L3 Strategic Management 24-hour At-Home Exam (February 2021)
General Feedback
As we approach the end of the marking process and have an overview of performance across the
cohort in the exam, I wanted to provide some general feedback on the almost 800 exam scripts
we received. When your marks are released you will get a short comment on your answers but
you should also read this report to put those comments in context.
Please read the following paragraphs carefully as we saw a wide array of abilities in our marking.
In summary, we saw a lot of missed opportunity in prominent places and some exceptional work.
The marks given reflect that.
Among the submissions we saw a number of excellent answers that demonstrated a very good
critical understanding of the theory stated in each question and its application - as well as
exploration of a contrasting view. In these essays it was clear that good preparation and
engagement through the module was paying off.
Some, striving to achieve this, however, did neglect to cover the core theory in sufficient depth or
merely referred to a contrasting view without showing understanding. Simply listing out criticisms
from the slides does not demonstrate understanding.
At the other end of the spectrum, it was clear that for many the 24-hour at home exam with the
emphasis on showing understanding had proved to be a real test. A surprising number simply
produced a summary of the theory but did not go on to show application and critically discuss it –
and so did not move up from the knowledge/understanding levels of Bloom’s taxonomy. We also
saw a number of scripts where the answers did not engage with the required theory or were just
describing the case study and so did not show the required understanding.
Strong performance across the portfolio of online tests will mean that overall; despite Covid and
the challenges of lockdown, online learning and socially separated classrooms; marks for the
module will be up this year
Below we look specifically at each of the questions:
Q1: CSR
It was in the compulsory CSR question that we saw the widest range of performance. We did see
some very good answers that not only appropriately mapped and discussed the options for
CEMEX but also used the stakeholder vs shareholder debate to take contrasting views
Others were less well done with a number of answers describing CSR and CSV and then simply
trying to tack on some comments, or a table, covering the CSR initiatives stated in the question. In
doing so they did not show the depth of understanding of analysis needed. A number of students
choose to ignore Porter and Kramer’s CSV framework – despite it being the focus of the question and instead focus the types of strategic CSR or attempt to use Elkington’s “triple bottom line”.
In terms of the mapping of the initiatives, a number of common errors suggest that for some, the
CSV framework needed to be better understood. Here it was important to think carefully about
what was inside CEMEX’s value chain (e.g., a product development) and what is outside (e.g., an
industry initiative. It is also important to assess if the value chain has a significant and specific
impact and if it is an area in which that firm has competencies/expertise. Do note that where
errors were made in the mapping, markers will have looked at how the mapping was justified in
your discussion and credit will have been given where understanding was shown.
Remember in the mapping you need to be staying true to Porter and Kramer’s theory to gain the
insight it provides. That doesn’t mean you have to agree with the output. You could have gone on
to pick up the criticisms: the shareholder perspective may have led you to argue that certain
initiatives might build its market profile, but it should wait until government regulations require
the firm to act on others. Or you could have argued that the CEMEX executive team do not have
the legitimacy to decide what is best for society and so should not be making these choices.
Finally, a number of scripts raised the shareholder perspective but positioned this as ignoring
social value. Of course, this is not the case, the argument between the shareholder and
stakeholder view is about how social value is best delivered. Should commercial firms directly
make decisions and engage in social issues (stakeholder view) or should firms fund other actors in
society better placed to deliver social value? Which of these view-points you buy in to is down to
you, but you should understand both of them.
Q2: RBV
This was the most popular optional question among the submissions we received. A number of
students provided quality answers – critically discussing in depth the core RBV theory and VRIO
framework and illustrating this with examples from CEMEX. Dynamic capabilities were then
brought in as a contrasting view, with Teece and Pisano’s types of DCs illustrated with examples
from CEMEX.
Less good scripts did not bring in the necessary depth – in particular many did not dig deeply
enough into the elements of the VRIO test (e.g., bringing in and discussing Barney’s reasons why a
resource might be inimitable). In some cases, lack of depth on this area of the theory seemed to
be a result of a keenness to progress on to discussing a contrasting theory – as stressed in the
briefing material, this will have lost more marks than could have been gained.
Where inimitability was discussed, often a resource/competency was said to be difficult to copy
because it was expensive or took time to build. However, if such a competency is the source of
advantage, then funding can be obtained and so there has to be other reasons why it, or the
funding, cannot be obtained. For CEMEX, where your competitors are the likes of global giants,
such as Lafarge and Holcim, this is even more the case.
A number of students struggled with identifying competencies and resources – instead suggesting
activities, strategies or market positions (see the slide in SU5 on what is not a competency). Some
suggested very generic categories like marketing or information technology. All firms have these
to a degree, so you must be specific. For others more care was needed in the VRIO test – where a
resource is not rare it cannot provide advantage (other firms have the same thing) even if it is
inimitable (although if it is not rare it’s probably not inimitable!).
Q3: Blue Ocean
Good answers to this question critically discussed the theory and illustrated the different steps in
the Blue Ocean process with examples from the Netflix case study. Several then went on to
introduce and apply either Christensen’s theory of disruptive innovation or the cognitive limits
theory, to provide a contrasting view on Netflix’ success and Blockbuster’s failure. However,
several essays attempted to cover both these contrasting theories, and also sometimes RBV, and
as a result, either did not cover the Blue Ocean theory in sufficient depth or did not show
understanding of any of the contrasting views.
Less successful essays missed out steps in the theory (usually the ‘As Is’ strategy canvas or the
buyer-utility matrix) or had misunderstood the vertical axis in the strategy canvas (it is amount of
the competitive factor not how much customers value it).
Q4. Corporate Strategy
This was the least attempted optional question, and also the one that more people struggled
with. However, we did see a number of very good answers that critically discussed the mapping of
Esquel’s subsidiaries into the Parenting Matrix from a shareholder perspective, engaged in its
criticisms and began discussing a stakeholder view on Esquel’s corporate activity.
By far the most common error was attempting to judge Esquel’s subsidiaries by the value they
brought to the Esquel group, rather than what value the Esquel group provided each subsidiary.
Remember, you are looking at the firm from the shareholder’s view and from this perspective the
Esquel Group is an intermediary that adds cost. So, if the Group does not add value then it
reduces the value the shareholder would receive if the subsidiary was directly owned by them.
Another common mistake was to look at the value Esquel had already delivered, rather than the
potential the Group had to deliver more value in the future. From a shareholder perspective, if no
additional value can be generated, it is better if the group sells that subsidiary to realise the value
created than let ownership costs slowly eat those gains away.
Q5. Strategy as Choice
This was the second most popular optional question with 500 answers being received. Good
responses explored Porter’s value proposition and lines of defence, with well-crafted activity
systems maps demonstrating 1st and 2nd orders of fit in Jet Blue. Some went further and explored
how the introduction of Mint would disrupt the activity system and began synthesising a
contrasting view such as Blue Ocean strategy or RBV.
However, a common issue in a number of answers was a misunderstanding of Porter’s 2 nd and 3rd
order fit. Often 3rd order fit was depicted simply as additional consistent activity choices.
Remember 3rd order fit is the tuning of the whole system – and that might mean dialling down the
effectiveness of some elements of 1st order fit. However, it is not a pulling apart of the system or
replacement of elements of the value proposition as arguably Mint would.
To support second order fit you would expect to see an activity system map busy with lines
connecting and interconnecting the whole system of activity choices. Not just a few activity
choices linked to themes and a few of those themes linked together – that is little more than 1st
order fit.
Less good answers struggled to pitch the value proposition, themes and activity choices at
appropriate levels. What Porter is doing here is providing a structure that allows you to see
alignment. So, at the value proposition level, you are looking for very high-level statements, the
themes are a bit narrower but it is not until activity choices that you get to the detail. Hence,
things like unlimited snacks would not be in the value proposition.
Despite covering this in the module, a few students still insisted in basing their answers on
Porter’s old generic strategies – cost leadership and differentiation. As Jet Blue shows this
simplistic view does not help when looking at today’s markets: Porter has moved on and so should
we. While talking about inappropriate theory, unfortunately, we did also see students trying to
use SWOT, 5-Forces and PESTLE - I guess they had just not watched/read/attended any of the
exam briefing support - fortunately it was fewer than in previous years.