-+
ASSIGNMENT 1 SEMESTER 1
~ ttt aOes r HJNrs Fltltrt.Yi- ANS~e-~o-
t t t
DUE: 15 APRIL 2026
DISCLA MER: 1 I I
THI' D CUMENf1S DR REFERENCE~NO-SUl ~CcPURP SE--------+-----+----+----+----+
ONLY. I DD NDTt TAKE RESPDNSIBIL!ITY~FDR ANr PLAGIARI M. ~MISUS • DR
ACADEMIC MISCONDUCT RESULTING FROM THEIR USE. IT I YOUR j ---
RESPDNSIBILIT! T! ENSU~E ORIGINALITY ANq CDMPLIAN E WITH
RELEVA T GUIDELINES DR STANDiRDS. ~ ~ ~---------------~
, PLEASE USE THIS DOCUMENT AS A GUIDE ONLY
PART A
1. Identify and briefly discuss eight economic, social, environmental, and governance factors
that can affect the operations of KT, which are evident from the information given in the
scenario.
1. Economic Factors
Supply Chain Concentration (Import Reliance): KT currently relies on a single packaging
supplier based in China. This exposes the company to risks such as exchange rate fluctuations,
shipping delays, and global supply chain disruptions. The move to a local facility is an
economic strategy to mitigate these "overreliance" risks.
Credit Risk and Liquidity: With 40% of sales made on credit to local wholesalers and spaza
shops, KT faces significant credit risk. In a province with low household income, any
economic downturn could lead to delayed payments or bad debts, tightening the company's
cash flow.
2. Social Factors
Regional Socio-Economic Context: Limpopo is characterized by high unemployment and low
household income. While this may depress local demand, the investment in a new facility
could provide much-needed job creation, potentially improving KT's social standing and the
local economy.
Health and Wellness Trends: KT produces Kombucha and organic juices. These products align
with the growing social shift toward health-conscious consumption. Success depends on the
local market's ability to afford "organic" premium products despite low average incomes.
3. Environmental Factors
Resource Scarcity (Water Crisis): The "chronic water supply challenges" in the local
municipality are a critical environmental risk. Since beverage manufacturing is water-intensive,
these shortages directly threaten production continuity and operational efficiency.
Plastic Pollution and Waste Management: The business relies entirely on plastic bottles. With
increasing global and local pressure to reduce single-use plastics, KT faces the environmental
challenge of managing its plastic footprint, which may lead to future regulatory costs or the
need for alternative materials.
Regulatory Compliance (Environmental Assessments): The requirement to conduct an
environmental assessment study (R150,000) highlights the impact of environmental laws on
capital projects. KT must ensure the new facility does not negatively impact the Polokwane
ecosystem.
ASSIGNMENT 1 SEMESTER 1
~ ttt aOes r HJNrs Fltltrt.Yi- ANS~e-~o-
t t t
DUE: 15 APRIL 2026
DISCLA MER: 1 I I
THI' D CUMENf1S DR REFERENCE~NO-SUl ~CcPURP SE--------+-----+----+----+----+
ONLY. I DD NDTt TAKE RESPDNSIBIL!ITY~FDR ANr PLAGIARI M. ~MISUS • DR
ACADEMIC MISCONDUCT RESULTING FROM THEIR USE. IT I YOUR j ---
RESPDNSIBILIT! T! ENSU~E ORIGINALITY ANq CDMPLIAN E WITH
RELEVA T GUIDELINES DR STANDiRDS. ~ ~ ~---------------~
, PLEASE USE THIS DOCUMENT AS A GUIDE ONLY
PART A
1. Identify and briefly discuss eight economic, social, environmental, and governance factors
that can affect the operations of KT, which are evident from the information given in the
scenario.
1. Economic Factors
Supply Chain Concentration (Import Reliance): KT currently relies on a single packaging
supplier based in China. This exposes the company to risks such as exchange rate fluctuations,
shipping delays, and global supply chain disruptions. The move to a local facility is an
economic strategy to mitigate these "overreliance" risks.
Credit Risk and Liquidity: With 40% of sales made on credit to local wholesalers and spaza
shops, KT faces significant credit risk. In a province with low household income, any
economic downturn could lead to delayed payments or bad debts, tightening the company's
cash flow.
2. Social Factors
Regional Socio-Economic Context: Limpopo is characterized by high unemployment and low
household income. While this may depress local demand, the investment in a new facility
could provide much-needed job creation, potentially improving KT's social standing and the
local economy.
Health and Wellness Trends: KT produces Kombucha and organic juices. These products align
with the growing social shift toward health-conscious consumption. Success depends on the
local market's ability to afford "organic" premium products despite low average incomes.
3. Environmental Factors
Resource Scarcity (Water Crisis): The "chronic water supply challenges" in the local
municipality are a critical environmental risk. Since beverage manufacturing is water-intensive,
these shortages directly threaten production continuity and operational efficiency.
Plastic Pollution and Waste Management: The business relies entirely on plastic bottles. With
increasing global and local pressure to reduce single-use plastics, KT faces the environmental
challenge of managing its plastic footprint, which may lead to future regulatory costs or the
need for alternative materials.
Regulatory Compliance (Environmental Assessments): The requirement to conduct an
environmental assessment study (R150,000) highlights the impact of environmental laws on
capital projects. KT must ensure the new facility does not negatively impact the Polokwane
ecosystem.
