Page 11 - CIMA SCS Workbook February 2019 - Day 2 Suggested Solutions

CIMA FEBRUARY 2019 – STRATEGIC CASE STUDY

training and so on. It may also be that with additional research we could decide that the risks are
so great that the best control could be to avoid this option altogether.

Recruitment
Another control we could implement, and this would only really be used if we decided to pursue
this further, would be recruitment, this would be particularly helpful to manage the risks
associated with lack of knowledge. We could recruit at the highest level, and bring in a director of
retail to the Vita Board, they would then be able to lead this development. They would be able to
work with Bibi Rainbow to oversee the recruitment of appropriate staff for the stores and to help
design the important training that is mentioned in the article.

Time
Again, this control only becomes relevant if we have decided to pursue this further. We do not
have to open 50 stores simultaneously across Newland. It could be a very gradual entrance into
the retailing industry. Indeed, the first site we open could be a test site, with break clauses to end
the experiment early if it does not go well. If it does go well, then the anticipation from the media
over where the next store opening may be will help develop the brand further. Look at companies
like Apple, their stores seem to fit the descriptions in the article, and each store opening gets
tremendous news coverage.

Also, in terms of timings and training, a good way to experiment with this maybe to set up a
concession in a current retail channel, it would be lower cost and in an area where the customer
already expects to buy a Vita device, so lower the risk overall.

Acquisition
A final consideration could be to acquire a retail chain, this could help with both the knowledge
and skills gaps, but also the sites, if the target had appropriate sites. It could be set us a separate
division and once the acquisition was complete it would help reduce the management time
consumed with it and hopefully allow strategic focus to remain on device/technology
development. It should be noted that we don’t have any experience in acquisitions, so this would
present certain risks of its own. I would be happy to elaborate, if required.

Conclusion
As you rightly say, this does seem an interesting business opportunity, but the Board must
carefully consider the need to balance the benefits you passionately believe in with the risks,
particularly the changing market conditions and the need to develop our wearable technology.

70 KAPLAN PUBLISHING