Business Studies Grade 12 Term 2 Revision
Business Studies Grade 12 Term 2 Revision
TLS Legal Services (TLS)
TLS Legal Services (TLS) is a medium-sized law firm located in Johannesburg. The firm specializes in corporate law but has recently attempted to expand its services to include criminal law to diversify its client base and revenue streams. As TLS seeks to expand its operations, it has encountered several significant challenges. TLS’s assistant lawyers, have been primarily trained in corporate law, and lack the necessary skills and training to handle criminal cases. This deficiency has led to several poorly managed cases, resulting in dissatisfied clients and a potential decline in the firm’s reputation. Additionally, Mbuzi Inc., a well-known law firm specializing in criminal law, has recently opened an office in the same building as TLS., making it harder for TLS to attract and retain clients in this new practice area. Furthermore, the recent downturn has forced the central bank to increase interest rates significantly. As a result, TLS is struggling to service its existing bank loan, which was taken out to finance the expansion into criminal law. The increased financial burden is putting a strain on the firm’s cash flow and overall financial health.
Business Studies Grade 12 Term 2 Revision
QUESTION
Identify the challenges faced by TLS Legal Services, specify the business environment associated with each challenge, and indicate the extent of control TLS has over each challenge.
The following challenges can be identified
1, TLS’s assistant lawyers are not trained to handle criminal cases. This challenge is an internal issue within TLSand falls under the microenvironment. The organization has high control over this challenge to manage and resolve it by investing in training programs to upskill their assistant lawyers in criminal law.
2, Another law firm, Mbuzi Inc., has set up a law practice in the same office block as TLS. This challenge falls under the market environment. TLS has limited control over the entry of new competitors but can implement competitive strategies, such as improving its service offerings or enhancing client relations, to mitigate the impact.
3. TLS can no longer service their bank loan due to an increase in interest rates. This challenge falls under the macro environment and TLS has no control over macroeconomic factors like interest rate increases. However, it can explore financial restructuring options, such as refinancing the loan or negotiating with the bank for better terms, to manage the financial strain.
Read the scenario below and answer the following Question
Fashion Haven Pty Ltd.
Fashion Haven is a mid-sized retail chain that focuses on women’s fashion. Despite the staff’s diligent efforts to deliver excellent service, they face problems due to outdated training programs that fail to properly equip them for their roles. This inadequate training, coupled with outdated technology and inefficient production processes, results in bottlenecks and escalating costs. Additionally, quality issues have emerged, with defective products occasionally reaching the shelves, leading to customer complaints. Ineffective communication within the team is further causing operational delays, attributable to inefficient channels and departmental shortcomings. Furthermore, the company’s ambition to launch new fashion lines is impeded by limited resources allocated for research and development. Externally, Fashion Haven’s marketing team is grappling with enhancing its ineffective marketing strategies and strengthening its brand positioning, which currently impedes customer engagement and brand development. Moreover, the company is diligently trying to adapt to changing consumer trends; however, the shift towards personalized fashion is complicating their product updates. On a larger scale, economic volatility, such as downturns and inflation, is reducing consumer spending on fashion. and growing concerns about sustainability and new environmental regulations are rendering the company’s supply chain and product-sourcing strategies unsustainable.
QUESTION
Identify the challenges faced by Fashion Haven, specify the business environment associated with each challenge, and indicate the extent of control Fashion Haven has over each challenge.
The following challenges can be identified:
1, Outdated training programs that fail to properly equip staff for their roles.
This challenge is an internal issue within Fashion Haven and falls under the microenvironment. The company has high control over this challenge because it can directly shape and control the content, delivery, and frequency of its training programs. Therefore it can manage to resolve it by investing in updated training programs and improving staff development practices.
Business Studies Grade 12 Term 2 Revision
2, Outdated Technology
This challenge is also an internal issue within Fashion Haven and falls under the microenvironment. The company has moderate to high control over the challenge of outdated technology because it is an internal issue that directly falls within the company’s operational domain.
Fashion Haven has high control over this challenge because it has the authority to allocate resources and budget towards technology upgrades as well as the freedom to manage the timeline and strategy for implementing new technology. Furthermore, Fashion Haven has the power to choose the specific technology solutions that best meet their needs and to develop and implement policies and strategies that prioritize technology upgrades.
However, this control is not absolute (hence moderate to high) because the extent of control is influenced by the company’s financial situation and budget limitations can restrict the extent and pace of upgrades. Additionally, while the decision to upgrade technology is internal, the actual implementation may depend on external factors such as the availability of technology and the reliability of suppliers. Furthermore, upgrading technology requires managing change within the organization, which can be challenging due to employee resistance and the need for training.
Business Studies Grade 12 Term 2 Revision
3, Inefficient Production Processes:
This challenge is an internal issue within Fashion Haven and falls under the microenvironment. The company has high control over this challenge because it’s an internal issue that directly falls within the company’s operational domain to review, assess, and modify its production processes. It also possesses the freedom to adopt new methods, strategies, and technologies to boost production efficiency without external interference. Furthermore, it has the power to allocate resources, such as manpower, time, and budget, specifically for the enhancement of production processes.
4, Quality Issues with Defective Products.
This challenge is an internal issue within Fashion Haven and falls under the microenvironment. The company has high control over this challenge because it can decide on the standards and protocols to ensure product quality without external interference. This involves implementing stricter quality control measures and enhancing product inspection procedures to detect defects early in the production process and take necessary corrective actions. Additionally, the company has the liberty to develop and implement training programs to equip employees with the skills and knowledge required to uphold high-quality standards. Lastly, Fashion Haven can decide to set up metrics and monitoring systems to continuously evaluate product quality.
Business Studies Grade 12 Term 2 Revision
5, Ineffective Internal Communication
This challenge is an internal issue within Fashion Haven and falls under the microenvironment. The Company has high control over this challenge, and this gives it power and authority to resolve it by enhancing communication channels and improving departmental collaboration, including Establishing Clear Communication Protocols, Conducting Regular Team Meetings, Providing Communication Skills Training to staff and teams, and Enhancing Leadership Communication.
6, Difficulty Adapting to Changing Consumer Trends
This challenge is an external issue within Fashion Haven and falls under the market environment. The organization has moderate control over this challenge and can manage or resolve it by enhancing market research and staying responsive to consumer preferences.
7, Ineffective Marketing Strategies
This challenge is an internal issue within Fashion Haven and falls under the microenvironment. The organization has high control over this challenge to manage and resolve it by developing more effective marketing strategies and improving brand positioning.
Business Studies Grade 12 Term 2 Revision
8, Difficulty Adapting to Changing Consumer Trends
This challenge is an external issue within Fashion Haven and falls under the market environment. Although the organization has limited control over this challenge, it can still take action to enhance market research and understand current consumer trends to stay responsive to consumer preferences. It can also leverage Data Analytics to gather insights from various sources and identify trends early and make data-driven decisions to align products with consumer demands.
9, Economic Volatility
This challenge is an external issue within Fashion Haven and falls under the macroenvironment. The organization has low control over this challenge and can only manage it by adapting pricing strategies and cost management in response to economic conditions.
10, Sustainability Concerns and Environmental Regulations
This challenge is an external issue within Fashion Haven and falls under the macroenvironment. The organization has low control over this challenge and can manage it by adapting to regulatory requirements and investing in sustainable practices.
2024 Memo Economics Paper 1 Grade12
Business Studies Grade 12 Term 2 Revision
Business in the Primary Sector
Duka Mines (DM)
Duka Mines specializes in the extraction of platinum. Recently, the company has faced situations that have impacted its operations and profitability.
Firstly, their suppliers of mining equipment have increased their prices by more than 20%, significantly raising operational costs. To complicate matters further, the supervisor at DM does not have a good working relationship with his employees, leading to internal strife and reduced efficiency. Additionally, DM can no longer export their products due to an increase in the exchange rate, which has made their products less competitive on the international market.Adding to these woes, environmental regulations have become stricter, requiring DM to invest heavily in cleaner technologies to comply with new laws. Meanwhile, there is a global decline in platinum prices, which has decreased the revenue generated from their primary product.
Internally, DM’s workforce is ageing, which is contributing to a decrease in productivity. To remain competitive, the company also needs to address the fact that competitors are adopting new technologies, gaining a significant competitive advantage. Compounding these issues is a shortage of skilled labor in the mining industry, making it difficult for DM to find and retain qualified workers. Externally, political instability in the region is creating an unpredictable business environment, further hampering operations. Finally, fluctuating fuel prices are continuously increasing operational costs, adding another layer of financial strain.
Business Studies Grade 12 Term 2 Revision
QUESTION
Identify the challenges faced by Duka Mines according to the scenario above. For each challenge, specify the business environment it falls under and state the extent of control Duka Mines has over each business environment.
The following challenges can be identified:
- Increase in prices of mining equipment by suppliers
This challenge is within the microenvironment because it involves direct interactions with suppliers. Duka Mines has limited control over this issue because the pricing is determined by the suppliers. Although DM can negotiate contracts or seek alternative suppliers, they cannot directly control the market prices set by equipment suppliers. - Poor relationship between supervisor and employees
This challenge is an internal issue within Duka Mines and falls under the microenvironment. The company has high control over this challenge because it can directly influence the working relationship between the supervisor and employees through training, team-building activities, and changes in management practices. - Increased exchange rate affecting exports
This challenge is within the macroenvironment as it involves external economic factors. Duka Mines has no control over exchange rates because they are determined by global financial markets and economic policies beyond the company’s influence. - Stricter environmental regulations
This challenge falls under the macroenvironment due to government-imposed regulations. Duka Mines has limited control over this issue because environmental regulations are enforced by government bodies. The company must comply with these laws but can advocate for changes through industry associations or by engaging with policymakers. - Global decline in platinum prices
This challenge is in the macroenvironment as it pertains to global market trends. Duka Mines has no control over global platinum prices, which are influenced by global supply and demand, investor behavior, and economic conditions. - Aging workforce reducing productivity
This challenge is an internal issue within Duka Mines and falls under the microenvironment. The company has medium control over this challenge because while it cannot change the demographics of its current workforce, it can implement policies for hiring younger workers, provide training, and improve working conditions to enhance productivity. - Competitors adopting new technologies
This challenge is within the market environment as it involves competitor actions. Duka Mines has limited control over this issue because it cannot control competitors’ decisions. However, the company can invest in its own technological advancements to remain competitive. - Shortage of skilled labor
This challenge is in the market environment because it pertains to industry-wide labor availability. Duka Mines has limited control over this issue as it depends on broader educational and labor market trends. The company can try to attract and retain skilled workers through competitive wages and benefits, but it cannot directly address the overall shortage.
Business Studies Grade 12 Term 2 Revision
QUESTION
Give any consumer rights as stipulated in the Consumer Protection Act (CPA), 2008 (Act 68 of 2008)
The Consumer Protection Act (CPA), 2008 (Act 68 of 2008), outlines various consumer rights to ensure fair treatment and protection in the marketplace. These rights are essential for safeguarding consumer interests and promoting transparent business practices. The consumer rights as stipulated in the CPA include:
1, Right to choose:
Consumers have the right to select from a range of products and services, allowing them to make informed decisions based on their preferences and needs. This right empowers consumers to choose what suits them best without undue pressure or coercion.
2, Right to privacy:
The CPA guarantees the right to privacy, ensuring that consumers’ personal information is protected and not used without their consent. This includes protection from unwanted marketing communications and the misuse of personal data.
3, Right to fair and honest dealings:
Consumers are entitled to fair treatment and honest transactions. This right ensures that businesses engage in ethical practices and provide accurate information about products and services.
4, Right to disclosure and information:
The CPA mandates that consumers have the right to access relevant and clear information about the goods and services they purchase. This includes details about pricing, terms of sale, and any potential risks associated with the product or service.
5, Right to fair and responsible marketing:
Consumers have the right to be protected from misleading or deceptive advertising. The CPA enforces that marketing practices must be truthful, and businesses should not exploit consumers’ trust.
6, Right to fair value/good quality and safety:
This right ensures that consumers receive products and services that are of good quality, safe, and provide fair value for money. It includes protection against substandard or hazardous goods.
7, Right to accountability by suppliers:
The CPA holds suppliers accountable for their products and services. This right ensures that consumers can seek redress or compensation in case of defective goods or poor service.
8, Right to fair, just and reasonable terms and conditions:
Consumers are entitled to fair terms and conditions in their contracts. The CPA prevents businesses from imposing unfair or unreasonable terms that could disadvantage consumers.
9, Right to equality in the consumer market:
This right promotes equal treatment of all consumers, preventing discrimination based on factors such as race, gender, or socio-economic status. It ensures that all consumers have equal access to goods and services.
QUESTION
Read the scenario below and answer the questions that follow.
BEST CANNING (BC)
Best Canning manufactures a variety of canned foods. BC lost customers to Damian Canning because their products are of a high quality. The profitability of BC decreased due to poor management skills. Best Canning borrowed money from the bank at a high interest rate.
1, Quote three challenges for BC from the scenario above.
2, Classify best canning’s challenges according to the three business environments.
3, State the extent of control BC has over each business environment classified in QUESTION 2.
Challenge 1, BC lost customers to Damian Canning because their products are of a high quality.
This challenge falls under the market environment as it pertains to the competitive landscape and consumer preferences where Damian Canning offers products of higher quality, making BC’s offerings less attractive in comparison.
BC has limited control over the market environment. While BC can attempt to improve its product quality and adjust its marketing strategies, the overall competition and consumer preferences are influenced by external factors beyond BC’s direct influence. Therefore, BC’s ability to control or change these factors is partial.
Business Studies Grade 12 Term 2 Revision
Challenge 2: The profitability of BC decreased due to poor management skills.
This challenge falls under the microenvironment, which includes internal factors such as management practices, organizational structure, and operational processes.
BC has full control over its micro environment. The company can address poor management skills through various means such as management training, restructuring, and implementing better internal processes. Since these issues are within BC’s internal sphere, the company has complete control over improving its management practices.
Challenge 3: Best Canning borrowed money from the bank at a high interest rate.
This challenge is associated with the macro environment, involving broader economic factors such as interest rates and economic policies. The high interest rate on the loan is determined by financial institutions and economic policy rather than BC’s internal decisions.
BC has no control over the macro environment. Interest rates and other macroeconomic factors are influenced by broader economic forces and policies that are outside BC’s influence. Consequently, BC’s ability to manage or alter these macroeconomic factors is nonexistent.
Business Studies Grade 12 Term 2 Revision
QUESTION
Outline the advantages of diversification strategies.
Diversification strategies offer several advantages for businesses aiming to expand and strengthen their market position. Here are the key benefits of adopting diversification strategies:
1, Increases Sales and Business Growth
Diversification can significantly boost sales and drive business growth by entering new markets or introducing new products. This expanded reach helps tap into different customer segments and generate additional revenue streams.
2, Improves the Business Brand and Image
By diversifying, businesses can enhance their brand and image. A diversified portfolio showcases a company’s ability to innovate and adapt, which can positively influence public perception and attract new customers.
3, Reduces the Risk of Relying Only on One Product for Sales/Revenue/Income
Diversification mitigates the risk associated with dependence on a single product or revenue source. By offering a variety of products or services, businesses reduce their vulnerability to market fluctuations affecting any one product line.
Business Studies Grade 12 Term 2 Revision
4, Businesses Gain More Technological Capabilities Through Product Modification
Engaging in diversification often leads to the development and acquisition of new technological capabilities. Product modification and innovation become more feasible as companies expand their expertise and resources across different product lines.
5, Creates Balance During Economic Fluctuations
By operating in various industries or product lines, businesses can achieve greater stability during economic fluctuations. This balanced approach helps to offset losses in one area with gains in another, providing a buffer against economic downturns.
6, Increases Efficiency Through Economies of Scale
Diversification allows for economies of scale, where businesses can increase output while optimizing resource use. Utilizing existing facilities for the production of multiple products leads to more efficient operations and reduced per-unit costs.
7, Retains Competitive Advantage
Diversification helps businesses maintain their competitive edge by addressing the evolving needs of both current and new customers. Offering a broader range of products or services can attract and retain customers, enhancing market position.
8, Maintains Relevance in a Dynamic Environment
In a constantly changing business environment, diversification ensures that businesses remain relevant and operational. By adapting to new trends and market demands, companies can stay competitive and continue to thrive amid industry changes.
Read the scenario below and answer the questions that follow.
RAINBOW FURNITURE MANUFACTURERS (RFM)
Rainbow Furniture Manufacturers took over Woody Furniture Manufacturers to reduce competition in the market. The management of RFM evaluate their strategies regularly.
Business Studies Grade 12 Term 2 Revision
QUESTION
Identify the type of integration strategy in the scenario above.
The type of integration strategy in the scenario is Horizontal Integration. This strategy involves acquiring or merging with a competitor operating in the same industry and at the same stage of production. In this case Rainbow Furniture Manufacturers (RFM) took over Woody Furniture Manufacturers to reduce competition in the market. By doing so, RFM aims to consolidate its position in the market and diminish competitive pressures.
QUESTION
Discuss the steps in strategy evaluation.
To effectively evaluate a strategy, such as a market penetration strategy, you can follow these key steps:
1, Examine the underlying basis of a business strategy.
Begin by assessing the core rationale behind the market penetration strategy. This involves understanding why the strategy was chosen, such as aiming to increase market share by offering existing products to existing markets at a lower price or through increased promotion. This step ensures that the strategy aligns with the business’s overall objectives and market conditions.
2, Look forward and backward into the implementation process.
Review both past actions and future plans related to the market penetration strategy. Analyze how the strategy was implemented, including any changes made during the process. This involves assessing historical data to understand previous outcomes and projecting future actions to ensure the strategy remains relevant and effective.
Business Studies Grade 12 Term 2 Revision
3, Compare the expected performance with the actual performance.
Measure the outcomes of the market penetration strategy against the goals set before implementation. For example, if the expected performance was a 10% increase in market share within a year, compare this with the actual market share achieved. This comparison helps identify whether the strategy is meeting its intended goals.
4, Determine the reasons for deviations and analyze these reasons.
If there are discrepancies between expected and actual performance, investigate the causes. For instance, if the market share increase is lower than anticipated, explore factors like ineffective marketing campaigns or increased competition. Analyzing these deviations helps in understanding what went wrong and why.
5, Take corrective action so that deviations may be corrected.
Implement necessary changes to address the identified issues. For example, if low customer engagement is found to be a reason for underperformance, adjust the promotional strategies or improve product offerings. Corrective actions help realign the strategy with its objectives.
6, Set specific dates for control and follow-up.
Establish a timeline for reviewing the progress of the market penetration strategy. Schedule regular intervals for checking performance and making adjustments as needed. This ensures ongoing monitoring and timely interventions if required.
7, Draw up a table of the advantages and disadvantages of a strategy.
Create a detailed comparison of the benefits and drawbacks of the market penetration strategy. Advantages might include increased market share and higher sales volume, while disadvantages could involve reduced profit margins and potential price wars. This table helps in evaluating the overall effectiveness of the strategy.
8, Decide on the desired outcome that will result in the achievement of business goals.
Clearly define the specific results you aim to achieve through the market penetration strategy, such as reaching a targeted market share or improving brand recognition. This step ensures that the strategy’s objectives are aligned with the broader business goals.
9, Consider the impact of the strategic implementation in the internal/external environments of the business.
Assess how the market penetration strategy affects both the internal operations and external market conditions. For instance, consider how increased promotional activities might impact internal resources and how market changes could affect the strategy’s success. Understanding these impacts helps in adjusting the strategy to fit the business environment better.