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ACP3RK14.indd 1-3

04/06/2014 11:41


PAPER P3
BUSINESS ANALYSIS

BPP Learning Media is an ACCA Approved Learning Partner – content for the ACCA
qualification. This means we work closely with ACCA to ensure our products fully
prepare you for your ACCA exams.
In this Practice and Revision Kit which has been reviewed by the ACCA examination
team we:


Discuss the best strategies for revising and taking your ACCA exams



Ensure you are well prepared for your exam




Provide you with lots of great guidance on tackling questions



Provide you with three mock exams



Provide ACCA exam answers as well as our own for selected questions

Our Passcard and i-pass products also support this paper.

FOR EXAMS TO JUNE 2015

P
R
A
C
T
I
C
E
&
R
E
V
I
S
I
O

N
K
I
T


First edition 2007
Eighth edition June 2014
ISBN 9781 4727 1109 0
(previous ISBN 9781 4453 6653 1)
e-ISBN 9781 4727 1173 1
British Library Cataloguing-in-Publication Data
A catalogue record for this book
is available from the British Library

Published by
BPP Learning Media Ltd
BPP House, Aldine Place
London W12 8AA
www.bpp.com/learningmedia

Printed in the United Kingdom by

All rights reserved. No part of this publication may be
reproduced, stored in a retrieval system or transmitted, in
any form or by any means, electronic, mechanical,
photocopying, recording or otherwise, without the prior
written permission of BPP Learning Media Ltd.

We are grateful to the Association of Chartered Certified

Accountants for permission to reproduce past
examination questions. The suggested solutions in the
practice answer bank have been prepared by BPP
Learning Media Ltd, except where otherwise stated.

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©
BPP Learning Media Ltd
2014
Your learning materials, published by BPP Learning
Media Ltd, are printed on paper obtained from
traceable, sustainable sources.

ii


Contents
Page

Finding questions
Question index .................................................................................................................................................................. v
Topic index ..................................................................................................................................................................... vii

Helping you with your revision ................................................................................................................... viii
Revising P3
Topics to revise................................................................................................................................................................ ix

Reading articles................................................................................................................................................................. x
Question practice .............................................................................................................................................................. x
Passing the P3 exam........................................................................................................................................................ xi
Exam information ........................................................................................................................................................... xvi
Useful websites ............................................................................................................................................................. xix

Questions and answers
Questions..........................................................................................................................................................................3
Answers ..........................................................................................................................................................................93

Exam practice
Mock exam 1

Questions ............................................................................................................................................................291

Plan of attack .......................................................................................................................................................299

Answers...............................................................................................................................................................300
Mock exam 2 (Pilot paper)

Questions ............................................................................................................................................................317

Plan of attack .......................................................................................................................................................327

Answers...............................................................................................................................................................328
Mock exam 3 (December 2013)

Questions ............................................................................................................................................................349

Plan of attack .......................................................................................................................................................361


Answers...............................................................................................................................................................362
ACCA exam answers

June 2013............................................................................................................................................................383

December 2013 ...................................................................................................................................................393

Review form

iii


A note about copyright
Dear Customer
What does the little © mean and why does it matter?
Your market-leading BPP books, course materials and e-learning materials do not write and update themselves.
People write them: on their own behalf or as employees of an organisation that invests in this activity. Copyright law
protects their livelihoods. It does so by creating rights over the use of the content.
Breach of copyright is a form of theft – as well as being a criminal offence in some jurisdictions, it is potentially a
serious breach of professional ethics.
With current technology, things might seem a bit hazy but, basically, without the express permission of BPP
Learning Media:



Photocopying our materials is a breach of copyright
Scanning, ripcasting or conversion of our digital materials into different file formats, uploading them to
facebook or emailing them to your friends is a breach of copyright


You can, of course, sell your books, in the form in which you have bought them – once you have finished with
them. (Is this fair to your fellow students? We update for a reason.) Please note the e-products are sold on a single
user licence basis: we do not supply ‘unlock’ codes to people who have bought them second-hand.
And what about outside the UK? BPP Learning Media strives to make our materials available at prices students can
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tiny minority ignore this and indulge in criminal activity by illegally photocopying our material or supporting
organisations that do. If they act illegally and unethically in one area, can you really trust them?

iv


Question index
The headings in this checklist/index indicate the main topics of questions, but questions are expected to cover
several different topics.
Time
Page number
Ins
Marks
allocation Question Answer
Mins

Part A: The overall strategic perspective
1

Nesta (6/13)

25

45


3

93

2

Airtite (3.5, 6/06, amended)

25

45

4

96

3

The Management Press (12/10)

25

45

5

100

4


Rock Bottom (6/09)

25

45

6

102

5

iCompute (12/11)

25

45

7

105

6

Jayne Cox Direct (6/12)

25

45


8

108

7

Frigate (12/10)

25

45

9

111

8

Alpha Software

25

45

10

114

25


45

12

118

10 Joe Swift Transport (6/10)

25

45

13

121

11 MMI (12/08)

25

45

15

124

12 Graffoff (12/12)

25


45

17

127

13 Country Car Club (6/08)

25

45

19

131

14 Ergo City (6/10, amended)

25

45

20

134

15 Cronin Auto Retail (6/11)

25


45

21

136

16 BeauCo

25

45

22

139

17 Finch Co

25

45

23

143

18 Chemical Transport (6/13)

25


45

24

146

19 Perfect Shopper (12/07)

25

45

25

149

20 Independent Living (12/09)

25

45

26

152

21 Accounting Education Consortium (6/08)

25


45

27

155

22 ISD (12/11)

25

45

28

159

23 Clothing Company (12/07)

25

45

30

161

24 Tillo Community Centre (6/12)

25


45

32

166

25 Lowlands Bank (12/09)

25

45

33

169

26 HomeDeliver (12/11)

25

45

34

172

27 OneEnergy plc (6/09)

25


45

35

176

28 ASW (6/10, amended)

25

45

37

178

29 Flexipipe (6/12)

25

45

39

182

30 Moor Farm (12/12)

25


45

40

184

31 Institute of Administrative Accountants (12/10)

25

45

41

187

32 Institute of Analytical Accountants (6/11)

25

45

42

189

33 Pharmacy Systems International (6/08)

25


45

44

192

34 World Engines (12/12)

25

45

45

196

35 AutoFone (6/08)

25

45

46

200

36 Academic Recycling Company (6/13)

25


45

48

204

Part B: Options and organisation
9

8-Hats (6/11)

Part C: Strategic implementation

Topic index

v


Part D: 50 mark questions
37 MidShire Health (6/13)

50

90

50

207

38 Polymat Tapes (3.5,12/03, amended)


50

90

53

212

39 The EA Group (12/12)

50

90

55

216

40 Shoal plc (12/10)

50

90

58

220

41 Bonar Paint (3.5, 6/07, amended)


50

90

60

225

42 Hammond Shoes (6/12)

50

90

62

231

43 GET (12/11)

50

90

65

236

44 EcoCar (6/11)


50

90

68

241

45 Oceania National Airlines (12/07)

50

90

70

247

46 ABCL (12/09)

50

90

73

256

47 Wetland Trust (6/10)


50

90

76

262

48 Institute of Information Systems Architects

50

90

80

268

49 The National Museum

50

90

83

273

50 GreenTech (6/09)


50

90

86

281

Mock exam 1
Mock exam 2
Mock exam 3 (December 2013)

vi

Topic index


Topic index
Listed below are the key Paper P3 syllabus topics and the numbers of the questions in this Kit covering those
topics.
If you need to concentrate your practice and revision on certain topics or if you want to attempt all available
questions that refer to a particular subject, you will find this index useful.
Syllabus topic

Question numbers

Benchmarking

39


Business process change

17

Capabilities and competences

11, 14

Change management & the context of change

14, 33, 38, 39, 40, 46, 49

Corporate appraisal (SWOT)

41, 43, 45, 47, 50

Critical success factors

43

Culture

5, 7, 37, 38

Diamond model

10

e-business


3, 15

e-Marketing

15, 18, 22, 47

Environmental analysis

2, 43

Five forces

1, 35, 38, 41, 46, 47

Integrated reporting

8

Investment appraisal

9, 12, 27, 34, 42, 46

Marketing mix

3, 21, 22

IT controls and continuity planning

16


Mission statements and organisational objectives

41, 42, 47

Organisation structure

4, 7, 9, 48

Outsourcing

13, 14, 44

People

36

PESTEL

41, 44, 47, 48, 49

Process-strategy matrix

5, 13, 18, 25, 48

Product Life Cycle

38

Product portfolio


40

Project management

23, 24, 25, 26, 28, 31, 37

Software

27, 29, 32

Stakeholders

14, 30, 46, 47

Strategic capabilities

35

Strategic change

14, 33

Strategic options

10, 11, 12, 38, 41, 42, 43

Strategy development

11, 35, 49


Supply chain management

6, 19

Value chain

6, 19, 20

Topic index

vii


Helping you with your revision
BPP Learning Media – Approved Learning Partner – content
As ACCA’s Approved Learning Partner – content, BPP Learning Media gives you the opportunity to use exam team
reviewed revision materials. By incorporating the examination team’s comments and suggestions regarding
syllabus coverage, the BPP Learning Media Practice and Revision Kit provides excellent, ACCA-approved support
for your revision.

Tackling revision and the exam
Using feedback obtained from the ACCA exam team review:


We look at the dos and don’ts of revising for, and taking, ACCA exams



We focus on Paper P3; we discuss revising the syllabus, what to do (and what not to do) in the exam, how

to approach different types of question and ways of obtaining easy marks

Selecting questions
We provide signposts to help you plan your revision.


A full question index



A topic index listing all the questions that cover key topics, so that you can locate the questions that provide
practice on these topics, and see the different ways in which they might be examined

Making the most of question practice
At BPP Learning Media we realise that you need more than just questions and model answers to get the most from
your question practice.


Our Top tips included for certain questions provide essential advice on tackling questions, presenting
answers and the key points that answers need to include



We show you how you can pick up Easy marks on some questions, as we know that picking up all readily
available marks often can make the difference between passing and failing



We include marking guides to show you what the examining team rewards




We include comments from the examining team to show you where students struggled or performed well
in the actual exam



We refer to the 2014 BPP Study Text (for exams up to June 2015) for detailed coverage of the topics
covered in questions



In a bank at the end of this Kit we include the official ACCA answers to the June and December 2013
papers. Used in conjunction with our answers they provide an indication of all possible points that could be
made, issues that could be covered and approaches to adopt.

Attempting mock exams
There are three mock exams that provide practice at coping with the pressures of the exam day. We strongly
recommend that you attempt them under exam conditions. Mock exams 1 and 2 reflect the question styles and
syllabus coverage of the exam; Mock exam 3 is the December 2013 paper.

viii

Helping you with your revision


Revising P3
Topics to revise
Firstly we must emphasise that you will need a good knowledge of the whole syllabus. Any part of the syllabus
could be tested within compulsory Question 1. Having to choose two out of three optional questions does not really

represent much choice if there are areas of the syllabus you are keen to avoid. There are certain topics that are
stressed in the syllabus and therefore are core:
Strategic position


The need for and purpose of business analysis (rational model, levels of strategy, strategic lenses)



The internal resources, capabilities and competences of an organisation (value chain and corporate
appraisal)



Setting critical success factors (CSF) and key performance indicators (KPI)



Environmental issues affecting the strategic position of an organisation (PESTEL and Porter’s Diamond)



Stakeholders, ethics culture and integrated reporting (stakeholder mapping, scope of corporate social
responsibility and cultural web)

Strategic choices


Portfolio models; the Boston Consulting Group (BCG) matrix, public sector, parenting matrix and Ashridge
Portfolio display




Approaches to achieving competitive advantage (strategy clock and generic options)



Methods of development (Ansoff’s matrix, internal development, mergers, acquisitions)



Criteria to assess strategic options (suitability, acceptability and feasibility)

Strategic action


Organisational set up (boundary-less organisations, hollow, modular and virtual) and strategic alliances
(joint ventures, networks, franchising, licensing) and concepts of outsourcing, offshoring and shared
services



Organisational configurations (Mintzberg)



Managing strategic change




Organisational context of change (Balogun, Hope and Hailey)



Different approaches to strategic development (emergent strategies)

Business and process change


Assess the stages of the business change lifecycle and the four view model



The role of Harmon’s process strategy matrix



Software solutions

Information technology


Analyse IT and application controls and evaluate controls for safeguarding IT assets



Principles of e-business including upstream and downstream supply chain management




Understand the characteristics of e-marketing using the 6I’s and the use of customer relationship
management software (CRM)

Revising P3

ix


Project management


The nature of projects (building the business case and managing projects)

Financial analysis


Understand the impact of financing decisions on strategy setting



The role of the budgetary process and evaluating strategic options (use of resources, make or buy
decisions)

People


Relationship between strategy and people (leadership traits, classical and modern theories)

Reading articles
The examining team have stressed the importance of reading the technical articles published on the ACCA website

that relate to P3. Some of the articles are written by the examining team.
It’s also useful to keep reading the business press during your revision period and not just narrowly focus on the
syllabus. Remember that this paper is about how organisations respond to real-world issues, so the more you read,
the more practical examples you will have of how organisations have tackled real-life situations.

Question practice
You should use the Passcards and any brief notes you have to revise these topics, but you mustn’t spend all your
revision time passively reading. Question practice is vital; doing as many questions as you can in full will help
develop your ability to analyse scenarios and produce relevant discussion and recommendations.
You should make sure you leave yourself enough time during your revision to practise 50 mark Section A questions
as you cannot avoid them, and the scenarios and requirements of Section A questions are more complex. You
should also leave yourself enough time to do the three mock exams.

x

Revising P3


Passing the P3 exam
Displaying the right qualities
You are expected to display the following qualities.
Qualities required
Fulfilling the higher level question
requirements

This means that when you are asked to show higher level skills such as
assessment or evaluation, you will only score well if you demonstrate
them. Merely describing something when you are asked to evaluate it will
not earn you the marks you need.


Identifying the most important
features of the organisation and its
environment

You must use your technical knowledge and business awareness to
identify the key features of the scenario.

Applying your knowledge to the
scenario

You should apply relevant theoretical models to the information
presented in the scenario. However, your answer should not simply
describe theoretical models.
You need to employ two different skills here:
 Use relevant theory to provide a framework or model for your answer
 Use the scenario to answer the question
The examining team frequently comment that students fail to use the
information in the scenarios properly. Answers that are too general, or
lack appropriate context as provided by the scenario, will not score well.

Selecting relevant real-life
examples

You may gain credit for using good examples, providing you use the
examples to illustrate your understanding of the points in the scenario.

Arguing well

You may be expected to discuss both sides of a case, or present an
argument in favour or against something. You will gain marks for the

quality and logical flow of your arguments.

Making reasonable
recommendations

The measures you recommend must be appropriate for the organisation;
you may need to discuss their strengths and weaknesses, as there may
be costs of adopting them. The recommendations should clearly state
what has to be done.

Avoiding weaknesses
Our experience of, and the examining team's feedback from, other higher level exams enables us to predict a
number of weaknesses that are likely to occur in many students’ answers. You will enhance your chances significantly if
you ensure you avoid these mistakes:


Failing to provide what the question verbs require (discussion, evaluation, recommendation) or to
write about the topics specified in the question requirements



Repeating the same material in different parts of answers



Stating theories and concepts rather than applying them



Quoting chunks of detail from the question that don't add any value




Forcing irrelevancies into answers, for example irrelevant definitions or theories, or examples that
don't relate to the scenario

Passing the P3 exam

xi




Giving long lists or writing down all that's known about a broad subject area, and not caring
whether it's relevant or not



Focusing too narrowly on one area – for example only covering financial risks when other risks are
also important



Letting your personal views prevent you from answering the question – the question may require
you to construct an argument with which you personally don’t agree



Unrealistic or impractical recommendations




Vague recommendations - instead of just saying improve risk management procedures, you should
discuss precisely how you would improve them



Failing to answer sufficient questions, or all parts of a question, because of poor time management

Using the reading time
We recommend that you spend the first part of the 15 minutes reading time choosing the Section B questions you
will do, on the basis of your knowledge of the syllabus areas being tested and whether you can fulfil all the question
requirements. Remember that Section B questions can cover different parts of the syllabus, and you should be
happy with all the areas that the questions you choose cover. We suggest that you should note on the paper any
ideas that come to you about these questions.
However don't spend all the reading time going through and analysing the Section B question requirements in
detail; leave that until the three hours’ writing time. Instead you should be looking to spend as much of the reading
time as possible looking at the Section A scenario, as this will be longer and more complex than the Section B
scenarios and cover more of the syllabus. You should highlight and annotate the key points of the scenario on the
question paper.

Choosing which questions to answer first
Spending most of your reading time on the compulsory Section A question will mean that you can get underway
with planning and writing your answer to the Section A question as soon as the three hours start. It will give you
more actual writing time during the one and a half hours you should allocate to it and it's writing time that you'll
need. Comments from the examining teams of other syllabuses that have similar exam formats suggest that
students appear less time-pressured if they do the big compulsory questions first.
During the second half of the exam, you can put Section A aside and concentrate on the two Section B questions
you’ve chosen.
However our recommendations are not inflexible. If you really think the Section A question looks a lot harder than

the Section B questions you’ve chosen, then do those first, but DON'T run over time on them. You must leave
yourself at least one hour and 30 minutes to tackle the Section A question. When you come back to it, having had
initial thoughts during the reading time, you should be able to generate more ideas and find the question is not as
bad as it looks.
Remember also that small overruns of time during the first half of the exam can add up to your being very short of
time towards the end.

xii

Passing the P3 exam


Tackling questions
Scenario questions
You'll improve your chances by following a step-by-step approach to Section A scenarios along the following lines.

Step 1

Read the background
Usually the first couple of paragraphs will give some background on the company and what it is
aiming to achieve. By reading this carefully you will be better equipped to relate your answers to the
company as much as possible.

Step 2

Read the requirements
There is no point reading the detailed information in the question until you know what it is going to
be used for. Don’t panic if some of the requirements look challenging – identify the elements you are
able to do and look for links between requirements, as well as possible indications of the syllabus
areas the question is covering.


Step 3

Identify the action verbs
These convey the level of skill you need to exhibit and also the structure your answer should have. A
lower level verb such as define will require a more descriptive answer; a higher level verb such as
evaluate will require a more applied, critical answer. It should be stressed that higher level
requirements and verbs are likely to be most significant in this paper.
Action verbs that are likely to be frequently used in this exam are listed below, together with their
intellectual levels and guidance on their meaning.
Intellectual level
1

Define

Give the meaning of

1

Explain

Make clear

1

Identify

Recognise or select

1


Describe

Give the key features

2

Distinguish

Define two different terms, viewpoints or
concepts on the basis of the differences between
them

2

Compare and
contrast

Explain the similarities and differences between
two different terms, viewpoints or concepts

2

Contrast

Explain the differences between two different
terms, viewpoints or concepts

2


Analyse

Give reasons for the current situation or what has
happened

3

Assess

Determine the strengths/weaknesses/
importance/significance/ability to contribute

3

Examine

Critically review in detail

3

Discuss

Examine by using arguments for and against

3

Explore

Examine or discuss in a wide-ranging manner


3

Criticise

Present the weaknesses of/problems with the
actions taken or viewpoint expressed, supported
by evidence

Passing the P3 exam

xiii


Intellectual level
3

Evaluate/critically
evaluate

Determine the value of in the light of the
arguments for and against (critically evaluate
means weighting the answer towards
criticisms/arguments against)

3

Construct the case

Present the arguments in favour or against,
supported by evidence


3

Recommend

Advise the appropriate actions to pursue in terms
the recipient will understand

Also make sure you identify all the action verbs; some question parts may have more than one.

Step 4

Identify what each part of the question requires
Think about what frameworks or theories you could choose if the question doesn’t specify which one
to use.
When planning, you will need to make sure that you aren't reproducing the same material in more
than one part of the question.
Also you’re likely to come across part questions with two requirements that may be at different
levels; a part question may for example ask you to explain X and discuss Y. You must ensure that you
fulfill both requirements and that your discussion of Y shows greater depth than your explanation of
X (for example by identifying problems with Y or putting the case for and against Y).

Step 5

Check the mark allocation to each part
This shows you the depth anticipated and helps allocate time.

Step 6

Read the whole scenario through, highlighting key data

Put points under headings related to requirements (eg by noting in the margin to what part of the
question the scenario detail relates).

Step 7

Consider the consequences of the points you’ve identified
Remember that you will often have to provide recommendations based on the information you've
been given. Consider that you may have to criticise the code, framework or model that you’ve been
told to use. You may also have to bring in wider issues or viewpoints, for example the views of
different stakeholders.

Step 8

Write a brief plan
You may be able to do this on the question paper as often there will be at least one blank page in the
question booklet. However any plan you make should be reproduced in the answer booklet when
writing time begins.
Make sure you identify all the requirements of the question in your plan – each requirement may have
sub-requirements that must also be addressed. If there are professional marks available, highlight in
your plan where these may be gained (such as preparing a report).

Step 9

Write the answer
Make every effort to present your answer clearly. The pilot paper and exam papers so far indicate that
the examining team will be looking for you to make a number of clear points. The best way to
demonstrate what you’re doing is to put points into separate paragraphs with clear headers.

xiv


Passing the P3 exam


Discussion questions
Remember that depth of discussion will be important. Discussions will often consist of paragraphs containing 2-3
sentences. Each paragraph should:


Make a point



Explain the point (you must demonstrate why the point is important)



Illustrate the point (with material or analysis from the scenario, perhaps an example from real life)

In this exam a number of requirement verbs will expect you to express a viewpoint or opinion, for example
construct an argument, criticise, evaluate. When expressing an opinion, you need to provide:


What the question wants. For instance, if you are asked to criticise something, don't spend time discussing
its advantages. In addition if a scenario provides a lot of information about a situation, and you are (say)
asked to assess that situation in the light of good practice, your assessment is unlikely to be favourable.



Evidence from theory or the scenario – again we stress that the majority of marks in most questions will be
given for applying your knowledge to the scenario.


Gaining the easy marks
As P3 is a Professional level paper, 4 or 5 professional level marks will be awarded in the compulsory question.
Some of these should be easy to obtain. The examining team has stated that some marks may be available for
presenting your answer in the form of formal business letters, briefing notes, memos, presentations, press
releases, narratives in an annual report and so on. You may also be able to obtain marks for the format, layout,
logical flow and persuasiveness of your answer.
What you write should always sound professional, and you will be awarded marks for good introductions and
conclusions. You must use the format the question requires. You must also lay your answer out so that somebody
could actually read it and use it. A good way to end all documents is to invite further communication.
How you make the document persuasive will depend on who you are and who the recipients are. If you are writing
to management you should consider how much information you need to provide. If you are trying to convince the
reader that a decision is right, you should focus on the benefits.

Passing the P3 exam

xv


Exam information
Format of the exam
Section A:
Section B:

1 compulsory case study
Choice of 2 from 3 questions (25 marks each)

Number of
marks
50

50
100

Time: 3 hours plus 15 minutes reading time
Section A will be a compulsory case study question with several requirements relating to the same scenario
information. The question will usually assess and link a range of subject areas across the syllabus. It will require
students to demonstrate high-level capabilities to understand the complexities of the case and evaluate, relate and
apply the information in the case study to the requirements.
The examining team have stressed the importance of reading the case in detail, taking notes as appropriate and
getting a feel for what the issues are.
Section B questions are more likely to assess a range of discrete subject areas from the main syllabus section
headings; they may require evaluation and synthesis of information contained within short scenarios and
application of this information to the question requirements.
Although one subject area is likely to be emphasised in each Section B question, students should not assume that
questions will be solely about content from that area. Each question will be based on a shorter case scenario to
contextualise the question.
The paper will have a global focus.

xvi

Exam information


Analysis of past papers
The table below provides details of when each element of the syllabus has been examined and the question number
and section in which each element appeared.
Covered
in Text
chapter


Dec
2013

June
2013

Dec
2012

June
2012

Dec
2011

June
2011

C

C

C

Dec
2010

June
2010


Dec
2009

June
2009

Dec
2008

C

C

June
2008

Dec
2007

Pilot
Paper

STRATEGIC
POSITION
1

Business strategy

O


1

Strategy lenses

2

PESTEL analysis

2

National
competitiveness

2

Competitive
forces

2

Business
scenario building
& forecasting

O

3

Marketing and
market

segmentation

O

3

Industry lifecycle

4

Value chain;
supply chain
management

O

4

SWOT analysis

C

4

Benchmarking

5

Stakeholders


5

Culture and the
cultural web

C

C
C

C

C

C

C

C

O
O

C

O

O

C


C

C

O

O

O

O

C

C

O

C

O

C

C
C
O

C


O

O

C

STRATEGIC
CHOICES
6

Generic
strategies

6

Product-market
strategy

C
O

BCG
6

Methods of
growth

6


Corporate
parents

6

SAF

C

C
C

O

C
C

O

O
O

C

ORGANISING
AND ENABLING
SUCCESS
7

Organisational

structures

8

Managing
strategic change

O
C

O
C

O

Exam information

xvii


Covered
in Text
chapter

Dec
2013

June
2013


Dec
2012

June
2012

Dec
2011

O

O

June
2011

Dec
2010

June
2010

Dec
2009

June
2009

Dec
2008


June
2008

Dec
2007

Pilot
Paper

O

O

O

O

O

O

BUSINESS
PROCESS
CHANGE
9

Process-strategy
matrix


9

Outsourcing

9

Business process
redesign

10

Managing risk

O

0

O
C

O

0

C

O
O
C


O

INFORMATION
TECHNOLOGY
11

E-business and
upstream supply
chain
management

11

E-business and
downstream
supply chain
management

12

E-marketing

12

Customer
relationship
marketing

O


O

O

O

O

C

O

O

PROJECT
MANAGEMENT
13

Project
management

C

O

O

O

O


O

O

FINANCE
14

Finance

O

O

O

C

PEOPLE
15

Leadership

O

15

Job design

O


15

Staff
development

O

STRATEGIC
DEVELOPMENT
16

Developing
strategies

IMPORTANT!
The table above gives a broad idea of how frequently major topics in the syllabus are examined. It should not be
used to question spot and predict for example that Topic X will not be examined because it came up two sittings
ago.

xviii

Exam information


Useful websites
The websites below provide additional sources of information of relevance to your studies for Business Analysis.


www.accaglobal.com

ACCA's website. The students’ section of the website is invaluable for detailed information about the
qualification, past issues of Student Accountant (including technical articles).



www.bpp.com
Our website provides information about BPP products and services, with a link to ACCA's website.



www.ft.com
This website provides information about current international business. You can search for information and
articles on specific industry groups as well as individual companies.



www.economist.com
Here you can search for business information on a week-by-week basis, search articles by business subject
and use the resources of the Economist Intelligence Unit to research sectors, companies or countries.




This site carries business news and articles on markets from Investment Week and International Investment.



www.pwc.com
The PricewaterhouseCoopers website includes UK Economic Outlook.




www.strategy-business.com
This website includes articles from Strategy and Business.



www.bbc.co.uk
This website of the BBC carries general business information as well as programme-related content.

Useful websites

xix


xx

Useful websites


Questions

1


2


THE OVERALL STRATEGIC PERSPECTIVE
Questions 1 to 8 cover the overall strategic perspective, the subject of Parts A, B and C of the BPP Study Text for

Paper P3.

1 Nesta (6/13)

45 marks

NESTA is a large chain of fixed-price discount stores based in the country of Eyanke. Its stores offer ambient goods
(goods that require no cold storage and can be kept at room temperature, such as cleaning products, stationery,
biscuits and plastic storage units) at a fixed price of one dollar. Everything in the store retails at this price. Fixedprice discount chains focus on unbranded commodity goods which they buy from a number of small suppliers, for
which the dollar shops are the most significant customers. Profit margins on the products they sell are low and
overheads are kept to a minimum. The target price is fixed. The products tend to be functional, standardised and
undifferentiated.
NESTA has observed the long-term economic decline in the neighbouring country of Eurobia, where a prolonged
economic recession has led to the growth of so-called ‘dollar shops’. Three significant dollar shop chains have
developed: ItzaDollar, DAIAD and DollaFellas (see Table One). The shops of these three chains are particularly found
on the high streets of towns and cities where there is significant financial hardship. Many of these towns and cities
have empty stores which are relatively cheap to rent. Furthermore, landlords who once required high rents and long
leases are increasingly willing to rent these stores for a relatively short fixed-term lease. The fixed-price dollar shop
chains in Eurobia advertise extensively and continually stress their expansion plans. Few weeks go by without one
of the chains announcing plans for a significant number of new shops throughout the country.
NESTA has recognised the growth of fixed-price discount retailers in Eurobia and is considering entering this
market.
NESTA recently commissioned a brand awareness survey in Eurobia. The survey results showed that NESTA was
relatively well-known to respondents who work in the consumer goods retail market. Most of these respondents
correctly identified the company as a discount fixed-price company with a significant presence in Eyanke. However,
amongst general consumers, only 5% of the respondents had heard of NESTA. In contrast, the three current fixedprice dollar shop discounters in Eurobia were recognised by more than 90% of the respondents.
NESTA itself has revenue of $120,000 million. It has cash reserves which could allow it to lease a significant
number of shops in Eurobia and establish a credible market presence. It has recognised competencies in effective
supplier selection and management, supported by effective procurement systems. Its logistics systems and
methods are core strengths of the company.

There are also many conventional supermarket chains operating in Eurobia. The largest of these has annual revenue
of $42,500 million. Supermarkets in Eurobia tend to increasingly favour out-of-town sites which allow the stores to
stock a wide range and quantity of products. Customer car parking is plentiful and it is relatively easy for supplying
vehicles to access such sites. As well as stocking non-ambient goods, most supermarkets do also stock a very wide
range of ambient goods, often with competing brands on offer. However, prices for such goods vary and no
supermarkets have yet adopted the discount fixed-price sales approach. In general, the large supermarket chains
largely compete with each other and pay little attention to the fixed-price dollar shop discounters. Many
supermarkets also have internet-based home ordering systems, offering (usually for a fee of $10) deliveries to
customers who are unable or unwilling to visit the supermarket.
Table One shows the relative revenue of the three main discount fixed-price chains in Eurobia.
ItzaDollar
DAIAD*
DollaFellas
Total

2012 ($million)
330
310
290
930

2011 ($million)
300
290
235
825

2010 ($million)
275
250

200
725

*Don’t Ask It’s A Dollar
Table One: Revenue of three main discount fixed-price chains in Eurobia

Questions

3


Required
(a)

Use Porter’s five forces framework to assess the attractiveness, to NESTA, of entering the discount fixedprice retail market in Eurobia.
(15 marks)

(b)

Discuss the potential use of scenarios by NESTA’s managers as part of their analysis of NESTA’s possible
entry into the discount fixed-price retail market in Eurobia.
(10 marks)
(Total = 25 marks)

2 Airtite (3.5, 6/06, amended)

45 mins

Airtite was set up in 2000 as a low cost airline operating from a number of regional airports in Europe. Using these
less popular airports was a much cheaper alternative to the major city airports and supported Airtite's low cost

service, modelled on existing low cost competitors. These providers had effectively transformed air travel in Europe
and, in so doing, contributed to an unparalleled expansion in airline travel by both business and leisure passengers.
Airtite used one type of aircraft, tightly controlled staffing levels and costs, relied entirely on online bookings and
achieved high levels of capacity utilisation and punctuality. Its route network had grown each year and included new
routes to some of the 15 countries that had joined the EU in 2004. Airtite's founder and Chief Executive, John
Sykes, was an aggressive businessman ever willing to challenge governments and competitors wherever they
impeded his airline and looking to generate positive publicity whenever possible.
John is now looking to develop a strategy which will secure Airtite's growth and development over the next 10
years. He can see a number of environmental trends emerging which could significantly affect the success or
otherwise of any developed strategy. Airtite has seen its fuel costs continuing to rise reflecting the uncertainty over
global fuel supplies. Fuel costs currently account for 25% of Airtite's operating costs. Conversely, the improving
efficiency of aircraft engines and the next generation of larger aircraft are increasing the operating efficiency of
newer aircraft and reducing harmful emissions. Concern with fuel also extends to pollution effects on global
warming and climate change. Co-ordinated global action on aircraft emissions cannot be ruled out, either in the
form of higher taxes on pollution or limits on the growth in air travel. On the positive side European governments
are anxious to continue to support increased competition in air travel and to encourage low cost operators
competing against the over-staffed and loss-making national flag carriers.
The signals for future passenger demand are also confused. Much of the increased demand for low cost air travel to
date has come from increased leisure travel by families and retired people. However families are predicted to
become smaller and the population increasingly aged. In addition there are concerns over the ability of countries to
support the increasing number of one-parent families with limited incomes and an ageing population dependent on
state pensions. There is a distinct possibility of the retirement age being increased and governments demanding a
higher level of personal contribution towards an individual's retirement pension. Such a change will have a
significant impact on an individual's disposable income and with people working longer reduce the numbers able to
enjoy leisure travel.
Finally, air travel will continue to reflect global economic activity and associated economic booms and slumps
together with global political instability in the shape of wars, terrorism and natural disasters.
John is uncertain as to how to take account of these conflicting trends in the development of Airtite's 10-year
strategy and has asked for your advice.
Required

(a)

Using models where appropriate, provide John with an environmental analysis of the conditions affecting the
low cost air travel industry.
(15 marks)

(b)

Explain how the process of developing scenarios might help John better understand the macroenvironmental factors influencing Airtite's future strategy.
(10 marks)
(Total = 25 marks)

4

Questions