Page 14 - CIMA SCS Workbook August 2018 - Day 1 Suggested Solutions

CIMA AUGUST 2018 – STRATEGIC CASE STUDY

Mitigation

The CSR policy is a good start as it shows focus on being a good employer, pay and benefits will
also help. Possibly the most important is to adopt innovative ways to deliver local news stories
that mean that FNG are able return to previous successes.

Health and Safety

There are numerous H&S issues FNG need to be aware of, any issues with these could lead to
heavy fines, litigation and damaged reputations. Journalists reporting on news stories could be in
dangerous situations, whether it is extreme weather conditions or events such as fires. Also
employees at the print facility could be at risk of injury.

Mitigation

Training has been mentioned, particularly at the print facilities, but there should also be training
and guidelines in place for reporters/journalists. FNG should also have insurance to help mitigate
this risk.

Bank Facility

FNG has significant loans, it appears to be repaying them at the moment, but this means they are
exposed to changes in interest rates, and given their falling margins and profitability, their ability
to meet repayments could be at risk.

Mitigation

A good relationship with the bank to make sure that they are aware of any issues and 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.

Currency risk

As FNG currently only operate in Borland, their currency risk is minimised, it looks unlikely they
will be exposed to any transaction risk. This could change if they were to outsource printing of
weekly publications to overseas suppliers.

Mitigation

Getting services from another country would lead to considerations around hedging transaction
risk.

52 KAPLAN PUBLISHING