Achievement Ladder Questions Flashcards
Value Chain Analysis
Porter’s Value Chain - identify any issues or benefits (question dependent and link them to the below)
1. Primary Activities
* Inbound logistics
* Operations
* Outbound logistics
* Sales/marketing
* After-sales service
2. Support Activities
* IT (Tech Development)
* Firm Infrastructure
* HR Management
* Procurement
Evaluating Negative Press
Ethical Issues
Identify pros and cons
1. Typical pros of being considerate
* Caring employer
* Does it link with our Values?
* Proactive
* Possibly cheaper
* May reduce press (negative)
- Typical cons of being considerate
* Could be considered bribery if money is involved
* Admission of guilt
* Sets precedent (very important if legal dispute)
* Could be expensive
* No guarantee of it not getting in the press (where NDA’s are involved, how robust is the NDA?)
Risk Register
Robobryce’s Risk Register
Pros
* Comprehensive stakeholders (employee’s, customers and suppliers)
* Comprehensive risks (operational and strategic)
* Maintains profitability by focusing on areas that threaten long term profitability
Cons
* Lacks any mapping / scoring / prioritisation (urgency vs importance)
* Lack of H&S for customers or employees
* Poor mitigation / lack of detail (ie. what will we do if risk occurs)
* Not enough risks on there (5 for a company that has revenue exceeding $14b)
Staekeholder Management
Identify stakeholders (customers, shareholders etc.) and use Mendelow’s Matrix to identify them
MM = power vs interest matrix
- High Power, High Interest = Key player (shareholders)
- High Power, Low Interest = Keep satisfied (Government)
- Low Power, High Interest = Keep informed (employees)
- Low Power, Low Interest = Do nothing
Stakeholder Communication
- Who (to) - affected stakeholders
- Who (by) - CEO & HR usually (could be senior director responsible for the area)
- What - relevant information
- Where - the format (email, phone, intranet, email etc.). As Robobryceis such a large company , formal public announcements will usually be required.
- When - ASAP, after X amount of time
Consider that communication may need to be two way and give stakeholders an opportunity to give feedback to us.
Dividend Policy to Maintain Share Price
If Share Price has fallen, should we raise dividends to maintain share price?
- Pros
* Signalling effect - indicates we are still feeling positive (market confidence)
* Affordability - Robobryce’s profits this year indicate we could raise dividends by a certain amount (check the maths of the question)
* Could satisfy shareholders and boost confidence - Cons
* Clientele Effect - could create expectation
* Poor use of cash - dividend may not be effective anyway, could invest it in research or H&S
* Could satisfy shareholders
PESTEL Analysis
- Define PESTEL - a tool to assess external environmental factors
- Try to analyse the factors and have one pro and one con for each letter
- How do customers’ PESTEL behaviours affect our own image / reputation / finances
Scenario Planning
Define scenario planning - a management tool to evaluate alternative scenarios of the future and plan strategies for those. Not for specific projects but for the wider environment and possibilities.
- To assess potential responses to new business proposals, scenario planning will allow us to:
* Evaluate attractiveness of projects - customer projects are identified as being big commitments (risk register)
* Encourage adaptability - by preparing for multiple futures. We also know our demand is cyclical (risk register)
* Advising customers - by evaluating the future we are better placed to advise our customers on their needs. (Customers do change project specifications - pre-seen)
* Identify factors that could affect demand for our products
* Supplement other strategic models - could combine with PESTEL, SWOT etc. with one driving the other
Transaction Risk
Strengthening home currency
- Define the general discussion around transaction risk and currency movements
- Explain the situation of invoicing in one currency, then the other
- Assuming that our currency is strengthening, the two sides are that:
* If we favour our invoicing, we get certainty over the amount we receive, however it’ll be more expensive for the customer and makes our prices less competitive
* However, if we favour the customer, although they get certainty over the contract value by paying in their currency, we would end up with less money
Hedging Techniques
Forward Contract
* Fixed commitment between two parties to buy/sell at a fixed rate in the future
* Adv. simple with no up front transaction costs
* Disadv. Cannot be amended so may carry downside risk
Money market hedge
* Uses the relationship between interest rates and exchange rates to manufacture a forward rate
* Involves taking a loan on the value of a future invoice or payment, exchanging it and growing the currency using the interest rate
* Adv. creates certainty over the cost and value of future transactions and can be reversed
* Disadv. Fixed so no upside risk
Currency future
* A currency future is a standardised contract to buy or sell a fixed amount of currency at a fixed exchange rate at a fixed future date, and it is achieved by entering into a futures contract that is completely separate from the underlying transaction.
* Any loss on the spot market should result in an equivalent gain in the futures market and vice versa
* Adv. futures contract can be ended at any point before the settlement date, which is useful is the date of the underlying transaction changes
* Disadv. Cannot be tailored to transaction requirements
Currency options
* Similar to other futures contracts, however, it gives the bearer the option to redeem not the obligation.
* Adv. protects the owner from downside risk as they can just not redeem
* Disadv. Premium is required to secure
Answer should include a description of the technique, simple illustration and advantages/disadvantages
