Page 12 - CIMA MCS Workbook February 2019 - Day 2 Suggested Solutions

CIMA FEBRUARY 2019 – MANAGEMENT CASE STUDY

TASK 2 ‐ INTERNAL ACTIVITIES

Suggested solution

Report:

From: Financial Manager
To: Finance Director
Date: Today
Subject: Internal activities

The Value Chain model can be used to understand the internal position of a company and how
the various activities can add value in the customer’s view. It can also be used to develop a
competitive strategy of either cost reduction or differentiation and decide on whether or not to
retain or outsource activities depending in whether they “fit” with an organisation’s distinctive
capabilities.

Within the value chain these activities are broken down into primary and support.

Primary Activities ‐ those directly concerned with creating and delivering the product or service,
i.e. sourcing the merchandise and selling the products to customer.

For CROWNCARE these would be the activities involved in the provision of dental treatments:

Inbound Logistics – the receipt and distribution of inputs to the process. This is obviously a key
area for CROWNCARE covering patient intake, scheduling, checking insurance etc.

Operations – would involve the actual dental procedures undertaken which, as we are aware, is
complex. The advent of technology has provided more flexibility within this process and greater
efficiency and effectiveness, for example in 3D printing design software. New technology is always
on the horizon and we need to be sure that any new processes do not disrupt this key activity but
at the same time be up to date to differentiate Crowncare from other competitors.

Outbound logistics ‐ would involve getting the goods/providing the services to the final customer.
Ensuring that the customer has a pleasant experience underpins the need to have pleasant
environments at each of our locations; however it may be the case that (for example) reception
staff may be idle for periods of time and be a drain on profits. This will need further investigation
as, although part of the mission is to exceed customer expectations and provide quality, it may
have an impact on the profitability of Crowncare.

Marketing and sales – occurs throughout the process with heavy emphasis on patient contact at
each stage of the process. The activities undertaken here can influence the success of Crowncare
considerably and we will need to be sure that we have the correct skill set in this critical activity.
In addition Crowncare does not currently have social media presence or an on‐line booking facility
which maybe an appropriate alternative.

Service – traditionally this would involve dealing with all after‐sales activities. In our case however
we would be dealing with the client in terms of errors throughout the process and any corrective
action taken. This is a sensitive area and one traditionally associated with differentiators like
Crowncare. The customer will expect quality however and that will apply to the service delivery
product throughout the whole process, particularly given the treatment options we are offering
patients.

102 KAPLAN PUBLISHING