Page 16 - MCS August Day 2 Tasks

CIMA AUGUST 2018 – MANAGEMENT CASE STUDY

TASK 2 – VALUE ANALYSIS

Trigger

To: Finance Director
From: Production Director
Date: Today
Subject: Value analysis

It is clear that to add value to our customers product differentiation and innovation is critical to
prosper in this industry and maintain competitive advantage.

Although Montel has continued to be dominant in the market the competitive threat does not
recede, the board are concerned at the most recent management accounts which, as you know,
reveal a further decline in sales against budget. In addition the growth of internet suppliers is a
real threat by offering lower cost substitutes for the products we offer. Given this increase in
competition, I am concerned whether all of the internal activities of Montel will actually add value
particularly if we respond to these challenges by developing new routes to market and in
formulating competitive strategies.

I have been advised that we could carry out a “value analysis” by reviewing our “activities” but I
am frankly confused with these terms. Before I take this proposal to the board I need to
understand the terminology and processes involved. I need to be sure of my facts. I would like
your team to help with initiative.

Could you let me have your outline proposals to instigate this initiative when we next meet?

Thanks

32 KAPLAN PUBLISHING