Exam code: 9609
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PC has the objective of increasing long term profits. Evaluate the strategic factors that the directors should consider when making the choice between option A and option B.
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Several strategic changes are likely to occur within PC. Evaluate how senior managers could implement these changes most effectively.
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Advise Sue on which approaches she should use to develop a new business strategy for RF2.
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Evaluate the usefulness of SWOT analysis as part of the strategic analysis required before HD’s directors make the choice between option 1 and option 2.
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Evaluate the role of corporate planning in the successful implementation of either option 1 or option 2.
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Evaluate the usefulness to WTZ of external environment analysis (PEST) as a framework to develop business strategy.
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Evaluate the strategic choice techniques that could help WTZ choose between option 1 and option 2.
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Evaluate the usefulness to TK’s directors of the strategic choice data in Appendix 1 as they make the decision between option 1 and option 2.
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Evaluate the importance to TK of contingency planning when implementing strategies to diversify the activities of the business.
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Evaluate the usefulness to UBH of Porter’s Five Forces analysis as a framework for developing its business strategy.
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Evaluate the strategic choice techniques that would be most useful to UBH when deciding between strategic option 1 and strategic option 2.
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Evaluate the strategic choice techniques FF’s directors could use when making the decision whether to enter the Asia Pacific retail glasses market.
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Evaluate the importance of change management techniques to the successful introduction of team working at FF.
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Evaluate whether the use of the techniques in Appendix 2 will eliminate risk for AC when choosing a growth strategy.
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Evaluate the importance of developing a change culture to the successful implementation of option 2.
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Evaluate whether the information in Appendix 1 is sufficient for the directors of WSC to make the strategic choice between Option A and Option B.
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Evaluate the importance to WSC of effective corporate planning if Option A is chosen.
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Evaluate whether the decision tree calculation in Table 3 is sufficient for JGS to make a strategic choice between Option 1 and Option 2.
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Evaluate the significance of contingency planning for JGS as it prepares to implement its future strategies.
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Evaluate whether the decision tree calculation in Table 3 is sufficient for JGS to make a strategic choice between Option 1 and Option 2.
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Evaluate the significance of contingency planning for JGS as it prepares to implement its future strategies.
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Evaluate the usefulness of the information in Appendix 4 for the directors of PAC as they make the strategic choice between Option 1 and Option 2.
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Evaluate the importance to PAC of contingency planning as part of strategic implementation if Option 2 is chosen.
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Evaluate the importance of core competencies as a framework for business strategy when NH carries out strategic analysis.
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Evaluate the effectiveness of using SWOT analysis to ensure that GR’s growth strategies are appropriate.
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Assume Leff chooses strategy 2. Evaluate how to implement this strategy effectively.
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Evaluate whether the data in Table 3 is sufficient for the managers of C4T as they make the strategic choice between option 1 and option 2.
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Assume option 2 is chosen. Evaluate the importance of a strategic business plan to the successful implementation of this option.
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Solaris Energy Solutions (SES)
SES was founded in 2009 in country T by engineer and entrepreneur Marco Santos. Using $200,000 of personal savings and a $300,000 bank loan, Marco set up the business designing and installing solar panels for residential customers. The bank loan was fully repaid by 2013.
Timeline of SES's strategy for growth
2009–2014 |
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2015 |
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2016 |
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2018 |
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2020 |
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2022 |
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Developing a new strategic direction
The domestic solar panel market in country T is becoming increasingly competitive. Several large multinational companies (MNCs) have entered the market in recent years, competing aggressively on price. Marco believes SES must change direction to secure its long-term future.
Two strategic options are being considered:
Option A: Expand internationally into country U, where government incentives have created rapid growth in solar energy demand.
Option B: Diversify within country T into electric vehicle (EV) charging infrastructure — a market that is growing rapidly as EV adoption increases.
SES's Finance Director has warned that the company's financial position has weakened and that any new strategy must be carefully costed and phased. Marco would like advice on which strategic direction SES should pursue.
Appendix 1: The renewable energy market in country T (2016)
The government of country T has committed to generating 50% of its electricity from renewable sources by 2030.
Solar energy is the fastest-growing renewable energy source in country T, with installations rising by 22% per year.
Growing public awareness of climate change is driving strong demand from residential and commercial customers.
Government subsidies for residential solar installations are generous but are scheduled to be reduced from 2021.
Competition for government contracts is intense; however, profit margins on public sector contracts are higher than on private sector work.
MNCs from Europe and Asia are beginning to establish operations in country T, benefiting from economies of scale and established brand recognition.
Appendix 2: HR Director's report following SES's acquisition of EcoGrid (2018)
EcoGrid was a family-run business of 45 employees. It had a flat organisational structure, a culture of autonomy and flexible working, and a strong reputation for technical innovation in energy storage systems.
SES operates with a more hierarchical management structure. Following the acquisition, SES standardised HR practices across both companies. EcoGrid employees were moved from flexible contracts to fixed-hours annualised contracts. A third of EcoGrid's specialist engineers chose to leave within twelve months.
Recruiting qualified energy storage engineers in country T is difficult. Training new engineers to the required standard takes an average of 18 months. Productivity in the EcoGrid division has fallen significantly since the acquisition. Several planned product development projects have been delayed.
Appendix 3: SES AI energy management software (2020)
Software is integrated into all new SES solar systems and is compatible with EcoGrid storage units.
Optimises energy use in real time, reducing customer energy bills by an estimated 15–20%.
Revenue model: customers pay an annual subscription fee of $120 per year.
12,000 customers are currently subscribed to the platform; subscription revenue is growing at 8% per year.
Development cost: $2.5m, funded entirely from SES's retained profit.
The platform is widely regarded within the industry as technically advanced, but requires ongoing investment to maintain and update.
Appendix 4: Analysis of SES's financial accounts between 2018 and 2022
2018 | 2019 | 2020 | 2021 | 2022 | |
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Current ratio | 1.8 : 1 | 1.6 : 1 | 1.4 : 1 | 1.3 : 1 | 1.2 : 1 |
Acid test ratio | 1.2 : 1 | 1.0 : 1 | 0.8 : 1 | 0.7 : 1 | 0.6 : 1 |
Return on capital employed (%) | 18 | 15 | 13 | 11 | 9 |
Gearing (%) | 12 | 22 | 28 | 32 | 38 |
Profit for the year ($m) | 2.1 | 1.8 | 1.6 | 1.4 | 1.2 |
Advise Marco on which strategic option — Option A or Option B — SES should pursue to secure its long-term future.
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'Investing in product innovation and stronger branding is the most effective way for KB to respond to increased competition from multinational companies in its domestic market.'
Evaluate this view.
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Horizon Hotels Group (HHG)
HHG was established in country R in 2005 by businessman Ethan Cross. Starting with a single boutique hotel, HHG has grown into a chain of 18 hotels across country R and neighbouring countries.
Timeline of HHG's strategy for growth
2005–2010 |
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2011–2012 |
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2013 |
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2015 |
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2017 |
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2019–2021 |
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2021 |
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2022–2023 |
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Developing a new strategy for 2024 and beyond
As HHG recovers from the pandemic, Ethan must decide how to grow the business sustainably. Two strategic options are under consideration:
Option A: Expand the HHG franchise network further, targeting independent hotel operators in new countries to grow the brand internationally with limited capital investment.
Option B: Invest significantly in technology and digital services — including smart room technology, AI-driven personalisation, and an enhanced loyalty programme — to deepen the customer experience and increase repeat bookings.
HHG's Finance Director has cautioned that while the business has recovered, gearing remains high and the balance sheet needs strengthening before major new commitments are made.
Appendix 1: The boutique hotel market in country R (2015)
Demand for independent boutique hotels growing as travellers seek authentic local experiences over international chains.
Review platforms (e.g. TripAdvisor) increasingly influence customer choices — online reputation is critical.
Shortage of skilled hospitality workers in country R; staff training is a significant competitive differentiator.
Growth in short-term rental platforms (e.g. Airbnb) is creating new competition for independent hotels.
Franchising is an increasingly common growth model in the hospitality industry.
Appendix 2: Strategic analysis following the CSH acquisition (2017)
Comfort Stay Hotels (CSH) operated in the budget segment of the market, targeting price-conscious travellers. HHG operates in the premium boutique segment.
HHG management found it difficult to improve CSH's service standards while maintaining competitive pricing. CSH staff were on minimum wage with high labour turnover; HHG had built its reputation on high staff retention and customer-facing quality. Attempts to integrate CSH into HHG's brand culture created friction and low morale in the CSH teams.
The $15m acquisition significantly increased HHG's gearing. Revenue from CSH properties was lower than forecast in the two years following the acquisition.
Appendix 3: HHG customer loyalty app (2021)
Developed during the pandemic using $500,000 from HHG's cash reserves.
Tracks customer preferences and enables personalised room features, local activity recommendations, and pre-arrival communication.
Currently has 35,000 active users.
Customer retention rate improved from 28% before the app to 41% following its launch.
The app has been particularly effective with repeat business travellers, who account for 38% of HHG's bookings.
Appendix 4: Analysis of HHG's financial accounts 2018–2023
2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
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Current ratio | 1.6 : 1 | 1.4 : 1 | 0.8 : 1 | 0.7 : 1 | 1.0 : 1 | 1.3 : 1 |
Acid test ratio | 1.1 : 1 | 0.9 : 1 | 0.4 : 1 | 0.3 : 1 | 0.6 : 1 | 0.9 : 1 |
Return on capital employed (%) | 16 | 13 | −8 | −12 | 5 | 11 |
Gearing (%) | 42 | 50 | 55 | 58 | 52 | 46 |
Profit / (loss) for the year ($m) | 1.8 | 1.2 | −2.4 | −2.8 | 0.6 | 1.5 |
Advise Ethan on whether HHG should pursue Option A (expanding the franchise network) or Option B (investing in technology and digital services) to develop its strategy for 2024 and beyond.
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