In the first of our series of challenges, we're inviting members to pit their wits against each other to solve a selection of puzzles and case studies for a chance to win a bottle of wine.
The following case study comes from the Chartered Institute of Management Accountants (CIMA). Read through the text below and then post your answers to the questions that follow as comments below. We'll post the answers back on this thread next week and the member judged to have given the best answer will win a bottle of wine.
RCH, an international hotel group with a very strong brand image has recently taken over TDM, an educational institution based in Western Europe. RCH has a very good reputation for improving the profitability of its business units and prides itself on its customer focus. The CEO of RCH was recently quoted as saying ‘Our success is built on happy customers: we give them what they want’. RCH continually conducts market and customer research and uses the results of these researches to inform both its operational and longer term strategies.
TDM is well-established and has always traded profitably. It offers a variety of courses including degrees both at Bachelor and Masters levels and courses aimed at professional qualifications. TDM has always concentrated on the quality of its courses and learning materials. TDM has never seen the need for market and customer research as it has always achieved its sales targets. Its students consistently achieve passes on a par with the national average. TDM has always had the largest market share in its sector even though new entrants continually enter the market. TDM has a good reputation and has not felt the need to invest significantly in marketing activities. In recent years, TDM has experienced an increasing rate of employee turnover.
RCH has developed a sophisticated set of Critical Success Factors which is integrated into its real-time information system. RCH’s rationale for the take-over of TDM was the belief that it could export its customer focus and control system, based on Critical Success Factors, to TDM. RCH believed that this would transform TDM’s performance and increase the wealth of RCH’s shareholders.
- (i) Identify four Critical Success Factors which would be appropriate to use for TDM.
- (ii) Recommend, with reasons, two Key Performance Indicators to support each of the four Critical Success Factors you have identified.