Page 6 - SCS May 2018 - Day 2 Suggested Solutions

CIMA MAY 2018 – STRATEGIC CASE STUDY

Stock Exchange Announcement

Couchweb announces today that it has been made aware of impending legal action against the
company from a former employee. The specific complaint is one of plagiarism, and the amount
sought is $100 million.

Couchweb is currently undertaking all necessary steps to substantiate the claim, including legal
advice, but remains committed to vigorously defending itself against what it considers to be a
groundless accusation.

Further details will be issued as necessary in due course.

EXERCISE 3

Email

To: Chet Nolan, CEO
From: Senior Manager
Subject: Download function and music streaming

This email will look at how different stakeholders might be affected by the decision to offer a
download function so that content can be viewed offline, and what reactions might be expected.
It will then evaluate the proposal to offer music streaming services.

Making content available offline

In terms of reactions to the above proposal, I will categorise stakeholders affected into two
groups – directly affected and indirectly.

Those who will be affected directly include:

Existing subscribers

Those subscribers who already hold an account with Couchweb are likely to be delighted at this
proposal. On the assumption that this new facility were to be made available free of charge (i.e.
that there will be no increase in the monthly subscription fee when it is introduced) then the
customer will effectively be getting extra service for no extra cost.

In some instances, when a provider announces that additional services will be made available to
its customers, it has no real impact on the customer and the reaction is one of indifference.
However, if Couchweb makes content available offline, this can impact our subscribers
significantly. It can make journeys more bearable for commuters and families with children; it can
save on mobile phone charges, as customers would no longer have to need large data plans with
mobile providers to be able to access content over services such as 4G; and it can improve the
viewing experience when there is excess demand on broadband width (multiple users
simultaneously can put the service under strain and result in patchy reception.

Existing subscribers are therefore likely to be pleased by the announcement. It will also prevent
those who are happy with the current level of service cancelling their subscription and switching

62 KAPLAN PUBLISHING