Page 12 - MCS August Day 2 Suggested Solutions

CIMA AUGUST 2018 – MANAGEMENT CASE STUDY

channels, e.g. web‐based sales, the lack of skills and experience in this area i.e. adding value by
advice could seriously undermine any future customer relationship.

Marketing and sales for Montel, the benefits our products offer, and how well you communicate
them, would be sources of value here. We currently rely on our own marketing department to
provide this service. We do not have any long term contracts with our customers so any loss of
customer could potentially have an adverse effect on value and effect revenue and cash flow.

Procurement – currently the relationship with suppliers provides value for Montel. In this regard
maintaining good relationships with suppliers to ensure continued access to high quality glass
inputs is vital.

Technology development – clearly a critical activity and we must be sure that we use this to
differentiate Montel from the other providers. Technology development is imperative to the new
product development process, but also in supporting distribution channel, sales and marketing
activities etc.

HRM – this will be a key factor for any future strategic development that takes Montel away from
its core business. We will need the skills, expertise and experience necessary to perform new
routine such as scientific equipment for example. The HR function has a key role to play in
developing policies to retain staff with the key skills, knowledge and experience.

Firm infrastructure – we will need to look carefully at head office costs and the allocation of any
of these uncontrollable costs to the retail outlets.

For Montel, it would seem that it is not using linkages between the activities to pursue a strategy
of differentiation through product innovation. In this context the relationship between the retail
outlet, the laboratory and the RND facility may need further investigation to be sure that
understanding and reacting to customer need is being achieved.

The activities Montel undertake are directly linked to achieving competitive advantage. If we wish
to outperform competitors by differentiating through higher product innovation we will have to
perform our value chain activities better than the opposition. The ultimate value Montel creates
should be measured by the amount customers are willing to pay for our products.

Financial Manager

96 KAPLAN PUBLISHING