MNG4801
ASSIGNMENT 3 2026
UNIQUE NO.
DUE DATE: 2026
,Strategic Management - MNG4801
Question 2
Corporate-level strategy refers to the long-term strategic decisions that determine the
scope and direction of an organisation by deciding the industries, products and markets
in which it will compete. Growth strategies enable organisations to increase market
share, strengthen competitive advantage and create long-term shareholder value. The
Clicks Group demonstrates four corporate-level growth strategies through its acquisition
and integration of the Sorbet Group.
1. Horizontal integration through acquisition
Horizontal integration occurs when a company acquires or merges with another
organisation operating at the same level of the value chain within a related industry.
This strategy enables firms to increase market share, eliminate competition and benefit
from economies of scale.
The Clicks Group adopted this strategy by acquiring Sorbet for R105 million in 2023.
Sorbet added more than 190 beauty salons to Clicks' existing retail network and
strengthened its health, beauty and wellness offering. The acquisition was regarded as
a natural strategic fit because both organisations operate within the health and beauty
industry, allowing Clicks to expand its market presence while increasing customer value
through complementary products and services.
2. Related diversification
Related diversification involves expanding into businesses that are linked to the firm's
existing operations and capabilities. The objective is to create synergy by sharing
resources, competencies and customer relationships.
Clicks diversified into the beauty salon industry by incorporating Sorbet into its existing
portfolio of brands, which already included Clicks, The Body Shop and private-label
beauty products. Sorbet's products complemented Clicks' existing merchandise and
, enhanced its differentiated product offering. The acquisition also contributed to a 12.3%
increase in Sorbet's turnover following integration into the Clicks Group, demonstrating
the value created through strategic diversification.
3. Market development (geographic expansion)
Market development is a growth strategy whereby an organisation introduces existing
products or services into new geographic markets.
The Clicks Group has expanded beyond South Africa into Botswana, Eswatini, Lesotho
and Namibia. The company evaluates market trends and customer preferences before
entering foreign markets and uses its distribution hubs together with local logistics
partners to facilitate expansion. Furthermore, the case study indicates that franchisees
have shown interest in opening Sorbet branches in Botswana and Mauritius, illustrating
continued regional expansion opportunities.
4. Product development
Product development involves introducing new or improved products and services to
existing markets in order to satisfy changing customer needs and strengthen
competitive advantage.
Clicks continually develops and expands its product portfolio through exclusive brands
such as Pay Less, Smartlife, Made4Baby and Oh So Heavenly while incorporating
Sorbet's beauty products into its stores. The award-winning Sorbet BB Cream further
demonstrates successful product innovation, while the integration of Sorbet's salon
services with the Clicks ClubCard loyalty programme creates additional value for
customers and strengthens customer loyalty.
According to Anwar and Abdullah (2021), organisations that pursue related
diversification and strategic acquisitions improve long-term competitiveness by creating
synergies, strengthening market positions and enhancing customer value through
complementary capabilities. The Clicks Group illustrates these benefits by combining
ASSIGNMENT 3 2026
UNIQUE NO.
DUE DATE: 2026
,Strategic Management - MNG4801
Question 2
Corporate-level strategy refers to the long-term strategic decisions that determine the
scope and direction of an organisation by deciding the industries, products and markets
in which it will compete. Growth strategies enable organisations to increase market
share, strengthen competitive advantage and create long-term shareholder value. The
Clicks Group demonstrates four corporate-level growth strategies through its acquisition
and integration of the Sorbet Group.
1. Horizontal integration through acquisition
Horizontal integration occurs when a company acquires or merges with another
organisation operating at the same level of the value chain within a related industry.
This strategy enables firms to increase market share, eliminate competition and benefit
from economies of scale.
The Clicks Group adopted this strategy by acquiring Sorbet for R105 million in 2023.
Sorbet added more than 190 beauty salons to Clicks' existing retail network and
strengthened its health, beauty and wellness offering. The acquisition was regarded as
a natural strategic fit because both organisations operate within the health and beauty
industry, allowing Clicks to expand its market presence while increasing customer value
through complementary products and services.
2. Related diversification
Related diversification involves expanding into businesses that are linked to the firm's
existing operations and capabilities. The objective is to create synergy by sharing
resources, competencies and customer relationships.
Clicks diversified into the beauty salon industry by incorporating Sorbet into its existing
portfolio of brands, which already included Clicks, The Body Shop and private-label
beauty products. Sorbet's products complemented Clicks' existing merchandise and
, enhanced its differentiated product offering. The acquisition also contributed to a 12.3%
increase in Sorbet's turnover following integration into the Clicks Group, demonstrating
the value created through strategic diversification.
3. Market development (geographic expansion)
Market development is a growth strategy whereby an organisation introduces existing
products or services into new geographic markets.
The Clicks Group has expanded beyond South Africa into Botswana, Eswatini, Lesotho
and Namibia. The company evaluates market trends and customer preferences before
entering foreign markets and uses its distribution hubs together with local logistics
partners to facilitate expansion. Furthermore, the case study indicates that franchisees
have shown interest in opening Sorbet branches in Botswana and Mauritius, illustrating
continued regional expansion opportunities.
4. Product development
Product development involves introducing new or improved products and services to
existing markets in order to satisfy changing customer needs and strengthen
competitive advantage.
Clicks continually develops and expands its product portfolio through exclusive brands
such as Pay Less, Smartlife, Made4Baby and Oh So Heavenly while incorporating
Sorbet's beauty products into its stores. The award-winning Sorbet BB Cream further
demonstrates successful product innovation, while the integration of Sorbet's salon
services with the Clicks ClubCard loyalty programme creates additional value for
customers and strengthens customer loyalty.
According to Anwar and Abdullah (2021), organisations that pursue related
diversification and strategic acquisitions improve long-term competitiveness by creating
synergies, strengthening market positions and enhancing customer value through
complementary capabilities. The Clicks Group illustrates these benefits by combining
