SCS – Nov 2019 – L3 – Strategic Growth and Challenges in Ghana’s Tourism Industry

Level: Level 3
Series: NOV 2019
Case Study Tags: Business Strategy, Corporate Governance, Financial Analysis, Growth Strategies, Mergers, Tourism Industry

Summarized Case Study

The case study focuses on Adofo Boateng and Coffie Oduro, who founded Ghanalux Ltd, a luxury tour company in Ghana. It explores the company’s growth trajectory, from its humble beginnings to its current operations in a growing but underdeveloped tourism industry. Ghanalux organizes premium tours for affluent tourists from the northeastern United States and aims to expand beyond its current market while maintaining its reputation for high-quality service.

Key challenges include talent retention, financing operations, and managing growth in a fragmented industry. The directors discuss various strategies for growth, such as increasing tour numbers, developing bespoke tours, and forming strategic alliances with hotels. Financial challenges, such as managing working capital and reducing the company’s reliance on bank overdrafts, are critical to the company’s future sustainability.

The study also covers governance issues, where the directors consider restructuring the board to include a non-executive director or promoting a senior manager from within. Ethical concerns related to customer safety, security, and service quality also arise, prompting discussions on internal controls and company ethics.

Strategic decisions covered include potential mergers, performance measurement systems (such as the balanced scorecard), and the importance of adapting marketing strategies to expand into new regions. The directors must evaluate the feasibility, suitability, and acceptability of these strategies to ensure continued growth in a competitive industry.

Full Case Study

Past Questions for SCS – Nov 2019 – L3 – Strategic Growth and Challenges in Ghana’s Tourism Industry

SCS – Nov 2019 – L3 – Q2d – Ethics and social responsibility

Discuss the ethical operations of Ghanalux and recommend internal controls to enhance customer safety and service.

Question

i) Discuss whether the company is operating in an ethical manner.
(5 marks)

ii) Recommend internal controls that might be implemented by the company to improve customer safety and security, and to deal with the problems of poor service to customers.
(7 marks)

Answer

Tags: Customer safety, Ethics, Internal Controls, Service Quality
Level: Level 3

Topic: Ethics and social responsibility
Series: NOV 2019

SCS – Nov 2019 – L3 – Q2c – Controlling risk

Recommend governance and organizational changes for Ghanalux to improve its performance.

Question

i) In response to the views of the company directors, and giving your reasons, recommend any changes to the governance and organization of Ghanalux that would benefit the performance of the company.
(8 marks)

Answer

Tags: Governance, Management, Organization
Level: Level 3

Topic: Controlling Risk
Series: NOV 2019

SCS – Nov 2019 – L3 – Q2b – Capital structure

Discuss the potential benefits and problems of converting short-term borrowing into long-term loans.

Question

i) Discuss the potential benefits and problems with proposals to convert the company’s short-term borrowings into a longer-term loan.

ii) Pay bigger cash salaries, or add a share option element to the remuneration packages.

iii) Maintain the dividend for 2019 at the 2018 level, or even reduce it further.

iv) Convert any surplus dollar cash into cedis.

(10 marks)

Answer

Tags: Borrowing, Currency Conversion, Financial structure, Foreign Exchange, Long-term loans, Risk Management
Level: Level 3

Topic: Capital structure
Series: NOV 2019

SCS – Nov 2019 – L3 – Q2a – Financial management

Analyze the financial performance of Ghanalux in 2018 and its effect on the bank overdraft.

Question

i) Analyze the financial performance of Ghanalux in 2018 to determine the extent to which the continuing large bank overdraft is attributable to profitability issues, cash flow management issues, or a combination of both.

ii) Prepare a forecasted cash flow statement for Ghanalux in 2019 to determine the likely bank balance or bank overdraft at the end of 2019. Assume the financial relationships and ratios are largely maintained from 2018 to 2019.

iii) iii) Recommend measures to improve the cash flow of the company.

(20 marks)

Answer

Tags: Cash flow improvement, Working Capital Management
Level: Level 3

Topic: Financial management
Series: NOV 2019

SCS – Nov 2019 – L3 – Q1d – Controlling risk

Recommend internal controls to improve customer safety and service at Ghanalux.

Question

Recommend internal controls that might be implemented by the company to improve customer safety and security, and to deal with the problems of poor service to customers.
(7 marks)

Answer

Tags: Customer safety, Internal Controls, Risk Management, Service Quality
Level: Level 3

Topic: Controlling Risk
Series: NOV 2019

SCS – Nov 2019 – L3 – Q1c – Methods of development

iscuss the strategic alliance proposal between Ghanalux and Sunlit Hotels.

Question

i) Discuss the issues that should be considered when responding to proposals for a strategic alliance between Ghanalux and Sunlit Hotels.
(7 marks)

ii) Discuss the issues that should be considered when responding to proposals for a business combination with the tour company in Kumasi.
(7 marks)

Answer

Tags: Acquisition, Business combination, Kumasi tour company, Merger, Partnership, Strategic Alliance, Sunlit Hotels, Tourism
Level: Level 3

Topic: Methods of Development
Series: NOV 2019

SCS – Nov 2019 – L3 – Q1b – Competitive Advantage

Discuss the competitive advantage of Ghanalux in the tourism industry.

Question

i) Discuss what you consider to be the main competitive advantage of Ghanalux in its industry.
(5 marks)

ii) Discuss how a balanced scorecard approach to performance measurement might help Ghanalux to improve its profitability.
(3 marks)

iii) Recommend performance measures that might be used by Ghanalux if it adopts a balanced scorecard system.
(8 marks)

Answer

Tags: Competitive Advantage, Ghanalux, Tourism
Level: Level 3

Topic: Competitive Advantage
Series: NOV 2019

: SCS – Nov 2019 – L3 – Q1a – Environment analysis

Analyze the competitive disadvantage of Ghana’s tourism industry using Porter’s Diamond model.

Question

i) Discuss the view that the tourism industry in Ghana might currently be at a disadvantage and under-developed compared to other countries.
Note: Use Porter’s Diamond to structure your answer.
(8 marks)

ii) Assess the two suggestions about expanding the business of Ghanalux outside Ghana and into conferencing, from the perspective that strategy should be suitable, feasible, and acceptable.
(6 marks)

Answer

Tags: Competitive Advantage, Ghana, Porter’s Diamond, Tourism
Level: Level 3

Topic: Environment analysis
Series: NOV 2019

SCS – Nov 2019 – L3 – Strategic Growth and Challenges in Ghana’s Tourism Industry

Past Questions for SCS – Nov 2019 – L3 – Strategic Growth and Challenges in Ghana’s Tourism Industry

SCS – Nov 2019 – L3 – Q2d – Ethics and social responsibility

Discuss the ethical operations of Ghanalux and recommend internal controls to enhance customer safety and service.

SCS – Nov 2019 – L3 – Q2c – Controlling risk

Recommend governance and organizational changes for Ghanalux to improve its performance.

SCS – Nov 2019 – L3 – Q2b – Capital structure

Discuss the potential benefits and problems of converting short-term borrowing into long-term loans.

SCS – Nov 2019 – L3 – Q2a – Financial management

Analyze the financial performance of Ghanalux in 2018 and its effect on the bank overdraft.

SCS – Nov 2019 – L3 – Q1d – Controlling risk

Recommend internal controls to improve customer safety and service at Ghanalux.

SCS – Nov 2019 – L3 – Q1c – Methods of development

iscuss the strategic alliance proposal between Ghanalux and Sunlit Hotels.

SCS – Nov 2019 – L3 – Q1b – Competitive Advantage

Discuss the competitive advantage of Ghanalux in the tourism industry.

: SCS – Nov 2019 – L3 – Q1a – Environment analysis

Analyze the competitive disadvantage of Ghana’s tourism industry using Porter’s Diamond model.

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SCS – Nov 2019 – L3 – Strategic Growth and Challenges in Ghana’s Tourism Industry

Past Questions for SCS – Nov 2019 – L3 – Strategic Growth and Challenges in Ghana’s Tourism Industry

SCS – Nov 2019 – L3 – Q2d – Ethics and social responsibility

Discuss the ethical operations of Ghanalux and recommend internal controls to enhance customer safety and service.

SCS – Nov 2019 – L3 – Q2c – Controlling risk

Recommend governance and organizational changes for Ghanalux to improve its performance.

SCS – Nov 2019 – L3 – Q2b – Capital structure

Discuss the potential benefits and problems of converting short-term borrowing into long-term loans.

SCS – Nov 2019 – L3 – Q2a – Financial management

Analyze the financial performance of Ghanalux in 2018 and its effect on the bank overdraft.

SCS – Nov 2019 – L3 – Q1d – Controlling risk

Recommend internal controls to improve customer safety and service at Ghanalux.

SCS – Nov 2019 – L3 – Q1c – Methods of development

iscuss the strategic alliance proposal between Ghanalux and Sunlit Hotels.

SCS – Nov 2019 – L3 – Q1b – Competitive Advantage

Discuss the competitive advantage of Ghanalux in the tourism industry.

: SCS – Nov 2019 – L3 – Q1a – Environment analysis

Analyze the competitive disadvantage of Ghana’s tourism industry using Porter’s Diamond model.

Our offerings

Contact Info

Customer

Get In Touch

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