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CIMA Strategic Case Study (SCS) frequently asked questions and answers with Astranti Peter StiffWatch the useful CIMA Strategic case study (SCS) question and answers session of Peter Stiff
This is very useful video before attempting the exams and a quick refresh before writing the exams enjoy the video!!!!
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Text Version of the video below
hello and welcome to this video for the strategic case study Q&A session now apologies for the issues that we had earlier or we couldn't access the YouTube stream because a lot of you posted a lots of different questions for the I would record a video answering those questions and then just post it as a video online so with apologies for that but those of you did ask questions you will get the answer to those questions now.
Can start very top of the list of questions from Mohammed who asked that they have done or they're planning to do the five astrology mock exams including the mock exams on are those sufficient for getting the best score but again that's quite a difficult question to answer in theory that should be enough to pass but then it all depends on you if you are putting in the effort in your mock exams if you are taking on boards your feedback then it should be enough if you are not really putting the effort in then it will most likely not be sufficient it's really all comes down to you all that we as tutors as tuition providers could do is provide you the tools to help you pass the exam there's no golden way of just teaching you and you know if you as long as you just do this one thing then you'll pass easily without doing anything else about putting any other effort in it's it's ultimately about you and that is a great way to prepare yourself though because this exam is more about your ability to identify requirements the ability to plan effectively your ability to write effectively and to produce a solid well-rounded answer so as many mock exams you can take will put you in a better position it's not just the Australian mock exam so you should be open as well you should be looking at other tuition providers mock exams should be looking at the Pearson vu and the CIMA ones you can access for free online as well because of all of these will help you pass and it's about getting as much training in as much practicing as possible as that question here relates to paragraph senses how much to cover 15 mark tasks now the answers for 15 marks generally are about seven to eight paragraphs long and this is okay but this is pretty much every single word is absolutely imperative and also a lot of these humor answers don't necessarily fulfill some of the competency requirements given by CIMA.
What we suggest is actually that you write around a paragraph for every Marks may sound like a lot and it is a lot but that way you can be far more sure that you will be putting in the amount of effort the amount of content that is required to get the mark and we generally believe here at strategy that we try to over prepare our students almost because it's best way to repair than it is to be under prepared so we teach them to write as much as possible to write as comprehensively as possible it's even the best possible chance of passing a weapon here relating to a drivers cars should zoom continue investing in drivers technology or should they buy more car well they don't actually buy any cars themselves at the moment all the cars are leased and they are not even least through the companies well at least with driver problem car manufacturer car we tell our partnerships and they do have a system in place now or they have a plan in place to only allow drivers to use vehicles that are less than three years old and vehicles of that are hybrids or electric that's one of their plans at going forward so they are moving in a sense in a different direction with regards to cars and the cars that will be operated but there is no intention to actually have their own cars to buy cars and then lease them to their independent contractors or to purchase them and then give them to many contractors to use and that's potentially another one of the advantages of having independent contractors is they then have to provide their own vehicles and that's why we don't have you know a lot of assets because if we had to buy all these couple audio loss-making company we have to buy them all these vehicles ourselves tens of thousands if not hundreds of thousands of vehicles it would be incredibly expensive and it would be very difficult for the company to be a profitable technique given it's not even profitable the member without all these expenses and with regards to should they continue to invest in driver less cars because highly unlikely that that is the direction the company is going to take the pre seen repeatedly mentions about drivers cars repeatedly mentions about the investment that is putting in how much minutes putting in and the potential payoff of it and the actual CEO of the organization.
CIMA has specifically said that this is the future for the company this is the future for the industry this is a future for Transport in general so I find it quite unlikely that she's suddenly gonna turn around and say you know what we're not actually gonna do this anymore they're gonna go to some Oh a completely different direction because it very unlikely a particularly driver-less cars there's very much a need to invest now because this is going to be the future generally speaking is going to be the future we know the enjoyment the government actively likes to contribute them to invest into a disruptive technologies so particularly within jaymund it's going to be the future and as a result of that we need to be investing now we don't want to be late to the party so to speak because if we are late we are going to be behind there is going to be the chance that other organizations other companies will set the industry standard that is to say the system that they have in place is the one that everyone has got to use or there's perhaps a few that everyone can use is there's not going to be hundreds of different systems for driverless cars because they need to be of all of each other a car manufacturer is not going to want to make ten different versions of their new car to fit ten different driverless car systems so the the system that ultimately is picked not just in Jena but potentially globally is going to be the system to use and so it's very important to be in on the ground floor helping shape the future rather than having to react to the future another question here relating get to be venture capital.
Assume in the venture capitalists do not produce more funding and do not provide more funding what are the best sources to obtain a finance and it's a good question and there it's plenty of ways in which they could raise plants of raising further equity by selling to private investors rather than the venture capitalists there's the chance of selling a portion of the company to a larger business there is the potential of taking out debt financing there's no gearing of the organization at the moment although a bank may be I'm willing to lend vast quantities of money to a company that is currently a loss making the one lighting is particularly relevant for this presea based on the fact that uber and lyft the two companies that are most relevant to the two companies given in the pre seen have done it recently is the potential to raise additional XE fighting by launching on the stock market by undertaking an IPO and that's why I think is one of the most likely issues for this exam is because of that need for funding it's because of the fact that it's happened in the real world that so many actual companies that are relevant to this particular organization such as lyft have undertaken an IPO uber of undertaking an IPO so I think that is potentially the best way that they would have raised a substantial amount of finances substantial amount of funding so that would be my my key suggestion for raising signal in quantities of finance would be a to undertake an IPO but it says is it really necessary but real-life examples and mention the names of such as uber it's not completely necessary and Sina themselves have said that there are no direct marks for using industry examples however saying that the CIMA Examiner specifically said in their examiner reports that they would like people to use real-world examples.
Because it illustrates that you've done the research it illustrates that you are thinking strategically because you are applying it to real world situations rather than keeping it completely theoretical and hypothetical and it readers and wait to your points as well because if you presume while you're talking about IPO cinemas then we'll win to raise additional finance on the on the stock market other companies such as uber such a bliss to have being able to generate vast amounts of equity financing in this fashion and therefore suddenly adds a lot more weight a lot more depth to your answer because you are showing that there is precedent for it working and that is going to add value to the response is going to add weight to the response and make it sound like a much more practical solution or much more potential a potentially suitable and successful solution to the other financial funding problem and are we required to address a point to every point in real depth and make a point I have three to four sentences or can we make them shorter well generally we suggest that you would make your paragraphs around three sentences long so you would it introduce the point explain what apply the point and then evaluate the point so you talked about funding for example so joke about we're gonna need additional funding because we put these expensive of expensive expansion plans we could raise it by methods such as undertaking an IPO to raise equity financing such as companies like uber this will also add prestige to the organization it will also add security to the organization and that would be more your evaluation points more you explain me the kind of advantages of doing it the the potential knock-on impact of doing it for the organization which is how you as his fusion think you don't think in the here-and-now necessarily or exclusively you don't just think about what it's gonna have the short-term reactions or the short-term impacts of your decisions you think of the long-term as well now Jenny asks about what other strategic aims of a zoom and they're looking to driverless technology and yes they are looking into drivers technology but for strategic end you think more about the the mission of the organization the mission of the organization is to connect people is to bring people together to improve the safety and security of Transport so everything that you are suggesting everything that they are doing etc should be linked ultimately to those misstatements and to those goals that were mentioned in the pre-seen.
so if it doesn't help connect people if it doesn't help bring people together more saviors and rapid transport to provide transport more safely etc then it arguably isn't going to be something that the company should be doing so early as well mentioned about driving their own castle producing their own cars and just purchasing vehicles now having their own vehicles is not going to help them provide safe and secure traffic or so there's any better than the system they can be how so is it potentially not something they should be doing particularly given that it's going to cost so many tens if not hundreds of millions of J dollars to do and I don't think they potentially should be doing that so the mystery games are ultimately to do with connecting people so actually if you think about alternatives that they could be doing they potentially not just be looking at the transport market so anything that connects people as well different technologies that connect people have apps smartphones etc are there any other more social media type apps that they could be looking at creating that will help connect people together that's almost more where they would be going in terms of being connecting company now potentially isn't related to transport but they could there are plenty of other sort social media things that could be related to transport things like TripAdvisor things like booking comm all these sorts of apps which are quite social in their interaction above a lot of talking to people who are arranging to meet with other people etc.
It's again it's related to travel but it's a different kind of travel than what is currently being on offer but what you always need to suggest when you are talking about strategic games is it's very easy to think of the things that the organization currently isn't doing but also we need to think about what the organization company is doing so a strategic aim your first strategic game if you are thinking you know what suggestions you're gonna make for the company is to always keep what they are doing well and keep doing it well look at what they are doing well why they are giving you well and take those lessons and use it for other areas of the organization they should never compromise on what they are currently doing well and particularly if you are given a suggestion which ultimately looks at potentially going against what they can't be doing well then you should be really sure to say we shouldn't be doing this because it goes against what we are currently doing what makes the business the business just states that as the three marks I've written already managed to get one integration mark out of the 27 available now individual marks are quite tricky to say exactly what should be doing to get them because they are quite arbitrary they are White's subjective in their application whether a novel is going to give you the model one way that I would look at integration Marx's it's ultimately the quality of your script as a whole so it's not looking the quality of your content in your individual paragraphs it's looking for quality of it as a whole does it link together nicely do the two sections linked together nice to do does your work flow nicely do you link the various different parts of the syllabus together and a good way of using of doing that is by looking at the SAF model the SAF model is good for integration marks because it looks at all different areas of the syllabus he looks at the suitability with your strategy because your acceptability looks at your stakeholders it looks at the risk is it in appropriate and acceptable level of risk that's your PD and looks at your funding your resources your feasibility of the project do you need to hire more staff again a stakeholder thing do you need to raise additional finance a an apt topic and therefore it's linking all the different bits of the syllabus together effectively and that is what is going to get your integration marks so linking the syllabus together applying the syllabus effectively and making sure the quality and the flow of your script as a whole is good are the ways in which you can achieve those integration marks how the syllabus change effect these strategic case study just in case you are not successful well hopefully you will be successful but these strategic case studies syllabus is not changing until February 2020 .
it's not like the objective test which will be being set under the new syllabus as early as November it's not until the February 2020 exam so the November 2009 exam will still be sat on the existing syllabus also with regards to the syllabus change very little is actually changing with regards to what you will actually be expected to do the way it is being marked that's going to be changed and we're going have some clarity from CIMA over the next month or so with regards to that and they're moving away from these core competencies to the core activities and the core activities are going to be less focused on specific topics and they're going to be more about the actual quality of what you are writing so questions could have a range of core activities in them rather than it being a case of this question is a technical question this question is a people question so from a student's perspective I actually think it's going to be a lot better because it's going to be judging your scripts far more holistically rather than very specific requirements and that's probably a lot of reasons.
Why students fail because they have potentially not made even though they've been very good overall they've not made specific met specifics or checklist requirements for what they have achieved but they're doing away with that they're also doing away with a minimum competency requirements or core activity required since it will now be so in the past you could have passed overall but you could have failed warned now of your four competencies you know you passed this when you pass this when you passes when you felt this one and you passed overall because you didn't meet the minimum competency requirements here you failed they're doing away with that as well so if you meet the past Marco rule you will pass regardless of how well you perform in those core activities so if you pass this one pass this one pass this one fail this one you'll still pass overall if you've got the minimum requirements overall so with the right classification of drivers do we classify them as employees do we classify them as independent contractors or there's these pre seen says that they are independent contractors and there will potentially be debates about this in the exam because they're in more in a legal sense you can't just call someone independent contractor if you then treat them as an employee the law will say that you are treating them as employees but only they are treating them as employees in this case because they are not getting the kind of benefits they are not expected to work at particular times etc they are well within their rights to choose exactly when and when they are and aren't going to work so I do think they are independent contractors the issue is is whether it's fair to employ independent contractors particularly if there are issues that the company is charging too much as price gouging and therefore people I'm using zoom services the independent contractors aren't getting jobs they're not getting paid because there's no work available because of actions taken by the organization.
I do expect there to be potential issues around this perhaps people wanting to be registered as employees then of course there might be issues over whether they have to use their own vehicles whether you can ask employees use their own vehicle however they're going to have to work on the legalities of that situation there will be you can give them the right to their own vehicle Berlin might have to pay them for the right to use their vehicle etc question from Thomas here on integrated reporting and how much they are going to be expected to know about this and the financial reporting standards etc now with regards to the case study is going to be very little on financial reporting standards and things like this is tested F 1 and F 2 level it's not going to be a big part of the strategic case study and you're not going directly testing it for integrated reporting they already do have some of their been your CSR reports and things of that which might be potentially linked into that is in do they have to link that with their financial statements and things like that but it's it's quite a small companies over the operating in one area at the moment so it could be quite it'll be quite unlikely for there to be too much on that at this point in time obviously might be giving more information in the unseen which may change that and with IT and information strategy risks do I think this will be a big issue will things come up on it I do think that it could be quite a big issue it was mentioned in these being the risk report given to us in the the pre seen with the tech companies is always going to be an issue at the moment they get a lot of their software from third parties that could be a potential risk if those focus of our business they start charging too much if they update their software and it's not compatible with the other software's that we use in creating our apps that could be an issue for lists what I would suggest doing is looking at berm up from very much the Vitara more pitama is a very good way to analyze risks because it gives you the options to solve those risks.
I think of transfer except the juice avoid etc now obviously if it's a fundamental part of our app we can't avoid it because we need it at the same time if it's gonna potentially have a massive impact on a business don't just accept that this so could we transform or of our software to an outsourcer specializes in managing those software if you go through those different options and you analyze which ones wouldn't wouldn't work that is a very good way of fleshing have you asked which is what you would also asked here is how we add weight to our answer and also if investment present comes up is it appropriate to use the SAF model now those of you listen to me speak before in my master classes except for up it is a very appropriate model for many many things in my favorite models to suggest to use just because it does cover everything vestment appraised it was a perfect time to use it strategy does the end result type our strategy no matter how profitable is is this going to help us connect people is going to help us provide safer team and transport if it isn't then potentially it's not what we should be doing is acceptable to our stakeholders is it going to have an appropriate level of risk can we fund it is it going to be feasible in terms of the resources that we have in fact it would be a perfect model to so I wouldn't actually suggest any other model other than the saf model well there are other models to use but the SAF model is the most appropriate model to use so I wouldn't suggest a better model than that Hanna is asking you about hedge accounting hedge accounting is very unlikely to come up at the moment because it until they start doing anything aboard there is going to be absolutely no neat mean to the hedge accounting in the first place if they do decide to trade abroad set up overseas is that have been it becomes an issue but because they would meet you would need to be considering that in the first place before it would come up.
I think it's gonna be more of an add-on question to a potential opportunity to start trading abroad rather than there being a whole question about it now for example in previous pre seen it was a whole section the pre seen about hedge accounting and they did a lot of business overseas so in that instance hedge accounting is a likely issue in hedge accounting you did to come up but it's not a particularly likely issue for this particular precinct because at the moment there is no they would have to change what they are currently doing for hedge hat accounting to even become an issue so you're already putting in potential hypothetical sea situations in place before it even becomes slightly relevant so I don't think it's going to be a huge issue and someone else actually has already answered your question there about it not actually been relevant until it has be altered they start trading abroad because they're about recording but unfortunately we weren't able to record the actual live class that's why I've been recording this video for you now of course when you see it of course it will be already relevant it will be up online yes we could get a question about drivers wanting to be known as employees there are obviously benefits to them for for this as in they get employee protection they get guaranteed of much county wage of other with potential issues that they might be put on zero hour contracts or things like that and that could be an issue for them as well the appropriate way to deal with this is they do strike as you suggested here is that it's very easy for them to get other drivers and they're hiring lots of new drivers and all these things independent contractors at the moment so unless the your on mass it might be quite difficult for them to actually yet offer for the the independent contractors to have linked in the art however the public would generally be on the the independent contractors side to be on the drivers side because it's always the case when you've got a massive corporation is there's already given these people you know a tough trip or tough no deal in terms of what they are offering them or they're giving them.
I'm guaranteeing them wage the UK it's been all this stuff about zero hours contracts etc so the appropriate way to handle it would be to consider the views of all stakeholders to consider both parties to try and get them on a negotiating table and then see where that takes us now can't suggest exactly what they should be doing yet because we have no idea it's a hypothetical situation we don't know what if they are striking ball of their threatening yet we don't know what they're asking for the moment these are all questions that would need to be answered in the unseen but always a starting point with regards to anything like that with like negotiations etc is to start from a point of collaboration and negotiation rather than trying to be dismissive about it can we say that all the venture capitalists or the shares it'd be very difficult to say that I don't think that would be the case at the moment they the owners of the company would definitely still have a significant portion of the shares venture capitalists will have a majority of the shares I think they'll probably have their 50 to 60 percent of the shares potentially more but they won't own all 100% of it because if they did it would be unlikely would be necessary the owners would still be having as much power as they can because the the venture capital to to put other people in place although venture capitals jhumri do sit back a bit and it doesn't seem like they're getting too involved in the running of the organization you also don't know how many venture capitalists there are now it could be that it was almost on their nose on a crowdfunding type thing for venture capitalists and they've got hundreds and hundreds of venture capitalist firms who have all invested a very small amount of money in each or it could be that there's a couple who have invested hundreds of millions of J dollars in each but it definitely will it more than like Aniston to be shareholdings by you the owners of the company.
How do you know how much money is being generated from the the bike-sharing versus the ride hailing was the ride-sharing and yes that would be a good thing to know that wasn't given to us in the pre scene but if we are given it the wrong thing that would be good about it which you could determine the profitability of each particular section you could determine whether or not the bike sharing was vastly more profitable than that the right paving service and then you could take appropriate actions if if bike sharing is so much more profitable then perhaps we need to focus more on building the right of a bike sharing part of the business should soon give up three shares to managers that's potentially a way of offering bonuses etc it would be difficult to do right now because the companies I've received are profitable and so that you could argue if the shares aren't really worth too much and it could be very difficult for them to to make anything of the shares because the the company is a private company at the moment so it's not like they are a tradable commodity to the same extent a question about a data breach happening so if a data breach had happened it measure be stolen by hackers it should they make that public yes they should because it's convenient ethical to not release the information and uber if you're asking about interests examples did the same thing they had a lot of information stolen including confidential customer information credit card information etc and they didn't publish it they didn't release it and I really found out a long time at later and that actually had followers of an impact on the bleach itself so they should always mention it they should always let people know and let them know to take appropriate action if need be it will annoy the public yes but it's half the damage that it would be if you let it go on how it made betas be used well betas may be used particularly if the company is trying to launch on the stock market and to come up an appropriate price for the organization as a private company.
There is no direct price for the company yet so they use industry betas to form an appropriate price of appropriate learning based and things like that method of analyzing the wealth and worth of the organization so looking at the industry basis of other transport network companies as how they may be used in the exam sounds asking how do you make sure that the you fulfill the competency requirements I didn't say the companies were important in terms of you get to meet a certain amount but there is no different way to answer a ten question business question people question ease your question it's all the same don't waste your time trying to identify which question is in which competence so I wouldn't bother doing that just answer the question I was just to put bow your head answer the question asked and you'll be fine you'll past this exam question about all committees yes there was no real mention about the audit committees or whether there was an audit committee if they do list on something they'll have to have an audit committee and so that would be potentially something I would suggest if you were talking about how they can improve their internal auditing how it improve their internal risk management because the job of the audit committee to install that throughout the organization so just looking through final questions I don't see any more on the on the youtube list so I'll bring this video to a close again sorry for the issues we had earlier with either live chats it just wasn't working for us here we were frantically trying and restarting it and creating new ones and it just was not working YouTube just was not working for the particular at the particular time for it so again really sorry about that I know you were giving up half an hour of your time for it's and we sorry didn't want that to happen but I have the corner of video now hopefully asking answering all the questions that you had posted into that chat group so thank you very much for for watching this video and to get in touch if you have any other questions and I wish you the best of luck in at your exam next week.
