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Jamie Carrahar

Chartered Management Accountant

Month

July 2015

Threat of Fake Perfume

Apple ‘fake factory’ raided in Chinahttp://www.bbc.co.uk/news/business-33681929

Whilst this article specifically relates to Apple, the threat of intellectual property theft remains a valid one for Scent. 

I’m sure you all will have seen fake fragrances being offered either in the UK or abroad where intellectual property rights may not be recognised. 

Consider the impact this could have for Scent, if the market for luxury perfume became flooded with cheap, fake perfume that may damage the Scent brand and lead to negative publicity from any associated celebrity. 

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Rise of Budget Stores

B&M Value Retail sales growth slows in UKhttp://www.bbc.co.uk/news/business-33563152

B&M Value offer branded products at prices significantly below the prices charged by supermarkets. Mainly due to purchasing production over-runs and a completely different fixed cost structure. 

However consider how supermarkets such as Merchants are fighting back. Increasing their own-branded product range, by requiring their suppliers to reduce prices and entering price wars. 

Do they pose a threat to Merchants? Consider preparing your own Porters Five Forces analysis of Zeeland’s supermarket industry. 

Living Wage – UK Aim

Supermarket workers have to claim £11bn benefits, charity sayshttp://www.bbc.co.uk/news/uk-32272817

The UK government recently announced plans to scrap minimum wage and instead offer the “living wage”, whereby employees would be paid a wage relative to the cost of living. 

Whilst the supermarkets have to pay minimum wage, this article highlights that a number of employees still have to rely on benefits in order to live. 

Consider the implication of such an implementation in Zeeland and the impact this could have on Merchants. 

Supermarket Price Wars

Supermarket price war ‘hitting food supply firms’http://www.bbc.co.uk/news/business-33592415

Consider the ethical implications of supermarkets increasing pressure on their suppliers to reduce prices, the potential impact of suppliers entering administration or liquidation as a result. 

This could link Porters Five Forces from E1 with Pricing Strategies and short term decision making from P1 and potentially the financial reporting treatment for potential legal claims as a result. 

Small Business Commissioner to tackle late payments

Small business commissioner to tackle late payments 

http://www.bbc.co.uk/news/business-33667447
Small business commissioner to target late payments

http://www.bbc.co.uk/news/business-33667024

An interesting point to consider for any exam, in that regulation imposed by the UK Government within the Enterprise Bill to create the Small Business Commissioner to tackle the estimated £26bn of late payments. 

Supermarkets are renowned for using their strong purchasing power to drive down prices, milk being one of those regularly on the headlines and also force suppliers into extending payment terms. 

Working capital cycles calculated by comparing receivables days, inventory days and payables days. Supermarkets based on their high inventory turnover, lack of receivables days and extended payables days, have negative working capital cycles. Such large cash surpluses are then used to fund expansion, acquisitions and further investment into technology and infrastructure. 

Consider how this could impact on Merchants, consider the impact on their working capital cycle, cash flow and possible reputational damage for failing to settle payments with suppliers in a fair and just manner. 

Charging for carrier bags

Should shoppers in England pay for plastic bags?

http://www.bbc.co.uk/news/uk-33648089

Environmental and ethical issues arising from the sheer volume of carrier bags given away are a likely to appear within your exam. 

Scotland and Wales have already started charging customers for carrier bags, most supermarkets offer “bags for life” and offer reward points for reusing carrier bags. 

“I hesitate to say this, but I actually quite enjoyed the format of this exam!” – by a February 2015 Operational Case Study Prizewinner

“I hesitate to say this, but I actually quite enjoyed the format of this exam!” – by a February 2015 Operational Case Study Prizewinner

https://connect.cimaglobal.com/blogs/operational-case-study-exam/%26quot%3Bi-hesitate-to-say-this%2C-but-i-actually-quite-enjoyed-the-format-of-this-exam%21%26quot%3B—by-a-february-2015-operational-case-study-prizewinner/Richard

Feedback from another Global Prizewinner, Richard, on his success in February 2015.

His comments on application certainly ring true following the examiner’s report stating that students who failed, generally produced textbook answers and lacked any application to the pre-seen.

How did the case study exam compare to what you had expected? 
In general, it was in line with my expectations. The exam wasn’t just asking me to repeat definitions and facts that I had memorised, which is a structure used by many exams. It was more about testing that I really understood the context behind different parts of the syllabus, and that I was able to communicate these concepts clearly and concisely. I hesitate to say this, but I actually quite enjoyed the format of this exam!

The main thing that surprised me in the exam was how I was expecting the questions to relate more closely to the pre-seen material. Most of the questions were quite general and could be applied to any company. The challenge was then working out how this should be applied in the context of the bottled water company that we were looking at.

I recommend reading Richard’s complete blog post and reflect on his tips for success.

Have a clear study plan and study frequently in order to build up knowledge and skills

Evelina, Global Prize Winner for Operational Integrated Case Study in February 2015, has shared her thoughts on the exam.

You can view the whole article here: –

https://connect.cimaglobal.com/blogs/operational-case-study-exam/%26quot%3Bhave-a-clear-study-plan-and-study-frequently-in-order-to-build-up-knowledge-and-skills.-%26quot%3B—by-a-february-2015-operational-level-case-study-prizewinner/Evelina

Her biggest challenge and how she overcome it certainly provides food for thought for others who have either passed a E1, F1 or P1 under the 2010 syllabus or have received an exemption from a previous qualification.

What was your biggest challenge and how did you overcome it?
My biggest challenge in the Operational Case Study preparation was F1 course content since I received an exemption from that exam. However I still decided to study for F1 exam in order to make sure that I have the required knowledge for the case study. This meant I had to study for F1 and the Operational Case Study simultaneously.

I tried to cover the main topics of F1 and understand the accounting treatment, therefore I followed the BPP online lectures and also the Operational Case Study Workbook was very useful including many practice examples.

Your Management Exam Toolkit

2015.07 – Your Management Exam Toolkit

CIMA have published an interactive toolkit that will help signpost you to the resources available on their website to help you prepare for the Management Level ICS exam.

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