ACCA Strategic Business Leader Past Paper PDF December 2024

STRATEGIC BUSINESS LEADER PRE-SEEN INFORMATION Applicable for the December 2024 Exam Contents 1. Introduction.............................................................................................................................2 2. Harland events management industry............................

STRATEGIC BUSINESS LEADER PRE-SEEN INFORMATION Applicable for the December 2024 Exam Contents 1. Introduction.............................................................................................................................2 2. Harland events management industry...................................................................................2 Overview..................................................................................................................................2 Events management in Harland..............................................................................................2 Collaboration and cooperation................................................................................................4 Industry-related risks...............................................................................................................5 Technological innovations.......................................................................................................5 Events management industry key performance indicators (KPIs)..........................................6 Industry body..........................................................................................................................6 3. Rodnim events overview........................................................................................................6 Background.............................................................................................................................6 Organisational structure..........................................................................................................7 Operations...............................................................................................................................7 Information systems................................................................................................................9 Extract from Rodnim website..................................................................................................9 Rodnim risk register [extract]..................................................................................................9 Performance..........................................................................................................................10 December 2024 1 1. Introduction Rodnim Events (Rodnim) is an events management business based in the country of Harland. Rodnim was established six years ago and specialises in managing events for both corporate and private clients. The two founders of Rodnim decided to set up a partnership rather than a limited company, so that they could maintain total control over the business. 2. Harland events management industry Overview Events are arranged to allow people to interact with each other, normally for a planned and stated, specified purpose. Events vary in size. Larger events include corporate conferences, music concerts, festivals and sports events. Smaller events include weddings and other parties for private individuals. Events management businesses specialise in arranging different types of events for their clients. Events management businesses plan and organise events for clients and co-ordinate the delivery and management of the event itself. An events management business is responsible for ensuring that all aspects of the event run smoothly and that the event meets the objectives of the client. Events management businesses charge a fee to clients for managing events, any revenue generated from the event itself is kept by the client. Usually, for larger events, events management businesses are asked by a client to tender (invited to tender) to manage the event. In their tender submission, each events management business would explain how they would manage the event, the services they would provide and the fee they would charge. The tenders would then be considered by the client and the contract to manage the event would be awarded to the events management business with the tender which is most acceptable to the client. In 20X3, revenue generated from events globally was estimated at $1,960 billion, with an estimated 11% annual growth for each of the next five years. Events management businesses charge between 35% and 40% of event ticket sales, in fees, for managing events, making it a financially lucrative and very competitive industry. Corporate clients and smaller private events are normally charged a fixed fee, negotiated in advance. Events management in Harland Harland is a large, prosperous, and economically advanced country which has an established and highly competitive events management industry. There are a wide variety of events management businesses in Harland, some only operate locally, others operate nationally throughout Harland, and some of the largest events management businesses have an international reach. The Harland events management market is dominated by four major companies, who collectively have around 74% of the total events management market share (measured by fee income). The remainder of the market is shared between many small events management businesses. Revenue generated by events in Harland in 20X3 was $108 billion, with events management businesses in Harland earning around $39 billion fees from managing these events. December 2024 2 Types of events Events managed by events management businesses in Harland generally fall into the following major categories: Music concerts These are live music performances which take place in front of an audience. The size of audience and type of music performed vary. Conferences These are gatherings to discuss specific topics or a set of topics. These can vary in size. Conferences are usually held in Harland’s major towns and cities. Festivals A festival is a gathering of people to celebrate something. They are usually cultural or social events and are of varying size and duration. Sports events These are games, matches, races or similar competitive events. They can include any type of sport. There has been a substantial increase in sports events in Harland over the last five years. Private events These events celebrate a special occasion with family and friends such as weddings, birthdays, etc. There has not been any significant growth in the number of private events over the last five years. Virtual events These are online events which enable attendees to attend an event over the internet rather than at one single physical location. They can be any type of event listed above. The virtual events are growing in popularity as they offer wide geographical reach and do not incur travel costs for the participants. A breakdown of the fee income generated by each type of event in the Harland events management industry in 20X3 is illustrated in the pie chart below: Virtual events 5% Private events 6% Music concerts Sports events 27% 12% Festivals 24% Conferences 26% December 2024 3 Types of clients Corporate clients The Harland events management industry is dominated by corporate clients who are organisations which require management of music concerts, conferences, festivals, sports and, increasingly, virtual events. This has been the situation for many years and is not expected to change significantly in the future. Private clients These are individuals who employ events management businesses to manage private events such as weddings and parties. Public sector clients Apart from corporate clients and private individuals, a number of public sector organisations also hold events. Public sector events include government conferences discussing particular policy issues, major sports events and national festivals. Recently, the Harland national government has engaged several events management businesses to run a series of virtual conferences. All three types of clients in Harland are increasingly expecting events management businesses to provide creative and innovative ideas to ensure events are well managed and meet the specific requirements of the client. A professional level of service throughout the events management process is also expected. A breakdown of the fee income generated by each type of client in the Harland events management industry in 20X3 is illustrated in the pie chart below: Private individuals 4% Public sector 23% Corporate clients 73% Collaboration and cooperation Larger events management businesses operate completely independently, however, smaller businesses within the industry sometimes informally cooperate and collaborate with each other to strengthen their collective bargaining power and position in the market. For instance, an events management business specialising in managing sports events may refer their client which plans December 2024 4 to hold a music concert event, to another events management business specialising in managing music concerts. This referral would be reciprocated if the opportunity arose. More formal strategic alliances and joint venture agreements also exist in the sector, but these tend to be between complementary rather than competitive business. This can include an events management business having exclusive access to venues operated by a property management company or access to temporary and casual staff to manage security at an event. Industry-related risks There are a number of key risk areas which most events management businesses in Harland are currently facing: Key risk Possible harmful impacts Worsening national economic conditions – High levels of inflation within Harland – Reduced demand for events – Increasing interest rates – Higher cost of borrowing Environmental issues – Reduction in predictability of weather – Cancelled and delayed events patterns due to climate change – Increased awareness of environmental – Reputational harm from negative impact of events environmental impact of events Legislation and regulation – Increased health and safety legislation – Increased cost of compliance – Increased data security and protection – Fines and sanctions for breaches regulation – Stringent employee rights – Employment disputes and strikes Operational issues – Increased risk of cyber-security attack – Reputational harm with clients – Possible litigation – Unauthorised selling of event tickets – Revenue threat – Advances in technology – System obsolescence Technological innovations There are several technological innovations relating to events management which are directly impacting the industry within Harland. These include: Live streaming of events – Developments in technology include the provision of internet –  enabled live streaming of events which is used when managing virtual events. Artificial intelligence – Artificial intelligence can be used by events management businesses –  to interrogate and analyse data to identify patterns and trends which are likely to become features of future events. This can help events management businesses gain and sustain competitive advantage. Navigation and mapping applications [apps] – Navigation systems help people attending an –  event find the venue using their own smart devices and mapping apps, reducing the need for local signage and physical venue guides at events. QR codes – QR codes provide a link to a website page for a scheduled event and allow –  registrations and the sale and issue of tickets. QR codes can also be used as a secure method of controlling access to events when included as part of a ticket. December 2024 5 Events management industry key performance indicators (KPIs) Events management businesses, irrespective of their size or the market segments they target, use similar KPIs to manage their financial and non-financial performance. The most common KPIs used in the sector are: KPIs Explanation Financial KPIs 1. Fee income growth – the increase in the amount of fees generated over a given period, analysed by: – individual client – event type 2. Operating profit margin – operating profit as a percentage of the fee income generated, analysed by: – individual event – event type Non-financial KPIs 1. Tender success rate – the number of successful tenders as a proportion of the total number of tender invitations in any given period analysed by type of client. 2. Client satisfaction – this can be measured in a number of different ways: – Client retention rate – Client referrals – Client feedback 3. Environmental sustainability – measurements used indicate the impact of an event on the natural environment, for example: – Percentage waste recycled – Water consumption – Energy efficiency Industry body Businesses operating in the Harland events management sector are supported by an industry body, The Institute of Events Organisations (IEO), which represents events management businesses serving the corporate, public and private sectors. The IEO aims to improve the quality, health and safety, and environmental practices of all its members by setting common technical standards. 3. Rodnim events overview Background Rodnim Events (Rodnim) is one of the smaller events management businesses based in Harland. Rodnim specialises in managing events for corporate and private clients Rodnim operates as a partnership. The partnership was established six years ago by two friends, Amanda Hope and Saffy Dubois, who had previously worked together as event managers for one of Harland’s largest events management companies. Amanda and Saffy own the business equally. Rodnim does not have any formal or informal cooperation or collaboration arrangements in place with other businesses, as the partners wish to preserve Rodnim’s independence. December 2024 6 Organisational structure Amanda and Saffy are responsible for the strategic direction of Rodnim and have ultimate management responsibility and control over the business. Amanda oversees the entire events management programme and Saffy is in charge of marketing and customer services. Rodnim has 34 full-time employees operating from a single office in Harland’s capital city. Rodnim employs three managers who directly report to both of the managing partners. These three managers form the management team with Amanda and Saffy. The organisational structure, detailing the whole Rodnim management team, is illustrated below: Amanda Hope Saffy Dubois Managing partner Managing partner Event programme Marketing and customer management services Jimmy Atros Mirza Hosni Dika Nkosi Manager Manager Manager Head of business Head of event planning Head of event delivery support – Mirza Hosni has worked in the events management industry for over 20 years. She joined Rodnim three years ago. – Dika Nkosi is 22 years old and a recent graduate in events management. – Jimmy Atros is a qualified accountant who has been with Rodnim from the beginning. A summary of the areas of responsibility assigned to each member of the Rodnim management team is detailed below: Amanda Hope Saffy Dubois Mirza Hosni Dika Nkosi Jimmy Atros Business planning Marketing Event scheduling Events General activities and planning coordination administration Budgetary control Website Venue sourcing Events delivery Financial control Corporate tenders management and reporting Resources Project Client liaison procurement management IT support and development Supplier contracts Event risk management Data analytics HR management Rodnim employs temporary staff to support events, as and when needed. Operations The diagram below illustrates the six stages in the process of tendering for corporate events. This process is used to plan, control and deliver events to clients. This includes arranging for December 2024 7 temporary staff to work at the events in areas such as security, hospitality, and technical support, as needed. This process has been progressively developed and refined so that Rodnim is able to deliver consistently high-quality events to all clients. Event initiation Receive invitation to tender document/consult with client – agree event specification – determine success criteria. Outline planning Draft project initiation document – appoint event manager – outline budget – submit tender – sign contract if tender is successful. Detailed planning (see note 1) Schedule event programme – logistical arrangements – detailed budgeting. Event organisation Set up event team – book the venue – arrange supplier contracts – issue tickets. Event delivery Venue access control – deliver event programme – manage external suppliers. Post event Conduct post completion review – evaluate success criteria – report to client. Notes: 1. The process does not continue to this stage if the tender is not successful and the contract not awarded to Rodnim. 2. For private events, the same process is followed, although there is no need to tender, Rodnim would simply meet the client to discuss their requirements. However, as with tendering, if they are not engaged by the client, Rodnim will not progress beyond the outline planning stage. December 2024 8 Information systems Rodnim utilises a range of information systems in support of its business activities, including: – Event planning system This system is used to support planning and organising all events at Rodnim. The system includes a range of project management tools which are designed to enable each event to be broken down into separate activities so that the project stands the best chance of being effectively scheduled to deliver the event on time, and within the agreed budget. – Event ticketing system The event ticketing system includes a bespoke mobile app which allows people attending a Rodnim managed event to register and pay for it using their smart phone. The system generates tickets for each registered attendee and allocates seating at the venue if this is required. The tickets can be displayed as QR codes, using the Rodnim mobile app, to allow attendees to gain entry to the event. – Marketing system The marketing system enables Rodnim to effectively promote the events it is managing. The marketing system is integrated with Rodnim’s website and a range of social media. – Management information system (MIS) The MIS collates data into event planning, event progress, and post-event reports (these are collated from Rodnim staff and clients’ and attendees’ feedback). The system includes a range of data visualisation tools which support management decision making. Rodnim uses an off-site data storage facility operated by a specialist company which allows it to store and retrieve all of its business data remotely and securely over the internet. Rodnim’s website provides information on forthcoming public events which it is managing and allows attendees to book online and provides details on how to contact Rodnim to help with any queries or bookings, and post comments about their experiences. The website also contains information about Rodnim and its business philosophy. Extract from Rodnim website The Rodnim mission is to provide all our clients with a top-quality service, ensuring that their needs and expectations are fully met. We will make every event a memorable experience for both the client and everyone attending the event. Rodnim’s strategic aims are to: – Explore and exploit new business opportunities which may arise. – Embrace and utilise innovative technologies to enhance operational efficiency. – Encourage an open, respectful, and ethical business culture. – Operate in an environmentally sustainable manner. Rodnim risk register [extract] The Rodnim risk register covers the main categories of risk which the business currently faces. The partners determine the nature and extent of the risks when setting the risk appetite, which limits the acceptability of risk. The individual risks are monitored by the management team, adjusted and adapted as necessary. Appropriate control activities are devised and undertaken to mitigate both the likelihood and the potential harmful effects on Rodnim. For each event, Rodnim also undertakes an individual risk assessment. December 2024 9 Risk category Risk factors Strategic risks The Harland events management industry is highly competitive and attracts new entrants. The resultant increase in available providers in the market can result in a loss of market share. This may require more competitive pricing to be adopted, which puts pressure on margins. Financial risks The costs associated with running some individual events may exceed the agreed budget, resulting in loss-making events. Corporate clients are offered commercial credit terms exposing Rodnim to the risk of bad debts, which could strain cash management. Economic risk Harland’s economic performance will directly impact on the demand for both corporate and private events. Interest rate rises will increase debt repayments and reduce liquidity. Compliance and regulatory risk Unforeseen changes to regulation and legislation, in areas such as health and safety and information management could significantly impact on events activities. Operational risk IT system failures affect all areas of business activity and negatively impact event delivery. Inability to procure all of the necessary resources, when required, for individual events, which would put the success of the event at risk. Performance Rodnim has built its business around corporate and private events for clients. Each corporate event generates significantly more fee income and profit than that which comes from private clients’ events. Rodnim’s 20X3 performance information is illustrated below. Fee income and operating profit Fee income Operating profit 20X3 20X3 Year 20X2 Year 20X2 20X1 20X1 720 730 740 750 760 770 780 790 35·50 36·00 36·50 37·00 37·50 38·00 38·50 $ million $ millions December 2024 10 Corporate tenders 20X3 corporate tenders 148 128 58 Tender invitations Tender submissions Tender success 86% of all tender invitations received during 20X3 were completed and submitted to clients by Rodnim, and 45% of these were successful. This was a marginal improvement in tendering performance compared to 20X2. Tender success is recognised as a major driver of corporate business at Rodnim. Client satisfaction 20X1 20X2 20X3 Net promoter score 9·1/10 8·4/10 7·5/10 The net promoter score (NPS) is a measure of client loyalty and satisfaction derived from client feedback on how likely they are to recommend Rodnim events to others on a scale of 0 to 10 (where 10 is the best score possible). The NPS is useful for benchmarking client satisfaction as it provides insights into how Rodnim is perceived and can be indicative of likely future business. December 2024 11