Chartered Postgraduate
Diploma in Marketing (Level 7)
561 – Analysis and Decision
Academic Session March 2011
Exam Marking Scheme
This marking scheme has been prepared by the Senior Examiner for the
purpose of giving guidance to the CIM marking teams. It should be noted,
however, that the marking scheme is just one element of guidance that is
given to markers and therefore must not be treated as the definitive guide to
how marks are allocated.
This marking scheme is issued to TUTORS ONLY as additional support to
assist with the delivery of CIM programmes and to enable tutors to enhance
feedback and guidance they give to students.
THIS MARKING SCHEME MUST NOT BE DISTRIBUTED AND THE
CONTENTS MUST NOT BE DISCLOSED TO ANY PERSON OTHER THAN
TUTORS FROM CIM ACCREDITED CENTRES.
Please also note that the marking schemes for individual units will differ in
style and format because as stated, these are guidance documents used by
the unit examination team.
© The Chartered Institute of Marketing 2011
Analysis and Decision Mark Scheme March 2011
CHARTERED POSTGRADUATE DIPLOMA IN MARKETING
ANALYSIS AND DECISION
Can the iPad save the print industry
Additional Information
Nokia files further Apple lawsuits
Adapted from: The Financial Times. Andrew Ward in Stockholm. Published: December 16 2010
Nokia has fired a fresh barrage of lawsuits against Apple in an escalating dispute over alleged patent
violations. The Finnish group said it had launched court cases against Apple in the UK, Germany and
the Netherlands, accusing the US group of stealing Nokia technology for its iPhone, iPod and iPad
touchscreen devices.
The lawsuits added to litigation already under way between the pair in the US and marked another
twist in a broader industry-wide battle over the intellectual property behind the fast-growing
smartphone and tablet computer markets. Apple has hit back with its own complaints against Nokia
and the US group is also engaged in patent disputes with Motorola of the US and HTC of Taiwan.
“There is an intellectual property war going on,” said Rob Enderle, president of Enderle Group, a
California technology consultancy. “It’s the kind of cycle that is not good for anyone’s bottom line,
apart from the attorneys’.”
The litigation has added further spice to intensifying competition between Nokia and Apple as the
Finnish group struggles to win back lost ground from Apple. Nokia said its latest lawsuits involved 13
patents, on top of 24 already under dispute in the US, and included a range of technological knowhow developed by the Finnish group and allegedly stolen by Apple. Apple declined to comment.
The complaints were filed in the UK High Court and courts in Mannheim and Düsseldorf in Germany,
and The Hague in the Netherlands. Mr Enderle said that by opening a new front in Europe, Nokia was
increasing the cost and difficulty for Apple to defend itself.
He said that the most likely outcome was a licensing agreement that would provide access to each
other’s patents, but warned Apple might not back down. “Steve Jobs [Chief Executive] is the kind of
guy that might decide he’s got the resources to hold out longer and try and drive Nokia into the
ground.”
The International Trade Commission, based in Washington, has started hearing arguments in one of
the first complaints filed by Nokia last year.
©Copyright The Financial Times Limited 2010
Chartered Postgraduate Diploma in Marketing
CHARTERED POSTGRADUATE DIPLOMA IN MARKETING
ANALYSIS AND DECISION
ALL TASKS ARE COMPULSORY
You are employed as a marketing consultant working for Apple, Inc. With reference to the
case study, your previously prepared strategic marketing audit and the additional
information included in this examination paper, you have been asked to produce a report
that addresses the following tasks.
Task One
a. Utilising a relevant conceptual framework, critically evaluate Apple Inc.’s existing core
capabilities, resources and competencies that have contributed to the success of the
iPad to date.
(15 marks)
b. In the context of rising competition facing iPad and changes in new technology, assess a
range of strategic marketing options available to Apple to sustain its competitive
advantage in the global market place.
(25 marks)
c. Recommend with justification ONE strategic option you think Apple should adopt in
relation to your answer for Task One b above that will ensure the long-term sustainability
of the company.
(10 marks)
(Total 50 marks)
Task Two
a. Analyse the financial implications of your recommended strategic option in relation to
your answer for Task One c, demonstrating the financial benefits to Apple Inc. in the
short to medium term.
(10 marks)
b. Assess THREE strategic risks facing Apple that may limit its ability to continue to be
recognised as an industry leader, and propose strategies to address these concerns.
(15 marks)
(Total 25 marks)
Task Three
Analyse the impact that the iPad may have on the value chain of the print industry, and the
implications this may have for generating a competitive advantage for Apple Inc.
(25 marks)
(Overall Total 100 marks)
Analysis and Decision Mark Scheme March 2011
CHARTERED POSTGRADUATE DIPLOMA IN MARKETING
ANALYSIS AND DECISION
Apple Inc.
Mark Scheme
Prior to the examination, candidates were required to attach a six A4-side summary of the
audit which was to be numbered for ease of reference when answering the examination
tasks. Although no marks are awarded for the audit itself, candidates are to be awarded
marks for how the audit is used to answer specific tasks.
The six page audit submitted by the candidate is 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 market environment (eg, major players
including Dell Computers, Samsung, Sony, Amazon, Barnes and Noble, Google, etc,),
customers (eg, consumers, small and medium sized businessess, educational institutions
like schools and government bodies etc,), market trends (eg, declining print industry,
growing market for e-readers and ebooks, greater acceptability of tablets including iPad,
online readerships, growth in developing markets, more demanding customers, decline in
net sales of Apple Mac, etc), market challenges and risks (eg, greater competition, 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, different stages of market developmement, etc), impact of
technology (eg, rapid changes in technology and the need for new product innovations),
competition (eg, direct and indriect competition)

an understanding of techniques/models to assess the internal environment, including a
resource and competency audit (eg, skills and resources supporting 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 strong brand equity, rapid
innovation in hardware and software exceeding customer expectations, loyal/well
informed employees, 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, the iPad sales helping surpass Microsoft; strong financials
in 2009 compared with 2008 and 2007)

a resource based view of Apple, including an analysis of company’s approach to meeting
customer needs, managing innovations, 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 determinants of strategic options including past and current strategies
including new product introduction, leveraging brand equity, marketing strategies,
strengths and weaknesses, capabilities, resources, and constraints and opportunities,
value chain analysis, Porter’s five forces analysis, etc.
Chartered Postgraduate Diploma in Marketing
When answering tasks, candidates are expected to consider the additional information
(Nokia’s further lawsuits against Apple Inc.,) provided at the time of the examination
alongside the information contained within the case study.
Task One
a)
Utilising a relevant conceptual framework, critically evaluate Apple Inc.’s existing core
capabilities, resources and competencies that have contributed to the success of the
iPad to date.
(15 marks)
Knowledge/Evaluation (10 marks), Application (5 marks)
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 candidate may argue that core
competencies are capabilities that are critical to a firm achieving competitive advanatage.
The true capability of Apple Inc., includes technology and product design and its core
competency orignates 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 enable Apple to provide a range of benefits
to customers generating very clear competitive advantage. An example of Apple Inc’s core
competency includes providing innovative products and solutions via design and
development of hardwardware and software. The outcome is products that are 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 may assess
the relevant criteria for core competence, including being able to create customer value,
sustain competitive differentiation and capable of leading to a wide array of new products
and difficult to immitate. Candidates may relate to some relevant conceptual framework (eg,
Prahalad and Hamel 1990) and may argue that Apple Inc., may need to change given the
significant changes in the company’s environment.
Candiates are 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 Inc.’s approach to business is fresh, innovative and
imaginative that combines high quality products offering style and desgin, sleek and enticing
personal communications, and a user friendly interface with exceptional after sales service
support.
Candidates need to be rewarded if they show good knowledge of relevant concepts and
apply their knowledge to Apple Inc.’s context. They also need to be rewarded for revealing
strategic insights and thinking based on good understanding of theory (eg, competitive
advantage, key success factors, value propositions, core competencies, etc).
Analysis and Decision Mark Scheme March 2011
b)
In the context of rising competition facing iPad and changes in new technology, assess
a range of strategic marketing options available to Apple to sustain its competitive
advantage in the global market place.
(25 marks)
Knowledge (10 marks), Evaluation (10 marks), Application (5 marks)
The case study provided extensive information about market for books and e-books and
competition facing the iPad (eg, Sony Reader, Kindle, Nook and imitators and highlighted
strengths and weaknesses of key competitors). The case study also emphasised the
continued and even 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, 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 are 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 Inc., which can contribute to sustaining competitive advantage in
the global market place.
Candidates are expected to demonstrate an understanding of competitive advantage (ie the
means by which Apple can outperform its competitors and achieve higher than average
profits), various sources of competitive advantage (eg, utilising core competency, resources,
skills and capabilities) and different strategic options available to Apple, given the rising
competition and changes in new technology.
In doing so, candidates may utilise some theoretical framework such as the Ansoff Matrix,
while assessing options relevant to market penetration, product development, market
development or diversification. Others may quote the BCG Matrix or Porter’s Generic
Strategies to achieve or maintain competitive advantage. In doing so, candidates may reflect
on Apple’s business model of focusing on three broad industry categories, including software
development, hardware and retail, and in doing so may comment on its relevance and
effectiveness in designing growth strategies.
Marking needs to be wholistic in approach and should reward those who demonsrate good
understanding of relevant concepts. Candidates are expected to assess a minimum of two
strategic options, but some may assess more and should be rewarded accordingly. The
candidates need to be rewarded for demonstrating strategic insights, based on good
understanding of theory (eg, reference to some model) and practice, rather than tactical
solutions and ideas.
Chartered Postgraduate Diploma in Marketing
c)
Recommend with justification ONE strategic option you think Apple should adopt in
relation to your answer for Task One b above that will ensure the long-term
sustainability of the company.
(10 marks)
Knowledge (3 marks), Evaluation/Application (7 marks)
There are a number of possible answers and a recommendation fitting the needs of some
customer group can be made while reflecting on competitive advantage, value creation,
proposition and differentiation, Apple Inc., institutional strengths, views of stakeholders and
checking against distinctive competencies of Apple Inc. Candidates are expected to
recommend one option and provide a rationale or justification for their recommendation.
Some candidates may discuss how their chosen option can be implemented.
Candidates are expected to recommend and justify a valid and viable strategic option rather
than a tactical solution or ideas. Candidates are also expected to provide some valid
justification.
Reward appropriately for demonstrating strategic insights and linking discussion with some
criteria such as suitability, feasibility, potential, validity and vulnerability.
To gain an A grade
An excellent ability to critically appraise, evaluate and apply material from the case study
providing an excellent evaluation of Apple Inc.’s core capabilities, resources and
competencies contributing to the success of the iPad, an excellent assessment of strategic
options for sustaining competitive advantage given the rising competition and changes in
technology, and an excellent ability to produce reliable, valid and incisive recommendation
and justification of a strategic option.
A grade answers are expected to demonstrate an excellent understanding of relevant
theoretical principles (eg, core competency, resources, skills, strategic options for sustaining
competitive advantage), synthesise information, demonstrate critical strategic insights and
apply to given context demonstrating originally of thought.
To gain a B
A strong ability to critically appraise, evaluate and apply material from the case study
providing an effective evaluation of Apple Inc.’s core capabilities, resources and
competencies contributing to the success of iPad, an effective assessment of strategic
options for sustaining competitive advantage, and a strong ability to produce reliable and
informative recommendation and justification of a strategic option.
B grade answers are expected to demonstrate a very good understanding of relevant
theoretical principles (eg, core competency, resources, skills, strategic options for sustaining
competitive advantage), demonstrate good strategic insights and application to the given
context.
To gain a C
A candidate would be expected to show a reasonable ability to critically appraise, evaluate
and apply material from the case study to provide a reasonable evaluation of Apple Inc.’s
core capabilities, resources and competencies contributing to the success of iPad, a
reasonable assessment of strategic options for sustaining competitive advantage and a
appropriate ability to produce reliable recommendation and justification of a strategic option.
Analysis and Decision Mark Scheme March 2011
C grade answers are expected to demonstrate a reasonable understanding of relevant
theoretical principles (eg, core competency, resources, skills, strategic options for sustaining
competitive advantage), demonstrate some strategic insights and application to the given
context.
Grade D
This grade is given for borderline work that does not meet enough of the assessment criteria
to gain a pass. This may be due to:








a lack of knowledge and strategic understanding of relevant issues
limited analysis of information and reference to theories and concepts
limited inclusion of contemporary issues and awareness or understanding of strategic
issues
superficial conclusions and recommendations
insufficient evaluation of marketing concepts, theories and methodologies, evidencing a
lack of understanding of strategic issues
an inability to apply appropriate techniques for problem solving and decision making
superficial understanding of business strategic options
inappropriate use of academic and professional communication.
Chartered Postgraduate Diploma in Marketing
Task Two
a)
Analyse the financial implications of your recommended strategic option in relation to
your answer for Task One c, demonstrating the financial benefits to Apple Inc. in the
short to medium term.
(10 marks)
Knowledge/Evaluation (5 marks), Application (5 marks)
The case study included relevant financial information in the form of Apple Inc’s balance
sheets, liabilities and shareholders’ equity, statement of operations and sales figures by
segment and products.
Candidates are likely to draw upon case study information and their six page audit. The
candidate is 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 are expected to provide an analysis of the financial
assessment of their chosen strategic option, utilising a range of financial benefits and risks
for Apple Inc., 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), cost of capital, etc, and an understanding of
corporate and reputational risks associated with selecting strategic options.
Expect a variation in candidates’ responses and the ways in which many can attempt this
task. Reward appropriately when candidate shows some good insights of relevant
underpinnings such as an understanding of profit/value maximisation approaches via cost
reduction and revenue increasing strategies.
b)
Assess THREE strategic risks facing Apple that may limit its ability to continue to be
recognised as an industry leader, and propose strategies to address these concerns.
(15 marks)
Knowledge/Evaluation (5 marks), Application (5 marks)
Candidates are likely to draw upon 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, 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 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.
Analysis and Decision Mark Scheme March 2011
The case study highlighted the risk of intellectual and property right infringement and the
new information presented further reinforced this risk and unfavourable results of legal
proceedings could adversely affect Apple Inc.
Candidates are expected to assess a minimum of 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 a range of strategies
designed to address these constraints or reduce risks (eg, scenario planning, forecasting,
changing approach/direction and avoidance strategies; strategic training of employees;
stakeholder strategy matrix, etc).
Mark both elements as a whole: assessment of strategic risks proposing strategies to
address the risks. Reward appropriately for evidence of strategic insights and thinking based
on good understanding of theory and practice, rather than tactical solutions and ideas.
To gain an A grade
An excellent ability to critically appraise, evaluate and apply material from the case study,
providing an excellent assessment of the strategic risks limiting Apple Inc.’s ability and
excellent discussion of a range of strategies to address these risks.
A grade answers are expected to demonstrate an excellent understanding of relevant
theoretical principles (eg, strategic risks and organisational constraints, resources,
competencies, abilities and mitigating strategies), synthesise information, and demonstrate
critical strategic insights, and application to the given context demonstrating originality of
thought.
To gain a B
A strong ability to critically appraise, evaluate and apply material from the case study
providing an effective assessment of the strategic risks limiting Apple Inc.’s ability and an
effective discussion of a range of strategies to address these risks.
B grade answers are expected to demonstrate a very good understanding of relevant
theoretical principles (eg, strategic risks and organisational constraints, resources,
competencies, abilities, risks and mitigating strategies), demonstrate good strategic insights
and application to the given context.
To gain a C
A candidate would be expected to show reasonable ability to critically appraise, evaluate and
apply material from the case study providing a reasonable assessment of the strategic risks
limiting Apple Inc.’s ability and a reasonable discussion of a range of strategies to address
these risks.
C grade answers are expected to demonstrate a reasonable understanding of relevant
theoretical principles (eg, strategic risks and organisational constraints, resources,
competencies, abilities and mitigating strategies), demonstrate some strategic insights and
application to the given context.
Chartered Postgraduate Diploma in Marketing
Grade D
This grade is given for borderline work that does not meet enough of the assessment criteria
to gain a pass. This may be due to:








a lack of knowledge and strategic understanding of relevant issues
limited analysis of information and reference to theories and concepts
limited inclusion of contemporary issues and awareness or understanding of strategic
issues
superficial conclusions and recommendations
insufficient evaluation of marketing concepts, theories and methodologies, evidencing a
lack of understanding of strategic issues
an inability to apply appropriate techniques for problem solving and decision making
superficial understanding of business strategic options
inappropriate use of academic and professional communication.
Task Three
Analyse the impact that the iPad may have on the value chain of the print industry, and the
implications this may have for generating a competitive advantage for Apple Inc.
(25 marks)
Knowledge (10 marks), Evaluation (10 marks), Application (5 marks)
The case study provided extensive and detailed information about the iPad and its
innovative features (portability, flexibility, user friendliness, interoperability and multifunctionality, with 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 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 iBook, etc), 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), 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 Inc.
Analysis and Decision Mark Scheme March 2011
While answering this task, the candidate is expected to draw upon this information along
with their six page audits and the new information presented.
Candidates are expected to demonstrate a good understanding of the concept of the value
chain (at industry level) and how the value chain can be used as a tool for generating
competitive advantage, and in doing so may refer to some relevent theoretical framework
(eg, Porter).
Marking needs to take into account both elements of this task (mark both elements as a
whole): an analysis of impact of the iPad on the value chain of the print industry and an
assessment of implications for generating competitive advantage for Apple Inc.
Candidates are expected to analyse the impact of the iPad on the value chain of the print
industry and not Apple itself and a good answer will achieve a balance between analysing
the value chain and assessing competitive advantage implications. The six page analysis is
expected to include a value chain model as applied to the print industry, making a reference
to Porter, and candidates are expected to draw from the model.
Candidates are expected to demonstrate a good understanding of the concept of competitive
advantage. The candidate may argue that the value chain is a useful tool to establising core
competency which Apple Inc., that can pursued to achieve a competitive advatnage; this
may include creating cost advantage or creating better differentiation via value chain
activities.
Reward appropriately 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.
To gain an A grade
An excellent ability to critically appraise, evaluate and apply material from the case study
providing an excellent analysis of impact of the iPad on the value chain of the print industry
with an excellent assessment of competitive advantage implications.
A grade answers are expected to demonstrate an excellent understanding of relevant
theoretical principles (eg, industry value chain and competitive advantage), synthesise
information, demonstrate critical strategic insights and application to the given context
demonstrating originally of thought.
To gain a B
A strong ability to critically appraise, evaluate and apply material from the case study
providing an excellent analysis of impact of the iPad on the value chain of the print industry
with an effective assessment of competitive advantage implications.
B grade answers are expected to demonstrate a very good understanding of relevant
theoretical principles (eg, industry value chain and competitive advantage), demonstrate
good strategic insights and application to the given context.
To gain a C
A candidate would be expected to show reasonable ability to critically appraise, evaluate and
apply material from the case study, providing a reasonable analysis of impact of the iPad on
the value chain of the print industry, with a reasonable assessment of competitive advantage
implications.
Chartered Postgraduate Diploma in Marketing
C grade answers are expected to demonstrate a reasonable understanding of relevant
theoretical principles (eg, industry value chain and competitive advantage), demonstrate
some strategic insights and application to the given context.
Grade D
This grade is given for borderline work that does not meet enough of the assessment criteria
to gain a pass. This may be due to:








a lack of knowledge and strategic understanding of relevant issues
limited analysis of information and reference to theories and concepts
limited inclusion of contemporary issues and awareness or understanding of strategic
issues
superficial conclusions and recommendations
insufficient evaluation of marketing concepts, theories and methodologies, evidencing a
lack of understanding of strategic issues
an inability to apply appropriate techniques for problem solving and decision making
superficial understanding of business strategic options
inappropriate use of academic and professional communication.