Business Studies Grade 12 Revision Exercises 5

                                                                                                                                                                                                                                                                                                                                                                     Complete the following statements by using the word(s) in the list below.

1.2.1  The role of … is to draw up skills development plans for their specific economic sector.

[bg_collapse view=”button-blue” color=”#eddfdf” expand_text=”Show Answer” collapse_text=”Close” ] SETA [/bg_collapse]

1.2.2 Businesses that offer goods on credit are required to register with the …

[bg_collapse view=”button-blue” color=”#eddfdf” expand_text=”Show Answer” collapse_text=”Close” ] National Credit Regulator [/bg_collapse]

1.2.3 Parkview Consultants compiled a … analysis to investigate the reasons for poor management in the business.

[bg_collapse view=”button-blue” color=”#eddfdf” expand_text=”Show Answer” collapse_text=”Close” ] SWOT [/bg_collapse]

1.2.4 Odwa is entitled to … as a compulsory benefit.

[bg_collapse view=”button-blue” color=”#eddfdf” expand_text=”Show Answer” collapse_text=”Close” ] unemployment insurance fund [/bg_collapse]

1.2.5 The production manager works closely with the … manager in order to buy the correct quality of raw materials. purchasing

[bg_collapse view=”button-blue” color=”#eddfdf” expand_text=”Show Answer” collapse_text=”Close” ] purchasing [/bg_collapse]

Choose a description from COLUMN B that matches a term in COLUMN A.

QUESTION 2: BUSINESS ENVIRONMENTS

2.1 Name any TWO types of integration strategies.

Two types of integration strategies commonly used in business environments are:

Horizontal Integration:

Horizontal integration refers to the strategy of acquiring or merging with competitors or businesses operating at the same level of the value chain. It aims to increase market share, gain economies of scale, reduce competition, and expand the product or service offerings.

For example, The Walt Disney Company acquired 21st Century Fox, a major media conglomerate. This horizontal integration allowed Disney to expand its media and entertainment portfolio, gain access to Fox’s content and intellectual property, and increase its market share.

Another example is facebook’s  acquisition of Instagram,, a popular photo-sharing social media platform. This horizontal integration enabled Facebook to enhance its offerings, tap into a younger demographic, and strengthen its dominance in the social media industry.

 

Vertical Integration:

Vertical integration involves the expansion of a company’s operations either backward or forward along the supply chain. Backward integration occurs when a company acquires or merges with its suppliers or sources of raw materials, while forward integration involves acquiring or merging with distributors or retailers. This allows companies to gain control over the entire value chain, reduce costs, improve efficiency, ensure the availability of inputs, and capture a larger share of the market.

For example , Tesla, the electric car manufacturer, has vertically integrated various aspects of its operations. It produces its electric vehicle components, such as batteries, and has invested in the development of its Giga factories to ensure a stable supply of essential components. This vertical integration allows Tesla to have better control over its supply chain, reduce costs, and maintain quality standards.

Apple has  also vertically integrated its retail operations by establishing its chain of Apple Stores worldwide. By directly selling its products through Apple Stores, Apple can control the customer experience, showcase its products, and maintain tight control over pricing and distribution, leading to a more seamless and consistent brand experience for customers.

2.2 Outline the steps in strategy evaluation.

Strategy evaluation is the process of assessing and reviewing the effectiveness, performance, and outcomes of a business strategy. By following these steps, organizations can systematically evaluate their strategies, identify areas for improvement, and take necessary actions to enhance performance and achieve desired outcomes.

1. Examine the underlying basis of a business strategy to establish how well it aligns with the organization’s mission, vision, and goals.
2. Look forward and backward into the implementation process by reviewing past actions and outcomes to identify strengths and weaknesses, while also considering future implications and potential challenges.
3. Compare the expected performance with the actual performance and Identify any gaps or deviations to assess the strategy’s effectiveness.
4. Measure the business performance and Identify the reasons for any deviations or variances between expected and actual performance.
5. Take corrective action by developing and implementing strategies and initiatives to address the identified issues and bring performance back in line with expectations.
6. Set specific dates for control and follow-up by establishing timelines and milestones for monitoring , follow-up and regular performance reviews.
7. Draw up a table of the advantages and disadvantages of a strategy to highlight the benefits and drawbacks of the strategy.
8. Decide on the desired outcome and ensure that these outcomes are measurable, specific, and aligned with the overall goals of the organization.
9. Consider the impact of strategic implementation on internal and external environments by evaluating how it aligns with market trends, customer demands, competitive landscape, and the organization’s resources and capabilities.

2.3 Read the scenario below and answer the questions that follow.

Use the table below as a GUIDE to answer QUESTIONS 2.3.1 to 2.3.3.

2.3.1 Quote THREE challenges for GTE from the scenario above. 

2.3.2 Classify GTE’s challenges according to the THREE business environments. 

2.3.3 State the extent of control GTE has over EACH business environment named in QUESTION 2.3.2. 

2.4 Explain the implications of the following Broad-Based Black Economic Empowerment Act (BBBEE) pillars for businesses:

2.4.1 Management control 

The Management Control pillar of BBBEE aims to promote transformation and address historical imbalances in representation and decision-making within businesses . Under this act

• Implementation of transformation at all levels throughout the organization, not just at the senior level. This means promoting diversity and inclusivity across all departments and levels of the company by  creating opportunities for previously dis advantaged individuals to advance their careers and be represented in various roles within the organization.
• Appointment of black people in senior executive positions/management: The Act emphasizes the need for businesses to appoint black individuals to senior executive positions and management roles. This requirement aims to address historical inequalities and promote representation at the highest levels of decision-making within organizations.
• Involvement of black people in strategic decision-making processes: Businesses are encouraged to involve black individuals in the strategic decision-making processes. This ensures that diverse perspectives and experiences are considered, leading to more inclusive and effective decision-making. It also provides opportunities for black individuals to contribute to the organization’s long-term vision and goals.
• Representation of black females in management: The Act specifically highlights the importance of ensuring the representation of black females in management positions. This requirement recognizes the intersectionality of gender and racial inequalities and seeks to address the underrepresentation of black women in leadership roles. Businesses need to actively promote the advancement of black females to managerial positions to comply with this pillar.
• Scoring points through share sales to black investors: Businesses can earn points under the Management Control pillar by selling more than 25% of their shares to black investors. This not only promotes ownership and economic empowerment but also creates opportunities for black investors to become directors. By involving black individuals in the governance and leadership of the company, businesses contribute to broader transformation objectives.
• Challenges related to a shortage of skilled black managers/directors: Some businesses may face difficulties in implementing the Management Control pillar due to a shortage of skilled black managers and directors. Historical inequalities and limited access to opportunities have contributed to this shortage. To address this challenge, businesses may need to invest in training, mentorship programs, and other initiatives to develop a pipeline of skilled black candidates for managerial roles.
• Direct penalties for non-compliance: Non-compliance with the Management Control pillar can result in direct penalties for businesses. These penalties can range from reduced BBBEE scores to loss of business opportunities and legal consequences. It is crucial for businesses to prioritize and actively implement measures to comply with this pillar to avoid negative consequences.
•  Appoint black people in senior executive positions/to management.
  – Involve black people in the strategic decision making processes.
•  Ensure that black females are represented in management.
•  Businesses score points in management when selling more than 25 % of their
  shares to black investors so that some of them can become directors.
• Due to a shortage of skilled black managers/directors, some businesses find it
  difficult to make appointments.
• Businesses are directly penalised for not implementing this pillar.

2.4.2 Skills development