Page 4 - CIMA SCS Workbook February 2019 - Day 1 Suggested Solutions

CIMA FEBRUARY 2019 – STRATEGIC CASE STUDY

• Data security a major issue for any tech company that captures user data

• Move towards more medical focus in data use eg heart rate monitors, blood sugar levels
etc

• Need for software to be compatible with smartphone operating systems; regular updates
required

• Social media comments can have big impact on reputation

Environmental

• Recyclability of product?

• Could have positive environmental impact eg if more people walk/run/cycle to work
instead of using cars

Legal

• Risk of infringement to patented technology

• Inaccurate data from fitness products could have negative health impact on users and lead
to litigation

• Health and safety/employee legislation throughout the supply chain

EXERCISE 2
Threat of new entrants

In order to enter this industry, an organisation will need to have technological skills and access to
a degree of finance. The former is likely to prove more challenging; as was shown when Vita was
created in 2011, if the business has a good idea it is likely to be able to raise the money somehow.
The market is described as highly competitive, which may act as a barrier to entry. It is made up of
many operators, some of whom will have established powerful brand names; it will be a challenge
to compete against these businesses.

However, this is not to say that it cannot happen. The industry is still relatively young, and there is
specific mention of companies such as Clown (2014), Gopher-IT (2015), and Smart Heart (2016)
which have all come into existence in the last 3 years and secured a strong position in the market.

The continued growth potential, mixed with good margins, will mean that this market remains
attractive to new entrants for some time.

Conclusion: barriers to entry are medium

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