SCS May/August 2022: Practice Task 1

Practice Task 1

You receive the following email from Peter Fodya: CFO of Snakwheel

From: Peter Fodya: CFO

To: Senior Finance Manager
Topic: Loss of Taystburger

Please see the attached news article about Taystburger’s decision to launch its own home delivery service.

The article is not clear when this will happen, nor whether its new service will be available in all the towns and cities of
Westaria.

Our Marketing Director has spoken with Taystburger management and she was told that this new service will run in
parallel with ours. We will still be able to sell and deliver Taystburger fast food through our platform

Our CEO, Ahmed Farah, has been receiving angry calls from shareholders who want to know why the share price has
fallen and why the Board didn’t foresee this.

I would appreciate your advice on the following matters before I discuss this with our CEO:

 Why has the share price fallen in the way it has?

[sub task (a) = 60%]

 Are the shareholders right to blame the Board for not having spotted the possibility of this sort of action by
partner restaurants?

[sub task (b) = 40%]

The article referred to is included as Reference Material for this task

© Adrian Sims 2022

SCS May/August 2022: Practice Task 1

Reference material X

Westaria Telegraph

Taystburger
Reference materialssteps out

Taystburger announces its own home delivery service

Westaria’s favourite burger restaurant chain is coming even closer to you, by launching its own
home delivery service.

Taystburger’s Chief Commercial Officer, Ankit Talwar, gave the Westaria Telegraph an exclusive
insight into the reasons for this.

‘At the moment we rely solely on Snakwheel to deliver our burgers to our customers at home and
work. It provides a good service and we are grateful, but our customers pay about 30% of the price
of the meal for this. Also we need to know about what our customers’ think of our food and the
delivery service and Snakwheel doesn’t tell us this. So we want to get closer to our customers and
also provide them with a cheaper delivery service option.’

An industry analyst at Mellors Investment Bank commented

‘This move by Taystburger recognises the trend is to eat fast food at home and not to travel to
restaurants. It will strengthen its ability to defend its market share. It’s not clear how Taystburger will
cope with orders that want more than burgers. Will it collect pizza from its rivals to deliver, or will
Taystburger start to sell pizza too?’

It looks like fast food just became a little bit faster-moving!

© Adrian Sims 2022