Page 10 - MCS August Day 2 Suggested Solutions
P. 10

CIMA AUGUST 2018 – MANAGEMENT CASE STUDY


               TASK 2 – VALUE ANALYSIS
               Suggested solution

               To:  Production Director
               From: Financial Manager
               Subject: Value analysis
               Date: Today


               Value Chain Analysis can be used by Montel to describe the activities that take place and relate
               them to our competitive strength. It is also one way of identifying which activities are best
               undertaken internally and which are potentially best provided by others ("out sourced").

               Value chain analysis is a three‐step process:

                     Activity analysis: firstly, identify the activities undertaken to deliver the product or service.
                     Value analysis: secondly, for each activity, consider what you would do to add the greatest
                     value for your customer.
                     Evaluation and planning: thirdly, evaluate whether it is worth making changes, and then
                     plan for action.


               Value Chain ‐ is a framework that could be used by Montel to help it understand its internal
               capability. It can be used by to analyse the different value adding activities that are the basis of its
               strategic capability, and assist us in understanding our internal strengths and weaknesses.  By
               breaking activities down into strategically relevant pieces it will allow Montel to see a fuller
               picture of the cost drivers and sources of differentiation, and then make changes appropriately.

               Part of this would involve assessing whether the strengths of Montel provide value to the
               customer, and benchmarking its strengths against the competition for comparison and
               development of best practice.

               Primary Activities ‐ those that are directly concerned with creating and delivering the product (e.g.
               for Montel lens production and camera assembly ‐ Operations)

               Support Activities which, whilst they are not directly involved in production, may increase
               effectiveness or efficiency (e.g. involving the recruitment of highly experienced staff ‐ Human
               Resource Management).

               The first step is to brainstorm the activities Montel undertakes. It is rare for a business to
               undertake all primary and support activities but with Montel this may be the case.

               Primary activities:

               Inbound logistics – activities that involve receiving, storing, distributing and handling inputs to the
               process. For Montel this would be e.g. the receipt of raw materials for lens production at the
               factory in Northtown and Eastown.






               94                                                                  KAPLAN PUBLISHING
   5   6   7   8   9   10   11   12   13   14   15