Strategic Financial Analysis – BUSS 3083
Individual case study assignment for External students
DUE DATE:
27 March 2018 at 12 noon
This individual case study assessment is worth 40% of your course mark. You are required
to prepare a written report covering all parts of the task as described below. A submission
link will be made available on LearnOnline closer to the deadline.
Purpose: The purpose of this task is to critically evaluate the strategy, governance and ethics of a
company to provide insight for a target audience. In this case, the target audience are risk averse
investors with limited knowledge (your client), so please ensure that your analysis is concise, clear
and free of jargon.
Completing this task will highlight how many of the different topics covered in this course are
interwoven and ultimately impact on investment decision making. While emphasis in this individual
assignment is more on the qualitative aspects of analysing a company, these factors are important to
providing context to the quantitative factors analysed later in the course.
Task description: Please read the case study of the BP Gulf of Mexico Oil Spill called “Drilling into
Disaster: BP in the Gulf of Mexico” on page XXXXXXXXXXusing the link below:
https:
www.cpaaustralia.com.au/documents/Corporate-governance-case-studies.pdf
Important note: please ignore the “Discussion questions” contained on page 169.
After reading the case, you are to prepare an analysis of the impact of the Gulf of Mexico Oil Spill on
BP’s past performance and future prospects according to the three tasks below: 1) strategy, 2)
governance and 3) ethics in relation to your role as a financial analyst. In terms of your role, consider
yourself a junior financial analyst working at an investment firm which has invested heavily in BP on
ehalf of a group of shareholders (who are the firm’s/your clients and the target audience for which
you are preparing your analysis for section 1 and 2). For section 3 (ethics), you will need to reflect on
the ethical decision making process as if you are the one who has to resolve the ethical predicament.
As this is a third year capstone course, please conduct further research to justify the assertions you
make. The quality of your arguments, written language and professional presentation will be
assessed.
Strategy
1. a) Evaluate BP’s competitive advantage using the 5 forces model before the 2010 Gulf of
Mexico Oil Spill.
https:
www.cpaaustralia.com.au/documents/Corporate-governance-case-studies.pdf
) Consider which, if any of the 5 forces, may have been affected after the Gulf of Mexico Oil
Spill. Discuss implications for the company’s ability to implement its business strategy in the
future.
Word target: 500 words
Governance
2. Write a letter to your clients, who are shareholders of BP, to evaluate the quality of
corporate governance and communication at BP during and after the Gulf of Mexico Oil Spill.
Guidance: Chapter 12 of the course textbook will assist in highlighting important points for
discussion (if relevant). Further research is important. Focus your discussion on providing
insight and implications for BP’s prospects as an investment.
Word target: 500 words
Ethics
3. Imagine that the manager from your investment firm (your boss) asks you to change some of
the ‘inflammatory’ wording you have used in the letter prepared for task 2) above so as not
to alarm your clients.
The manager wants you to replace the following sentence in your report:
“Despite strong financial performance, BP’s senior leadership team displays an
alarmingly poor ability to manage risk which may lead to a further deterioration of
its
and reputation, higher litigation costs in the future and negatively affect share
prices in the short to mid-term.”
with the following sentence:
“We are confident in our earlier analysis of BP when recommending our clients to
invest in the company. BP is a strong and sound company with a demonstrated track
ecord of good financial performance. We expect BP to recover quickly as a result.”
Apply the AAA model described in Topic 3 to a
ive at a well-reasoned decision as to what
you should do in this situation.
Guidance: The facts in the case are necessarily
ief. You will need to explain and apply each
element of the AAA model while considering the potential motivations and various possible
alternatives for all parties involved in this ethical dilemma. The quality of your reasoning is
most important.
Word target: 500 words
BUSS XXXXXXXXXXEXTERNAL
Individual case study assignment
Criteria Weighting Excellent Very good Good Acceptable Poor
1. a) Evaluate BP’s
competitive advantage
5% A comprehensive
application of the
5 forces model
with relevant case
examples to
illustrate key
assertions made.
A strong
evaluation is made
as to the strength
of the case
company’s
competitive
advantage relative
to the industry.
A strong
application of the
5 forces model
with relevant case
examples to justify
most of the
assertions made.
A good evaluation
is made as to the
strength of the
case company’s
competitive
advantage relative
to the industry.
A reasonable
application of the
5 forces model
with some relevant
examples
although some
elements were
lacking in
discussion. An
insightful
conclusion is
made as to the
case company’s
competitive
advantage relative
to the industry.
A fair application of
the 5 forces model,
ut some or all
areas need further
analysis and
explanation.
Examples from the
case context were
fair, but need to be
stronger to support
justification of the
points made. Some
discussion of the
competitive
advantage of the
case company in
elation to its
industry is made.
An inadequate
and inaccurate
epresentation of
the 5 forces
model. Examples
did not support the
analysis or
needed further
justification or
explanation.
Competitive
advantage is not
addressed in
sufficient detail.
1. b) Evaluate BP’s
competitive advantage after
the disaster and future
implications.
5% An excellent
outline of the
impacts of the
disaster on the
factors discussed
in 1. A) above.
Future
implications for the
company in terms
of implementing its
strategy are
thoroughly
discussed with
An strong outline
of the impacts of
the disaster on the
factors discussed
in 1. A) above.
Future
implications for the
company in terms
of implementing its
strategy are
soundly discussed
with good insight
provided as to
An good outline of
the impacts of the
disaster on the
factors discussed
in 1. A) above.
Some future
implications for the
company in terms
of implementing its
strategy are
discussed with
easonable insight
provided as to
An
ief outline of
the impacts of the
disaster on the
factors discussed in
1. A) above. Future
implications for the
company in terms
of implementing its
strategy are limited
in discussion, with
some insight
provided as to
investment in BP
An inadequate
outline of the
impacts of the
disaster on the
factors discussed
in 1. A) above.
Future
implications for the
company in terms
of implementing its
strategy are
limited in
discussion or not
strong insight
provided as to
investment in BP
for the target
audience.
investment in BP
for the target
audience.
investment in BP
for the target
audience.
for the target
audience.
discussed. Insight
provided as to
investment in BP
for the target
audience is limited
or not clear.
2. Quality of corporate
governance and
communication at BP
10% An excellent
critical evaluation
of significant and
elevant aspects
of corporate
governance and
communication at
BP is provided.
Balanced and
insightful
argument of the
facts using
excellent case
examples.
Discussion details
corporate
governance and
communication
thoroughly before
and after the
event, highlighting
changes and
implications for the
target audience. A
strong comparison
of other
companies in the
industry is present
in forming
A strong critical
evaluation of
significant and
elevant aspects
of corporate
governance and
communication at
BP is provided.
Balanced and
insightful
argument of the
facts using strong
case examples.
Discussion
explains corporate
governance and
communication
well before and
after the event,
highlighting
changes and most
implications for the
target audience. A
strong comparison
of other
companies in the
industry is present
in forming
A good critical
evaluation of
significant and
elevant aspects
of corporate
governance and
communication at
BP is provided.
Good insight
provided using
some good case
examples.
Discussion is
easonable,
explaining most
aspects of
corporate
governance and
communication
well before and
after the event. A
number of key
implications for the
target audience
are discussed. A
good comparison
of other
companies in the
industry is present
A fair critical
evaluation of
significant and
elevant aspects of
corporate
governance and
communication at
BP is provided.
Some case
examples are used,
ut can be better
explained in relation
to the argument
presented.
Discussion explains
corporate
governance and
communication
efore and after the
event. Some
changes and
implications for the
target audience are
presented. A
easonable
comparison of other
companies in the
industry is present
in forming
A poor critical
evaluation of
significant and
elevant aspects
of corporate
governance and
communication at
BP is provided.
Unbalanced
argument with little
or no use of facts
using case
examples.
Discussion
explains corporate
governance and
communication
well before and
after the event is
minimal.
Implications for
the target
audience are
unclear. A poor
comparison of
other companies
in the