Topic: Strategic Management Accounting

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  • 20 Marks

PM – Nov 2015 – L2 – Q4 – Strategic Management Accounting

Examine strategic and performance issues MOOJ Ltd. must consider before adopting internet trading.

The existing business of MOOJ Ltd. is very profitable, with forecasts for the next year
showing that this trend of profitability will continue.
MOOJ Limited manufactures all of its own clothes, and then sells these direct to the
public through 105 branches located around Nigeria. The branches are not run as profit
centres; prices are set centrally for the clothes and the costs of each branch are
monitored at the Head Office. Surprisingly, there is no minimum or maximum turnover
requirement for each branch. In the company‟s view, this enables staff to focus on
customer service without the concern of meeting a profit figure. The strategy obviously
works well, given the company‟s results.
The existing Information Technology (IT) infrastructure is based around each shop
maintaining its own inventory records. There is no Wide Area Network (WAN) and Head
Office has few integrated systems.
The Directors recognise that the current IT infrastructure of MOOJ Limited is inadequate
for Internet trading.
The Board of MOOJ Limited is currently discussing whether or not to start selling clothes
on the Internet.

Required:
Identify and discuss the strategic and performance management issues that the Board of
MOOJ Limited will have to address prior to a decision being taken regarding trading on
the Internet.

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  • 15 Marks

PM – Nov 2016 – L2 – Q6 – Strategic Management Accounting

This question discusses how firms can monitor buyer bargaining power, reduce threats of new entrants, and reasons for continuing operations in low-return industries.

Michael Porter, in his book “Competitive Advantage: Creating and Sustaining Superior Performance,” suggested that a firm must assess the industry’s market attractiveness by considering the following:

  • The extent of the rivalry between existing competitors;
  • The bargaining power of suppliers;
  • The bargaining power of buyers;
  • The threat of substitutes; and
  • The threat of new entrants.

Required:
a. Recommend FIVE factors that should be included in the monitoring system implemented by the firm if a firm wishes to monitor the bargaining power of buyers. (5 Marks)

b. Explain FOUR different methods whereby a firm can reduce the threat of new entrants to an industry. (7 Marks)

c. Explain the reason why firms often continue to operate in an industry that is generating below-normal returns in the short run. (3 Marks)

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  • 15 Marks

PM – May 2018 – L2 – Q7 – Strategic Management Accounting

This question asks for the classification of five products using the BCG matrix and an analysis on how this helps the company in strategic decision-making regarding products and markets.

Adrak Nigeria Limited produces five different products, and sells each product in a
different market.
The management accountant has obtained the following information about
market size and market share for each product which consists of actual data for
each of the last three years and forecasts for the next two years:

 

 

In the current year, the market share of the market leader or the nearest competitor
to the company has been estimated as follows:

Market share of market leader or the company‟s nearest competitor
Market for: %
Product 1: 37
Product 2: 26
Product 3: 12
Product 4: 29
Product 5: 20

Required:
a. Using the Boston Consulting Group model, how should each of these
products be classified? (7 1/2 )
b. How will this analysis help the management of the company to make
strategic decisions about its future products and markets („product-market
strategy‟)? (7 1/2 )
/2 Marks)

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  • 15 Marks

PM – May 2019 – L2 – Q6 – Strategic Management Accounting

Discusses the essential qualities needed for management accounting information to be useful for decision-making.

“The purpose of management accounting is to provide relevant and reliable information so that managers can make well-informed decisions. The value of management accounting, therefore, depends on the quality of the information provided and whether this information helps managers to make better decisions.” Therefore, before management accounting information can be useful to managers, it must possess some qualities.

Required:
Discuss the essential qualities of good management accounting information.

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  • 20 Marks

PM – Nov 2015 – L2 – Q4 – Strategic Management Accounting

Examine strategic and performance issues MOOJ Ltd. must consider before adopting internet trading.

The existing business of MOOJ Ltd. is very profitable, with forecasts for the next year
showing that this trend of profitability will continue.
MOOJ Limited manufactures all of its own clothes, and then sells these direct to the
public through 105 branches located around Nigeria. The branches are not run as profit
centres; prices are set centrally for the clothes and the costs of each branch are
monitored at the Head Office. Surprisingly, there is no minimum or maximum turnover
requirement for each branch. In the company‟s view, this enables staff to focus on
customer service without the concern of meeting a profit figure. The strategy obviously
works well, given the company‟s results.
The existing Information Technology (IT) infrastructure is based around each shop
maintaining its own inventory records. There is no Wide Area Network (WAN) and Head
Office has few integrated systems.
The Directors recognise that the current IT infrastructure of MOOJ Limited is inadequate
for Internet trading.
The Board of MOOJ Limited is currently discussing whether or not to start selling clothes
on the Internet.

Required:
Identify and discuss the strategic and performance management issues that the Board of
MOOJ Limited will have to address prior to a decision being taken regarding trading on
the Internet.

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You're reporting an error for "PM – Nov 2015 – L2 – Q4 – Strategic Management Accounting"

  • 15 Marks

PM – Nov 2016 – L2 – Q6 – Strategic Management Accounting

This question discusses how firms can monitor buyer bargaining power, reduce threats of new entrants, and reasons for continuing operations in low-return industries.

Michael Porter, in his book “Competitive Advantage: Creating and Sustaining Superior Performance,” suggested that a firm must assess the industry’s market attractiveness by considering the following:

  • The extent of the rivalry between existing competitors;
  • The bargaining power of suppliers;
  • The bargaining power of buyers;
  • The threat of substitutes; and
  • The threat of new entrants.

Required:
a. Recommend FIVE factors that should be included in the monitoring system implemented by the firm if a firm wishes to monitor the bargaining power of buyers. (5 Marks)

b. Explain FOUR different methods whereby a firm can reduce the threat of new entrants to an industry. (7 Marks)

c. Explain the reason why firms often continue to operate in an industry that is generating below-normal returns in the short run. (3 Marks)

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  • 15 Marks

PM – May 2018 – L2 – Q7 – Strategic Management Accounting

This question asks for the classification of five products using the BCG matrix and an analysis on how this helps the company in strategic decision-making regarding products and markets.

Adrak Nigeria Limited produces five different products, and sells each product in a
different market.
The management accountant has obtained the following information about
market size and market share for each product which consists of actual data for
each of the last three years and forecasts for the next two years:

 

 

In the current year, the market share of the market leader or the nearest competitor
to the company has been estimated as follows:

Market share of market leader or the company‟s nearest competitor
Market for: %
Product 1: 37
Product 2: 26
Product 3: 12
Product 4: 29
Product 5: 20

Required:
a. Using the Boston Consulting Group model, how should each of these
products be classified? (7 1/2 )
b. How will this analysis help the management of the company to make
strategic decisions about its future products and markets („product-market
strategy‟)? (7 1/2 )
/2 Marks)

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  • 15 Marks

PM – May 2019 – L2 – Q6 – Strategic Management Accounting

Discusses the essential qualities needed for management accounting information to be useful for decision-making.

“The purpose of management accounting is to provide relevant and reliable information so that managers can make well-informed decisions. The value of management accounting, therefore, depends on the quality of the information provided and whether this information helps managers to make better decisions.” Therefore, before management accounting information can be useful to managers, it must possess some qualities.

Required:
Discuss the essential qualities of good management accounting information.

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