BUSS3 SunTravel Case Study - Practice Questions

We encouraged students who attended our BUSS3 exam coaching workshops during Nov/Dec 2012 to practice their exam technique as much as possible during the runup to the BUSS3 exam. Set out below are some exam-style questions for the 10 and 18-markers (i.e. questions 1-3). A good revision approach would be to outline (plan) the paragraph points that you would make in order to properly answer the question. Look for the hooks and (referring to the case study) identify the strongest points that you could develop into a L5 paragraph. For the 18 mark questions, also consider the potential evaluation points you could develop.As we suggested during the exam coaching sessions, it is most important to practice developing a strong, logical chain of analysis in a single paragraph point, making effective use of case study evidence. If you have time, practice writing a single paragraph point and see if you can get it to L5.

10 Mark Questions (remember - no evaluation!)

Analyse two possible reasons why SunTravel achieved significantly less operating profit in 2011 and 2010 than GoSTAY Travel plc.

Using the data in Appendix A and in the case study, analyse the profitability and gearing of SunTravel between 2011 and 2010.

Analyse the possible issues that SunTravel plc would have to consider if the market for mainstream holidays were to continue to decline at the recent rate.

Analyse two potential disadvantages of SunTravel plc repositioning itself as a provider of differentiated holidays.

Analyse the potential people management problems that may result from ending the scheme that provides heavily-discounted holidays for staff, family and friends.

Analyse two ways in which SunTravel plc could reduce the capital intensity of its operations and business.

Analyse two potential advantages of SunTravel plc reducing its travel agent portfolio and aiming to increase the proportion of bookings made directly.

Analyse two potential benefits of SunTravel plc outsourcing a significant proportion of its holiday flying to JetSky plc.

Using the data in Appendix 2, Appendix 3 and in the case study, analyse the competitive strength of SunTravel plc in comparison with GoSTAY Travel plc.

18 Mark Questions

Marcus Klose believes that, in order to significantly improve the firm's share price over the next 3 years, SunTravel plc should aim to achieve market leadership in the overseas holiday market. Do you agree with this view? Justify your decision.

Do you think that SunTravel plc's financial underperformance compared with GoSTAY plc is mainly down to the wrong marketing mix or other issues? Justify your view.

With reference to the data in Appendix 4, do you think that the poor profitability of SunTravel plc is connected to problems with the management of the firm's employees?

To what extent do you think that SunTravel plc's organisational structure is currently effective? Justify your view.

With reference to the data in Appendix 1, do you think that SunTravel plc's bankers are justified in being concerned about the financial position of the firm? Justify your view.

Hazel Blair anticipates significant resistance to her proposals to reduce SunTravel plc's operating costs. To what extent do you believe this resistance is likely to a significant factor in the success or otherwise of Hazel's plan? Justify your view.

To what extent do you think that Hazel Blair's lack of experience in the travel industry will hinder her ability to improve SunTravel plc's profit quality?

With reference to the operations data in Appendix 2 and marketing data in Appendix 3, how likely do you think it is that SunTravel plc will be able to improve its share of the differentiated holiday market in the next three years?