P3 Business Analysis Debriefing past exam paper Lili Han Education Manager ACCA China P3 Business Analysis Debriefing past exam paper

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Q1 Dec 2009 Required: (a) Xenon usually analyses an industry using Porter’s five forces framework. Using Porter’s framework, analyse the business analysis certification industry (BACTI) in Erewhon and assess whether it is an attractive market for ABCL to enter. (20 marks) (b) After considering Xenon’s interim report, ABCL decided to enter the business analysis certification training industry (BACTI) in Erewhon through the acquisition of one of the three main providers. In March 2009 they asked Xenon to write a short report to evaluate Ecoba Ltd and to analyse whether it was the most appropriate and attractive of the three possible acquisition targets. You are a business analyst with Xenon and were given the task of writing this report. Write the requested short report evaluating Ecoba Ltd and analysing whether it was the most appropriate and attractive of the three possible acquisition targets for ABCL. (16 marks) Professional marks will be awarded in part (b) for clarity and format of your report. (4 marks)

(c) In November 2009 ABCL acquired Ecoba Ltd (c) In November 2009 ABCL acquired Ecoba Ltd. Gillian Vari agreed to stay on for two years to assist the management of the ownership transition. However, her business partner became seriously ill and ABCL have agreed, on compassionate terms, for her to leave the company immediately. ABCL, from experience, know that they must manage stakeholders very carefully during this transition stage. Identify the stakeholders in Ecoba Ltd and analyse how ABCL could successfully manage them during the ownership transition. (10 marks) (50 marks)

a) Analyze the attractiveness of industry Existing competitors how hard to succeed in an industry little competition (well tolerate with each other) 2 strategic groups 20 small providers covering 20% of market (fierce competition)

New competitors how hard to enter the new industry (barriers to entry) Megatrain entered into the industry and Big 3 training work together - price cutting - strengthening promotional campaigns Megatrain’s foreign ownership (ABCL are from the same country, and they are likely to do it again) Gold certification (12 months to achieve) - significant disadvantages

Customers Powerful? The more powerful, the harder to make profit 15 large corporate customers trying to costs hard to profit Suppliers Powerful? The more powerful, the harder to make profit lecturers- Big 3 find hard to recruit lecturers powerful higher salary

Substitutes Conclusion alternatives to the products/alternatives to attending college the more substitute, the harder to price - direct substitute students attending other colleges (smaller colleges) - indirect substitute online course (little online tuition appears in Erewhon - monetary substitute receiving tuition but not attending class (self-taught 40% and Eloba did not insist students to attend) they spend on other products/service Conclusion ABCL can expect a vigorous response to their proposed entry into the industry, so not suitable for organic growth need to enter the market through acquisition

b) Write the requested short report evaluating Ecoba Ltd and analysing whether it was the most appropriate and attractive of the three possible acquisition targets for ABCL. (16 marks) Professional marks will be awarded in part (b) for clarity and format of your report. (4 marks) To: Owner of ABCL From: Business Analyst Date: Today Subject: Possible acquisition targets Introduction Look at 3 largest companies in the industry All targets will be through SFA test

Catalyst Batrain Ecoba Acceptability public limited company core business and source of significant growth for Tuition Group public limited company Batrain Acceptability 8 owners with 4 under age of 40 (too young to retire) Ecoba Acceptability 95% owned by Gillian Vari approaching retirement age Feasibility assuming ABCL has funds to purchase Ecoba

Financial perspective Suitability Financial perspective CATalyst Batrain Ecoba Comment 1) Revenue $35,000,000 $25,000,000 $22,000,000 from $ 19,000,000 (29.4% due to gaining 2 new large customers) 2) Gross profit margin 35% 37% 20.45% high salary for named lecturers 3) Net profit margin 6% 8% 4.55% smaller for Ecoba. best at controlling their overhead 4) Sales revenue to capital employed 3.36 3.19 3.89 better than the others two meaning Ecoba using its lecturers efficiently (only pay them for when they are actually teaching) 5) Liquiduty ratio 0.92 0.93 industry norm 6) Average payables settlement period 65 days 60 days 144 days reflect the concerns of the lecturers at Ecoba. It takes too long for them to be paid 7) Average receivables settlement period 30 days 35 days 71 days better terms given to 2 customers to persuade them to come 8) Gearing ratio 30% 25% 3.50% lower than 2. Once ABCL buys Ecoba, easy to borrow money to expand the business (particularly the NCA required to develop online tuition 9) Interest cover ratio 3.25 4.75 50 low level of borrowing they have & no financial risks for ABCL to worry

Non-financial perspective Most lecturers do not work full time for Ecoba, so it is unlikely much resistance to an acquisition Conclusion Pass SFA test

Q3 Dec 2011 Explain the purpose of each of the following: a post-project review, a post-implementation review and a benefits realization review. (6 marks) Evaluate the problems and the lessons that should be learned from a post-project review and a post-implementation review of the electronic ordering system at HomeDeliver. (12 marks)

Q3 Dec 2011 (a) A post-project review Time take place when the project has been completed. (last stage of the project) Focus the conduct of the project itself, not the product it has delivered Aim identify & understand what went well & what went badly in the project & improve future project Lessons feed lessons learnt back into the project mgt system

Q3 Dec 2011 (a) A post-implementation review Time take place a specified time after the product has been delivered. Focus the product delivered by the project & fitness of product for purpose Aim fix or address identified faults & make recommendations on how to avoid the faults in the future. Lessons feed lessons learnt back into the product production process

Q3 Dec 2011 (a) A benefits realization review Time take place after the product has been delivered (part of post-implementation review) Focus Aim Lessons feed lessons learnt back into the benefits mgt process Review of the initial cost (accurate)/benefit (accrued) analysis & any subsequent updates made to this analysis during the conduct of the project

Q3 Dec 2011 (b) Post-project review @ HomeDeliver Problems The late allocation of order administrators full time to the project. (other normal operational duties & 2 mth slippage) The failure to consult catalogue supervisors & agents (amend an order not included) The implementation scope, implementing all supervisors and agents inappropriately (too ambitious and risky) Lessons learnt Deadline will slip if appropriate employees are not allocated full-time to the project Ensure that stakeholder analysis includes all stakeholders. The risk assessment of the scope of projects is important & project mgr should look to mitigate risk by reducing scope.

Q3 Dec 2011 (b) Post-implementation review @ HomeDeliver Problems Faults & omissions in the computer software (browser/order amendment) Faults in the documentation (content/delivery) - spelling& function faults received actually? print out by agent at the cost of themselves Training of users (miss the opportunity to find early faults ( eg. Certain browser & could not support multiple orders from one householder. Lessons learnt Acceptance testing should be undertaken & multiple browser should be considered. Documents must be carefully inspected before software release & its physical distribution should be considered. Training is necessary -Build rapport with users -Identify possible issues & faults with the software at an earlier stage.

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