Top 10 Issues video for MCS August 2019 - CIMA Management Case Study - Cruisecalm

Top 10 Issues video for MCS August 2019 - CIMA Management Case Study - Cruisecalm
Top 10 Issues video for MCS August 2019 - CIMA Management Case Study - Cruisecalm






MCS August 2019 Pre-seen video analysis Cruise calm - CIMA Management Case Study




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Text Version 

Welcome to the CIMA MCS top ten most likely unseen issues for cruise comm in August 2019 so the first thing to get underway with here is that the basis of my choice is going to be centered around how much space is devoted to the issue in the pre seen and the degree of importance attached to it by the examiner relating to also that space at the same time that is utilized and appreciated for it also the strategic importance of this topic specifically how it relates to the SWOT analysis that we've done and these sort of importance that will likely be attributed to it by directors and then of course I've got a wealth of experience now doing these cases as well as my colleagues we've been doing it essentially since it was created in 2015 so we've got a lot of experience in this area and we know what comes up in the past exams we know the typical issues which will relate to some of these top ten and of course.

 We know how easy it is to write issues on certain subjects for the examiner and how that fits into how they test and that's very much a key sort of reasoning for some of these topics so as we go through here how do we prepare for these issues well we prepare the key models from the precinct information and remember to adapt all models for new points in that unseen material so the important thing is to have some key models like the ones in the true strategic analysis as in my hand during your revision and make sure that you adapt all models that once you revise that kind of model you have to add any unseen information into the model so that we can then you know get better response in the exam the important part that we've seen a lot of examiner's reports is that students are ignoring the case material and also the new material given to them in the exam which is very very bad for their overall writing of a good response then following this you want you practice mock exams that cover the key issues that are covered in this presentation and you want to find relevant real-life examples and then prepare sample paragraphs relating to these issues and learn them that way you can kind of pluck from memory the kinds of paragraphs that will get you the best grades based on whatever comes up in the unseen material and your requirements in the exam and of course as a general sweeping statement learn typical key points advantages disadvantages certain aspects in the industry.

Different model being utilized so for example balanced scorecard why would we use it why wouldn't we use it and prepare for which models to use to support each issue that we go through because some of them you know may be semi relevant but based on what you get asking the exam it may differ so you go make sure we have the relevance to the issues very much you know understood in regards to the models and how we use them when we use them so our first issue if you're number 10 is a new project now one of the key things here is that the basis of choice is that it's very common as a topic is very often on the top 10 list it simply has to be it's just so commonly asked very easy to provide factual information for you to analyze too short F 2 is covered and of course a lot of these new projects will have risks and funding issues which covers essentially most of the bases so added up altogether the examiner is very likely to test you a new project of course and the likely issues we'll see in this case is new products so essentially that would be river cruises short-term cruises specialty cruises and this will center around they need to diversify sort of demo-graphical changes that we seem to be seeing in the industry and any numerous opportunities that we have for example we could diversify into a bus travel for example and another issue would be just a new project so for

Example like a new factory being useful X or a new food storage facility in the case of cruise comm just gaining and efficiency with a new project that doesn't need to be this grandiose new project for example it could just be a project about setting up a new system etc so now how do we talk about this issue or the key points you have to raise well it is it financially viable as a project is where the key ones you know having a brief in a reminder of NPV is very very point important in this case and also is it consistent with our CSR our strategy our prequel success factors for example you know we have a good reputation our CSFs are going to be innovation customer service etc any sort of knowledge and experience on the staff team are very very important we also have to think about how it will be funded this could be linked to a financing sort of question or investment question and you must also make a recommendation even if not asked to do so because in regards to projects whether the key aspect is going to be so the leadership skills.

 Our justification include the key action points to take that project forward and understand or at some point is as a project so with that said we're now to issue now which is value chain efficiencies and this is centered around the 10% or less profit margin that we've got and the new technology reference in exhibits we need to gain some sort of efficiencies entirely due to the fact that we have such a high gearing and our profit margin isn't really strong enough to generate the kind of cash that will be needed to suffice for our loans in the long term so it's very very important that we raise that margin and one of the best ways to do so is by finding efficiencies in the value chain saving some costs and set around passing those costs on for more revenues but we also want to look at all the new technologies available in the industry that we see Waveline sail line using that will perhaps provide some cost cuttings to our admin process which is a large portion of our operating costs decision-making is part of an English again having this decision based on what we should do how it will affect stakeholders for example is extremely important.

so will it upset staff staff for a key issue that we may need to think about as well so with that in mind there's a lot of these decisions to be made between different efficiencies for example if you reduce the admin department because you've implemented new technology there's going to be some consequences for staff and route it sets around so with that in mind the decision-making marks come in here in regards to leadership so what are the kind of likely issues here well it's where to achieve further efficiencies this could be economies of scale or it could be a high powered processes with tips for example checking in without any staff involvement required automated easier process that way so what should we raise in regards to version efficiencies well where's the value chain that works needs to be covered the implication of chief decisions on value chain for example that automation from software could have significant impacts on staff morale because we likely will make some redundancies due to that also areas of possible efficiencies can also be that technology aspect but also how big data informed decisions interact with our overall profitability for example if we overstock food because we've misjudged the demographics on the ship then of course they'll eat into our profit margin for that voyage and overtime over a course of a year those kinds of Misinterpretations or Analysis will mean that we have these sort of increased costs that could be saved by being a bit more efficient in particular the inform the big data inform decisions that could be you know more accurate if we perhaps collected more data or in a specific way that says hello it's me again.

 I just want to take a few minutes of your time to first extend my hope that you enjoyed the free sample that you've just viewed but also to just sort of explain what else is trying to do to help you pass your exam really effectively provided you found our sample particularly interesting and insightful of course so of course we have a study text for every module ranging from p1 to f3 and certificate level is also free on our website so we have study texts throughout the SEMA course every module you could hope to study the certificate level of free as I mentioned and then the rest of them ranging from p1 to f3 are all available to purchase alongside this if you're not so much a study text kind of student and you prefer a visual way of learning we have the course videos we essentially break down the study text into bite-size presentations with a walk through and it's a very very very engaging way of explaining the course following this we have the preseason alysus where we break down each pre seen sitting into a number of videos going through the whole document but also adding a top 10 recommendations for it will come up in the exam and also a strategic analysis where we put all the models you'd find in e - for example - the pre seen itself whichever that may be at the time alongside this we provide an industry analysis this is a document and accompanying video which help you give that contextual information in your exam so for example if the pre seen on the oil industry the industry analysis will break down the oil industry the current topics trends issues what the competitive market looks like all those kind of aspects all condensed into one so you can spend your time wisely in your study period following on from this.

when you actually want to practice all this knowledge we have mock exams for all of our materials so study Tech's has a generic mock exam based on the module whereas the pre seen analysis has mocks available to purchase that are based on that specific pre seen that a targeted to the key issues we believe will come up and if you're not content we're just doing those mock exams and practicing that way we have a marking a feedback system where you can purchase the ability to send in your paper have it marked by a CIMA qualified accountant and get personalized feedback but on whether you can improve X or Y area and so finally if you will if you're feeling really unprepared and that exam is kind really really soon the master classes are offered biased Randi and they essentially a crash course in anything you could want for that topic so if it's a master class on the pre scene it's going to give you absolutely everything that you could possibly need to know about the pre seen in run in one rather really condensed sitting likewise if it was the f3 master class you would have all of f3 gone through a very crash course style presentation and video link you can also purchase it post stream as opposed to viewing it live all these kind of aspects we are very very confident that these materials will help you get the exam success to you one so we have a pass guarantee provided you fill out a form which demonstrates that you have utilized our materials to a large extent actually taken the time to study them and you have unfortunately failed we will offer you the same materials again for the next sitting as in a consolidator ii offer to ensure that you can get back on the horse and get that exam grade that you want with that said thank you very much for watching the sample video I hope you enjoyed it and it gives you a lot of confidence in a strand tea and your CIMA future.


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MCS August 2019 Pre-seen video analysis Cruise calm - CIMA Management Case Study

MCS August 2019 Pre-seen video analysis Cruise calm - CIMA Management Case Study
MCS August 2019 Pre-seen video analysis Cruise calm - CIMA Management Case Study


Find the MCS August 2019 Pre-seen video analysis from Astranti

Watch the Pre-seen video Analysis for Cruisecalm , the company you will be working for in the CIMA MCS August 2019 exam From Astranti,MCS sitting in August 2019 on cruise comm so before we get straight under way I'm just going to introduce myself very briefly so the first thing is that my name is Joseph and I am the MCS expert at Ron T I write mocks for the MCS as well as offering you know tutor responses to any MCS queries as well as f3 queries and I also write portions of our study text in regards to the MCS and f3 so that is my sort of background I've been you know working with the MCS for around two and a half years now is quite a few sittings so far and I've had a lot of sort of knowledge around this kind of level for a number of years now before I took over as the MCS expert Ron T so you can find sort of sneak previews and video clips are surrounding the MCS and exam success in the case study at my facebook page which is sort of shown at the bottom if you search that you will find you know all kinds of clips on a weekly basis regarding the MCS even when there isn't a pre seen around yet we look at some examiner's reports okay so besides that what actually is the pre seen well it's a video series first and foremost in this analysis we go section by section covering each page in as much detail.







MCS August 2019 Pre-seen video analysis Cruise calm - CIMA Management Case Study








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 We do come across like there's some that we're speculating on and there are others that are just huge huge indicators that I will 100% point out to you you know sort of the given questions that will definitely turn up in one of the variants and potentially that variant is yours we didn't have the strategic analysis which is a very focused business model to pre seen sort of video and presentation and we have the top ten most likely issues which follows up all this information with essentially the top ten problems that are likely to come up in the exam with the top one to four being almost a guarantee that they will be you know definitely there we have a pretty good success rate I believe in the past five sittings we have scored about seven and a half correct issues in the majority of the different variants so with that in mind you can have a lot of confidence in our sort of guesswork and speculation and then this the other ones near the top of that list which are basically guaranteed to come up so how is it going to work we'll go section by section we'll assume that there's no knowledge as I progress so by that I mean you haven't pre read the pre seen will be going through together as it was our first reading if you've already read it great but I will assume that you have not read further on at any given point the only thing I assume is that you're relatively well versed in our F2 P2 and E2 modules at least enough to be able to go back and revise a topic if you know we mentioned that it's particularly relevant what I suggest throughout this series is that you read a section and make notes just before you know you watch it or just after you watch the section and this will mean you can compare and contrast with my speculations and sort of inputs and this will give you the biggest and most well-rounded exam prep you can possibly get so very much go with that it's very very useful and as we go through of course .

I'll have my review at each video end I will sort of sum up to the best of my ability what we've covered and why it's important and of course the last two products will be going through a full strategic analysis and the top ten issues which are pretty straightforward as we discussed in the previous slide so without further ado you will now cut to the current MCS pre seen for you to get stuck in with now with that set this first video is going to cover the first six or so pages we'll begin with the introduction and then we'll stop at the history section for video two so each video is going to go through just document without that prior knowledge if you remember you know every sort of video will be an iteration on our knowledge and we'll go through each section as it comes so without rambling on too much let's get underway with the introduction now the first thing I love to point out on this first page there's always a little introduction is that we typically see the whole case as the foundation for the unseen material that we get exam and that's ultimately what we're asked to respond to however in regards to the actual case this introductory page is the foundation for the case so it's actually a very very useful page and it might seem quite small and not very important at this point but believe me as you go through it we can get a lot from this so the first thing that we see is that Cruz camp is a quoted company so they are on the stock market and this brings about a number of regulations first and foremost that they will have to adhere to a lot of information that needs to be disseminated for those regulations but also it means that we have quite a high sort of influence from our shareholders we have to keep them happy as our key stakeholders and ultimately this is going to be in regards to dividends etc wealth creation for those investors so investor relations are going to be quite important and it means we're gonna need to try and keep the growing there's I mean very very sort of Drive on wealth creation based on the fact we are a listed company because of all the shareholder interests typically they're investing to get wealthy so we need to keep that in mind so for example if we were to get into the exam is feasible that we would get some unseen material on some shareholder concerns perhaps about our gearing or a potential project that we're planning or just an idea of you know the growth at the moment isn't quite good enough shareholders are looking elsewhere that kind of context is quite common.


when we have quoted and listed companies as our case so keep that in mind because it's going to be quite important you need to consider as we go through the next thing I see is that we they are a cruise company they operate a fleet of holiday cruise ships and this is obviously two things we know the industry now and if you've seen the entry back already you've got a lot of information on cruise ships you know as a whole but just to you know overview that kind of analysis you know you've got these very very large companies ranging from you know cruise calm colors you know fifteen twenty thirty fleet and then there are some large companies with around you know a hundred in their fleet so you're looking at these very very large companies quite a small amount of them compared to many industries and they're very very competitive it is dominated by an extremely large company that has almost 50 percent market share called carnival so it's a very difficult industry however importantly in this industry and it's suggested in this phrase here they have a fleet of holiday cruise ships now we're going to assume they own those ships because that's just typically you know what happens in the industry and this means we have a high amount assets and when we have a high amount of assets we have a lot of potential secure against loans to of

 also told that cruise calm is based in a city called port ro in N'awlins that's our fictional country and port ro offers extensive shipping facilities and is a major business center so two things that I'd like to point out here is that the first about extensive shipping facilities it raises the question of do we have that competence are we a group or are we just a cruise company I suspect at this point given the name of the company we are a specialized cruise company however shipping and freight are quite a common competence in the sort of group companies that we see in the industry so there is a question mark there I'll be a group do we have this as a potential you know revenue stream are we doing shipping as a company and if not well is it a way to diversify or is it not worth it so there is that question mark over diversification and in relation to our major business center to me that simply suggests that we've got a lot of activity in that city so typically you know they're trying to outline poor taro as an actual like hub where loads of people are going through for example whilst Dover in the UK is not particularly a high business center a major business center it does have a lot of activity going through the ports perhaps they're suggesting this is a large city lots of skilled labour may be along sighs this busy port I imagine because it to be there typically an Anita port with all their cruise ships so that's what I'm getting from that small mention of the major business center and just a second before we move on for words I did forget to mention it's very typical for me to suggest that you make your own notes as we go so that we can compare them at the end of the videos now.


 typically I can't do that with you but it is very very good because it is very subjective a lot of these aspects I mean we all you know hopefully know very much the F 2 P 2 e 2 however how that sort kind of influences we pull from different terminology may differ from person to person there are some you know there's not really a wrong answer in many cases however we then mind just take your own notes as we go through and you'll get the most from these videos as possible because you can compare against what I've suggested and have you know an ultimate set of notes that fantastic so with that said let's go on to now said Norland is a developed country that has a high standard of living so typically this is going to correlate well to the kind of consumer or customer that goes on a cruise ship holiday they have quite expensive up front it is argued by many industry analysts that you know cruises are cheaper on average than a normal holiday however the upfront cost is almost certainly 


higher because in a cruise you're typically paying upfront for your food because it's all-inclusive typically and you've got a lot of these costs happening all at once to a very expensive holiday the benefit being that you might spend more on a different holiday that isn't a cruise but in those different holidays you're probably spending a lot less in the initial investment in that holiday so considering this you know it's very very good that Norland or domestic market have a high standard of living we do you need to have quite affluent customers to get you know passengers onboard tourism typically is related to affluent populations there is obviously scope for less affluent people to go on holiday but the more affluent the more holidays typically we are also told that the average age of the population in Norland is relatively high with large numbers of citizens who can afford to indulge themselves in expensive holidays so again this links to our suggestion that there is consistent customer demand and the fact they are you know a higher average age that does suggest that there will be more people you know able to afford them but also willing to usually the older you get the more time you may have on your hands especially in retirement for example however in regards to our industry analysis that we did that were if you haven't seen it there was a consumer trend there that the average age of cruise passengers is trending downwards to more youthful passengers it's still extremely popular with those of older age.


However there is also you know a very significant number of young passengers joining because there's a some age of Instagram where younger passengers or young travelers are seeking 

something like cruise because they've seen multiple locations in one holiday versus a single location in a single holiday compared to a normal holiday and this gives them the opportunity to take more pictures come on social media etc hashtag travel is but one of the biggest hashtags on social media so with that in mind there is that element to it here so there is a balancing act there on how we market we have a higher average pop halation but the industry is trending to accessing more young passengers so we need to have a think about how that might translate to a marketing approach for example we don't spend all our budget on a new social media campaign because it's less likely that the older population will be on something like Instagram or Facebook where is the young passengers will but if those young passengers are only 20% of our customers it doesn't make sense to put all of our money into a social media marketing campaign so we have to consider what the best approach to our marketing is given those two sort of dynamics so with that said we can now see that Nolan's currency is the end dollar and that's quite a small phrase but it's very very important this means that we are potentially subject to exchange rate risk we obviously don't know at this point how crews come handle their sort of exchange rate risk whether they are invoicing in only their domestic currency or whether they're invoicing in you know all kinds of currencies because if you invoice in your own currency only then you obviously remove or reduce / sort of void the exchange rate risk there but with that said as I've just mentioned we've got our reduce and avoid that's part of the TARA framework so you've got transfer except to reduce the void and that will be quite key when we consider our risk management of course and in this case we've got exchange rate risk now one thing 

we should mention is that if they do not you know fully remove or you know get rid of the risk in exchange rate so if they're invoicing in several currencies then we do need to go through that process of tarah and a typical sort of suggestion is that invoicing in domestic currency only or the alternative to reduce risk is to take out options and swaps etc these financial instruments which help us mitigate exchange rate risk you need to explain how they work per se but mentioning them we'll get you some marks if this comes up as a topic so just keep that in mind and following this we get a reminder that we are required to prepare financial statements in accordance with IFRS now the big one here is pretty much always group accounts but we haven't had confirmation that we are a group company yet so with that in mind you know it could be any IRS my recommendation is always don't try to narrow down into a single or a couple irises in my opinion you really need to know your RS is really well especially the theory you don't necessarily need to be able to do particular calculations and set around because that's not required in the case of the exam but you will need to know how to handle it what the consequences are what this mean to the company how we adapt essentially so you're thinking at the bigger picture but always keep focused on our dresses because without calculations in the exam there's very few things that the examiner can use to test your f2 knowledge and IFRS is are essentially the big bulk of the syllabus when you remove calculations so with that in mind make sure to brush up on all your irises perhaps leases might come up you know maybe some activity entertainment kind of machinery equipment like a rock wall for example that maybe you know present on the cruise ship to entertain guests will they want to own a rock wolf permanently perhaps not so they may be leasing and therefore all you know we've got leases as an 


IRS for example but that's just a suggestion I would recommend that you know all your irises very very well finally we are told that we are a financial manager and Cruz comes head office that's pretty standard that's what we expect and it's just the standard MCs reminder that we are a management accountant now and essentially what does that mean so we're reporting to a senior financial manager and who then reports directly to the files director so we have quite a important role and if you look at this sentence here the director and to a slightly lesser extent the senior financial manager are going to be the employees thinking about the strategic elements of the finance function and essentially at those levels we're thinking about how we might change strategy at our level we need to keep in mind we are taking a step up from the operational and we're thinking about the implementation of the strategy so we are monitoring the strategy being you know implemented into operation we are not often going to comment on strategic changes we are often going to be respecting the strategic outlook of our you know senior employees above us and monitoring how that is working in our overall company so we do comment we do perhaps sometimes recommend when the exam question suggests it but overall keep in mind that we are not simply carrying out you know operational functions anymore we are now monitoring how those tie-in with our strategy whether they are you know working as intended and that's where our position is in that food chain if you will so do not forget that we do have to think about some strategic aspects but mostly about how we are carrying out our strategy and how it links in so keep that in mind as we move forward it is very very important to keep that in mind because we no longer looking at just you know you know budgeting and absorption costing etc we were looking at a slightly higher or quite a bit of a higher level now on that company perspective all right well phew I did say that was a particularly in point age and you can see here that we've got a lot chart down so with that in mind let's move on now to the next page hello it's me again I just want to take a few minutes of your time to first extend my hope that you enjoyed sample that you've just Feud but also to just sort of explain what else the strategy do to help you pass your exam really effectively provided you found our sample particularly interesting and insightful of course so of course we have a study text for every module ranging from p1 to f3 and certificate level is also free on our website so \


we have study texts throughout the CIMA course every module you could hope to study the certificate level of 3 as I mentioned and then the rest of them ranging from p1 to f3 are all available to purchase alongside this if you're not so much a study text kind of student and you prefer a visual way of learning we have the course videos we essentially break down the study text into bite-size presentations with a walk through and it's a very very very engaging way of explaining the course following this we have the priests analysis where we break down each pre seen sitting into a number of videos going through the whole document but also adding a top 10 recommendations for what will come up in the exam and also a strategic analysis where we put all the models you'd find in e - for example - the pre seen itself whichever that may be at the time alongside this we provide an industry analysis this is a document and accompanying video which help you give that contextual information in your exam so for example if the pre seen on the oil industry the industry analysis will break down the oil industry the current topics trends issues what the competitive market looks like all those kind of aspects all condensed into one so you can spend your time wisely and your study period following on from this when you want to practice all this knowledge we have mock exams for all of our materials so study Tech's has a generic mock exam based on the mod whereas the pre scene analysis has mocs available the purchase that are based on that specific pre scene that are targeted to the key issues we believe will come up and if you're not content we're just doing those mock exams and practicing that way we have a marketing a feedback system where you can purchase the ability to send in your paper have it marked by a CIMA qualified accountant and get personalized feedback but on whether you can improve X or Y area and so finally if you will if you're feeling really under prepared and that exam is coming really really soon the master classes are offered biased Randy and they essentially a crash course in anything you could want for that topic so if it's a master class on the pre seen it's going to give you absolutely everything that you could possibly need to know about the 

pre Seen

 in run in one rather really condensed sitting likewise if it was the f3 master class you would have all of F3 gone through in a very crash course style presentation and video link you can also purchase it post stream as opposed to viewing it live all these kind of aspects we are very very confident that these materials will help you get the exam success to you one so we have a pass guarantee provided you fill out a form which demonstrates that you have utilized our materials to a large extent actually taken the time to sell you them and you have unfortunately failed we will offer you the same materials again for the next sitting as in a consolidator ii offer to ensure that you can get back on the horse and get that exam grade that you want with that said thank you very much for watching the sample video I hope you enjoyed it and it gives you a lot of confidence in a strategy and your CIMA future.



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Industry Analysis OCS August 2019 - AKL Sparkle - Pre seen video Preview from VIVA - CIMA

Industry Analysis OCS August 2019 - AKL Sparkle -  Pre seen video Preview from VIVA - CIMA
Industry Analysis OCS August 2019 - AKL Sparkle -  Pre seen video Preview from VIVA - CIMA








First part of VIVA Financial Tuition's Industry Analysis for the August 2019 CIMA Operational Case Study pre-seen.



For More videos of VIVA visit the link- Watch more OCS video analysis click here


For more Operational case study (OCS)  resources visit - http://www.exploreaccountancy.com/p/operational-case-study-exam-ocs_5.html



Hello and welcome along to the industry analysis for the operational case study of August 2019 here we're going to be looking at the real world jewelry market broadly speaking and then focusing in on some of the more relevant segments within that industry from the perspective of the pre seen document before I get into the nuts and bolts of the industry analysis itself I want to address a question which is often asked by students especially students who may be approaching the case study for the first time and that is what is the purpose of doing an industry analysis after all you are presented with some irrelevant industry information in the pre seen document itself so is it not a surplus to requirements to go into the industry in more detail well one thing I think that has to be accepted and admitted from the outset is that you are not expected to be an industry expert by any stretch of the imagination the examiners do not expect you to know all of the ins and outs of the relevant industry when you go to do your exam.

However there are some good reasons to do a deeper dive on the industry than the information that you're presented with merely in the pre seen document and there are two main reasons for that so I think understanding the wider business environment and the industrial context in which the pre seen business operates has two key potential benefits on exam day firstly it helps you to anticipate some of the potential issues that might arise in the unseen scenario and thereby avoid any nasty surprises or confusion it also familiarizes you with some of the key concepts and some of the key jargon within the industry and allows you to read then the unseen information more fluently on exam day if they do make use of any of that kind of terminology and so that's one of the main benefits is you become more fluent in the language of the industry and it makes it easier then to address the issues that come up on exam day a second reason I think it's important to do an analysis of the industry is that it makes easier for you to illustrate and apply your abstract theoretical knowledge by giving concrete examples and specifics rather than simply stating your theories in the abstract of course knowing the pre seen document is key in that respect as well because it makes you it allows you to reference specific people within the company's specific areas or departments or products for example or facts and figures but that it's also useful for that reason to look at the wider industry as well because it will help you in some cases to give more elaborated examples and illustrations of your applied theories from the objective test studies.


Those are two I think key reasons why it is a useful exercise to have a look at the broader industry of course some tuition providers might go a little bit into overkill on the industry analysis present you with too much information overwhelm you and provide you with big long documents on all aspects of the industry at Viva we believe that that is not necessary we don't want to overwhelm you so what we've done is we have distilled the industry to its essential components and to those aspects that are most relevant from the perspective of the pre seen document ok so let's have a quick overview of what we're going to be covering and then we'll get into the nitty-gritty we're gonna start off with a quantitative analysis of the market we're looking at some key figures some key growth trends and trends from the previous years as well as projections for the coming years and from there then we're going to move into a qualitative analysis this is a deeper dive on what we've come across in the quantitative segments and try to make sense of those numbers and interpret them and figure out why it is the case that those numbers are as they are in section 3 then we're focusing on enameling specifically if you've already read the pre scene and you've had a look at our pre scene analysis videos you will probably have a good idea already of why enameling is potentially so important and we'll be looking at it from the perspective of the real world and just giving you a better of exactly what's involved there in that process from there then we'll move on to a real world a template I think for the pre seen company that is elf nine to five and we'll explain why we think this is a good candidate for the inspiration for the pre seen company and it's a useful exercise to look at a real-world company.


It allows you then to compare and indeed to contrast I think more crucially with the pre seen company and you can see for example what they're doing differently and how that might be the future path or trajectory that a company like AKL Sparkle will take in the coming years finally then in Section five we're gonna look at some opportunities and threats this will be tying everything that we've seen in the previous sections together and giving you a good sense of what kinds of opportunities a company like AKL Sparkle has facing them based on the real world industry and also some of the threats and then at the end we've got a nice little section on sources for you if you want to pursue any of the points that were raised in this industry analysis further we will have everything that this industry analysis is based on at the end of the PowerPoint for you to look at in your own time if you wish to do so ok so let's get started on the quantitative aspect of the analysis here we're just giving you a general overview of the jewelry market globally and where it fits in then within the broader at luxury goods market personal luxury goods market so that's where we start at the top with the value of the personal luxury goods market worldwide it's 260 billion euros approximately that is a nice big market indeed and then within the personal luxury goods market which includes things like for example luxury cars you also have the luxury jewelry market and that is worth 18 billion euros.


 The total luxury goods market so not a trivial proportion of that overall market and then finally you can see here at the bottom this is the overall jewelry market including all sorts of jewelry not just luxury jewelry but fine fan fashion jewelry indeed as we saw in the priests in that is the key from the perspective of the precinct company is the fashion jewelry segment within the broader jewelry market and the global to do market is worth a whopping 271 billion US dollars so that is a very impressive market indeed here we're looking at some of the key figures in terms of the segmentation of this market you can see here on the left playing gold jewelry not necessarily the most relevant from the perspective the pre seen but interesting to note nonetheless that global plain gold jewelry market is likely to grow at a compound annual growth rate of five point three seven percent over the next five years necklaces and chains here in the middle this is going to be an important point from the perspective of diversification as we will see later on in this industry analysis in 2016 the necklaces and chain segment contributed thirty-one point three seven percent in the global gems and jewelry market that is a significant proportion indeed for just one segment of this particular market almost a third of the total market is necklaces and chains worth bearing in mind and then finally on the right here you can see this is the market in a pack a pack is an acronym for at the asia-pacific region asia-pacific region was the leading region in the global gems and jewelry market with a market share of whopping fifty three point two eight percent of the overall global jewelry and gems market that is very very significant indeed and from the perspective of the pre seen that is very important of course because we know that the precinct company is based in the Asian zone so it's probably more than likely you would say in the asia-pacific region and that is a very very lucrative market from the perspective of absolute value so now we move into the nich the distinction I should say the very important distinction of fashion versus fine jewelry as we came across in the pre seen we're looking here at some of the key regions indeed countries from the perspective of fashion jewelry and you can see here on the left as in terms of retail value that is say purchasing of Jewellery .



China is way out in front and in terms of its growth rate it also is very healthy looking forward to 2021 an average annual growth rate of 3.5% but overall in absolute terms that is a huge market in terms of retail value for fashion jewelry and you also have India with some very healthy growth figures looking forward to 2020 18.4% average annual growth rate also you have in the top five here you've got USA Japan and Hong Kong but it's notable there the asia-pacific region and Asia indeed including India is very well represented indeed and that was reflected in the previous slide that we saw luxury or fine jewelry those two terms are used often interchangeably much different picture in terms of the retail value markets that our major players you can see here USA is in absolute terms way out in front in terms of retail value for luxury jewelry not surprising perhaps as perhaps one of the richest countries in the world per capital certainly in terms of disposable income you have a lot of people there who are going to be interested in luxury jewelry you also have places like France and Italy in other words you have the mature as the mature developed markets in the West in Europe and North America primary primarily responsible for most of the retail value of luxury jewelry also have Japan and China is moving up as well in the rankings but the general picture and the takeaway here is that for the fashion jewelry segment as we saw it's the Asia and asia-pacific regions which are leading the way and then when it comes to luxury and fine jewelry the markets are much larger in the Western countries and in Europe and North America.


 In particular so now we move on to the issue of brand this is an important point to bear in mind especially from the perspective of how exactly and the company the pre seen is marketing and selling its products branded jewelry is on the rise brand adverse non-branded or you can see here in terms of the overall percentage of the market branded is moving upwards and it has set to hit thirty to forty percent of the overall market by 2020 on branded still is a large proportion of the global market bought branded is becoming more and more important and that includes not just luxury jewelry but also it includes the branded fashion jewelry that we were looking at in the previous slide welcome back to the shoe brand a little bit later on but here we're shifting the focus now to the online jewelry market which is becoming increasingly important the market will be accelerating growing at a compound annual growth rate of close to 16 percent that is a very very healthy growth rate indeed incremental rolls and this is projected to 2020 to bear in mind incremental growth of seventeen point six five billion US dollars the year-over-year growth rate for 2018 is estimated to have been at fifteen point one nine percent that is a huge huge growth rate the market is fairly fragmented you can see two here at the bottom left with quite a few players who occupy the market share as we saw in the priests  forty one percent of the growth will come from the Americas again that is based on the the push from the luxury market especially in the United States you have a huge market there for luxury goods and one of the key drivers for this market will be the innovation in jewelry design and technology remember in the case of the pre seen the use of CAD technology in the design of the products for aka Sparkle so the online market is going to be very important and we're going to come back to it a little bit later on but now we're moving into the qualitative analysis we're going to be breaking down some of those figures that we saw in the previous slides and giving a deeper dive in some of the key trends from the perspective of say consumer tastes and things like that in this industry basing a lot of what follows on a very interesting study which is linked at the end of this pre seen or I should say Industry Analysis a multifaceted future the jewelry industry in 2020 from McKinsey and company and there are four key trends that they have identified .


 I think or some way to explaining and shedding light on some of the figures that we've seen in the previous section internationalization and consolidation is one very important trend which we're going to look at fast fashion based on some of what we've seen in the apparel and clothing industry more broadly speaking and the idea is that some of this is actually beginning to seep through into the jewelry market find versus fashion apparently the line is blurring and we'll come back to that and of course as we mentioned in the previous slide the online market is becoming very important indeed so we're now going to take each of these four key trends in turn and look at them in a little bit more detail so with respect to internationalization and consolidation you can see here in the 1980s national apparel brands were the clear leaders that is to say those clothing brands which were specific to particular country they were native to that country and they were the cheerleaders back in the 1980s however now we're seeing these huge multinationals coming on the scene such as Zara and H&M others have built or expanded their international presence Hugo Boss for example in Germany we expect a jewelry to follow a similar path today the jewelry industry is still primarily local but the ten biggest jewelry groups capture a mere 12 percent of the worldwide market and only two Cartier and Tiffany and Cody's reverse in the luxury segment are in inter brands ranking of the top 100 global brands the rest of the market consists of strong national retail brands such as Christ in Germany or Chow Tai Fook in China and small or mid-sized enterprises that operate single branch stores however based on this study at the interviewees expect that a handful of thriving national or regional jeweler brands are likely to join the ranks of top top global brands by 2020 so that's an important thing to bear in mind from the perspective of the pre seen company AKL Sparkle is confined to the new land market but it is an increasingly important player within that market and according to this analysis at least were likely to see a trend towards consolidation and internationalization as it moves towards the model and the path already paved by apparel and clothing in terms of the move towards fast fashion and as we saw in the priests as well the is calmly a kale Sparkle is really keen to churn out a lot of new designs on a monthly basis and that reflects the growing interest from the younger segments who are looking for new trends all the time looking to stay ahead of the curve when it comes to fashion and to have something unique and different and that obviously is very conducive to a fast fashion model some local brands will almost certainly become known globally as a result of industry consolidation international retail groups will acquire small local jewelers so it may is where it may also be the case that the company in the preseen is a very very attractive candidate for acquisition by one of the bigger more international players in the industry


 some industry observers project that the ten largest jewelry houses will double their market share over 2020 primarily by acquisition of those local players and if the apparel industry does indeed hold any lessons for the jewelry industry incumbent jewelry houses will soon be fighting bidding wars against large private equity players with deep pockets so don't be surprised if some kind of scenario like this is coming up on exam day fast fashion then let's move a little bit more detail here on the fast fashion idea fine jewelry has so far been immune to the fairy the effects of fast fashion but the same can't be said of the fashion jewelry industry so as opposed to the finer luxury market the fashion jewelry segment is already seeing some shifts toward the fast fashion model and that is evidenced in the pre scene by the fact that the egg company a KL Sparkle is churning out ten new designs every month and that's likely to become more important as we move forward and competition heats up there will be a larger demand for more and more new designs an example of Senna acceleration here beeline a German branded jewelry players adding hundreds of new items to its assortment every month so tens in the case of a KL Sparkle hundreds in the case of the real world company of beeline and that's an unheard-of pace in the industry where two collections per year is standard so we're seeing that shift towards fast kind of strands fast styles as we have seen in the case of companies like Zara in the clothing industry in the fast fashion world flexible companies with adaptive business systems reap disproportionate Awards innovative jewelry players will emulate fast fashion apparel companies they'll react to trends quickly and reduce their product development cycle times doing so will require closer collaboration with partners along the entire value chain from suppliers to designers to logistics providers this is going to be a very important point later on when we come back to opportunities what about this blurring the line between fine jewelry and fashion jewelry well the previously clear-cut boundaries between fine jewelry which is characterized as we know from the pre scene by the use of precious metals and stones and then fashion jewelry on the other hand which is made of plated alloys and crystal stones these lines are starting to blur for example fine jewelry used to be almost exclusively a gift purchase but today's consumers are increasingly buying higher-end items for themselves some fine jewelry is available at bargain prices indeed especially in online retail and secondhand retail online chivonne Germany for example sells gold diamond rings starting at $99 on the flip side brands such as Lanvin and Roberto Cavalli sell fashion jewelry for thousands of euros so industry insiders expect that segments will increasingly be defined by price points and brand rather than purchase and wearing occasions one of the interviews interviewees in the study put it as follows


We encourage our customers to layer and mix high and low price points and just go for it to do what they're doing with apparel in this spirit actress Helen Hunt recently paired $700,000 worth of Martin Katz jewelry with a H&M dress at the Academy Awards in 2013 so there is a kind of a blurring of the lines are not so clean-cut as you might think between fine and fashion jewelry it's not clear if that's actually really spilling over into the APAC region just yet but it is something to bear in mind moving forward online as we saw earlier is increasingly important from the figures point of view but let's look into it a little bit more qualitatively here in all major markets over the past decade online sales of a parallel have grown at double-digit rates in the UK for instance online sales now account for 14% of total apparel sales up from approximately 1% in 2003 and that's already surpassed 14% by this year our analysis suggests online jewelry sales are only four to five percent of the market today with substantial variations across regions brands and types of jewelry our interviewees believe this number at least for fine jewelry will reach 10% by 2020 and won't grow much beyond that so bear that in mind for the fine jewelry segment or not looking at a huge jump in the case of the online market however look here at the bottom as for fashion jewelry which is where our company okl Sparkle is operating our interviewees predict a slightly higher online share of sales in the neighborhood of ten to fifteen percent by 2020 that's because as we see above here in terms of the rationale for fine jewelry most consumers prefer to buy expensive items from brick-and-mortar stores which are perceived as more reliable and which provide the opportunity to actually touch and feel the merchandise that seems to be less of an issue when it comes to fashion jewelry as this is seen as a jewelry that is more replaceable perhaps a little bit more disposable and there's the demand again for new Styles all the time styles that can be changed around and tried with different different items of clothing and mixed and matched for example in that context of course it's not going to be as important for the purchaser to actually see the stuff in person seeing it visually online may well be sufficient for their purposes and for that reason the online segments in fashion jewelry is likely to grow more aggressively than it is in the case of fine jewelry millennium millennial I should say demands are having a big influence on the fashion jewelry segment as well.


 We saw in the case of AKL Sparkle their target market is in the Millennial age range as Millennials are becoming the major consumers but have limited buying ability fashion jewelry is proving to be a truly outstanding replacement option allowing them to fulfill their emotional lead of looking good all the time and being up to the latest trends and giving themselves a perception of having something unique and that is distinct from what everyone else has and that is a huge driver of this new pattern and this new push towards a fast fashion model within this segment we're also seeing some interesting geographical shifts particularly in that APAC asia-pacific region which is important from the perspective of the precinct company India was previously one of the major exporters of fashion jewelry and silver based fashion jewelry in particular the export Indian export of silver jewelry and artifacts was a record high of a little above four billion in 2016 2017 taking major market share from Thailand that has since reversed silver jewelry exporters from Thailand have made their articles more attractive with contemporary and modern designs while Indian exporters continue to offer the same style of ornaments failing to move in line with consumer demand we're gonna see why Island is potentially important a case study from the perspective of the pre seen Thailand's export of silver jewelry jumped 15 percent to nearly 1.8 billion in the calendar year of 2017 from the year before silver jewelry was nearly 44 percent of their overall gems and jewelry export and that's very important again from the perspective of the pre seen we're dealing primarily with silver based jewelry export in the segment also rose from Indonesia and China pulling down India's global share interestingly as well jewelry demand is expected to record a solid year of growth in 2019 with Thailand said to be one of the driving forces behind that rice o'the island is increasingly becoming a major player terms of growth and indeed overall market share in the asia-pacific region now silver is a key as supply in the context of the pre seen company of course and here we're just gonna have a quick look at some interesting aspects of the silver market in and of itself and how that could have a knock-on effect then on the jewelry market in the fashion jewelry market in particular you can see here the top six production stage silver mines are based in Australia Mexico Bolivia Peru Poland and Mexico and then down below you see here top six near-term silver mined development projects through 2015 these are I in the pipeline and on the way and you can see again .


Chile Argentina Mexico Bolivia Canada and Peru what's the pattern here the Americas are a huge player when it comes to silver mining most of the major silver mining operations are based in American countries both North America and South America particularly in South America even a huge number of countries they're specializing in silver mining one country that I want focus on here important from the perspective of the pre seen company is Australia Australia seems to be geographically the closest a nation when it comes to a exporting silver to a place like for example thye land or the fictional country of new land in the pre scene so that is important to bear in mind from transport costs and so on now silver prices what is exactly affecting silver prices and indeed the demand for silver unlike gold which is also another commodity the price of silver swings between its perceived role as a store of value like gold and its role as an actual industrial metal for this reason price fluctuations in the silver market are more volatile than goal that's something very important to bear in mind so while silver will trade roughly in line with gold as an item to be hoarded in terms it's called investment demand the industrial supply and demand equation for the metal exerts an equally strong influence on its price and that equation is always fluctuated with new innovations so you can see here this is a nice breakdown an overview of the different sources of demand for silver globally you can see jewellery is at 209 point 1 million ounces demanded verse is you can see here another important player perhaps the most important segment is industrial electronic and electronics uses that would include things like iPhones and other such devices they're becoming increasingly important in terms of demand for silver and then you also have an interesting one here this is one of the things we would need to keep an eye on is the photo voltaic that is to say the panel's used in solar panels and a cup when it comes to energy and it comes to when it comes to renewable energies this is becoming an increasingly important area of course with the climate change and global warming issues


controversies and so there is likely to be a push towards more investment in solar panels and at in turn then we'll put a price pressure on silver as the demand goes up the price of silver is likely to go up as well and that then has knock-on effects on companies in all the other segments where silver is demanded including of course jewelry what if things look like in recent years well last year in 2018 the silver market faced a very challenging environment which was reflected in a muted price performance preliminary estimates point towards a minor 0.3% increase in total supply whereas demand contracted 3% a slowing Chinese economy coupled with rising US interest rates and equity quite equity market bull run and global rate tensions trade tensions I should say affected the price performance across many markets this is actually good news from the perspective of course of a company like the one in the pre seen if the silver price is depressed of course that is going to be good for them because they can afford more silver and lower prices but you have to bear in mind as well what's going to happen going forward this year 2019 we expect the sentiment to be more supportive for the silver market the start of 2019 has already proven to be good for silver investors the US Mint for example sold 12% more American Eagles in January compared to January 2018 in addition the expected slowdown in the US Federal Reserve rate hiking cycle should also benefit silver which in comparison to gold has a very attractive price point based on the high gold silver ratio at around 82 percent so basically what these analysts are expecting is that the price of silver is actually going to start rising in 2019 it's already at such a low that it's likely to see relatively rapid rises in the price and so obviously from the perspective of a silver jeweler this is going to be a bit of an issue if the price rises rapidly in the coming years






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