Jamie Carrahar

Chartered Management Accountant


July 2015

Writing a report in the Case Study exams

2015.02 – Writing a report in the Case Study exams

Report writing is a valuable skill within the workplace, and CIMA have published another useful article on how to write a report within the Case Study exams.


Writing an email in the Case Study exams

2015.03 – Writing an email in the Case Study exams

CIMA have published a guide of how to write an email within your case study exam.

Although this has been covered during previous sessions, I thought this would provide you with a useful overview from CIMA’s perspective

Understanding roles to help your case study approach

Understanding roles to help your case study approach!

A recent article from CIMA highlighting the importance of understanding your role within the case study environment in order to frame your answer within the context of your role, the organisation you work for and ultimately to add value!

Mergers & Acquisitions – Analysis for Scent

Not All M&As Are Alike—and That Matters — HBS Working Knowledge

Joseph Bower (2001) identified five reasons why acquisitions occur, namely

  • to deal with overcapacity through consolidation in mature industries;
  • to roll-up competitors in geographically fragmented industries;
  • to extend into new products or markets;
  • as a substitute for R&D; and
  • to exploit eroding industry boundaries by inventing an industry.

In his article he also goes on to explain how to overcome the challenges presented from each M&A strategy.

Well worth a read as Scent may be looking to acquire another fragrance house or consolidate production, which will require you to apply financial accounting and reporting aspects to your answer along with details of the business strategy and project management angles too. Performance management may crop up in terms of investment appraisal, financial and non-financial performance measures and finally risk management.

(Thank you to Kevin for sharing this with me!)

Pricing Strategies

Do pay-what-you-want pricing strategies really work?

Whilst I don’t think for one minute that a pay what you want strategy would be successful for either Scent or Merchants, the point is still worth considering. 

Is their current pricing strategy correct? Is it sustainable within the current market? Consider Porter’s Five Forces Analysis to understand the power of buyers, suppliers and competitiveness within each respective industry. 

Solar Energy Subsidies

Small scale solar energy subsidies set to end

BBC news this morning have reported on a potential cut/withdrawal of subsidies originally offered to support the renewable engery industry. 

Throughout the Merchant case there is reference to CSR and green initiatives, which maybe based on current support available in Pictland that could subsequently be withdrawn. 

Consider the implications of grant funding and the accounting treatment from a financial reporting perspective, the working capital implications from a management accounting perspective and potential damage to their reputation from withdrawing solar panels. 

Apologies – Reputational Damage Limitation

Sorry: Is it too hard for ‘macho’ company bosses to say?

An interesting BBC News article this morning. 

It is worth reading and reflecting on how an apology may be required to resolve an ethical issue in your exam. 

P. & G. Innovation

An incredibly insightful application of Ansoff’s Matrix for P. & G., extending the product lifecycle of a 50 year old laundry detergent by diversifying into a range of complimentary products in order to increase revenues and profits.

I suggest you reflect on how such horizontal diversification could crop up within the Scent case study, with new complementary products such as moisturisers, shower gels et al to differentiate themselves from their competitors. The lessons for leaders are well worth considering too, to contextualise the leadership element of your E2 syllabus.

P. & G. Share Prices

Another interesting article on P. & G., According to Zacks, “P&G is known for its strong brand recognition, diversified portfolio, aggressive cost savings efforts, rapid growth in the developing nations, impressive product development capabilities and marketing prowess. However, P&G operates in a challenging environment. It is struggling to grow sales due to significant negative Fx impact, market share erosion and lower consumption in several countries due to pricing action, and macroeconomic headwinds in many key markets. Moreover, its portfolio restructuring and productivity initiatives, though progressing well, will take time to boost earnings growth.”

Financial reporting issues surrounding the accounting for subsidiary disposals, foreign exchange translation and cash flow statement implications could appear in your exam. From a management accounting perspective, be prepared to discuss the cost saving measures, inevitable transfer pricing agreements between the sites where fragrances are manufactured and sold, the NPV computation and impact of reduced volumes on pricing to cover any fixed costs. From a business strategy perspective, you should consider pricing strategies for developing nations based on the principles of purchasing power parity, PESTEL analysis, Porter’s Diamond, Porter’s Five Forces and the Boston Consulting Group Matrix.

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