Instructions: Each is valued 15 marks.

1. Discuss the issue of culture and the politics of strategy choice
2. What is a SPACE matrix? Describe how it is constructed and interpreted. What kind of help or value does it provide to an organization? NB: you are not mandated to construct an actual matrix; this is optional.
3. You are consultant to the Best Dressed Chicken and they have called you in to assist some of their members with some strategic plans. Some of the plans you discuss are cost and focus strategies, and how their business can capitalize on these moves. Against this background, apply Porter's five generic strategies to this scenario and explain how each of the five could work in the meat industry.
4. What is a Balanced Score Card and what purpose does it serve? Design a Balance Score Card for Megamart Ltd. You will determine the elements that go into this scorecard.
5. Explain ANY TWO (2) approaches to conducting a corporate valuation
6. Office Pro Ltd, manufacturers and distributers of office equipment and furniture in Jamaica, has been in existence for approximately five years. The company has enjoyed a fair degree of success since its inception and its management is now contemplating a major expansion over the next three years; this will call for a significant outlay of new capital. Bearing in mind the state of Jamaica's financial segment and all the macro environmental factors, advise Office Pro's management on the pros and cons of doing an IPO or using corporate bonds for raising capital for their business. Be comprehensive.

SECTION B: Application-type Questions

Instructions: Each is valued 25 marks.

1. With reference to the factors outlined below, develop a QSPM for KFC, giving the relevant description and prescription. Note: you are free to add or assume other variables.

Environmental/Industry Factors re Fast Food Industry

• The Jamaican dollar has weakened in strength over the past 12 months
• Inflation has been steadily under 6% for the past three years
• Juici Patties opened four new outlets over past 12 months
• Serious crimes in Jamaica have been trending down since 2017
• Marginal increase in number of graduates from tertiary institutions over past three years
• Chicken prices increased by 2% over last 18 months
• Agri sector affected droughts across the island
• Jamaica has had no serious hurricanes over past 10 years
• Petrol prices have increased by 15% since 2019
• Burger King and KFC have best overall parking facilities in the industry
• Customer service across the industry rated at 75%
• Menu options are generally bland across the industry
• Fast food prices in general are considered reasonable
• Popeye's has cheapest overall food prices
• Island Grill seen as an "uptown" store
• KFC has highest market share and most outlets
• KFC has been in existence in Jamaica since 1970's
• All companies in the industry operate profitably.

2. Outlined below are some financial projections for Farmaton, a medium-sized farm that distributes food stuff across Jamaica and the Caribbean. They are seeking to raise capital in order to meaningfully expand their market share in the region over the next few years and they are faced with a financing decision that requires your assistance. Calculate the projected EPS for each of the three scenarios given and advise Farmaton on what to do. You may show the working on this question sheet or in your answer booklet.

EPS/EBIT Analysis for Farmaton Ltd.

Input data

The Number

How determined

Amt of capital needed

$100M

Estimate of projected expansion - to expand operations

EBIT Average

$30M

Based on previous years EBIT & projected earnings from more business

Interest rate

6%

Average rate of government bonds

Tax rate

30%

Corporate tax rate

Stock price

$40

As at close of trading last week

No. of shares

125.5 million

Shares outstanding as at last business day

Projections:

100% debt

50/50 Debt/Stock Combo

100% Stock

EBIT

Interest

EBT

Taxes

EAT

No. of shares

EPS