements? If purchasing a business how can those tangibles be treated.
• Expansion – organic or acquisition? Local or international?
• Ethical issues – this tends to arise in at least one sitting. Know your CIMA codes and stick true to yourself, explaining carefully any approach you suggest taking to an ethically challenged situation.
• Communication to stakeholders specifically if listed. Inadequate communication compromises value and stakeholder relationships. If a stock market listing will take place, then an Integrated report will need to be published going forward.
• Valuation of Zoom or another purchase target. Know the methods and suitability.
• Disposal of the bike business to raise funds. This is a possibility as Zoom are heavily invested here.
• What does Zoom require to operate – good networks so the App can be used and good quality city streets.
• The independent contractor status of drivers – how to honour this relationship and ensure it delivers quality.
To conclude, there are some key exam techniques that you need to polish up on before your exam and use during your exam. Make sure you do the following:
• Plan your answers before starting to flesh them out. Practice, practice and practice this. It is critical to ICS exam success!
• Allow your experience to come through in your communications. Let your responses flow.
• Every point well explained can earn you 2 or even 3 marks. Everything you say should be explained. In fact, start writing your emails differently and more clearly at work. Before pushing the ‘send’ button make sure your message is very clear, without repeating yourself though.
• Keep your communications at the strategic level remembering that the technical skills were examined in the OTs.
As you work through practice mock exams and become more embedded in Zoom and the Industry you can add to the above list. Ensure you practice communicating your thoughts and views, which although not theory, may be informed by a blend of theory, experience and knowledge.
Become a Zoomer and enjoy the ride!