Page 12 - CIMA MCS Workbook February 2019 - Day 1 Suggested Solutions

CIMA FEBRUARY 2019 – MANAGEMENT CASE STUDY

Each of the above suggestions would need to be evaluated before implementation which entails
considering each strategic option in terms of its feasibility and fit with the strengths and core
competences of the business.

Key risks associated with each of these options are:

 Market penetration – in the UK, dental practice market grew by 12.3% through 2017,
according to the latest figures. Industry statistics indicate that demand continues to
outstrip supply and with good market liquidity supported by strong industry dynamics,
activity remains strong across all price ranges. CROWNCARE must continue to innovate and
develop new products to meet the threat from social and environmental change. As such
more detailed information on consumer preference and future trends is required to
facilitate these decisions. This could be obtained by harnessing the benefits of “big data”
and the skills of existing senior management. To be complacent in this industry is not an
option.
 Product development – CROWNCARE need to enhance and embrace new technology to
develop new services and minimise the risk of trends or technological, economic and social
changes. Failure to do so could dramatically affect the long term future of industry players
such as CROWNCARE. The key risk in this context is having the competences in place to do
so. Targeted new product innovation is critical in the battle against the increasing costs &
patient responsiveness e.g. digitised dentistry, which results in resulting in huge cuts in
turnaround times. Dental practices must focus on fast‐growing emerging patient
preferences and create value‐added products that meet consumer desires.
 Market development – this would be a risk for CROWNCARE without a detailed
understanding of new markets or segments targeted. They are not a global company
(despite the vision statement) with all sales coming from Varentia customers. The risk may
be greater given the lack of experience on the board to manage such development as well
as the lack of additional capacity that such growth would demand.
 Diversification – the risk here lies with the lack of relevant skills, resources and
competences which is typical of diversification. CROWNCARE may need to consider
different expansion options to secure these skills such as acquisition or joint ventures e.g.
to feed the changing technological and social needs. Despite a positive cash position, these
options will be expensive and the availability and, given its unlisted status, the choice of
funding will need more investigation.

It will be vital therefore that each option be thoroughly evaluated before any action is taken to
develop and implement the strategy.

This will need both financial and non‐financial analysis and by the end of this process, the Board
will need to decide on a shortlist of options that will be carried forward to the strategic
implementation stage.

62 KAPLAN PUBLISHING