Study Advice

Case study support 1- preparing for the case study exam

This is the first in a short series of three articles written for students who are preparing for case study exams. It is based on the authors’ experience in setting and marking CIMA case studies. These articles will be valuable to candidates who are preparing for each of the three levels of the CIMA Professional Qualification.

Note: These articles take examples from the pre-seen materials and question tutorials for all three levels of the CIMA qualification to illustrate the points made, so a familiarity with these would be helpful. With that in mind, it is recommended that candidates read these articles in conjunction with the other resources that are available to them, including materials that are level specific.

Study planner additional resources: Operational question tutorial material Management question tutorial material / Gateway question tutorial material Strategic question tutorial material For further resources and variants visit the study planner and view a relevant exam session.

The purpose of the case study exam

CIMA describes the case study exam as a “role simulation”. It requires candidates to “respond to authentic work-based activities presented during the examination, drawing together learning from each of the three subjects to provide solutions to the issues and challenges presented”. The case studies at each of the three levels require candidates to imagine themselves as finance professionals with clearly defined roles that are linked to the Operational, Management and Strategic levels of the professional qualification. These roles are outlined in the examination blueprints for each level.

Each case study comprises two separate elements:

  • The pre-seen information is released in advance of the exam. It describes an entity, providing background information on its industry and other information that should help candidates to understand any issues that arise. Each level has its own pre-seen.
  • The unseen information is provided on the day of the exam. It comprises supplementary information that expands upon the background in the pre-seen, along with requests for responses from a colleague/superior that are the exam task requirements.

The case study exam can be described as a “role simulation” because it reflects what happens in the real world by providing scenarios which reflect various types of organisations and industries and require candidates to take on the kind of role a CIMA student or member would have in the simulated organisation. CIMA finance professionals are expected to understand the entities that employ them. As they progress through their careers, they are expected to be capable of accepting greater levels of responsibility. When assigned a task they should be able to apply their technical knowledge to the entity itself and the position in which it finds itself.

In the real world, it should be expected that a finance professional would be able to make realistic and sensible recommendations that can be justified in the event of a superior who asks: “why do you think that?”. The case study approach enables CIMA to promote the employability of its students and members to organisations who are recruiting finance professionals who can do more than simply pass knowledge-based exams: the case study role simulation requires candidates to think and act as they would be required to do in the workplace.

CIMA has released a question tutorial for each case study level of the Professional Qualification.

  • The question tutorial for the Operational Case Study relates to GymFiT, a company that operates 102 low-cost gyms. The candidate is expected to assume the role of a Finance Officer, who supports the company’s Finance Manager.
  • The question tutorial for the Management Case Study relates to Grainger, a company that designs and manufactures mobile phones and that operates globally. The candidate is expected to assume the role of Finance Manager.
  • The question tutorial for the Strategic Case Study relates to Fizz, a soft drink manufacturer that operates largely within its home market but is contemplating overseas expansion. The candidate is expected to assume the role of a Senior Manager who reports directly to Fizz’s Board.

Each of the pre-seen documents for the question tutorials describes a very different business, and that is key to understanding what is required in the case study exam. For example, GymFiT is a service company that operates from a large number of separate locations. Candidates will have to take that into account in responding to any requests for support on operational matters.

Using the blueprint to support case study exam preparation

Candidates are expected to have already studied the syllabus material that is relevant to their case study, either through passing the relevant objective tests set by CIMA for the three objective tests at that level or through having been granted exemptions for previous relevant study. Regardless of how they got there, case study candidates are expected to have grasped the syllabus content and now be able to apply it in the context of the case study, to be able to formulate and structure a credible response to a request from a superior/colleague.

For example, the Management Case Study question tutorial sets a task that asks about the challenges associated with transfer pricing for charges to be made by one part of the entity to another, to reflect the transfer of resources. Clearly, a candidate who did not know what transfer pricing was or what a target costing exercise involved, would struggle to answer this requirement. (The need for application to the case – which is clearly crucial in a case study exam – will be explored in a further article.)

To assist candidates in their preparation, CIMA has published a series of examination blueprints, which spell out core activities and expands on those by breaking them down to “I can” statements (headed as assessment outcomes). So, for example, a candidate preparing for the Management Case Study knows that it is necessary to be able to manage internal and external stakeholders (Core Activity E) and that requires the candidate to be able to say “I can explain the behavioural and transfer pricing issues associated with internal trading.”

Making full sense of the blueprints requires careful study and preparation. Every candidate should complete a satisfactory course of study, whether self-led or facilitated by a tuition provider, to ensure that the necessary content has been mastered.

The case study exams reflect the real world in the sense that all tasks are compulsory. It is very risky to skip topics on the basis that they would take too long to revise or have been evaluated as unlikely to be in the exam. It should go without saying that knowledge that has been learned and examined in the past can be forgotten and so there is no substitute for revising study materials to refresh knowledge and to ensure that it is up to date.

Candidate responses which appear to have been written as a summary of the information in the pre-seen and do not reflect any of the framework that is expected from them will receive few marks.

For example, the Management Case Study question tutorial includes a sub-task requirement that relates to the challenges associated with ensuring that a proposed team will be effective. Ideally, candidates would have written strong answers by using their knowledge of the factors that can determine the success or failure of teams, drawn from the syllabus material, with the facts that were presented in the unseen material concerning this particular team. The syllabus material would be a significant element in offering a justification for the arguments, with the facts provided in the case itself enabling the candidate to demonstrate application of that material.

Reading the pre-seen

The pre-seen is made available on the CIMA website before the exam. It is expected that candidates will read and study the document closely and that they will be extremely familiar with it on the day of the exam.

Realistically, the examiner cannot expect candidates to have memorised every single paragraph of the pre-seen. A copy of the pre-seen material is available for reference throughout the exam so candidates can check details. It is quite common for the tasks themselves to repeat key facts rather than risk causing confusion or wasting precious time during the exam. For example, the Strategic pre-seen lists the directors’ names and areas of responsibility, but a task would not take it for granted that you had memorised that list. If a task referred to, say, Simon Bridges then it would remind candidates that Mr Bridges is the Production Director.

When working on the pre-seen material, the expectation is that candidates will develop an awareness of the way the syllabus knowledge that they bring into the case study should be applied. Returning to Fizz, it is clear that:

  • Fizz manufactures a range of products for the consumer market that are sold through third parties (mainly retailers and food outlets such as cafes, restaurants and bars).
  • This is a competitive industry with relatively little scope for innovation.
  • The company has effective governance systems in place.
  • There is financial information that might repay careful study.
  • There is a collection of news clippings at the end of the pre-seen.

The first two points are vitally important because they can help candidates avoid offering unhelpful or ill-informed advice. It is easy to lose credibility through ignoring the nature of the industry.

For example, the sample assessment 2 for the Strategic question tutorial asks about the implications of fixing the costs of ingredients for extended periods. Without going too deeply into the mechanisms available for doing so, Fizz has two basic choices for buying sugar: it can either accept the current market price whenever it places an order or it can make a contract that fixes prices for a specified future period.

The nature of the business really matters when offering advice because Fizz cannot necessarily pass any cost increases on to its customers. Supermarkets may not be willing to pay more for Fizz’s cola drink if the company’s competitors are keeping their prices unchanged.

Regardless of the level of the case study, the nature of the entity will have an impact on the advice that is offered. In the case of the Operational Case Study, our entity is a low-cost gym. Its clients are attracted by low costs and so cost control could be more important for GymFiT than it might be for a traditional full-service gym that promotes itself based on quality of service and facilities. In the case of Grainger, it sells mobile phones and customers might be more interested in quality and functions than in selling price and so cost control could be less important.

The initial read through the pre-seen should involve thinking about all the commercial, regulatory and financial issues that have been provided. The examiner has scope to develop tasks that require candidates to identify the relevant issues and to address them in the context of the case study.

Candidates should always ensure that they understand the content of the pre-seen. The fact that they have had several weeks to study it suggests that they should have been able to take time to interpret the facts that have been provided. For example, the Strategic pre-seen for the question tutorial charts the respective share prices of Fizz and its competitor Qwench. The most striking feature of the graph is that Fizz’s share price has remained relatively unchanged over the period under review in comparison to Qwench’s, which has declined slowly. Another key feature is that the two companies’ share prices have tended to move at the same times and in the same direction, implying that they have been affected by the same events. Candidates might be tempted to focus on the fact that Qwench’s share price was consistently higher than Fizz’s, but this means nothing whatsoever in financial or economic terms.

A closer read

When marking case study exams, it is clear that many candidates conduct their own independent study of the industry and the factors that affect it. That often results in them developing helpful insights that they can use to develop and inform their answers. For example, a candidate for the Operational Case Study might find it helpful to learn more about the background to the industry, the factors that drive demand and the contrast with full-service gym providers. Background research is not mandatory – there will be sufficient information in the pre-seen and unseen documents to enable candidates to write full and relevant answers – however some independent reading and research can benefit case study preparation.

Candidates should beware of the one major risk associated with independent research. Many candidates feel that they must demonstrate that they have read more widely and that often results in them including irrelevant arguments or examples in their answers. Marks are awarded for arguments that are both correct and relevant, so illustrating an argument with a real-world event that bears no relation to the case will simply waste time. Rather than researching the industry in very narrow terms, candidates might benefit more from keeping up to date with the general business news. Many candidates gain credit simply by demonstrating that they have a good grasp of the issues that might affect, say, a service industry and applying that understanding to the case study and its associated requirements.

Many candidates work through the information in the financial statements and use that information to illustrate their arguments. For example, GymFiT’s revenue increased by 24% compared to the previous year, which may be a useful statistic to cite in an answer. Numerical tasks are not set in the case study exams, but credit is given for any relevant computations provided by candidates, including accounting ratios, which support the response to the task.

As with personal research, care must be taken to avoid wasting time on insights from deep study of the pre-seen material just because it is possible to do so. There is no point in telling the marker something that does not relate to the task requirement, even if it is correct.

Candidates should always take care to read through the content of the press clippings that usually appear at the end of the pre-seen. Examiners often provide those in order to help candidates better understand the industry. These may not always be directly relevant to task requirements. They may also be provided with the intention of adding background information that could help candidates to better understand the context of a requirement.

For example, the question tutorial Operational Case Study Pre-seen includes a news article on data analytics and improving health. One of the tasks in the question tutorial deals with the potential usefulness of digital sources and the costs associated with providing gym members with a fitness app. Neither of those requirements could have been predicted from reading the news report, but the background information that it provides would have helped candidates to develop informed and relevant answers.

Prefabricated answers and question spotting

So far, we have argued that candidates can improve their marks by studying the pre-seen and thinking about what might happen in this particular case study, to this particular company. That is a legitimate and helpful frame of mind in which to read the pre-seen and be ready to address the requirements that are set on the day. In contrast, candidates should resist the temptation to read the pre-seen with a view to predicting the tasks that will be set and concentrating their revision on the related topics.

As mentioned previously, the purpose of the case study approach is to reassure employers that CIMA finance professionals are employable. In the real world, finance professionals are expected to be able to respond to unforeseen and unpredicted problems. Case studies will often reflect that by introducing a change of direction or a complication that could not necessarily have been predicted from the pre-seen.

For example, the Management Pre-seen for the question tutorial provides quite a detailed discussion of battery technology. That then informs requirements that deal with a collaborative effort to design a new model of phone that incorporates certain design elements that are restricted by the battery. Candidates responding to that task would have benefitted from close study of the pre-seen in advance of attempting those requirements but would have struggled to have guessed the task in advance.

Question spotting is dangerous because it risks candidates excluding topics from their revision that could form the basis of a task in the exam. The fact that the information in the pre-seen could lend itself to a particular topic does not guarantee that the topic will be examined.

Some responses read as if candidates have read the pre-seen and have prepared a response on a topic which has fortunately come up in the exam. Unfortunately, those answers often stress the information drawn from the present to the exclusion of the additional material that is provided in the unseen content that accompanies the requirements. These “prefabricated” answers read as if they have been written in advance and are then reproduced by the candidate without much attempt to reflect all of the facts that the examiner has provided. These types of responses earn few marks.

It should be stressed that it would be potentially helpful to read the pre-seen carefully with a view to understanding the business and the challenges that it might face. Problems only arise when candidates do not prepare themselves to adapt to changing scenarios or unexpected events.

To sum up …

The case study approach to exams is intended to provide candidates with the ability to demonstrate their employability by asking them to approach practical problems using their knowledge of the syllabus material to develop an appropriate response.

The pre-seen is a key element of that exam and it should be regarded as such by candidates. Close study of the pre-seen material and careful preparation will equip candidates to provide relevant and well-informed answers to the task requirements, drawing on their knowledge and skills to provide solutions to the practical problems presented in the exam.