hello and welcome to the estranja strategic analysis video for the August management case study exam on spark space now spark space is an odd company quite a difficult industry perhaps at least at least initially to analyze because of course it’s on the server resale and high-performance computing industry and this is one that we’re probably not very familiar with we’ve all used computers we’ve all used cloud computing but we don’t really know much about it but actually like most industries like most companies we can actually apply a lot of the same models a lot of the same theories to it so at the moment we know that spark space is a successful company a successful company in the server resale hydrophones computing industry based in Westland they have large revenues up in the billions and they have employees in the thousands so let’s take a look at the company and the way we’re going to look at the company is through the rational model now the rational model is essentially looking at where we are now using theories such as SWOT analysis Five Forces pestle internal analysis value chain and where we want to be using theory such as mission statements ethics corporate social responsibility governance stakeholder mapping and finally the business strategy so the business strategy is the bridge how we’re going to get from where we are now to where we want to be in the future and the first thing we’re going to do is look at where we want to be where the spark space want to be in the future and we’ll kick off by looking at mission statements so what is a mission but a mission statement is about your company what your company is all about who do we exist for why do we exist what do we wish to achieve so what does spark space wish to achieve now the good thing about a mission statement is it provides a common purpose provides a common goal common focus for the organization through strategy and one of the reasons why it works is because it ties all of the people within the organization all of the different business units within the organization together gives them a common goal a common purpose to work towards now a company like spark space a given the variety of the jobs it does the the nature of industries that are very consultancy based very bespoke client based is that we may have a lot of different project teams or a lot of different departments not really working together they’re all involved in their own jobs their own roles and as such they perhaps lose sight of the but grand overarching objectives of the company itself and therefore by having this common ground this is this mission statement that we’re all buying into we’re all part of we can all work together we all know what we are doing we’re not just cogs in the machine we’re huggers working towards an overall objective but interestingly enough we were not given any information about mission statements about overall overarching objectives in the presea so what makes a good mission statement could it be that the management at sparks basis simply didn’t know how to come up with a business they didn’t know what went into a mission statement well a mission statement is supposed to be something that is fairly ambiguous not a really specific target not that we want to have a 20% market share in a particular industry by the year 2017 that’s too specific statement should be broad it should be applicable to anything that the organization does and we can see here the four key elements of a good mission statement so first of all purpose so why does the organization exist who does it exist for and what do they wish to achieve but we can see from the pre scene the company is striving to be somewhat a market leader striving to be a successful company in the high-performance computer market and in the server market and they exist to provide high quality usable strategic information to their clients it’s almost incidental that the services the products they provide are high performance computing technology essentially they are existing to give their clients more information to help their clients with their own business that is their overall goal that’s why the complete exists it’s to provide high quality information that allows for district decision making so how does the organization compete as the next one is strategy how are they going to compete in the server industry how are they going to compete in the high performance computing industry when the high performance computing industry spark space actually has a lot of intangible as a source of patents it’s one of the the most innovative companies when it comes to the HPC market and in the server market it aims to compete by adding the most value the difference between the HPC market and the server market is that the server market is highly commoditized there’s very little room for differentiation so you can compete on price by being the cheapest or you can compete on providing the best overall service but in adding additional value adding activities and that could be in the form of more specialization more specializations for the customers needs for the clients needs it could be by the level of attentiveness provided by our consultants it could be the level of maintenance level of after sales service that we provide the next one is the values of York so what does the organization stand for quality value for money innovation all of these are relevant to the organization to spark space it was reiterated many times in the case study the need for high-quality if you remember looking at the job vacancy adverts every single job vacancy for all the different positions all the different vacancies mentioned about cover the culture of quality quality management another one that was incredibly important was innovation all the different initiatives such as the spark innovate initiative with the Western University and how that has provided a lot of commercially viable products of the company has used we can also see the value that it places in its patterns the value that it places in its research and development for the heart by the high level of intangible assets in the statement of financial position and finding policies so this is more to do with how your staff work the values that they follow and what is generally accepted expected of them and another thing that came up consistently was the importance of good customer service the importance of meeting clients needs the importance of fantastic customer manner that was another thing that came up repeatedly in those job applications so based on all this an example of a mission statement of what suit spark space could be providing high quality and innovative information to help meet our clients needs because that would in a sense cover all of these bases again we move on to more objectives more performance measurement now that we know what we want to achieve we now need to figure out how we are going to achieve it by breaking it down to objectives by measuring those to see if we are meeting the required the level of performance we weren’t really given any specific targets in the case if it wasn’t anything that said we have to achieve revenue of this level by this amount of time because an objective is a breakdown of the business segment it’s the the building blocks that go into making our mission statements so we work towards our goals towards our objectives and that in turn allows us to move to our overall strategy what allows us to achieve our overall strategy and it could be that we do not have any specific strategic targets if we are given some in the unseen now so right if we’re not given any and that could be considered a weakness in the company’s approach a weakness of the organization of weakness of the planning of the organization because of course as I mentioned on the previous page that if we do not have an overall objective to work towards we do not have a common ground to unite employees a common ground to unite business units something to work towards together and if we do not have an adequate way of measuring our performance to see if we are on target to meet those objectives then that is a weakness as well because we are not checking to see if we are underperforming we are not checking to see where we are over performing and perhaps by not doing that we cannot take the information of where we’re being efficient and apply it to the areas of well being inefficient and one thing that could work well here is the balanced scorecard now the balanced scorecard basically understands that financial performance is not the only measurement we also have things like customer satisfaction staff satisfaction quality management all these things that are important in meeting our overall objective and we do know that they use of balanced scorecards because on one of the job vacancies for a management’s role there was a section that said bonus payments will be dependent on meeting certain performance objectives which will be decided on the basis of a balanced scorecard so we know that the balanced scorecard does exist in the organization so now we move on to governments so and as this is not a uk-based company there’s no net mandatory requirement to follow governments but they are a listed organisation so that there are things that they could learn from it essentially governance is all just about controlling and running the organization in a way that is ethical and sustainable in the long run and there are various ways in which the the UK code of governance provides for this so we have separate chairman and CEO so the the chairman of C’s the head of the board and the CEO is head of the company and you have the same person both setting the the strategies and the same person making sure the company fulfills and meets those strategies and goals then you’re unlikely to be too progressive because that’d be the person will set goals for they know that they can achieve because it makes them look like they’ve done a great job you need independent non-executive directors to ensure that the executive directors are not doing things for themselves because of course the executive directors are employed by the company and the company’s yearly performance reflects their bonuses and therefore they may run the company in a way that is beneficial for the short term but not for the long term but of course owners of the company want sustainable long term growth they don’t want to choose a very short term performance against long term performance next we have audit nomination remuneration committees populated by non-executive directors so these are the committee’s that look into the board look into the executive directors to ensure that they are running the company fairly they’re responsible for appointing non-executive directors so ensuring that the right people with the right skills are employed by the company and also the remuneration committee they decide on how the directors are paid how they are compensated for their work to so to ensure fair pay for Fair Work and also risk management risks affect any business big or small and the smallest risks can become larger if they are not properly dealt with so it’s always important to have a board that is looking out for risks and ensuring that they do not become more of a threat to the organization than they need be and I’ve got some other bits here about information and decision-making so ensuring that the right controls are in place so the directors have the right information to make the right decisions if the directors are making strategies for the organization but they have no information about how all the company’s doing they have no information about the industry etc then those strategies may not be feasible they may not fit in with what is possible and finally to ensure that they have regular meetings with shelves of the owners of the organization basically to ensure that the owners needs are being met but any questions they may have about the organization are being answered so now let’s apply governance to the case study to spark space as I said before there’s no real mandatory requirement for them to apply the UK kody governance because of course they are not a uk-based company they I Westland based come but that doesn’t necessarily mean that some of the parts of the code of corporate governance are not relevant because of course it’s all about how companies are administers how they have control fairly control for all stakeholders and therefore there should be something that every organization can take from that now we weren’t really given much information about the structure of the organization about the board of the organisation or the ownership of the organisation but a few things that we can take from it was there was no mention of non-executive directors now ideally under the corporate goal of governance there should be half non-executive directors I did you have a board of 12 there should be six executive directors and six non-executive directors now the point of a non-executive directors of course is because it I’m sorry is to check that the executive directors are doing their job properly check that they are running the business for the benefit of the business and not for the benefit of themselves and to check that they are well qualified and right for the role there was also no mention of remuneration or audit or nomination committee the remuneration committee of C in charge of deciding the salaries of the directors the audit committee in charge of risk management throughout the organization and nomination committee in charge of deciding who becomes an executive director now the one I want to talk about mainly here is the audit committee our reason why I want to talk about the audit committee is because there is a lot of risk in the pre scene there was that large section on risk index measuring the impact and the probability of risks and a lot of risks were there and also in the swatter that sort of threats were there as well of threats to the organization and a risk management team should be in charge of insuring those risks are mitigated and the audit committee are in charge of ensuring that all these these risk management processes are being put in place and of course if there is no Audit Committee then there is no one to do this so this could be a real weakness of the organisation here particularly given the magnitude of the risks that base the organization and a few other things here there was no real mention of meetings with shareholders meetings are using the AGM meetings with her owners necessarily or disclosing the directors pay there was no specific section in the profit statement statement profit and loss to say how much will paying our directors so given what we know about governments are given what we know about the the board and the directors and the organisation are whole sparks face we can’t really make any firm judgement because we given enough information but if the reason why we hadn’t been given that information is because there’s no information to give then we can say that governance is particularly weak at spark space at the moment so I hope you’ve enjoyed this sample video and more importantly found it useful before I go I’d like to quickly tell you about a few of the products that we do here as a strong financial training specifically for our case study costs we have a study text which details all the key theories which you will be expected to use in your case study exam as well as details of how to approach the pre scene and the case stir you also have a series of course videos detailing how to answer case study questions is actually an area in which many students struggle most of the scripts that I’ve seen the failing scripts that I’ve seen has actually been due to poor case study technique rather than lack of knowledge we also have a series of pre C analysis videos based on the current up-to-date pre scene detailing all the key bits of information and likely issues you may face in the exam next up is the industry analysis pack detailing information about the industry that the precinct company resides in information about the key players within that industry and more background information on the industry in general we also have a range of mock exams created for each level and based on the current pre scene which is a great way to get some practice in before you sit the real thing we also offer marking and feedback on those mock exam so you can see where you are going wrong and where you can improve finally we have the master classes these are two one day classes taken by our expert tutors to give you all the the hints and tips you need to really add to your chances of passing the exam also if you take our full course we offer a pass guarantee which provided you have met all the requirement the pass guarantee you will get a free reset on the next exam 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