9 Steps to Planning Your Strategic Case Study Exam Answer

strategic case study answer planning

When it comes to passing the strategic case study exam, you need to overcome the most common error identified in the examiner reports:

“The main issue as usual was candidates not answering the question”

“Answers could often be improved considerably by applying the answer directly to the case study and making answers less generic”

 “The main problems were candidates failing to answer what was asked and writing everything they knew on the topic being asked about”

So why do students keep falling into this trap?

Well, because it’s so easy to do.

As soon as the exam starts you’re under pressure.  The pressure you put on yourself to pass.  The pressure you’re under from work to complete your studies.  And the time pressure of that clock ticking away before you are timed out of that section you are answering.

And in the heat of the moment, your mind starts to get overwhelmed and you lose focus on what you are being asked to do.

You’ve got all that technical knowledge running around in your head from revising F3, P3 and E3, so as soon as you see a topic that you are familiar with, you think: “Great! I know about this.  There’s loads I can write about!”

Wrong!

You see, you don’t just need strategic level knowledge, but also strategic level thinking.

By this I mean you need to think strategically about how you are going to answer the questions being asked, before you start typing.  So that each point you make is sufficient to earn you a mark, but concise enough so that you don’t run out of time.

And that’s where the following 9-step answer planning approach comes into play.

Let’s take a look…

Step #1: Initial skim reading of the scenario

This is where you want to identify what the requirements are.   And confirm whether there are any separate elements to  address in your answer.

So at this stage you’re simply looking out for what you’re being asked to do.  Not what information would be helpful to reference in your answer.  We’ll do that in a minute.

Let’s take a look at the requirements for  Section 1 of Variant 1 for the August 2017 Strategic Case Study Exam

Requirement 1:

Firstly, to what extent will agreeing to this proposal limit AutoAuto’s strategic options in the future?

Requirement 2:

Secondly, how is our participation in this project likely to affect our share price during the development phase?

As you can see, the requirements are usually pretty clear.  But just be aware they could appear anywhere in the information provided.

Okay, so we know what we are being asked to do.  Onto the next stage.

Step #2: Create a structure around those requirements

Firstly, we need to decide where we will create our plan.  I advise using the answer area like the one below.

This allows you to:

  • Underline and bold the headings and sub headings you will use.
  • Copy and paste your headings and bullet points underneath your plan to quickly format your answer.
  • Avoid switching between windows on screen

We can then start off our plan by breaking down the requirements into the separate parts we need to address, which we will use as our sub-headings in our written answer.

For requirement 1, we are basically being asked for our advice on what could happen to our strategic options if we agree to the proposal (i.e. benefits and drawbacks)

For requirement 2, we are being asked to give our advice on what could happen to the share price in the development phase of this project. (i.e. arguments for it going up, down and remaining unaffected)

Next, we need to estimate the number of marks to allocate to each part of the two requirements.  Now, section 1 of the exam was 1 hour long.  And given we know the exam overall is 3 hours long, it is fair to assume that a 1 hour section is worth a third of the marks in total – so that’s 33 marks.

And we know from the examiner that each requirement carries an equal (or very similar) number of marks:

“Case writers craft tasks so that each element within a task has an equal number of marks and this should be used by candidates as a guide to the amount of time to allocate, and volume of work that should be produced, for the task”

So without even knowing the marking guidance, we could have guessed that the two requirements were worth around 15 marks each.

And as we want to try and write strong, in-depth points that earn us two marks each, we can then structure our plan as follows…

Requirement 1 – 15 marks

Strategic options limited 7 marks

  • Point 1 – 2 marks
  • Point 2 – 2 marks
  • Point 3 – 2 marks

Strategic options not limited 7 marks

  • Point 1 – 2 marks
  • Point 2 – 2 marks
  • Point 3 – 2 marks

Requirement 2 – 15 marks

Share price goes up  – 5 marks

  • Point 1 – 2 marks
  • Point 2 – 2 marks
  • Point 3 – 2 marks

Share price goes down  – 5 marks

  • Point 1 – 2 marks
  • Point 2 – 2 marks
  • Point 3 – 2 marks

Share price stays the same  – 5 marks

  • Point 1 – 2 marks
  • Point 2 – 2 marks
  • Point 3 – 2 marks

Remember this is just a quick estimate of the breakdown of marks.  It doesn’t have to be precise.  Just use it as a guide for how many points you need to make.

Step #3: Brainstorm your initial thoughts

This step involves brainstorming any initial ideas that come to you BEFORE you read the scenario in detail.

We do this now as it’s easy to get lost in the detail of the scenario and miss some obvious points which can earn you marks.

Here, you want to ask yourself:  “is there any technical knowledge I can use which would make my answer more helpful?”  If so, jot down any models or theories that would be relevant.

After all, the Strategic case study examiner recently said in their post exam report:

“A good level of knowledge of the three strategic syllabi is necessary in order to do well in the exams”

Also, consider any common sense ideas that come to mind which would be useful.

This should only be a very quick process – one or two minutes max – but it will give you confidence that you have some relevant points you can expand on in your answer.

If we take requirement 2 from above, we should have some initial thoughts on how the share price could be affected.

For instance, how could it go up?

If the market finds out about our involvement in the project and believes this will benefit our future cash flows

How could it go down?

If the market finds out about the collaboration and believes it will harm the success of our own projects because of diverted resources and delays etc

So we can add those ideas to our plan for requirement 2…

Requirement 2 – 15 marks

Share price goes up  – 5 marks

  • Point 1 – 2 marks – market believes proposed project will benefit our future cash flows
  • Point 2 – 2 marks
  • Point 3 – 2 marks

Share price goes down  – 5 marks

  • Point 1 – 2 marks – market believes proposed project will harm existing projects
  • Point 2 – 2 marks
  • Point 3 – 2 marks

Share price stays the same  – 5 marks

  • Point 1 – 2 marks
  • Point 2 – 2 marks
  • Point 3 – 2 marks

Step #4:  Read the scenario carefully and add notes to your plan

Here we want to read through the scenario, paragraph by paragraph, to see if there is any information we can add to our answer plan to help address the two requirements.

Let’s start with the first paragraph in section 1, variant 1, of the August 2017 exam:

“The Board has received an enquiry from Grant Motors, one of the world’s largest manufacturers of cars and vans.  I have brought a copy of the letter that we received from Grant’s CEO.”

Okay, so as “one of the world’s largest manufacturers of cars and vans” (of which there are very few) this enquiry could have a significant impact on our business going forward.   This gives us some initial context as to the extent that our strategic options could be impacted.

Next, in paragraph 2, we are told:

“Grant Motors would like us to assist in the development of autonomous vehicles.  This is a more ambitious target than our own project to develop a driverless system because Grant Motors plans to carry passengers or delivery workers who will not have the ability to override the electronic controls.  AutoAuto’s Board is confident that we could continue with the development work on our existing driverless vehicle technology without it being classed as a competing product to Grant Motors’ proposal for autonomous vehicles.  However, both of these projects will require extensive and costly development work for at least two years and Grant Motors will probably ask us to sign a non-disclosure agreement.”

If this project is “more ambitious” than our own project then this indicates that there is more risk involved.  Albeit shared risk.  So this may be seen negatively if the market finds out and cause downward pressure on our share price.  We can add this to our answer to requirement 2.

With the Board being “confident that we could continue with the development work on our existing driverless vehicle technology without it being classed as a competing product to Grant Motors’ proposal for autonomous vehicles” then this suggests our strategic options would not be that limited as we can keep heading in the direction of developing driverless vehicle technology to sell onto customers.

But a big issue to consider is that both this proposal and our own project “will require extensive and costly development work for at least two years” which could in turn impact negatively on our future cash flows.  Both in terms of the investment required in the collaborative project, and any delays to launching our own products.  This would be viewed upon negatively in the market and would likely see our share price fall.

If however, we are asked to sign a non-disclosure agreement then this should mean very little, if any, news about the project will be known by the market.  And so on this basis the share price should remain unaffected by the proposal going ahead.

Now, let’s turn to the reference material – the letter received from Grant’s CEO.

“Grant Motors is interested in working with AutoAuto to develop an autonomous commercial vehicles.  Unlike the current designs that AutoAuto has in progress, these vehicles would have no driver”

With the proposed product being differently designed to what we have in development, this should distinguish the products from one another when it comes to offering them to market.  Perhaps there is also an opportunity to learn from the design of these driverless vehicles which could help our own development.  This all suggests our strategic options wouldn’t be that limited and we can add these points to our plan for requirement 1.

“Grant Motors is in discussion with Appcab, the world’s leading internet-based taxi service.  Customers presently use a mobile phone app to summon a taxi with a driver to take them to their destination.  Appcab wishes us to develop an autonomous taxi that can navigate itself, unoccupied, to collect passengers and then continue to the destination.   The car will not have any manual controls, to prevent the customer from crashing or stealing the car.“

With a big customer already interested in buying unoccupied autonomous vehicles, there is clearly demand for the technology and therefore opportunity to share in the revenues/profits for meeting this demand and boost our future cash flows.  But also, other internet-based taxi services may want our own technology instead, where the automatic controls can still be overridden.  As this would be less risky in terms of vehicles crashing/being stolen and would likely be more popular with users who would feel safer.

“We are also in talks with Interbox, a major online mail order company.  Interbox wishes to buy a fleet of autonomous delivery vans that can drive themselves to customers’ addresses.  The van might have a delivery person who will work in the cargo compartment while being driven to the next delivery and who will take items to customers’ doors.   Alternatively, the van might be completely unmanned and be equipped with on board lockers that can be accessed by customers.  The van would park and alert the customer with a text message and a code number to open the relevant locker. “

Again, there is both the opportunity to share in the revenues/profits for meeting this demand and boost our future cash flows, but also to supply our own technology into this market.

“If we agree to collaborate on these two projects then we would have to agree that AutoAuto would not develop any competing products for other manufacturers, although you could continue with existing driverless vehicle technology for general sale.”

Okay, so this does limit our strategic options in terms of the opportunity to develop similar products in the future for other manufacturers if we see that this product is successful at Grant Motors.  This in turn would restrict our potential future cash flows which would be seen as a negative in the market.  And therefore reduce our share price.

Also, there is the risk that our own product will have elements of the technology used in the driverless vehicles – as our engineers will be working on both – and therefore we would be open to a legal dispute which could result in delays and financial penalties.

But we can at least continue with the development of our current technology which is the current strategy we are pursuing.  So on this basis our share price should remain steady as this will already be factored into the current share price.

The concern would be that the collaborative product is so successful that other manufacturers want the same technology, not the one that we are developing ourselves.  This would clearly be viewed upon negatively in the market and see our share price fall.

Okay, let’s include all the key points we’ve learned from the scenario onto our plan…

Requirement 1 – 15 marks

Strategic options limited 7 marks

  • Point 1 – 2 marks – as one of the world’s largest manufacturers of cars and vans  who will have their own technology, that is a big potential customer we lose out on for our own product
  • Point 2 – 2 marks – may be subject to legal dispute if our own design is deemed to have elements of similar technology to the collaborative product.  May have to totally redesign a new product to ensure it is completely different to the product for Grant.  This could lead to delays and substantial costs.
  • Point 3 – 2 marks – if the driverless system is successful, other large vehicle manufacturers may want similar technology rather than our own.  And we would be prohibited to work with them on competing products.

Strategic options not limited 7 marks

  • Point 1 – 2 marks – can still continue to develop our own product although may be delayed as resources are diverted to collaborative project

 

  • Point 2 – 2 marks – there is clearly demand for this new driverless system and so we can benefit from our share of the revenues and profits. And invest this back into developing our on product.

 

  • Point 3 – 2 marks – may be the opportunity to enter into the internet based taxi market as well as the van delivery market with our own product

 

Requirement 2 – 15 marks

Share price goes up  – 5 marks

  • Point 1 – 2 marks – If Grant releases information about the project, and names us in it, then the market may believe the proposed project will benefit our future cash flows (increased revenue and profits, already demand from customers etc)

 

  • Point 2 – 2 marks –  Market may find out about the project and believe that we can take advantage of the learning curve and develop our own product more quickly (and therefore enjoy positive cashflows sooner)

 

  • Point 3 – 2 marks –

Share price goes down  – 5 marks

  • Point 1 – 2 marks – market finds about project and believes it will harm development of existing projects and therefore future cash flows

 

  • Point 2 – 2 marks – market finds out about project and see it as a risk to cash flows because it is more ambitious than our own project

 

  • Point 3 – 2 marks –  if the market finds out that we have been withholding information about this project they may see this as an indication of hiding bad news

Share price stays the same  – 5 marks

  • Point 1 – 2 marks – non disclosure agreement would mean we can’t release information to the market about the collaborative project

 

  • Point 2 – 2 marks – we would be unlikely to offer much disclosure in our financial statements which analysts use as information to predict future cash flows

 

  • Point 3 – 2 marks

Step #5: Apply to Pre Seen

Next up, you want to consider if there are any elements from the pre seen that would be relevant to reference. As this will help you demonstrate your commercial awareness by showing you understand the business and its industry.  And earn you marks for business skills.

Now, you don’t want to re-read the pre seen (even though it is available in your exam) as this is not a good use of your time.  But it is helpful if you can remember some key points that would add value to your answer.

For instance, from the pre seen we know that we have collaborated with other with vehicle manufacturers in the past when it comes to sharing technical drawings.   There is no evidence that this has limited our strategic options before and so we can use that experience to deal with any similar issues that arise out of the potential collaboration with Grant.

Step #6: Consider Ethics

As I said in my recommended weekly study schedule for the strategic case study exam revision of ethics is vitally important in your preparation. Because ethical issues can come up in any exam sitting.

Now, it might be that one of the requirements asks you to specifically advise on an ethical issue in the scenario.  So you’d have to come up with ethical related ideas in your plan anyway.

But also, you should consider whether there are any ethical or CSR related points that you could include which would add depth to your answer.  And impress the examiner.

For instance, when answering requirement 2 from above, you could make the point that there is a moral obligation to be transparent with stakeholders and so to provide some form of disclosure about our involvement in the project with Grant.  As long as it did not contravene the terms of the Non Disclosure Agreement.  Knowledge of this information could well affect our share price, depending on the view of how our future cashflows would be affected.

Step #7: Final brainstorm considering all 3 OT paper theory

Even after the steps above, you’ll still probably find that some sections of your plan have few, if any, points on them.

So this is your chance to add any final ideas to your plan – in particular, is there any theory, pre seen knowledge or element of the scenario that you can reference?

Well, we could briefly talk about efficient market hypothesis and how this affects share prices.  (That share prices incorporate and reflect all relevant information).  And that as financial statements are deemed to be the most credible source of information, there is more confidence that the current share price is reliable and so fewer reactions occur to other news.

Step #8:  Make any relevant recommendations

As part of your role in the exam, you’ll be tested on your ability to influence your boss.   Or other senior management.

So where possible, you want to try and make clear, logical recommendations and justify those recommendations.

Can you think of any recommended courses of action that senior management should take for requirement 1 or 2?

Well, for requirement 1 we could recommend to go ahead with the proposal as Grant seems likely to proceed with the project whether we collaborate with them or not.  It is therefore a good opportunity to steal a march on our competitors by generating a new revenue stream and gaining more knowledge about driverless technology which we can then use to our advantage when developing our own products.

For requirement 2, we could recommend not to release any news or update in our financial statements about the project as we would not normally publish details about ongoing research and development (to protect our own intellectual property) and this would of course contravene the non disclosure agreement with Grant.  Therefore, the share price should remain unaffected.

Step #9: Plan your writing time

This final step in the planning process will make a huge difference to your exam success.

You must monitor your time regularly throughout your exam.  And be strict on yourself when it comes to moving on to the next part of your answer.  Otherwise you will simply end up writing too much for one element and not enough for another.   And you run the risk that your answer is incomplete when you are timed out for that section of the exam.

This will clearly harm your chances of passing.

So you should plan how long you have to write for each individual part of your answer, based on the number marks you have allocated them.

I recommend you spend around 25% of your section time on planning (including reading). That means for a 1 hour section you want to be spending around 15 minutes on your plan and 45 minutes on writing.  So that’s about 22 minutes of writing time for each of the two requirements.

We then want to break down those minutes as precisely as we can for both requirements.  And add those timings on our plan.

That way we know how long each part of answer should take to write.  And if we also include how much time we should have remaining after completing each element of our answer, it will allow us to monitor our time against the clock on the screen in the exam.

Let’s do this for each requirement from above…

Requirement 1 – 15 marks – 22.5 minutes (start with 45 minutes to go)

Strategic options limited 7 marks – 11 minutes (start with 45 minutes to go)

  • Point 1 – 2 marks – as one of the world’s largest manufacturers of cars and vans  who will have their own technology, that is a big potential customer we lose out on for our own product
  • Point 2 – 2 marks – may be subject to legal dispute if our own design is deemed to have elements of similar technology to the collaborative product.  May have to totally redesign a new product to ensure it is completely different to the product for Grant.  This could lead to delays and substantial costs.
  • Point 3 – 2 marks – if the driverless system is successful, other large vehicle manufacturers may want similar technology rather than our own.  And we would be prohibited to work with them on competing products.

Strategic options not limited 7 marks – 11 minutes (start with 34 minutes to go)

  • Point 1 – 2 marks – can still continue to develop our own product although may be delayed as resources are diverted to collaborative project.  We have overcome this sort of challenge in the past where we have shared technical designs with other manufacturers.

 

  • Point 2 – 2 marks – there is clearly demand for this new driverless system and so we can benefit from our share of the revenues and profits. And invest this back into developing our on product.   Grant will go ahead with the project anyway.

 

  • Point 3 – 2 marks – may be the opportunity to enter into the internet based taxi market as well as the van delivery market with our own product

 

Requirement 2 – 15 marks – 22.5 minutes (start with 22.5 minutes to go)

Share price goes up  – 5 marks – 7 minutes (start with 22.5 minutes to go)

  • Point 1 – 2 marks – If Grant releases information about the project, and names us in it, then the market may believe the proposed project will benefit our future cash flows (increased revenue and profits, already demand from customers etc)

 

  • Point 2 – 2 marks –  Market may find out about the project and believe that we can take advantage of the learning curve and develop our own product more quickly (and therefore enjoy positive cashflows sooner)

 

  • Point 3 – 2 marks – moral obligation to release some form of disclosure about the project with shareholders and other key stakeholders, if future cash flows would be greatly affected.

Share price goes down  – 5 marks – 7 minutes (start with 15.5 minutes to go)

  • Point 1 – 2 marks – market finds about project and believes it will harm development of existing projects and therefore future cash flows

 

  • Point 2 – 2 marks – market finds out about project and see it as a risk to cash flows because it is more ambitious than our own project

 

  • Point 3 – 2 marks –  if the market finds out that we have been withholding information about this project they may see this as an indication of hiding bad news

Share price stays the same  – 5 marks – 7 minutes (start with 7 minutes to go)

  • Point 1 – 2 marks – non disclosure agreement would mean we can’t release information to the market about the collaborative project.

 

  • Point 2 – 2 marks – we would be unlikely to offer much disclosure in our financial statements which analysts use as information to predict future cash flows

 

  • Point 3 – 2 marks – ongoing costs associated with research are unlikely to be affected by this new contract and so the impact on profits may be minimal. Which in turn would mean minimal reaction in the share price.

Remember to keep your eye on the clock throughout each section of your exam and move on according to your planned timings.

Why You Don’t Need a Completed Plan

The above final plan goes into greater detail than you’ll need in your mocks and real exam.  But I’ve made it this way to help you get a better understanding of the planning process.

And you don’t even need a fully completed plan.

If your plan is 80% complete then you should easily have enough to work with when it comes to writing a strong answer.   (And even a half complete plan will give you a good structure to use).

Remember, your answer plan won’t be getting marked so don’t get bogged down with it.   Your writing time must always take priority.

Try using as few words as possible when jotting down your plan.  You just want enough information to remind you of the headings you will use, and the key points you will expand on in your answer.  This will enable you to plan more quickly.

And sometimes fewer points will come into your head than you’d like during your planning phase.

But don’t worry.

When it comes to writing up your answer, you can just go into greater depth on the points you do have.  And new ideas may well come to you as you’re typing away.

Conclusion

Your answer plan has three main jobs:

  1. To ensure you structure your answer around the specific requirements
  2. To come up with enough points to earn you pass marks
  3. To allocate your writing time precisely for a balanced and completed answer

So why would you ignore using one in your exam?

All you have to do is complete as many of the recommended steps as you can before you have to start writing.

But you can’t just try this answer planning approach once and expect to be an expert at it.

Like all elements of case study exam technique, you need to put in the practice.

So give this 9-step approach a go in your practice exams

If you put in the work now, you’ll soon be able to perform the steps quickly and accurately, when under the time pressure of exam conditions.

And not only will your plans improve, but your exam score, too.

Now, I realise that we’ve covered a load of detail here, so if you have any questions, just email me below.

Thanks for your time,

Matt

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