Question 1

1.1 Strategic Management Strategies used by Shoprite

 A low-cost strategy is type 1 of cost leadership in Michael Porters five generic strategies,
it’s a pricing strategy in which an organization offers its products or services at a relatively
low price to a wide range of customers in order to gain market share. The new Shoprite
shore in Westgate mall provides low price on most of its goods, which helps them gain
market share.
 Unrelated diversification is adding new but unrelated products or services into your
product0service line, Shoprite has added money market and MediRite pharmacies in
selected stores.
 Market development is a strategy in which an organization seeks to find new customers
for its current goods or services, these potential customer segments may already be
served by rivals. The main goal of market development is to growth the company through
expanding into untapped markets. The Shoprite group opened its first Shoprite
supermarket in Kenya

1.2 Characteristics of a mission statement

 The mission statement is inspiring as it shows how Shoprite is working towards being the
leading food retailer.
 Its broad in scope it explores several factors (growth plan, innovation. etc) but it includes
numbers
 It is fewer than 150 words
 It identifies Shoprite’s product and services such as being a leading a food retailer
 The mission statement includes all nine components of a mission statement
 Its enduring as it is applicable for many years to come
 Its reconciliatory and sustainable
 Its reveals Shoprite is socially responsible as it doesn’t only care about financial returns
they care about bringing social change in the communities in which their stores are in
 Shoprite is environmentally responsible as they acquire new innovative strategies to
building their brand without causing any harm to the environment

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Question 2
The Resource Based view approach analyzes and interprets organizations internal resources as
it argues that internal resources are more vital to the organization compared to external factors,
in achieving and maintaining sustainable competitive advantage. In terms of the RBV, an
organization can be viewed as a set of:
 physical resources,
 human resources and
 organizational resources
The RBV takes a firm specific view of why organizations fail or succeed in the marketplace and
industry in which they operate in. Unique, rare, inimitable and non-replaceable resources
(empirical indicators) allow a firm to build and retain competitive edge/advantage.

Shoprite is one of South Africa’s biggest retailer is following a research-based view strategy,
Shoprite has built its business strategy around its strength, capabilities and export knowledge in
building food retailer stores. Shoprite initially started in 1979 with one small store then grew to
have more than 2998 stores in 15 countries globally, over time it expanded its offering by
providing services like money market and MediRite pharmacies and so much more. All of the
products and services Shoprite provides leverages the company’s ability to build leading retail
stores.

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Question 3
Production/Operational issues are all kinds of problems that can make a business less profitable.
There are different categories, each with its own undesired consequences, that shape
operational issues. These issues cause massive drains on the business energy, they can impact
operational efficiency, cause strategic execution issues and stand in the way of the growth of an
organization if it’s not managed properly. Production/Operational issues could affect Shoprite:
1. Restructuring and Reengineering
Restructuring entails a reduction of the company’s size in rems of the number of
employees, divisions and hierarchy level in the organizational structure. Shoprites growth
in the food retail industry was obtained through new acquisitions and expansion,
restructuring would mean eliminating some departments, employees which could
negatively impacts its position in the industry in which the operate in.
Reengineering entails reconfiguring work, jobs and processes for the sole purpose of
refining costs, quality, service and speed. Its main concern is the welfare of employees
and consumers. The reengineering process generally does not affect the organizational
structure nor does is contribute to retrenchments or layoffs for staff members. Shoprite is
always looking for new innovative expansion strategies.
2. Managing resistance to change, resistance frequently occurs in organizations through
absenteeism, baseless complaints and a refusal to cooperate to name a few. Managing
resistance to change is crucial as resistance to change is considered one of the biggest
challenges to effective execution of a strategy. Due to the pandemic many Shoprite
employees didn’t understand the necessity of wearing marks and spraying each customer
with sanitizers which made them resist to the change. Shoprite conducted a health and
wellness workshop to inform employees about the virus and its risks and measures they
must take to ensure the safety of their staff and customers.
3. Deciding where and how to produce goods, Shoprite must have suppliers who supply
good quality products that will meet its customers standards and needs, a good
distribution channel that will not cause any issues in terms of the products reaching their
retail stores in time and this can be achieved by using a Just-in-time production approach.
4. Employee stock ownership plans refers to an employee benefit plan that provides
employees with an ownership interest in the company. Shoprite can create a trust in which
it will put new hares in or cash to buy existing stock and then allocate all these share to
their employees individual accounts.

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Question 4
4.1 Avon falls under quadrant II as it has a weak competitive position and a rapidly high growth

4.2 Avon must take a closer look at their current marketplace approach. Even though the beauty
industry is growing, they are not competing effectively, in its current position its very important for
Avon to determine why its current approach is ineffective and find a way to improve its
competitiveness. The most suitable strategies for firms who fall under quadrant II are:
 Market development- entails introducing current products into a new geographic location,
Avon can expand its current geographical horizons by operating on more than a divisional
by geographic region.
 Market penetration- seeking increased market share for present products, Avon can
achieve this by selling their products online so that they reach a greater market share,
through greater marketing efforts
 Product development- improving current products or introducing new ones for the purpose
of increasing sales. Avon can do an online survey to see if they can improve their current
packaging as small things like color skims in packaging can increase sales
 Horizontal integration- is taking control over competitors. This is not applicable to Avon as
they are one of the world’s leading direct sellers
 Divestiture- selling a division or part of the organization. This is not applicable to Avon as,
the organization can keep up with the market growth so there is no need for defensive
strategies as of yet
 Liquidation- selling all company assets to recover debts. Avon doesn’t need liquidation as
its doing well in the industry it operates in its only problem is its competitive position in the
USA.

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Question 5

Various Strategies Implications for Avon

Become a low-cost provider. would requires longer production schedules and
fewer product modification
 Selling products at an affordable price while
still making revenue
Become a high-quality provider. it would require very skilled representatives
 providing products that are of high quality
and that clients can rave about and
recommend to others
Giving great customer service. Requires prompt response to customer needs and
preferences.
 Making sure the consumer is always happy
and feels valued
Introduce new products, A lot of time and money will be spent on market
research and product development as they would
 Expanding the current product line to attract
need to take inti account what customer wants and
new customers and maintain existing ones what fits for their brand also.
Become highly automated May have a negative affect on labor relations and
makes maintenance progressively important.
 usage of electronics and computer-controlled
systems to take over process control
Stability of employment the organisation will have employee loyalty and it
plays an important role in attracting and retaining
 is minimizing layoffs, and making
highly skilled employees
employees feel valued and part of the
organization.

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Question 6
6.1
FP= 5
SP= -3.3
IP= 4.50
CP= -4.3
SP + FP= y-axis coordinates
(-3.3+5=1.7)
CP+IP= x-axis coordinates
(-4.3+4.50=0.2)

Financial6 position (FP)

5
4
competitive position (CP)

3
2
1.7
In
1
d
0
-6 -5 -4 -3 -2 -1
-1
0 1 2 3 4 5 6 us
-2 tr
-3
y
-4
-5
p
-6 os
Stability position (SP)

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6.2 The graph illustrates that Thabo’s firm directional vector is located in the Aggressive
guardant. Thabo will have to use Aggressive strategies, and these include:
 Backward, forward, and horizontal integration;
 Market penetration;
 Market development;
 Product development; and
 Diversification (related and unrelated)
I would recommend Thabo uses the following Strategies:
 Market development is introducing the firms present products into new geographic areas,
Thabo can do market research and see where he could expand his manufacturing firm.
 Market penetration, seeking to increase market share of present/established good, Thabo
can sell his products directly to customers and to other manufactures to distribute or to
wholesalers to reach a higher market share, through greater marketing efforts.
 Forward integration is taking control over distributors. Thabo’s company can be the one
that delivers the product it manufactures to its clients, instead of them fetching them from
the warehouse.

Question 7
Competitors Varsity College Monash South Africa Vega School
Critical success weight rating score rating score rating score
factors
Education quality 0.35 3 1.05 2 0.70 4 1.40
Tuition fee 0.20 3 0.60 3 0.60 2 0.40
Standard of 0.20 4 0.80 3 0.60 3 0.60
learning
Brand reputation 0.25 2 0.50 3 0.75 3 0.75
Total 1.00 2.95 2.65 3.15

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