Its Pizzatime:

A Slice by Slice analysis of the Management Case Study for the February Sitting

OVERVIEW OF THE CRITERIA:

The Case Study is a test of competence and how you can apply the knowledge that you have learned in your studies at the Management
level. Think of it as a job interview; the tasks that you will be asked to do in the case are representative of those you would do in a real
place of work. Dont forget, you wont be asked to do any detailed calculations as these will have been covered in the OTQ exams.
The pre-seen material has now been issued for the February case. Remember there will be 5 variants of the exam in February; each will
lead on from this pre-seen material and move the business forward in time. Each variant will be drawn from any of the subjects within
the total Management syllabus. The tasks will be weighted in line with the competency framework and therefore the majority of the marks
at the Management level will be for Technical Skills (39%).
However, you will not pass simply by strictly focusing on the technical skills; you will need to obtain a minimum number of marks in
Business (24%), People (21%) and Leadership skills (16%) as well.
There are also six marks for integrating your answer into the given scenario within the variant. Integration can be across pillar or across
competencies. These marks will be embedded into the tasks; if you address the task being asked you will gain these integration marks.
On the day of your exam you will be presented with one of the 5 variants. Each variant will deal with a different challenge or opportunity
for the business. New information about the business will be presented to you in the form of Triggers.
Triggers might be an e-mail, journal article, new financial or product information. For example, an article similar to the one in the preseen about healthier pizzas. You could then be given more information and asked to explain different techniques for marketing the
companys sale of these new healthier pizzas. Note: this is only an example, whilst there is evidence in the pre-seen that they do sell the
new healthier type of pizza, and you could be asked to write about the implications of this, dont assume that this will come up in your
variant.
You will be then given a time-based task to reply to the new information received, using knowledge from the pre-seen (note, you will not
be able to bring your copy of the pre-seen into the exam, but it will be available on screen). Once you choose to move to the next task,
or are moved on by the system, you will not be able to return to, or refer to, your previous answers. So use your time wisely - formulate
your plan on the screen, as the markers can only assess what they can see on the screen. Once formulated, populate your plan with
your answer. If you finish within the time available, re-read your response to see if you can add anything to it remember you will not be
allowed to return to this answer once you have moved on.

THE PRE-SEEN
Look at the job description assigned to you in the Case Study, why do you think it has been given? It is quite specific. You are a manager,
therefore people skills and leadership skills will be important. You create budgets and do costing of specific projects, therefore both Core
Accounting and Finance Skills, and Business Acumen will be important. All of these appear to be wrapped up in that description. Are you
comfortable talking about project management? Remember, unlike the Operational Case Study, you will be using higher level verbs such
as Discuss, Evaluate and Advise. Have you seen the descriptions of these verbs in the 2015 syllabus?
Pizzatime operates a chain of pizza restaurants - as at 31st December they had 970 of them. 900 restaurants are in the home country
of I-Land, 69 are in a neighbouring country of P-Land and 1 is in C-Land. C-land in the Case Study is classed as further away. Where
else in the Case Study does it go into more detail about C-Lands location? What subjects within the syllabus would this suggest?

BUSINESS MODEL
Alert: When looking at the business model do not rush off to the internet to search for a company that fits the description in the Case
Study. The company is fictitious, and so is their rival, Pizza2go. The industry they work in, though, is real and you can see lots of Pizza
restaurants on the high street. All required answers will be based on the fictitious companies, however, and there will be no benefit gained
from trying to identify and research real-life examples.
The restaurant managers are responsible for ordering enough dough to make the following weeks pizzas. What would the implication
be if not enough dough was ordered? Which part of the management syllabus covers this?
Restaurants replenish their ingredients for toppings using the Economic Order Quantity Model (EOQ). Can you explain the model? What
are its good points or its bad points?
The general business model is for passing trade wanting a pizza and a soft drink. Partially eaten pizza can be boxed and taken away,
however this equates to only a small part of the business. Is this a generic strategy? If so, which one? What type of strategy helped build
the business? Could you discuss the present strategy and any other strategies that Pizzatime might develop?

FRANCHISES
Half of all restaurants are franchises, the others are owned by Pizzatime through leasing new properties and taking over failing restaurants
and re- branding. In the Case Study there is mention of operating leases. Do you know of any other type lease? If so, are there any
different accounting treatments that need to be used? By franchising, are you taking a risk? It states in the Case Study that a thorough
process is involved before allowing a new franchisee, and constant monitoring takes place in relation to food safety, customer service
and decor. As a student, are you comfortable with advising on different types of risk? Consider the revenue taken by Pizzatime in relation
to the franchisees, how should it be dealt with? Could you explain and discuss the accounting treatment of it?

MARKET POSITION
Pizzatime operates in three different countries, each with their own currency - which part of the syllabus covers foreign exchange? What
methods are there for accounting for them? Which part of the syllabus covers that, and could you describe the processes that are involved?
What else might be different other than the currency?
I-Land: Pizzatime is the dominant chain in this country, it is an established market and the company is continually looking at new ways
to refresh and appeal to the younger generation. What models talk about market share and continually developing products? If you have
a dominant position, what could happen to that position? Are there any models that could be used to identify how you maintain the
advantage? There are a growing number of self-employed people running small businesses. Why might this be useful for Pizzatime?
P-Land: Pizzatime is not as large in P-Land but the regional manager is always looking for opportunities to grow the market. Is there a
model that looks at market growth? If so where in the syllabus is it? Could you evaluate the position and advise on a strategy? If so how?
C-Land: Pizzatime has only one restaurant in this country, however there is potential for growth. It has an appetite for fast food including
pizza. How could you make pizza special? Are there any models in the syllabus that look at making a product special (different)? GDP
is outstripping the other two countries, what does that mean?
Is there a model or tool in the syllabus that would help Pizzatime gain an advantage within different countries? If so, where are they in
the syllabus, and could you explain them?

BRAND ANALYSIS
Consistent branding is important to Pizzatime as well as cleanliness and customer satisfaction. Think about the business model - how
will Pizzatime monitor and maintain cleanliness and customer satisfaction? Are there tools or models in the syllabus that will help? Could
you explain and discuss them?
The new programme PCCS is being put into place to educate and motivate staff, alongside a programme of Corporate Social
Responsibility, does this include ethics? Could you discuss the ethical responsibility of Pizzatime to its stakeholders?

ORGANISATIONAL STRUCTURE
At the moment, Pizzatime is de-centralised, could you discuss the advantages and disadvantages of de-centralisation against
centralisation? If so, where in the syllabus is it?

EXTRACTS FROM THE FINANCIAL STATEMENTS

Pages 10 to 12 relate to the financial statements of Pizzatime. The intangible assets are goodwill from purchased businesses. Could you
explain various treatments of goodwill? As stated earlier, there will be minimal calculations involved on the day of the exam, however a
bit of analysis might be useful. You have the data, why not use it?

CHAIRMANS STATEMENT
What is the Chairman saying to the stakeholders? He talks about competitor monitoring, where in the syllabus is this mentioned? Think
about what the Chairman is saying on pricing and product to meet the changing needs of customers. What type of supply chain is needed?
Where in the syllabus does it discuss elimination of waste? Is it covered in more than one area of the syllabus?

STRATEGIC OBJECTIVES
There appear to be three strategic objectives. What do they mean?

Does an increase in revenue always increase the return on capital?

How could you increase returns on existing restaurants and still maintain outstanding customer service?
Support market growth and market position - is there a model or tool to manage that?

All of these topics are covered throughout the syllabus, but where are they and can you explain them?

LIST OF DIRECTORS
What is the point of giving you a list of directors? Look at your job description - you could be asked to write an explanation of a topic to
one of them, so you would need to know from what perspective they are asking the question.

SHARE PRICE AND EPS HISTORY

You have been given two graphs: one with the growth of EPS; and one with the market price of the shares. Also in the financials, you
were told the EPS for the year. Is there a ratio you know that uses those two figures? Also did Pizzatime pay a dividend? If so, is there a
model that uses growth, dividends and market price of shares? If so, what is it and can you discuss it?

SWOT ANALYSIS
What is a SWOT analysis? What is it for? What does it tell you about Pizzatime? Could you evaluate its usefulness if a certain trigger
appears, challenging one of the quadrants?

COSTING INFORMATION
You have been given a breakdown of the costs per customer in a typical restaurant. Are there any costs in there that the restaurant has
no control over? If so, what other methods could be used in the costing system, and could you evaluate and discuss them if asked about
them?

CSR
Corporate Social Responsibility - who is interested in this? What type of topics does it cover? As stated earlier, has it anything to do with
the code of ethics? If so, what about ethical threats that could undermine them. Can you discuss the ethical threats?

PRESS RELEASE
The press release seems very positive, however what could go wrong? Its part of your CSR, so how could this affect the SWOT? Could
you explain and advise on any changes, either negative or positive?

COMPETITIVE ENVIRONMENTS
Competition comes from various types of restaurants and pizza takeaways with no seating, these are deemed to be substitutes. With
the title Competitive Environment think - is the examiner possibly highlighting a model? If so, which one? Could you discuss it, and
how it could be used?

KEY COMPETITOR INFORMATION

Pizza2go is deemed the main competitor, even though their business model is different as it only supplies takeaways, they are competing
for the same customers. How could Pizzatime compete against Pizza2go? What strategies could they use? Are you comfortable
explaining and discussing them? Also what type of marketing could they use? C-Land is a new country for Pizzatime and Pizza2go is
already well established there.
You have been given figures for Pizza2 go, so as before, some analysis would be useful, although in the exam you will be required to do
minimal calculations. In your studies you have studied ratios - how useful are one years figures? What should you always do with the
ratios you have calculated? Ill give you a hint - go to the list of verbs in the syllabus and look at the one that is paired with contrast.

FINALLY
I know that this looks daunting, and the detail of this analysis has given you a lot to think about. But remember: not everything will arise
in your particular variant. These are the topics that could arise though, so you need to be prepared for them.
Look at the past exam variants on CIMAconnect and you will see the types of responses that your examiner and their marking team are
looking for. Go through past exams to see if you can explain in the level of detail your examiner wants.
Finally, remember: DO NOT go into the exam with pre-determined ideas or pre-prepared answers as that approach tends to lead to
failure.

Good Luck!