SCS – Nov 2020 – L3 – Golden Onyx Hotel Management Challenges

Level: Level 3
Series: NOV 2020
Case Study Tags: Business Strategy, Corporate Governance, Ethical Conflicts, Expansion Project, Financial Projections, Hospitality Industry, Market Development, PESTEL Analysis

Summarized Case Study

Cheetah Investments Limited (CIL), operating under the brand name Ghana Golden Onyx Hotel (GGOH), faces various strategic and financial challenges as it seeks to expand and strengthen its market position in the competitive hospitality industry. Established in 2016, GGOH provides services ranging from accommodation to conferencing and fitness, targeting both international and domestic clients. The company’s mission and vision aim to establish it as a leading destination in Ghana, focusing on delivering unforgettable customer experiences.

Key issues explored in the case include corporate governance challenges, particularly the decision not to appoint a managing director, which raises concerns about leadership and ethical governance. The board composition and alternating chairmanship model between shareholders also pose potential conflicts that could impede effective decision-making.

The financial challenges are underscored by a $3.5 million foreign currency loan from ABSTRACT Bank, accrued during the construction of the hotel. CIL is grappling with cash flow issues and an inability to meet financial obligations due to a sluggish start in operations. The company’s financial projections depend heavily on increasing room occupancy rates and expanding facilities, which includes a planned expansion project to add 60 standard rooms and a multipurpose conference facility.

Strategic growth opportunities are analyzed using Ansoff’s Product/Market Growth Matrix, revealing that GGOH could benefit from market penetration and development strategies, especially as competition intensifies in the hospitality sector. The case also discusses transaction risks arising from foreign currency loans and the potential impact on GGOH’s financial stability. Ethical conflicts and integrity in financial reporting are addressed in line with IFAC guidelines.

This case study encourages students to apply strategic analysis tools, assess financial performance and governance structures, and devise solutions for sustainable growth and debt repayment, making it a comprehensive scenario for examining real-world business challenges in the hospitality sector.

Full Case Study

Past Questions for SCS – Nov 2020 – L3 – Golden Onyx Hotel Management Challenges

SCS – Nov 2020 – L3 – Q8 – Financial management

Calculate operating and financial gearing for GGOH and assess how these ratios impact investor decisions.

Question

Assume a 10% interest on the outstanding loan and 22% Corporate Tax.

Required:
i) Calculate the operating gearing and financial gearing for GGOH. (5 marks)

ii) Assess how these ratios could impact an investor’s decision to invest in GGOH. (5 marks)

Answer

Tags: Corporate finance, Financial Gearing, Investor decision, Operating Gearing, Ratio Analysis
Level: Level 3

Topic: Financial management
Series: NOV 2020

SCS – Nov 2020 – L3 – Q7 – International financial management

Explain how to handle ethical conflicts and assess the impact of transaction risk on GGOH’s ability to repay its loan.

Question

ABGL that the loan will be paid within the period specified.

Required:
i) In reference to the IFAC suggested model for dealing with ethical conflicts and using your judgement, explain how you will undertake this assignment with integrity. (5 marks)

ii) Assess the impact of transaction risk on the ability of GGOH to repay its loan, with relevant calculations. (5 marks)

Answer

Tags: Ethical conflict, Foreign Exchange Risk, IFAC model, Loan Repayment, Transaction Risk
Level: Level 3

Topic: International financial management
Series: NOV 2020

SCS – Nov 2020 – L3 – Q6 – Strategy implementation

Prepare a business plan extract for GGOH to meet one of ABGL’s recommendations, incorporating 2019 financial performance assumptions.

Question

As a Business Advisor, you have been contracted by the Management of GGOH to prepare a Business Plan to meet one of ABGL’s recommendations. For the purpose of this examination, you are required to prepare an extract based on the following structure:

Executive Summary
Body of the report
- Business description
- Business environment analysis
- Industry background
- Competitor analysis
Operating plans
- Marketing Plan
Management Summary
Financial Plan (You are expected to incorporate new assumptions based on the 2019 actual financial performance). (20 marks)

Answer

Tags: Business Plan, Financial plan, Marketing Plan, Strategic Planning
Level: Level 3

Topic: Strategy implementation
Series: NOV 2020

SCS – Nov 2020 – L3 – Q5 – Professional practice and codes of ethics

Advise on how GGOH could improve governance using the Ghana Code of Best Practices and the UK Corporate Governance Code.

Question

In reference to the Ghana Code of Best Practices for Corporate Governance and the UK Corporate Governance Code, advise the shareholders of GGOH on how they could improve governance in the organization. (10 marks)

Answer

Tags: Best Practices, Corporate Governance, Ghana Code of Best Practices, UK Corporate Governance Code
Level: Level 3

Topic: Professional practice and codes of ethics
Series: NOV 2020

SCS – Nov 2020 – L3 – Q4b – Strategy implementation

Advise on the merits and demerits of the shareholders' decision not to employ a managing director at GGOH, considering their circumstances.

Question

The shareholders of GGOH decided that they will at all times maintain four individuals as members of the Board, and the Chairmanship will alternate between the two shareholders every two years. This could be a potential for conflicts between the shareholders.

Required:
Advise the shareholders on the merits and demerits of their decision not to employ a Managing Director, taking into consideration their peculiar circumstances. Highlight ethical issues that might arise. (10 marks)

Answer

Tags: Conflict Resolution, Corporate Governance, Ethical Issues, Leadership, Managing director
Level: Level 3

Topic: Strategy implementation
Series: NOV 2020

SCS – Nov 2020 – L3 – Q4a – Strategy implementation

Explain how effective collaboration can help the shareholders achieve the goals and objectives of GGOH.

Question

Required:
How can effective collaboration help them achieve the goals and objectives of GGOH? (10 marks)

Answer

Tags: Collaboration, Conflict Resolution, Goals and objectives, Stakeholder Management, Teamwork
Level: Level 3

Topic: Strategy implementation
Series: NOV 2020

SCS – Nov 2020 – L3 – Q3 – Competitive advantage

Apply Ansoff's Product/Market Growth Matrix to assess GGOH’s potential market development opportunities.

Question

With the increasing competition in the hospitality industry, GGOH must adopt market development strategies to stay in or ahead of the competition. Apply Ansoff’s Product/Market Growth matrix to assess the extent of the potential market development opportunities available to GGOH. (10 marks)

Answer

Tags: Ansoff’s matrix, Competition, Growth Strategies, Market Development
Level: Level 3

Topic: Competitive Advantage
Series: NOV 2020

SCS – Nov 2020 – L3 – Q2 – Environment analysis

Discuss how GGOH might fail to honor its financial obligations using a PESTEL analysis.

Question

The external environment within which GGOH operates has an influence on its financial position and financial performance both now and in the future. Using PESTEL analysis, discuss the view that GGOH might fail to honor its financial obligations. (10 marks)

Answer

Tags: External Environment, Financial obligations, Financial Performance, PESTEL Analysis, Risk Assessment
Level: Level 3

Topic: Environment analysis
Series: NOV 2020

SCS – Nov 2020 – L3 – Q1 – Strategy, stakeholders and mission

Explain how the mission statement of GGOH can be made relevant to the future success of the organization.

Question

A mission statement can have several different purposes. In reference to the mission statement of GGOH, explain how management can make it relevant to the future success of the organization. (10 marks)

Answer

Tags: Business Objectives, Management, Mission Statement, Strategy, Success
Level: Level 3

Topic: Strategy, stakeholders, and mission
Series: NOV 2020

SCS – Nov 2020 – L3 – Golden Onyx Hotel Management Challenges

Past Questions for SCS – Nov 2020 – L3 – Golden Onyx Hotel Management Challenges

SCS – Nov 2020 – L3 – Q8 – Financial management

Calculate operating and financial gearing for GGOH and assess how these ratios impact investor decisions.

SCS – Nov 2020 – L3 – Q7 – International financial management

Explain how to handle ethical conflicts and assess the impact of transaction risk on GGOH’s ability to repay its loan.

SCS – Nov 2020 – L3 – Q6 – Strategy implementation

Prepare a business plan extract for GGOH to meet one of ABGL’s recommendations, incorporating 2019 financial performance assumptions.

SCS – Nov 2020 – L3 – Q5 – Professional practice and codes of ethics

Advise on how GGOH could improve governance using the Ghana Code of Best Practices and the UK Corporate Governance Code.

SCS – Nov 2020 – L3 – Q4b – Strategy implementation

Advise on the merits and demerits of the shareholders' decision not to employ a managing director at GGOH, considering their circumstances.

SCS – Nov 2020 – L3 – Q4a – Strategy implementation

Explain how effective collaboration can help the shareholders achieve the goals and objectives of GGOH.

SCS – Nov 2020 – L3 – Q3 – Competitive advantage

Apply Ansoff's Product/Market Growth Matrix to assess GGOH’s potential market development opportunities.

SCS – Nov 2020 – L3 – Q2 – Environment analysis

Discuss how GGOH might fail to honor its financial obligations using a PESTEL analysis.

SCS – Nov 2020 – L3 – Q1 – Strategy, stakeholders and mission

Explain how the mission statement of GGOH can be made relevant to the future success of the organization.

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SCS – Nov 2020 – L3 – Golden Onyx Hotel Management Challenges

Past Questions for SCS – Nov 2020 – L3 – Golden Onyx Hotel Management Challenges

SCS – Nov 2020 – L3 – Q8 – Financial management

Calculate operating and financial gearing for GGOH and assess how these ratios impact investor decisions.

SCS – Nov 2020 – L3 – Q7 – International financial management

Explain how to handle ethical conflicts and assess the impact of transaction risk on GGOH’s ability to repay its loan.

SCS – Nov 2020 – L3 – Q6 – Strategy implementation

Prepare a business plan extract for GGOH to meet one of ABGL’s recommendations, incorporating 2019 financial performance assumptions.

SCS – Nov 2020 – L3 – Q5 – Professional practice and codes of ethics

Advise on how GGOH could improve governance using the Ghana Code of Best Practices and the UK Corporate Governance Code.

SCS – Nov 2020 – L3 – Q4b – Strategy implementation

Advise on the merits and demerits of the shareholders' decision not to employ a managing director at GGOH, considering their circumstances.

SCS – Nov 2020 – L3 – Q4a – Strategy implementation

Explain how effective collaboration can help the shareholders achieve the goals and objectives of GGOH.

SCS – Nov 2020 – L3 – Q3 – Competitive advantage

Apply Ansoff's Product/Market Growth Matrix to assess GGOH’s potential market development opportunities.

SCS – Nov 2020 – L3 – Q2 – Environment analysis

Discuss how GGOH might fail to honor its financial obligations using a PESTEL analysis.

SCS – Nov 2020 – L3 – Q1 – Strategy, stakeholders and mission

Explain how the mission statement of GGOH can be made relevant to the future success of the organization.

Our offerings

Contact Info

Customer

Get In Touch

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