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

CIMA FEBRUARY 2019 – STRATEGIC CASE STUDY

Information Technology
Technological advancements mean that there are more efficient ways of working so could lead to
potential savings from manufacturers and maybe even the need for new manufacturers, but
perhaps more importantly technological advancement gives opportunity to add additional
features; the convergence between wearable tech and smart watches is an example of this.

Mitigation
Vita needs to continue to invest in IT and R&D, perhaps the focus needs to shift from the
hardware to software, applications and upselling other features.

Retention of key staff
The quality of staff is mentioned in the integrated report on pages 14 & 15. In a competitive
industry staff will be aware of the challenges and the activities of the competition, one of the
reasons will be that they will want to work at an organisation well suited to meeting those
challenges.

Mitigation
The turnover rates are currently one of the lowest in the industry but they must continue their
talent management and communication, as well the research to ensure that Vita remains
competitive in the converging industries. Bibi Rainbow, director of HR will maintain Vita’s strategic
focus on their employees.

Health and Safety
Vita are not directly involved in manufacture, but the health and safety of staff must still be
paramount, in particular research and testing of fitness devices could put staff in potentially
dangerous positions at work, or if any members of staff are visiting the suppliers manufacturing
sites this could put them at risk of injury.

Mitigation
Again, Bibi Rainbow would be involved in ensuring that all staff are trained and compliant with
H&S procedures.

Bank Facility
Vita has significant loans. While it doesn’t appear to be in financial difficulty at present, having a
net interest receipt in both 2017 and 2018, Vita does have a cash outflow for the most recent
period and needs to continually invest in R&D to remain competitive.

Mitigation
A good relationship with the bank to make sure that they are aware of any issues and the steps
being taken. Good controls to help protect the business and clear planning to show how they plan
to remain competitive will assist with that relationship.

Political risk
Vita is based in Europe, operates globally, but critically all manufacturing is done by two suppliers
in one country (Golandia) in Asia. If there were any changes in government or legislation that
could impact the ability of HJM or Force to export then it could have major implications for Vita.

Mitigation
A good relationship with the Golandia government would help with this, but also it could be
further mitigated by diversifying the location of the supply chain.

52 KAPLAN PUBLISHING