Chartered Postgraduate
Diploma in Marketing
Analysis and Decision
Senior Examiner Assessment Review Report March 2011
© The Chartered Institute of Marketing 2011
Senior Examiner Assessment Review Report
UNIT NAME:
Analysis and Decision
AWARD NAME:
Chartered Postgraduate Diploma in Marketing
DATE:
March 2011

Background to the paper:
Prior to the examination, candidates were provided with an extensive case study (Apple Inc.,)
reflecting a real life situation.
The case study included extensive information about history of company (eg, established in
1977 in USA), its strategic focus (provide innovative products and solutions to different
segments), its product/brand range (eg, iPhone, iPad, iMac etc), its distribution strategy (eg, a
combination of own specialist stores, retail outlets, online shopping sites, third party
wholesalers and retailers), its markets (B2C and B2B markets) and the company value (eg,
$222 billion, surpassing Microsoft with the help of the iPad sales).
Extensive information was included about Apple’s innovation strategy (focus on delivering
cutting edge products to discerning customers), creative focus (eg, being different to the point
of seeming idiosyncratic or even anarchic), the competitive nature of markets in which Apple
operated (characterised by rapid innovation in hardware and software).
Further detailed information was included about the Apple brand (eg, third world leading
brand behind Google and IBM), brand equity elements such as loyalty (devoted and faithful
customers actively seeking new products as soon as these become available), brand
associations (a blend of quality, innovation, reliability and trendy sophistication), brand
lifestyle associations (eg, celebration of freedom and originality) the brand value ($83.2 billion
last year), the brand logo (new monochrome logo since 1998), brand strategy (using same
logo across markets and across product categories, using the Mac brand at the centre of
product range acting as a hub, using flagship products to boost others brands), brand pricing
(eg, premium prices), brand strengths including stronger supply chains, high quality customer
service delivery via highly motivated and knowledgeable staff.
The case study also included some challenges facing the brand including higher than ever
customer expectations and the need to live up to these repeatedly. The PR disaster in July
2010 due to problems with built-in aerial of inferior quality badly affected customer
perceptions and generated bad publicity and in the short term affected company value and
share prices. A range of strategic risks facing the company were listed (based on the annual
report of 2009), including the potential impact of bad economic conditions, rising competition,
the need for frequent innovations, substantial inventory and other asset risks, reliance on third
party suppliers, software developers and applications, huge retail business, quality problems,
the continued availability of key personnel, etc.
The case study provided detailed information about the iPad and its rapid popularity (eg,
selling three million in 80 days; 11,000 unique applications for the iPad), its competition (eg,
initially no direct rival in the tablet market) , the iPad markets (laptops and high end net books,
gaming platform, an e-reader, movies player), its success factors (eg, ability to present books,
magazines and newspapers in a highly attractive and readable format) and a range of other
features.
The case study also highlighted many of the problems facing the printed medium/industry (eg,
drop in revenues, popularity of e-readers, environmental concerns over consumption of wood
for paper, the loss of jobs in the industry), falling advertising revenues, online newspapers
and relevant issues facing these (eg, charging subscriptions), the iPad competitors (e-readers
such as Sony Reader, Kindle, Nook), including their brief profiles, future trends (eg, all
segments of the entertainment and media industry will experience an increased impact from
digital technologies.
The case study also included material relevant to the demise of traditional business models
and critical factors for the successful operation in the new value chain, including the need for
strategic flexibility, delivery of engagement and relationships with customers, economies of
scale and scope, speed of decision making and execution, agility in talent management,
ability to monetise the brand and rights across different platforms, and strong capabilities in
partnership structuring and in marketing and advertising targeting and integration.
The case study included information on the ability of technology to transform a number of key
relationships such as between users and digital content, between vendor and user and
between supplier and vendor.
Twenty two appendices were included providing further relevant information ranging from
financial performance (eg, balance sheets, shareholder equity, statement of operations, sales
figures by segment and products to ability of the iPad to save newspapers, the issue of
charging online readers, rising competition (Sony teaming up with Google and Dell’s entry to
tablet market), price war (eg, Kindle lowering its prices), new emerging markets such as India
and e-book sales to overtake prints within five years.
Prior to the examination, candidates were required to carry out a six page audit of the case
study and bring it to the examination venue where it was to be attached with their answer
sheets. No marks were to be awarded for the audit itself but for how the audit was used to
answer the tasks during the examination.
Candidates were provided with a Candidates’ Brief prior to the examination. The brief
required candidates to imagine being employed as a marketing consultant working for Apple
Inc. As part of the marketing team they were required to analyse the factors that had
contributed to the success of the company and in particular of its iPad.
They were asked to consider the changing nature of the print industry and the role of
technology in addressing the challenges it faced. Apple was said to be keen to explore the
opportunities that the iPad created and the potential impact that the iPad had on the
traditional value chain model. They were also briefed that the company was seeking insights
into how it could maintain its reputation and position in the market as a brand leader and
successful innovator.
The examination paper included some additional information to the Apple case study (not
seen by candidates prior to the examination), including a media report about Nokia filing a
range of lawsuits against Apple in an escalating dispute over alleged patent violations, with
Nokia, accusing Apple of stealing Nokia technology for its iPhone, iPod and iPad touch
screen devices. The lawsuits were filed in the UK, Germany and Netherlands with an
intention to increase the cost and difficulty for Apple to defend itself in multiple countries.
Apple, as per the report, also faced disputes with Motorola of the US and HTC of Taiwan
reflecting intense competition and rivalry among major players in the industry. When
answering tasks, candidates were expected to consider this additional information provided at
the time of the exam alongside the information contained within the case study.
The examination paper consisted of three tasks, all of which were compulsory. Task One
(50%) had three elements each worth15 marks, 25 marks and 10 marks respectively. Task
Two had two elements with the first element worth 10 marks and the second element worth
15 marks. Task Three had a single element and was worth 25 marks. All three tasks were
interlinked and candidates were expected to answer all of them using information from the
Apple case study, the six page audit and the additional information presented on the day of
the examination.

Comments on how the marking scheme was applied in terms of:
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Concept, Application and Evaluation
Syllabus coverage
Use of command words and the extent to which answers reflected what was
required
The relative weighting of each part of a question/task and an indication of what
aspects of the question/task required most care and attention
What differentiated the A, B, C, or D grades
Throughout the assessment, candidates were expected to show a good understanding and
knowledge of relevant concepts from a range of syllabus areas and evaluate and apply them
in appropriate detail.
For instance, via the six page audit, candidates were expected to demonstrate insights into
the following:
- A knowledge of a range of techniques, processes and market information to assess the
external marketing environment, including the market environment (eg, major players
including Dell Computers, Samsung, Sony, Amazon, Barnes and Noble, Google, etc),
customers (eg, consumers, small and medium sized businesses, educational institutions such
as schools and government bodies, etc), market trends (eg, declining print industry, the
growing market for e-readers and e-books, the greater acceptability of tablets including the
iPad, online readerships, the growth in developing markets, more demanding customers,
decline in net sales of the Apple Mac, etc), market challenges and risks (eg, greater
competition, a price war by Amazon, current economic conditions, new players with low cost
features, faulty products and potential negative publicity, supply chain issues, reliance on
cellular networks in certain markets, the different stages of market development, etc), the
impact of technology (eg, rapid changes in technology and need for new product innovations),
competition (eg, direct and indirect competition).
- An understanding of techniques/models to assess the internal environment, including
resource and competency audit (eg, skills and resources supporting the ability for new
product development and launches, quality control; managing employees and distribution
outlets, both online and on the high street, the supply chain and strategic partners),
innovation audit (eg, a very strong brand with an excellent history of introducing cutting edge
products and solutions through design and development of hardware and software etc.); core
competency (eg, hard core customer base with a strong brand equity, rapid innovation in
hardware and software exceeding customer expectations, loyal/well informed employees, an
extensive distribution network, etc), key success factors (eg, an innovative approach to
meeting customer needs with enhanced functionality and product features, continuous
innovation, strong brand personality, operational effectiveness, etc) and financial performance
(eg, iPad sales helping surpass Microsoft; strong financials in 2009, compared with 2008 and
2007).
- A resource based view of Apple including an analysis of the company’s approach to meeting
customer needs, managing innovations and enhancing brand equity and customer value, and
the value of this approach in developing further resources and capabilities
- An understanding of strategic uncertainty/risks in the external market facing Apple
- An appraisal of the determinants of strategic options including past and current strategies;
new product introduction, leveraging brand equity, marketing strategies, strengths and
weaknesses, capabilities, resources, constraints and opportunities, value chain analysis,
Porter’s Five Forces analysis, etc.
Task One
The first part of Task One required candidates to critically evaluate Apple’s existing core
capabilities, resources and competencies that have contributed to the success of the iPad to
date, utilising a relevant conceptual framework.
The mark scheme allowed ten marks for knowledge/evaluation and five marks for application.
Drawing upon and referring to the six page audit summary, the case study material and the
new information presented at the time of examination, the candidates were expected to argue
that core competencies are capabilities that are critical to a firm achieving competitive
advantage.
The true capability of Apple included technology and product design, and its core competency
originated from superior resources (eg, significant brand equity, customer service), skills (eg,
human resource and innovative systems) and technology (eg, which allows the delivery of
cutting edge products), that enabled Apple to provide a range of benefits to customers
generating a very clear competitive advantage. An example of Apple’s core competency
included providing innovative products and solutions via design and development of hardware
and software. The outcome was products that were elegant and trendy with sophistication
reflecting a lifestyle celebrating freedom and originality, providing superior customer value
and competitive differentiation. Such core competencies allowed Apple to introduce a wide
range of new products and services. Good candidates were expected to assess the relevant
criteria for core competence, including being able to create customer value, sustain
competitive differentiation and with being capable of leading with a wide array of new
products that would be difficult to imitate. Candidates were expected to relate answers to a
relevant conceptual framework (eg, Prahalad and Hamel 1990) and to argue that Apple
needed to change given the significant changes in the company’s environment.
Candidates were also expected to link their discussion to the key factors contributing to the
success of the iPad to date, including the business models relevant to saving the print
industry, etc. Candidates may argue that Apple’s approach to business is fresh, innovative
and imaginative; that it combines high quality products offering style and design, slick and
enticing personal communications, and a user friendly interface with exceptional after sales
service support.
Candidates were rewarded for showing a good knowledge of relevant concepts and their
ability to apply their knowledge to Apple’s context. They were also rewarded for revealing
strategic insights and thinking based on a good understanding of theory (eg, competitive
advantage, key success factors, value propositions, and core competencies).
The second part of Task One required candidates to assess (in the context of rising
competition facing the iPad and changes in new technology) a range of strategic marketing
options available to Apple to sustain its competitive advantage in the global market place.
The mark scheme allowed ten marks each for knowledge and evaluation and five marks for
application.
The case study provided extensive information about the market for books and e-books and
competition facing the iPad (eg, Sony Reader, Kindle, Nook and imitators and highlighted the
strengths and weaknesses of key competitors). The case study also emphasised the
continued and ever changing impact of digital technologies on entertainment and media
industry, including changes in consumer lifestyle, acceleration of market fragmentation, the
rising power and mobility of devices, the growing dominance of the internet experience over
all other mediums, and the ability of technology to transform relationships.
The new information presented further information about new challenges being faced by
Apple (eg, the Nokia lawsuit). The information was in addition to a range of challenges faced
by the print industry already discussed in the case study.
Candidates were expected to draw upon their six page audit, the case study material and the
new information presented at the time of the examination, and assess different strategic
options available to Apple, which could contribute to sustaining competitive advantage in the
global market place.
Candidates were expected to demonstrate an understanding of competitive advantage (ie the
means by which Apple can outperform its competitors and achieve higher than average
profits), the various sources of competitive advantage (eg, utilising core competency,
resources, skills and capabilities) and the different strategic options available to Apple, given
the rising competition and changes in new technology.
There were many potential answers and candidates were expected to reveal strategic
thinking and insights while assessing and evaluating options. They were expected to link their
discussion to the rising competition and changes in technology. It was expected that some
candidates would refer to the Ansoff Matrix (market penetration, product development, market
development or diversification), utilising it as a framework. Others were expected to quote the
BCG matrix or Porter’s Generic Strategies to achieve or maintain competitive advantage. Still
others were expected to utilise information from the PESTEL framework with a view to outline
opportunities and assess some relevant options (eg, a strategic partnership with
publishers/newspapers, etc). Good candidates were expected to reflect on Apple’s business
model of focusing on three broad industry categories, including software development,
hardware and retail, and in doing so were expected to comment on its relevance and
effectiveness in designing growth strategies.
Candidates were rewarded for demonstrating good understanding of relevant concepts, and
strategic insights, based on a sound understanding of theory (eg, reference to some model)
and practice, rather than tactical solutions and ideas.
The third part of Task One required candidates to recommend with justification, one strategic
option Apple could adopt in relation to their answer for Task One b that would ensure the
long-term sustainability of the company.
The mark scheme allowed three marks for knowledge and seven marks for evaluation and
application.
There were a number of possible answers and a recommendation fitting the needs of Apple
could be made while reflecting on competitive advantage, value creation, proposition and
differentiation, Apple’s institutional strengths, the views of stakeholders and checking against
the distinctive competencies of Apple. Candidates were expected to recommend one option
and provide a rationale or justification for their recommendation.
Candidates were expected to recommend and justify a valid and viable strategic option rather
than a tactical solution or ideas. Candidates were also expected to provide some valid
justification. Those showing strategic insights and linking their discussion with some criteria
such as suitability, feasibility, potential, validity and vulnerability were rewarded.
The first element of Task Two required candidates to analyse the financial implications of
their recommended strategic option in relation to their answer for Task One c, demonstrating
the financial benefits to Apple in the short to medium term.
The mark scheme allowed five marks for knowledge and evaluation and five marks for
application.
The case study included relevant financial information in the form of Apple’s balance sheets,
liabilities and shareholders’ equity, statement of operations and sales figures by segment and
products.
Candidates were expected to draw upon the case study information and their six page audits.
They were expected to demonstrate insights into an application of understanding of the
financial performance indicators and criteria for assessing feasibility, viability and capability to
deliver. In doing so, candidates were expected to provide an analysis of the financial
assessment of their chosen strategic option, utilising a range of financial benefits and risks for
Apple, when selecting strategic options including ratios (eg, Return on Investment ROI; initial
financial descriptors), investment appraisal techniques (eg, Payback, Net Present Value NPV,
discounted case flow), the cost of capital, etc, and an understanding of corporate and
reputational risks associated with selecting strategic options.
Variations in candidates’ responses and the ways in which they could attempt this task were
expected. They were rewarded appropriately for showing some good insights of relevant
underpinning knowledge, such as an understanding of profit/value maximisation approaches
via cost reduction and revenue increasing strategies.
The second element of Task Two required candidates to assess three strategic risks facing
Apple that might limit its ability to continue to be recognised as an industry leader, and
propose strategies to address these concerns.
The mark scheme allowed five marks for knowledge/evaluation and five marks for application.
Candidates were expected to draw upon the case study information and their six page audit.
The case study provided information about a range of strategic risks facing Apple that could
potentially limit its ability to continue to be recognised as an industry leader.
Examples included the risk of economic conditions getting worse, global markets becoming
highly competitive and the company’s inability to compete effectively, the failure to handle
frequent product introductions and transitions, the lack of ability to manage substantial
inventory and other assets, the inability/ability to obtain key components at favourable prices
and in sufficient quantities, the lack of ability to handle supply chain and distribution issues
(eg, component, product manufacturing and logistics services provided by third parties
outside the USA, third party suppliers of digital content and applications, access to third party
patents and intellectual rights, third party software developers, distributors, carriers and
resellers etc), the lack of ability to invest substantially and commit resources, the inability to
initiate and implement high risk business strategies, the inability to handle product quality
failures, the inability to recruit and manage human resources including key personnel, the
inability to handle uncertainty in markets and risks of technology failures, the inability to
manage financial resources wisely, and the inability to manage shareholder value and
relationships, etc.
The case study highlighted the risk of intellectual and property right infringement and the new
information presented further reinforced this risk and the unfavourable results of legal
proceedings that could adversely affect Apple.
Candidates were expected to assess three strategic risks and demonstrate an understanding
of the resource based view of firm assessing Apple’s resources, including its key strengths
(eg, financials, human resources, brand equity and loyalty, effective use of technology, etc),
against organisational constraints and propose strategies designed to address constraints or
reduce risks (eg, scenario planning, forecasting, changing approach/direction and avoidance
strategies; strategic training of employees; stakeholder strategy matrix, etc).
Both elements of this task were marked as a whole (the assessment of strategic risks
proposing strategies to address the risks) and candidates were reward appropriately for
evidence of strategic insights and thinking based on good understanding of theory and
practice, rather than tactical solutions and ideas.
Task Three required candidates to analyse the impact that the iPad might have on the value
chain of the print industry, and the implications this might have for generating competitive
advantage for Apple.
There were two elements (impact of value and implications) and the mark scheme allowed
ten marks each for knowledge and evaluation and five marks for application.
The case study provided extensive and detailed information about the iPad and its innovative
features (portability, flexibility, user friendliness, interoperability and multi-functionality), with a
very strong potential to affect different areas of the value chain of the print industry. The print
industry value chain includes papermaking at the front end, the printing in the middle and the
publishing industry at the other end of the value chain. The case study included important
information about the iPad and its impact on newspaper publishers (eg, the likely saviour of
the newspaper industry, allowing to charge for online contents without alienating readers and
replicating what Apple did for the music industry with iTunes; by combining a new visual
approach with the iTune payment system, the iPad is helping to change consumer attitudes
towards paying for digital contents), the iPad and ebook publishers (eg, iBook allowing prices
to be set by publishers, easy downloading and saving of books on virtual bookshelves,
authentic page turning, book marking, multiple sites to download books via the iBook, etc),
the iPad and journalism (eg, funding for quality journalism), etc.
The case study also presented seven critical factors for the successful operation in the new
value chain: strategic flexibility, delivery of engagement and relationships with customers
through consumption experiences, economies of scale and scope, the speed of decision
making and execution, agility in talent management, the ability to monetise brands across
platforms and strong capabilities in partnership structuring and in marketing and advertising
targeting and integration.
The case study also presented information about various opportunities (eg, an altered
subscription model with the potential of generating more revenue via online advertisements
etc), the ability of the technology to transform a number of key relationships (eg, between
user and digital content, between vendor and the user, and between supplier and the vendor)
with the iPad expected to break new ground and support and sustain the huge reputation of
Apple.
While answering this task, the candidates were expected to draw upon this information, as
well as their six page audits and the new information presented.
Candidates were expected to demonstrate a good understanding of the concept of the value
chain (at industry level) and how the value chain could be used as a tool for generating
competitive advantage, and in doing so they were expected to refer to a relevant theoretical
framework (eg, Porter).
Marking took into account both elements of this task (both elements were marked as a
whole).
Candidates were expected to analyse the impact of the iPad on the value chain of the print
industry and not Apple itself and good answers were expected to achieve a balance between
analysing the value chain and assessing competitive advantage implications. The six page
analysis was expected to include a value chain model as applied to the print industry, making
a reference to Porter, and candidates were expected to draw from the model.
Candidates were expected to demonstrate a good understanding of the concept of
competitive advantage arguing that the value chain is a useful tool to establishing core
competency which Apple could pursue to achieve a competitive advantage; this could include
either creating cost advantage or creating better differentiation via value chain activities.
Candidates were rewarded for evidence of strategic insights and thinking based on a good
understanding of the theory (eg, value chain and competitive advantage) and practice, rather
than tactical solutions and ideas.
There were no ‘A grade’ scripts.
There were quite a few B grade scripts revealing a very good understanding of various areas
of the syllabus, including a strong ability to critically appraise, evaluate and apply material
from the case study and the new information presented on the exam day.
B grade scripts provided an effective evaluation of Apple Inc.’s core capabilities, resources
and competencies, an effective assessment of strategic options, justification of a strategic
option using financial implications, an effective assessment of strategic risks and strategies to
address the risks, and effective analysis of the impact of the iPad on the value chain of the
print industry with an effective assessment of competitive advantage implications. B grade
answers demonstrated a very good understanding of relevant theoretical principles, strategic
insights and application to the given context.
C grade scripts demonstrated a reasonable level of understanding of various areas of the
syllabus, including some reasonable ability to critically appraise, evaluate and apply material
from the case study and the new information presented on the exam day.
C grade scripts provided a reasonable evaluation of Apple’s core capabilities, resources and
competencies, a reasonable assessment of strategic options, justification of a strategic option
using financial implications, a reasonable assessment of strategic risks and strategies to
address the risks, and reasonable analysis of the impact of the iPad on the value chain of the
print industry with a reasonable assessment of competitive advantage implications. B grade
answers demonstrated a reasonable understanding of relevant theoretical principles, strategic
insights and application to the given context.

A general overview of how the assessment (exam or assignment) was tackled,
including a statistical analysis on the assessment as a whole.
The overall pass rate for the March 2011 paper was 56.63%.
The grade profile was as follows:
There were some very good answers and overall understanding of the case study was very
good.
Candidates continued to append high quality and comprehensive audits reflecting the
teaching quality and standards applied at most centres. However, significant variations were
noted in the way candidates used insights from respective audits when responding to specific
tasks, and higher marks were awarded to those who went beyond a simple/generic
referencing to the audit without providing the required analysis. For future assessments,
candidates are advised to integrate material from their appendix into their answer and use it
for discussion, analysis, evaluation and conclusions, rather than using it as a simple
referencing mechanism.
Generally speaking, candidates responded well to Task One in comparison with Tasks Two
and Three, and more time and energy went into answering Task One providing a lot of
details. Candidates should be encouraged to practise lay out and exam technique and should
aim to provide enough details for each element of the task.
Task One a was answered well with many achieving very good marks by revealing a good
understanding of Apple’s core capabilities, resources and competencies, though not many
were able to link this to the success of the iPad.
There were variations in the way Task One b was handled. Some referred to the Ansoff
Matrix, whereas others used Porter’s Generic Strategies to assess options, though not many
were explicit in elaborating how best to achieve or maintain competitive advantage.
Generally speaking there was a good understanding of the basic theory (eg, growth options),
though weaker candidates were unable to utilise any theoretical framework.
Important marks were lost when candidates assessed options that did not make any strategic
sense, which then had a compounding effect for Task One c and Two a. In other cases, the
assessed options were not really strategic marketing options and reflected a personal line of
thinking rather than anything else.
Good candidates were able to respond well to Task One c with many linking their discussion
with criteria such as suitability, feasibility, potential, validity and vulnerability. Weaker
responses were visibly shorter lacking justification and sufficient details/evaluation to merit
higher marks.
There were rarely any good answers when responding to Task Two a, revealing a continued
and long standing problem with this particular area of the syllabus (financial implications).
Significant variations were noted here with many providing a generic justification of their
recommended choice (often a repeat from the previous section) or citing some financials
without any links to the chosen option.
Task One b was generally handled well by a majority, though there were variations when
recommending mitigation strategies. Good candidates responded well by highlighting the
risks and pointing to some reasonable strategies to mitigate. Weaker candidates failed to
assess the risks properly and were unable to recommend/discuss mitigating strategies. The
ability to provide sufficient details was also a differentiating factor between stronger and
weaker candidates.
There were very few who handled Task Three properly. There were some who focused
entirely on assessing the new digital value chain for Apple and ignoring the required focus of
the question. Others produced discursive and chatty answers lacking insights into relevant
theory. Not many were able to properly assess the impact of the iPad lacking insights into
how the value chain could be used as a tool for generating competitive advantage. This was
quite surprising given the extensive detail provided in the case study and the presence of high
quality value chain analysis in the six page audits. Many made simple references to their
audit without elaborating on the impact of the iPad on the value chain of the print industry.
Centres and tutors are therefore reminded to cover this area of the syllabus in further depth
with students.

Feedback on the academic quality of the cohort(s) that has just been examined and
the quality of the teaching, as judged by the results
There were no A grade scripts, but there were some good B grade scripts and many C grade
scripts.
Understanding of some basic concepts (eg, core competencies, capabilities and resources,
strategic options and generic risk assessment) appeared to be good across the board and
centres/tutors are hereby congratulated for their efforts in encouraging candidates and
guiding them when producing excellent quality six page audits. Often, the quality of
commentary contained in the audits was quite admirable reflecting good practice. Candidates
are, however, strongly advised to make most of their audits by integrating insights from the
audits into their answers.
On the whole, good candidates provided sufficient details and responded to the required
focus of each task very well. They showed a good understanding of underlying theory and
there were some who even cited some academic papers that appears to be a good trend.
However, weaker candidates were unable to provide sufficient details and were not able to
show critical and strategic insights. Also, certain areas of the syllabus need further attention
such as financial analysis and the value chain analysis.

Commentary as to whether recommendations made in previous years have been
properly followed up
Areas of improvements include following:
- Develop an understanding of how various elements of syllabus and theories can be
interlinked
- Develop the ability to provide sufficient details, analysis and evaluation
- Develop the ability to make reliable and valid recommendations
- Demonstrate a mature and analytical understanding of strategic level thinking, decisionmaking and risk assessment strategies in a complex and unpredictable marketing
environment
- Demonstrate greater understanding of relevant theories and their implications for strategy
formulation
- Improve time management skills
- Answer each part of a question
- Further referencing to course content, models, frameworks, etc.
- Move beyond simple description to include analytical and critical insights and thinking, and
make good use of the additional material included at the front of the exam paper.

Guidance about how candidates can avoid making similar errors and strategies for
improving performance
Common Strengths
In general, the strengths of the cohort appeared to be as follows:
- The Apple case study was well understood and generally handled very well.
- The six page analysis was prepared to a very high standard in a majority of cases. The
analytical approach taken by a particular tutor at a centre was quite visible and this might be a
reflection of particular teaching approaches adopted at a local level. There were some
variations, with a tendency for some candidates to produce written/descriptive analysis rather
than visual analysis via graphs/figures/tables was noticed.
- Many candidates referred to their six page audit while responding to the requirement of the
task at hand, which is a good trend in itself. However, tutors need to remind candidates that
simple referencing to the audit without further explanation is not enough to merit higher
marks.
- Many demonstrated a good understanding of core capabilities, competencies and
resources, though there were variations in linking them with competitive advantage and the
success of the iPad to date.
- Generally speaking, a good understanding of strategic options was visible among stronger
candidates.
- There were many also who demonstrated a good understanding of strategic risks facing
Apple, though there were significant variations when it came to proposing mitigating
strategies to address risks.
- Stronger candidates were able to provide useful strategic insights and responded to the
additional material provided to them in the exam by integrating it in their answers.
- Stronger candidates demonstrated a good understanding of relevant theoretical concepts
(eg, core capabilities, resources and competencies, strategic options, risk assessment and
value chain analysis).
- Stronger candidates demonstrated a strong ability to appraise, evaluate and apply material
from the case study and the additional information provided at the time of the examination.
- Task One and Task Two b were generally handled very well in comparison with other tasks.
- Stronger candidates managed their time well allowing them sufficient time to address all
parts of the three tasks.
- Candidates appeared to be well prepared for the required format (report, introduction, and
memo etc) and answers were generally well presented and the writing was legible and
coherent.
- There was some clever use of tables to answer tasks and some useful value chain diagrams
were drawn illustrating the impact of the iPad.
Examples of Good Practice
While there were variations in candidates’ answers across the board, some examples of good
practice include the following:
a) Following the required report format (eg, starting with a proper memo heading)
b) Introduction highlighting the importance of task in a broader context making references to
the six page analysis and the Apple case study material as and when needed.
c) Understanding the required focus of the question and responding with appropriate details.
For instance, while response to the requirement of first element of Task One, a
candidate wrote the following:
Apple is a strong market leader in the technology marketplace. They have developed this
position through unique positioning through a highly optimised value chain. This has enabled
Apple to become a key player and developed their capabilities through the marketing and
operations carried out. Apple’s resources can be seen through technology, staff, supply chain
and procurement with their key competencies developing through the positioning of the brand
and innovation. Porter created the concept of the value chain to enable companies to fully
understand how to maximise their resources. Appendix 7 displays Apple’s value chain by
indicating their strengths in each area.
Apple’s capabilities – Marketing: Apple is a market leader and as a result they have
developed strong capabilities in sales and marketing. Apple have created an image that is
based on innovation and sophistication using the latest technology. Their capabilities have
enabled them to achieve this through strong marketing communications strategy and
informed sales staff ….. [candidate continues and assesses further capabilities including
operations].
Resources – Technology: Innovation and new product development are key to Apple. With
the rapid changes in marketing, staying ahead of competition is vital … Appendix 14
illustrates the iPad’s positioning indicating the higher personality combined with high product
attributes. As a result of this resource, it has continued to contribute to the success of Apple
by enabling significant points of differentiation over competitors …. [candidate continues and
assesses further resources such as supply chain and procurement processes making a
reference to Appendix 11].
Competencies – Brand Position: “Brands affect all audiences or all stakeholders and groups
from customers to staff and if the brand is highly regarded then they behave in a more
favourable way towards the organisation which drives up the value” Chris Fill. Branding is
imperative for a company to survive and Apple has created a company individual brand that is
positioned as unique and taps into consumers’ emotional beliefs. The brand asset valuator
values a brand under differentiation – high brand awareness and loyalty …. The intangible
benefits from the emotional values created through relationships and product values through
quality and innovation has provided Apple with core competencies that have resulted in
significant success for the iPad … [candidate continues and further assesses competencies
such as innovation and culture].
In response to the second element of Task One, a candidate wrote the following:
Strategic Marketing Options – Porters 5 Forces shown in Fig 18 clearly shows that there is a
potential for new products and competitors to encroach on Apple’s success and marketing
position. Along with rapid changes in technology and changing demands from customers (Fig
3) Apple not only needs to grow in the market but also defend its position. Ansoff’s Matrix (Fig
13) is a useful model for generating strategic options and there are several available to Apple.
Market Penetration – Increase Cross-Selling. Apple has a mixed portfolio of products (Fig 20)
of which some are incredibly successful and generating considerable revenue (Fig 22)
whereas some for example the desktop computers and iPod are experiencing a reduction in
sales. In addition Apple has 100m credit card accounts on its iTunes application (Fig 23).
Apple could use these accounts as well as owners of current products to sell their other Apple
products and services. This strategy could use a ‘position defence’ strategy and help Apple
defend itself from the competition. It requires relatively low investment and Apple can
leverage its strong customer loyalty (Fig 1) to achieve this. It also helps them maintain their
brand position (Fig 24) and their focus differentiation strategy (Fig 19). However, it is not
meeting their customer expectations of launching new products (Fig 3) nor does it correlate
entirely with Apple’s brand identity of being innovative (Fig 24). Finally it could limit profitability
– Apple’s strategy is focused on frequent product introductions (Fig 7) and their revenues are
greater for new products (Fig 22d) so by focusing on current products this could impact the
revenue. There is also a risk of cannibalisation in that they iPhone as a product has replaced
the iPod for example.
Product Development – Continue new Innovations. One option available to Apple is to
continue doing what they do today. Their current strategy of regular new product introductions
(Fig 7) has been incredibly successful, boosting Apple’s reputation (Fig 2) and its financial
standing (Fig 22). By using an offensive strategy like a bypass strategy, Apple can try and
leapfrog the competition and remain at the front of new technologies. Apple’s intuitive
technology (Fig 11) has already been successfully used across its product range and they
could adapt this to develop a television or home automation device for example. This strategy
would allow Apple to continue to focus on its niche differentiation strategy (Fig 19) as well
meeting their customer expectations with a new innovation maintaining their segmentation
and positioning strategy (Fig 5 and 6). As the market is experiencing rapid change as shown
in the PESTEL analysis (Fig 3) this allows Apple to keep up with the changes and maintain
their competitive advantage ……
Market Development – Strategic Alliance with Newspaper/Publisher. A third strategic option is
to look into the market development and develop a strategic alliance with a newspaper
company (eg, NEWS Corp) or a book publisher (eg, Pearson). The print industry is going
through a rapid period of change as detailed in Fig 3. There is a considerable decline in
traditional forms of newspapers and books and an increase in digital editions and ebooks,
combined with a rapid change in technology and decrease in advertising revenues and this
becomes and potentially lucrative option for Apple. Their customers are seeking out new
functional benefits that support their digital lifestyle (Fig 5) and therefore there is a strategic fit
between newspapers like the Times and Apple [candidate continues to assess further
strategic options].
Similarly, another candidate while responding to the second element of Task One
wrote the following:
The current industry within which iPad is currently operating is very competitive and
determined by the rapid technological changes in the environment. For a detailed analysis of
the iPad competitive environment refer to Fig 1.3 – Porters 5 Forces. The evidence is that the
barriers of entry are high considering the costs involved in designing and introducing a high
technical product like iPad …..
The strategic marketing options available for Apple to sustain its iPad in the market can be
categorised into two a) how to compete – either through differentiation focus or cost
leadership – refer to Fig 2.2 Porter’s Generic Strategies) and b) directions for growth.
Overall cost leadership will not be feasible because Apple brand is associated with quality
and if Apple wants to compete on the basis of price and be a cost leader then it will have to
dilute its brand equity …
Differentiation – currently Apple is using the differentiation strategy to compete in the highly
competitive market. And it uses product differentiation though constant innovation and service
differentiation to gain competitive advantage. Through differentiation which has resulted into
so many sources of competitive advantage (Fig 2.3) for Apple. In my view, Apple is best able
to compete in the market by continuing with the differentiation strategy. It is through
differentiation that Apple can be able to command a high level of customer loyalty which has
become a resource to the organisation.
Directions for growth – refer to Fig 3.1. Apple has got various options which it can use to grow
the iPad sales. Because the focus for Apple is to increase market share and be able to
remain market leader the growth options it can use are market penetration, product
development, market development and diversification (refer to Fig 3.1).
Market Penetration – Apple already commands a strong loyalty from its customers … Apple
can use existing relationships with its clients to move and make iPad more popular … and
can use relationship-marketing strategies. It can go back its CRM and try to encourage their
existing customers to buy an iPad … Apple has got a very strong brand equity and it should
make this stronger through marketing communications and hence penetrate the market quite
easily.
The second option for growth is though product development (refer to Fig 1.2 PESTEL
analysis and Fig 2.1 SWOT analysis). The external environment is posing a threat to the print
industry through concern for environment and pollution caused by the print industry and the
print industry sees iPad as its saviour – hence an opportunity to develop iPad into a complete
package where users of iPad can use it to read books, e-books and magazines. From Fig 2.1,
the opportunities represented to iPad as a result ... include product development through
collaboration and alliances with book authors and participants in the print industry.
The third option under methods of growth is market development. Here Apple has an
opportunity to venture into new geographical regions such as India and N. America where
there is the potential [candidate continues to assess options including diversification]
In response to the third element of Task One, a candidate wrote:
The strategic options presented earlier would push Apple into completely different directions.
Using Johnson and Scholes (2002) model of evaluation, the most suitable option is product
development and to continue developing new products for the market. As discussed
previously competition is intensifying (Fig 3 and 18) and companies like Nokia are really
beginning to push Apple (additional information). It would be easy for Apple to sit on its
laurels and simply defend its position but this does not fit with its brand and key
competencies. Apple’s strengths, as shown in Fig 1 and 23, lie in developing new innovative
market leading products and by continuing to do this they will sustain their competitive
advantage. As well as being suitable in terms of environment and resources and capabilities it
also matches shareholders expectations. All the stakeholders, in particular those with a high
interest in the company as show in Fig 12 will want to see Apple continuing to push the
market and maintain their focus differentiation strategy (Fig 19) ... In terms of implementation,
there is minimal impact to the value chain (Fig 17) …the main risk is around the high
investment required and the new innovation itself.
In response to the first element of Task Two, a candidate wrote following:
Currently Apple’s return on capital employed is relatively high at 23% (see Fig 1) which
means the company is in a good position to generate future profits. The company current
ratio is 1.88 (Figure 2) which means that they are highly capable of meeting short term debt.
However, the current ratio of 1.88 does highlight that the company may not be utilising their
earning potential as a figure of 1 is normally acceptable. The proposal of forming a strategic
alliance with News Corporation to introduce personalised content to iPad users (see Figure
10; the Figure presented Future ROI in the UK/USA for 4 years based on 30% share of
profits; Apple to introduce a new daily newspaper with personalised contents specific to
individual reader) would mean releasing funds to add both shareholder value (SHV) and
customer value (CV). Figure 10 highlights gross revenue and net income until 2014. As you
will see, by forming a strategic alliance with News Corporation, the company will only be
risking investment of up to 30% of what it would have cost to establish an Apple onlinecommunication (see Figure 11; this Figure presented ROI figures for 4 years for the
introduction of daily newspaper for all iPad users).
Not only does the strategic alliance entails less overall investment, but it allows for a wider
number of subscriptions as the company will be joining forces with a reputable company that
currently holds 22.90 % share of the UK newspaper market (Appendix 10 of Case Study).
News Corporation published reputable titles like The Times, The Sunday Times which have
similar identity and brand attributes to Apple …. [candidate continues and further assess
financial implications of their chosen strategic option]
In response to the second element of Task Two, a candidate wrote following:
1. Risk of reputation visibility. Apple is run by a strong leader Steve Jobs - he drives the
company forward through innovation. Appendix 19, illustrates who the other competitors are
run by … With the announcement of Jobs’ health deteriorating the possibility of him standing
down, this could greatly affect the direction of the company. Apple needs to ensure this part
of brand reputation of Apple is not damaged. Constant communication needs to be kept in
place with the media to give them information on where is company is heading. It is vital that
the culture is maintained to ensure Apple remains the brand leader and continues to innovate
new products. A new leader needs to be ready to take the company forward who has as
much drive and passion as Jobs.
2. Risk of changing technology – The market Apple operates in is immensely competitive (Fig
6 5 Forces Analysis). If NPD is not kept high then Apple risk not being able to compete
efficiently. Apple continues to invest a lot in research and development (R&D) … to ensure
they have the latest product with the correct features … With the threat of lawsuits over
patent violations Apple need to have mitigating strategies in place. This can be achieved
through fully understanding the market and using forecasting techniques to comprehend the
direction of the market … Scenario planning is best to be used here …
3. Risk of competition – Apple has had a large success in recent years …. There is the threat
that Amazon, Sony, Dell could fight back by guerrilla attacking Apple by undercutting on price.
This could lead to random attacks over a sustained period of time with high unpredictability.
Apple needs to implement a pre-emptive defence position and strike at competition before
they hit … As Apple has strong brand loyalty this will be an important element in mitigating
their risk ....
Similarly, another candidate while responding to the second element of Task Two,
wrote the following:
1. From the additional information provided in support of the case study, we see that Apple is
facing several lawsuits over intellectual property rights. Apple is engaged in patent disputes
with Nokia, Motorola and HTC all competitors in the consumer electronics business.
The litigation will be costly to Apple both in terms of financial resources it requires to defend
itself especially since the cases have been filed in several countries – US, UK, Germany,
Netherlands with the cases overseas most costly due to distance and also due to Apple’s lack
of familiarity with the laws of all the different countries. It will also be costly in terms of
reputation and these cases would impinge on its brand identity, time and management or
resources … Apple has a reputation for being creative and different. This could be hurt if it
was proven that indeed it stole patents. It would also give customers reasons to switch to
competitors as they could be seen as just as good. Therefore Apple should fight to defend its
position. In the meantime, it should also use publicity to resources its customers of its
innocence and in so doing protect its brand equity.
2. Competition – the markets within which Apple operates are intensely competitive (Figure
2A). To compete effectively and retain leadership, the company should continue to build on its
strengths of innovation and customer loyalty. It can leverage the success of some products to
support slower selling products such as it does with the iMac. To compete effectively a
strategy of focused differentiation where it focuses on a particular segment and provides a
differentiated product will enable it to reach its objectives ….
3. Global sourcing – the company relies on 3rd party component manufacturing and logistical
services located outside US. This has an effect on its value chain (Fig 6) which could
introduce a risk to the business if there was an interruption to the supply. To manage this risk,
the company should do the following: a) It should not rely on only one manufacturer or logistic
provided but spread the risk in case of the failure of one b) The company should enter into
written and binding contracts which are mutually beneficial to mitigate risk and c) the
company should develop a contingency plan that would detail how to deal with an adverse
situation and minimise risk to the firm.
In response to Task Three, a candidate wrote following:
Candidates correctly draws and labels Print Industry Value Chain.
Using Porter’s Primary Value Chain Analysis model, we can assess how the iPad may affect
the print industry.
Inbound logistics and operations – The print industry suffers large overheads in terms of
production. Starting from scratch to build a model, you would not need pulp from lots of trees,
use trucks and paper boys to deliver a screenshot of yesterday’s news. The iPad may offer a
new way of distributing the news. People want instant news whilst they are on the go and the
iPad can provide this. In order to save itself, the print industry must embrace the mobile web
and tablets.
HR Management – The newspaper industry needs to reposition itself so that their website is
at the forefront of all that they do. Designers need to be employed or trained from within in
order to ensure their news pages and contents are stylish and readable – through the web, on
phones, and through applications. Journalists need to be trained so that they can provide
content suitable for both the web and the newspaper. Some newspapers may need to ditch
some print runs during the week as their focus becomes online. That way they could charge
more for adverts in the newspapers and move online.
Technology development – Newspapers should look to work with Apple and marketers to
enable advertising and content personalisation. If Apple can provide the print industry with
meaningful marketing metrics then advertisers will be more willing to utilise online ads. As a
minimum they will need to know preferences and profiles of user. Adverts and suggestions
can then be tailored to individuals. This allows advertising to become much more interactive
and deals of the day may become popular.
Procurement – The print industry has time to develop to the new world. The progression to
tables will be gradual, although the growth of smart phones is exponential. Worldwide the
print industry continues to thrive in China and India but as Fig 9.3 and 9.4 show the sales and
advertising revenues from newspapers are in serious decline in the Western world.
Apple does have the potential to make large revenues from its mobile devices as people have
shown a willingness to buy newspaper apps allowing them access on the move. The print
industry is falling over itself to develop apps and mobile friendly websites for mobile devices
….
Inbound Logistics – Currently journalists place their news stories via newspapers and authors
via publishers but this model could be altered in the future years. There is no reason why
authors could not get straight to e-reader providers like the iPad or Kindle and cut out
publishers. This would mean Apple could pick up a share of revenues, which would under the
old model, have gone to the publisher …. Likewise journalists may set up their own apps and
blogs which cut out the newspapers. Apple should keep tabs on such developments. If the
current system of publishers pushing books ensures Apple can see to take a percentage of
their revenues through further development of its iBook Store …
Similarly, another candidate while responding to Task Three wrote the following:
With the launch of Apple iPad, many players in the print industry were affected badly and
were anticipating more damage. Moreover the advent of re-readers has reduced the profit
share of print industry which showed slump in revenues and numbers since the era of
internet. Print industry mainly includes the newspaper companies, book publishers and others
(refer to Fig 24 and Fig 26).
The introduction of the iPad changes the value chain of print industry upside down with many
areas of change (Fig 27). The following are the impacts the print industry value chain:
Inbound Logistics – The traditional value chain of print industry comprises of paper, ink
materials, human labour sources, news information etc which will be converted to digital value
chain cutting down on all these components. Only few labour (IT experts), graphics, content
developers will be required. This causes social problems like job losses among journalists
(see Fig 2) and unemployment issues.
2. Operation – the content development to physical printing of newspapers will be replaced by
means of digital soft copy formats. This will lead to unutilised assets of the printing industry
where less physical printing is done affecting the revenue of companies.
3. Outbound logistics – Physical distributions using the existing distribution channels are
warehousing will be totally eradicated and replaced by total online distribution. Distribution will
only be in the form of soft copy and through secured portals. Here too social issues will be
faced by suppliers and distributors losing their share of business.
4. Marketing and sales – Physical cash, cheques will be replaced by credit cards and smart
cards. The physical stock management, promotional activities (in the form of flyers etc) will be
largely replaced by promotional activities where more customers are targeted via online using
emails and SMS. The impact on employees and suppliers will be felt here too.
5. Services – The service maintained so far will be electronically replaced with more efficient
after sale assistance offered and more customer relationship management practised than is
the case currently in the print industry. E-CRM will be more active and effective method for
getting feedback from customers.
Overall this changes the dynamic nature of the traditional value chain print industry (Fig 27).
The implications of these changes for Apple will be more favourable competitive advantage.
The changing and more influencing nature of Apple in print industry will lead to a number of
strategic options like tie ups with e-reader providers, forward integration with online or ereaders of their own and online portals and new business models. For Apple, a strategic tie
up will ensure a long sustainability via its innovative products like iPad. With many in the
newspaper industry already looking at going online and charging the customers (see case
study), Apple with iPad applications for newspapers will allow them to penetrate the market
further and gain distribution by collaborating with existing newspapers. The bargaining power
of Apple will be stronger (Fig 3) than others in the print industry (Fig 25) and more
opportunities will open for Apple at a global level …

Common Mistakes and Weaknesses
In general, the weaknesses of the cohort appeared to be as follows:
- Task Two a and Task Three were not handled well by many, pointing to a strong weakness
in syllabus coverage.
- Many candidates produced much shorter answers for Tasks Two and Three in comparison
with Task One, with some doing extremely badly for both Tasks Two and Three.
- A significant majority could not handle financial implications of their recommended strategic
option, with many producing generic or less relevant or descriptive details. Tutors and centres
are reminded to cover this area of the syllabus with greater care in the future.
- Lack of ability to respond to the required focus was an important issue particularly for Task
Three, where candidates were required to analyse the impact of the iPad on the value chain
of the print industry. Instead, weaker candidates tended to rely on answers prepared
beforehand (eg, focusing on digital value chain and failing to analyse the value chain of the
print industry altogether). Also, not many were able to assess the implications for generating
competitive advantage for Apple.
- Weaker candidates were unable to utilise insights from their six page audits and hence this
continues to be an important issue that tutors should address in exam preparation.
Candidates need to be advised that a generic tendency to make repeated and simplistic
references (eg, see Figure 2.20 etc) is not enough on its own to merit higher marks. Instead,
they need to be encouraged to use insights from their audits and provide sufficient
explanation/details as part of their answer.
- Weaker candidates were unable to make valid recommendations and address the specific
requirements of the tasks.
- Lack of ability to provide sufficient critical evaluation and sufficient insights into the relevant
theories continued to be an issue. In some cases, some candidates did not attempt all tasks
and hence lost some crucial marks
- Weaker candidates tended to provide superficial answers revealing little strategic insights
into relevant theory and practice.
- For instance and in response to Task Two b (worth 25 marks), weaker candidates tended to
focus on generic issues rather than assessing strategic marketing options. Other noticeable
problems included a tendency to base answers on common sense and personal experience
and not on relevant concepts/models. Also, assessed options were often tactical rather than
strategic in nature, revealing lack of strategic insight into decision-making at a higher level.
- Weaker candidates were largely unable to integrate the additional material provided to them
in the exam and appreciate the additional challenges facing Apple.

Suggestions of possible alternative approaches to tackling a question/task or parts
of a question/task while making it clear that it is not the only way
There are alternative approaches in tackling a question and in each case high marks can be
achieved as long as there is enough evidence suggesting the achievement of learning
outcomes and a relevant and valid response is provided in the given context.

Recommendations for how performance can be improved in future assessments
Candidates should be encouraged to:
- Study all areas of the syllabus. For instance, not many were able to handle Task Two very
well, which is a bit surprising and an area of concern for most centres.
- Make extensive use of the six page audit and refer it throughout as and where needed. In
other words, encourage candidates to apply the insights they gained from the audit to the
tasks posed in the examination. This is a skill that may be new to some candidates and
something that tutors must address in exam preparation.
- Consider each element of the task and its value in terms of marks allocation, and assign
efforts accordingly.
- Make sure that each and every response is labelled, making it clear when they move from
one task to the other or from one element to another. For instance, each individual task
should be clearly numbered and candidates should be advised to make sure that they start
each task on a new page.
- Score through their rough working notes inside the exam scripts to avoid confusion as to
what the examiner is being asked to mark.
- Identify the required focus of the task; in other words make them think about what the task is
asking them to do. Candidates should be encouraged to read the tasks carefully and ensure
that each task requirement has been sufficiently addressed.
- Appreciate that all tasks in the examination can be inter-linked; their responses as such
need to demonstrate this while responding to all three tasks. Candidates must be encouraged
to read the whole exam paper and think about how each task links with others in the paper
before commencing their answers.
- Engage in deeper learning (rather than surface learning), apply theory to context and
develop abilities to evaluate the given topic in certain depth and detail. It is important that
candidates are able to demonstrate not only their knowledge but their abilities and skills to
apply and evaluate in the given context.
- Consult the reading list and read from the core texts and other wider publications. This is
significant as very rarely do candidates refer to any journals or core texts while answering
questions.

Clarification about any syllabus or assessment changes
None anticipated at the moment.

Possible future assessment themes
There are some areas of the syllabus that are likely to appear on future examination papers
and hence tutors should ensure that candidates are familiar with the theory and practices in
these areas.
Examples such as critically evaluating an organisation’s strategies, including: brand strategies
with consideration of value creation and sustainable competitive advantage; evaluating and
prioritising a range of strategic marketing options, recommending with justification strategic
options given a particular analysis; analysing financial implications associated with strategic
marketing options; critically evaluating the concept of relationship marketing as a means of
achieving growth and profitability; staffing policy; evaluating potential risks for the company
involved and measures for mitigating risks; assessing the potential for organisational
constraints to limit an organisation’s success in using any given strategic choice and a range
of strategies to address these successfully.