AQA Unit 3: ‘Strategies for Success’ requires A-Level students to have a full understanding of strategy in terms of finance, marketing, operations and human resources. Typically the case will be based upon a strategic decision that the business might take. The theory behind the exam is extensive; however, the following are a few key areas that from my experience need to be pushed heavily with students.
1. Making effective use of the case study is paramount. I would expect no student to even attempt the questions before understanding the real underlying issues from the case study. The use of well-placed selective arguments focused on the question means that students should spend around 10-15 minutes really understanding the case study before attempting to answer even the first question. Students need this time to plan and become more selective in identifying their key points. The use of a SWOT analysis has been particularly effective in previous years. I have often asked students to place an ‘S’ next to case evidence where a competitive advantage can be seen, an ‘W’ next to internal factors of weakness that may provide them with a competitive disadvantage, an ‘O’ next to external opportunities and a ‘T’ next to those threats that are outside of the control of the business. The need to be really selective is vital. What are the main issues that really jump out at you? Students will need to only select a few points here for deeper analysis. Often I have asked my group to break the question down and catalogue the elements of the case study in list format in terms of importance that most precisely provide the examiner with what they are looking for.
2. Often a case will ask you whether to adopt a plan or not. Possibly as with many past papers, a new management team has been installed in the business to provide a new strategic focus. Students must be able to assess the likelihood of that particular plan becoming a success. Drill down into areas of the case looking at liquidity, cash flow, Ansoffs matrix, profitability, efficiency, management capability, and competitive offering amongst other areas. With my groups previously, I have asked them to ‘reverse engineer’ the question, by simply asking them ‘What should you not include in the answer?’ By asking my business students this question it allows for a discussion within the group as to what are the most important aspects of the case, by breaking down those elements that are of least importance.
3. When completing Ratios or Investment Appraisal, students must take account of the case study and its qualitative theory and not just the quantative data that is produced from completing a formula. Of course it is vital that students can quickly and efficiently calculate ARR, Payback and NPV and provide understanding of theory behind the methods. However, their work must always be supported with the written case. For example, a student may say an organisation with above 50% gearing is overly leveraged with debt, but have they truly considered the main aims and objectives of the firm. What type of organisation are they? Many firms are able to work with high levels of gearing and this can even provide benefits for shareholders.
4. The impact of external market forces will run through the exam like a stick of rock as the case study will focus on attractiveness of the market. Students will need to have a real understanding of the influence of such forces. Accordingly, as students prepare their revision it is vital that they focus on the role of Porter’s five forces model and bring in the underlying economic drivers that will shape the market within the case study. There are plenty of great materials online for students to develop their understanding of Michael Porter; in particular the following video from Harvard Business is an excellent resource: http://www.youtube.com/watch?v=mYF2_FBCvXw
5. Often I have found that those middle learners who are prone to use generality and unstructured responses need to be shown how to retain focus in their answers. In particular, these students must be required to plan all of their answers before getting stuck in. This often allows them to keep their responses in the context of the case study. In particular, with the final question students must not ‘sit on the fence’. Recommendations are often the most difficult for these students as occasionally they lack the confidence here to deliver a final decision. A lesson spent on the final question only is often a lesson well spent.