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2.1 Identify the element of Porter's Five Forces model that applies to each of the following statements: 2.1.1 Royal Clothing attracts more customers than Pro Clothing because they offer lower prices - English General - NSC Business Studies - Question 2 - 2017 - Paper 1
Question 2
2.1 Identify the element of Porter's Five Forces model that applies to each of the following statements: 2.1.1 Royal Clothing attracts more customers than Pro Cloth... show full transcript
Worked Solution & Example Answer:2.1 Identify the element of Porter's Five Forces model that applies to each of the following statements: 2.1.1 Royal Clothing attracts more customers than Pro Clothing because they offer lower prices - English General - NSC Business Studies - Question 2 - 2017 - Paper 1
Step 1
2.1.1 Royal Clothing attracts more customers than Pro Clothing because they offer lower prices.
Answer
This statement represents the 'Threat of Substitute Products' in Porter's Five Forces model, as the lower pricing strategy of Royal Clothing positions it competitively against Pro Clothing. It highlights how price can influence customer choice and brand preference.
Step 2
2.1.2 Local Plastics is the only place where retailers can buy plastic shopping bags.
Answer
This scenario illustrates 'Bargaining Power of Suppliers' in Porter's Five Forces model, indicating that Local Plastics holds a unique position, limiting alternatives for retailers and allowing them greater control over pricing and supply.
Step 3
2.1.3 Handsome Stores want to start an exclusive fashion boutique that requires huge capital investment to cover the high establishment costs and expensive stock.
Answer
This correlates to 'Barriers to Entry' within Porter's Five Forces, representing how significant capital investment creates a barrier for new entrants into the fashion industry, favoring established brands.
Step 4
2.1.4 Medi-Care has a few regular customers who always place large orders.
Answer
This points to 'Bargaining Power of Buyers,' as having regular clients who place large orders grants Medi-Care a stable income, showing the potential influence customers can have on a business's operations and pricing.
Step 5
2.1.5 Customers prefer warmer coats to more expensive, formal jackets.
Answer
This reflects 'Threat of Substitute Products' again, shifting consumer preference from formal wear to functional items, emphasizing the need for businesses to understand consumer behavior and adjust their offerings accordingly.
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2.3 Describe the strategic management process.
Answer
The strategic management process involves several key steps:
- Define Vision and Mission: Establishing the organization's purpose and the direction for achieving its objectives.
- Environmental Scanning: Analyzing internal and external environments to identify strengths, weaknesses, opportunities, and threats (SWOT analysis).
- Formulation of Strategy: Developing strategies based on the insights from the environmental scan. This may include using models like PESTEL (Political, Economic, Social, Technological, Environmental, and Legal factors).
- Implementation: Executing the chosen strategy through the allocation of resources and establishing responsibilities.
- Evaluation and Control: Monitoring performance against strategic goals to determine success and making necessary adjustments.
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2.4.2 Explain the purpose of the Skills Development Act (SDA), 1998 (Act 97 of 1998).
Answer
The Skills Development Act aims to improve the skills of the South African workforce by promoting education and training, ensuring workers are more competent and better integrated into the economy. It also facilitates the implementation of strategies responsive to the skills needs of employers and employees.
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2.5 Explain THREE defensive strategies that businesses can use to overcome their challenges.
Answer
- Retrenchment: Restructuring the organization to reduce costs and improve efficiency, potentially leading to downsizing.
- Diversification: Expanding into new markets or product lines to reduce risk and enhance stability.
- Liquidation: Closing unprofitable divisions to focus on core business operations and pay off debts.
Step 11
2.6 Discuss any THREE consumer rights as stipulated in the Consumer Protection Act (CPA), 2008 (Act 68 of 2008).
Answer
- Right to Choose: Consumers have the right to select from a variety of goods and services at competitive prices.
- Right to Access Information: Consumers are entitled to clear and truthful information regarding the products and services they purchase.
- Right to Fair Treatment: Consumers should be treated fairly and without harassment in all transactions.
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2.7.3 Explain the impact of the BBBEE Act on businesses.
Answer
The BBBEE Act has significant implications for businesses: it promotes greater diversity in the workforce, ensures compliance with transformation requirements, and can enhance a company's reputation and competitiveness. Businesses must adopt inclusive practices to align with the goals of BBBEE.
Step 15
2.7.4 Evaluate the impact of the BBBEE Act on businesses.
Answer
The impact of the BBBEE Act can be viewed positively as it drives economic inclusion and growth for previously disadvantaged groups. However, it may also impose challenges such as compliance costs and the need for strategic changes in management practices. Overall, embracing BBBEE can lead to sustainable economic development and community upliftment.