Name and Surname : Sindisiwe Jane Jiyana

Email Address : [email protected]

Student Number : reg1403274
Course Code : BBA 1_STRAT_ASG_2024
Module : Strategic Business Management 1
Number Of Pages : 12 (including Cover Page)
Word Count : 3468

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Table of Contents
Introduction 2
Question 1 2
Macro environment 2
Microenvironment ……………….…………………………………………………………....3
Market environment …………….…………………………………….……………………..4
Question 2 6
Departmentalization 6
Question 3 7
Leadership theories 7
Question 4 8
Emotional and Spiritual intelligence 8
Conclusion 9
References 11

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Introduction
Retail outlets play an essential part in the daily lives of modern-day individuals. EVERSHOPPE
(Pty) Ltd is a retail store that will provide groceries and clothes to customers. Our main goal is to
offer ready-to-consume products and the newest styles in fashion at affordable prices by procuring
all our products locally. For the purposes of this assignment, we will examine environmental
analysis and investigate the micro, macro, and market environments. Departmentalization is crucial
in business operations. It is essential to choose the most suited departmental structure for the
business's operations. A successful business operation requires effective leadership. We will
examine numerous theories on leadership and recommend the most acceptable one for the
organisation. Finally, we will discuss how spiritual and emotional intelligence might impact the
development of relationships with our suppliers and producers.

Question 1
Environmental analysis
(Villegas, 2022) describes environmental analysis as a method used to assess both internal and
external elements that may impact the success of a business. By doing environmental analysis,
one may develop a strategic understanding of the corporate environment on three different levels:
the microenvironment, the macroenvironment, and the market environment; It is essential for the
management of Evershoppe (Pty) Ltd to be aware of what is occurring in each of the three
environments and to be able to respond appropriately to the circumstances that arise in each of
them this is according to (Regenesys Strat Study Guide, 2024).

Discussion of the environmental analysis that will be performed on Evershoppe (Pty) Ltd is as
follows:

Macro-environment
(Philip, 2019) defines macro-environment as the Key external and uncontrolled elements that
impact an organization's decision-making process; This environment combines factors that offer
opportunities and can present threats to the business. These factors are:

a) Political environment
 Current Tax Policy, according to (TaxTim, 2022) businesses are required to register
for Value Added Tax if their revenue above R 1,000,000 within a 12-month period.
Businesses must pay taxes based on a proportion of their gross profit at the
conclusion of each financial period, with the tax rate limited by the profit generated.
 Government policyGovernment and politicians establish rules for citizens,
businesses, and retail industry. Increased sales taxes may increase prices, causing
customer selection and decreased sales. (Shaw, 2020).
 Political instability, (Shaw, 2020) indicates that if the political environment of the
country changes like protests, roadblocks or bans, then it would disrupt the supply
chain of products and services. Therefore, businesses cannot run their operations
smoothly if there’s a conflict in local politics, Take, for instance, the chaos that
occurred in July of 2021; retail stores are still suffering the effects of that event to
this day.
b) Economic environment
 Economic growth, (Marais, 2024) provides a viewpoint that with the economy
continuing to be under pressure in 2024 because of the energy crisis in South
Africa, this indicates that economic activity will decrease, that unemployment will
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 continue to be high, and that individuals will continue to have less resources in order
to participate the economy.
 Inflation, (Amoussou, 2022) implies tha Higher consumer demand for a product is
viewed as a more good sign of inflation. The current economic conditions in South
Africa have led to a rise in inflation. By sourcing our items locally, we want to reduce
expenses, enabling us to provide our products at a lower price and maybe increase
demand.
 Disposable income, in line with what (Shaw, 2020) implies the current economic
conditions in South Africa do not encourage consumers to spend their money freely
due to limited employment opportunities, resulting in decreased sales in the retail
industry.
 Unemployment rate, South Africa's high unemployment rate is causing a slowdown
in the economy due to constraints on spending habits of the unemployed. (What Is
The Unemployment Rate & What It Means For Traders, n.d.).
c) Social environment
 Lifestyle attitude, according to (Shaw, 2020) Social trends influence people's buying
habits, attitudes, and behaviors. Education influences choices, with educated
individuals favoring global brands. Rural clients choose food based on availability,
while knowledgeable consumers analyze calorie and vitamin content.
 Retail businesses can be impacted by age distribution, as preferences vary among
different age groups, with younger individuals preferring adventurous items and
older generations preferring pleasant goods. (Shaw, 2020) .
d) Technological environment
 Technology trends,(Shaw, 2020) mentioned that the retail sector has been
significantly impacted by the introduction of systems for generating revenue figures
and managing cash. As a retail firm, it is essential to adopt software and hardware
technology that improves with time.
 Level of innovation, Research has shown that mainstream retail businesses have
seen advantages by using technology, particularly with the introduction of online
shopping, enabling consumers to make purchases at their convenience(Shaw,
2020).
e) Environment
 Climate change, according to (Colson, 2023) Companies are obligated to uphold
environmental responsibility by implementing sustainable practices such as
reducing energy usage, promoting recycling, and utilizing eco-friendly programs.

f) Legal environment
 Consumer safety, an abstract originating from (Mahambane, 2017) demonstrates
that "Peace of mind" is a significant factor that consumers consider when choosing
which retail store to frequent, and it is frequently the factor that determines whether
or not they will return to the store in the future.

Micro-environment
(Philip, 2019) defines micro-environment as the present-day setting that communicates with the
business and directly impacts its day-to-day business activities. There are six components of
micro-environment namely the company, Customers, suppliers, competitors, intermediaries and
general public. (Regenesys Strat Study Guide, 2024) states that ss the manager of Evershoppe
(Pty) Ltd, it is necessary to periodically assess the internal environment through a study of

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strengths and weaknesses in the microenvironment. The SWOT analysis of Evershoppe (Pty) Ltd
is discussed below.

Strengths Weaknesses
 Locally sourced goods and services  unfamiliar locally manufactured items or
from the local suppliers. brands
 Reduced production costs resulting in  Limited budget for advertising
lower selling price.  Ensuring the security and safety of
 No import or export expenses consumers
 Generate employment possibilities for  Dependence of suppliers on low unit
the local community. prices
 We have adequate funding to begin the  the purchasing practices of consumers
business.  Retail space that is limited
 Strong competition from other stores

Opportunities Threats

 Considering expanding to build other  Competing with known brands and

stores nationwide. stores such as Woolworths and Pick 'n
 Boost future sales through the Pay.
introduction of online shopping.  Rise in petrol costs will impact our
 Enhance profit margin by implementing pricing.
competitive pricing strategies.  An increase in the rate of inflation
 marketing based on location  Climate change
 an ageing society that practice of  Practices that are unfair to big number
shopping on demand of sellers in terms of price
 increases in productivity, decreases in competitiveness
costs, and improvements in service  experiences related to the brand that
are produced by manufacturers
 labour laws and restrictions on the
location of the business
 inequality in the economy
 The high cost of natural resources in
the food industry

The market environment

(Kotler & Keller, 2020) market environment refers to the surrounding factors and forces that have
an impact on the capacity of an organisation to build and sustain successful transactions and
relationships with its target consumers.

(Regenesys Strat Study Guide, 2024) suggests that Porter’s Five Forces model is a renowned
framework that examines the market environment influencing competitiveness as well. Evershoppe
(Pty) Ltd will use the model in this manner.

Potter’s five analysis in the retail industry: Evershoppe (Pty) Ltd

Potential Bargaining Bargaining Threats of Industry
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 Entrants power of power of buyers substitute Competitors
suppliers products
Threat: very low Threat: Low Threat: Medium Threat: Medium Threat: High
 There is a  sufficient  The  Competi  Pricey
requireme suppliers influence ng with marketin
nt for a available of presently g costs
large
 It is informatio recognis  Building
amount of
capital. simple to n ed customer
 Complianc switch accessibil substitut loyalty
e with food suppliers. ity on e  intense
safety  Reasona sales is products competiti
regulations ble limited. on from
 Maintenan switching  Customer existing
ce of costs s are stores
different extremely  Developi
products price ng a plan
conscious for
 Having
easy . increasin
access to  Set apart g sales
the many by the
suppliers pricing
strategy.
 Alternativ
e goods
 Many
customer
s are in
the
market.


Question 2
Departmentalisation
According to (Bhasin, 2019) departmentalisation is organisation of company’s teams that are
organised under different departments. These teams consist of multiple employees that carry out
operations that are similar to one another with the purpose of improving the company's
functionality.

(Regenesys Strat Study Guide, 2024) suggests that an organisation can be structured into
departments based on different criteria. Functional departmentalization groups employees based
on the functions they perform. Geographic departmentalization organises the organisation by
geographic regions. Product departmentalization divides the organisation by its product lines.
Customer market departmentalization structures departments according to different customer
types. Lastly, matrix departmentalization is suitable for complex projects requiring specialised skills
and knowledge.
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Evershoppe (Pty) Ltd has established a functional department structure to help fulfil its vision and
objectives. As a retail shop business, our primary goal is to enter the existing market, promote our
goods, meet our sales targets, and provide customer service. This structure will be advantageous
for the firm in the following manner. According to (Ivanius, 2023)

 The specialisation and knowledge of workers will enable them to specialise in their
particular areas of expertise, resulting in increased skills development and efficiency
within each functional area.
 Clear Hierarchy and reporting lines, reporting lines will be clearly defined for staff,
indicating who they report to and who controls their work. This will minimise
miscommunication and enhance accountable behaviour.
 Efficiency in cost saving, Resources and personnel will be structured according to
their functions to minimise and eliminate unnecessary roles, skills, and
competencies.
 Focused strategy execution, the structure will be aligned with particular strategic
objectives, enabling each department to concentrate on its role in accomplishing the
organization's overall goals.
 Economic scale, the aforementioned structure will take advantage on economies of
scale by consolidating resources and knowledge, resulting in cost savings and an
advantage in competitiveness.
 Standardised process, implementing standardised processes and procedures in
each department will enhance quality and ensure consistency.
 Focused training and development, employees are going to receive specialised
training and development to improve their skills and capacities.

Functional departmentalization may provide challenges in effectively managing and operating a

profitable company, as which we have recognised. Decision-making can be hindered by formal
organisational structures that mandate employees to get approval from management and other
authority figures before making decisions. There is a possibility that this structure might lead to
interdepartmental competition, prompting employees to work together as a cohesive team to
achieve targeted objectives. Having a goal-oriented attitude, although usually beneficial, can lead
to competitiveness within departments. without further direction or information from managers
Employees in different departments may work with little understanding of how their duties align
with the company's objectives and how their work connects with other departments.

After reviewing several organisational structures, we have formulated the company's long-term
strategic plans. We are exploring the possibility of expanding our stores nationwide in the future
and sourcing our products from local suppliers. Upon analysing the business environment, it was
seen that the business has the potential for expanding quickly. The functional structure is deemed
as the most advantageous organisational structure to help the company achieve its long-term
objectives.

Question 3
Leadership Theories
(Barney & Pratt, 2023) define leadership as the capacity of an individual or group of individuals
with the ability to influence and provide direction to followers or members of a group, organisation,
or society.

Leadership is one of the most important factors that determines the success and direction of a
company. In order for organisations to successfully communicate their purpose, vision, and goals,
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as well as to unify their team members behind those goals and accomplish them, effective leaders
are essential to success. Difficult decision-making is frequently necessary for the success and
development of an organisation. Businesses rely on leaders with strong abilities to make difficult
decisions and resolve issues. Leadership skills that are strong are key to the competitiveness of a
company since they are the driving force behind improvements and innovation. The best leaders
are those that keep an eye on ideas that come from within their organisation and bring in people
who think creatively.

(Barney & Pratt 2023) discusses different leadership theories, but for this assignment, we will focus
on three specific styles of leadership:

1. Transformational theory, Leadership involves motivating and inspiring individuals to

innovate and create new strategies for advancing a company's future and achieving
success.
2. Path-goal theory, suggests that a good leader is characterised by providing clear guidance,
setting high goals, actively participating in achieving those targets, and supporting
employees.
3. Transactional theory is a method in which leaders use rewards and punishments to
motivate followers and accomplish desired outcomes.

Evershoppe (Pty) Ltd proposes that the path-goal theory is most appropriate for the business
environment in South Africa and the internal environment of its retail company for the reasons
outlined below. Path-goal theory proposes that managers may influence their teams' performance
by adjusting their leadership style to better align with the particular needs of their team. Employee
motivation is believed to be reliant upon leadership support and a manager's capacity to
successfully address team challenges.

The (Indeed Editorial Team, 2023) suggests the path-goal theory emphasises a number of
leadership behaviours that can help a company's internal environment accomplish its goals and
objectives. The following types of behaviours are outlined below:

 Achievement oriented, this approach often emphasises promoting excellence via the
establishment of high targets, with leaders encouraging workers to perform their highest
best. Leaders motivate people by showing outstanding job accomplishments and to
consistently improve the quality of their work.
 Directive path goal clarifying, the leader will be able to offer employees with clear rules for
processes and expectations. It provides employees with a higher level of clarity on
processes, policies, and rules.
 Supportive, the leader focuses on the needs and well-being of employees, creating a
pleasant work environment by being friendly and caring.
 Participative, this behaviour entails engaging in discussions with employees over important
choices regarding work duties, goals, and strategies to achieve those goals, allowing
employees to actively participate in the decision-making process.

Those who are interested in becoming a great leader will find the path-goal theory to be an
extremely intriguing idea that will also serve as an eye-opener. The idea focuses on employee
motivation, which ultimately results in pleased employees and a productive team. This theory
improves employee performance and satisfaction by concentrating on employee motivation.

Question 4
Emotional and spiritual intelligence
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The ability to create meaning based on an in-depth understanding of soul issues and
understanding, as well as the capacity to use multiple levels of knowledge in the process of
problem resolution, are the basic elements of spiritual intelligence (Vaughan, 2022). The ability to
perceive, use, comprehend, and control one's own and other people's emotions is what we mean
when we talk about emotional intelligence (Indeed Editorial Team, 2024) .

The growth of emotional and spiritual intelligence will have a positive impact on the approach that
we take to creating relationships with our suppliers in South Africa in this manner.

(Indeed Editorial Team, 2024) indicates that it is important for a company to form relationships with
its suppliers since doing so may assist the company in developing trustworthy relationships, mutual
understanding, and confidence with its suppliers. If you are aware of your own emotions as well as
the emotions of your suppliers, you will be able to modify your communication style, tone, and
message to suit the nature of the issue and the individual who is receiving it. When confronted with
challenges, comments, or complaints, it is possible to avoid behaving in a dictatorial defensive, or
aggressive manner if you are able to control your emotions. The ability to demonstrate respect and
appreciation for the needs, expectations, and concerns of others is facilitated by emotional
intelligence, which also assists in being socially aware.

In addition, we make use of emotional intelligence in order to interact successfully with our
suppliers. This is accomplished by actively and attentively listening to them, expressing ourselves
in a clear and courteous manner, and modifying our approach. demonstrating a keen interest in the
products and services that our suppliers offer, while without interrupting, criticising, or rejecting
them. When sharing our opinions, we should use language that is constructive and positive, and
we should be honest and transparent about our requirements, expectations, and criticism. in order
to constantly take into consideration, the personality, culture, and preferences of our suppliers
while adjusting our communication style, whether it be informal or formal, communication by email
or correspondence via phone. The recognition of their accomplishments and efforts can also
contribute to the development of stronger relationships.

When dealing with suppliers, there is a significant amount of negotiation that takes place.
Emotional intelligence will be of assistance in negotiating fairly with our suppliers. In order to
negotiate successfully, we need to conduct research about our suppliers' history, goals, strengths,
weaknesses, and alternatives, as well as define our own objectives and limits. During the course of
the discussion, we are required to cultivate an environment that is constructive and cooperative by
demonstrating respect and appreciation for our suppliers. Instead of competing or compromising,
we need to look for solutions that are beneficial to both parties, and we should employ strategies
such as brainstorming, problem solving, and integrative bargaining in order to produce and
evaluate alternative choices.

In situations where there are relationships involved, we are definitely going to have arguments.
Although arguments are unavoidable in relationships, they can present an opportunity for learning
and progress, or they can lead to damages or feelings of resentment. This method will aid us in
resolving issues with our suppliers by allowing us to focus on the problem rather than the person,
as well as interact and cooperate with one another. Emotional intelligence will be of great use to us
in this aim. It will be helpful for us to empathise with our suppliers and actively listen to their point of
view. As a corporation, we should determine the underlying reason, interest, and need of both
parties while providing facts to support what we say. Instead of viewing our suppliers as
competition, we should consider them to be partners and work towards establishing a common
ground. This may be accomplished by employing skills in communication, negotiation, and
mediation in order to facilitate the process and look for a solution that is satisfactory to both parties.

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Conclusion
Evershoppe (Pty) Ltd has chosen to establish a retail store company that will exclusively operate in
South Africa and extend its outlets nationwide. One of its objectives is to procure products from
local suppliers. During the company development, we performed an environmental study including
macro, micro, and market environments for the retail industry in South Africa. Departmentalization
plays a crucial role in business operations. We analyse multiple methods of departmentalization to
determine the most suited one for the organisation. Leadership is crucial in an organisation. After
examining different perspectives on leadership theories, we selected the ones that will help the
company achieve its goals. Additionally, we explored how emotional and spiritual intelligence will
impact our strategy in developing relationships with local suppliers and producers in South Africa.

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