CAS3701 Assignment 12
2024 - DUE 4 October 2024
QUESTIONS WITH ANSWERS
,CAS3701 Assignment 12 2024 - DUE 4 October 2024
QUESTION 1
1. INTRODUCTION Rhino Cellular Ltd (“RhinoCell”) is a South African
based manufacturer and retailer of low-cost smart phones. RhinoCell was
founded in 2011 in response to the uptake of smart phones in the South
African market. The company quickly saw a market opportunity for a low-
cost smart phone that provides a basic version of features when compared
to other high-end smart phones manufactured in South Africa and other
African markets. RhinoCell has a 31 August financial year-end. The board
of RhinoCell expects to authorise the annual financial statements of
RhinoCell for issue on 14 December 2023. The key to RhinoCell’s
competitive advantage is its locally based supply chain. RhinoCell
manufactures its products at the Maluti-A-Phofung Special Economic Zone
(“SEZ”) in Harrismith, Free State Province. The Maluti-A-Phofung SEZ is a
key logistic link by road and rail to South Africa’s economic and industrial
heartland, with key links to Gauteng, the Port of Durban, and the
Bloemfontein-Cape Town route. RhinoCell sources its main materials from
South Africa and other African countries and employs workers from the
Harrismith community. This strategy allows RhinoCell to procure materials
at competitive prices and pay lower wages to its employees, as the cost of
living in Harrismith is lower when compared to urban centres such as
Johannesburg, Durban, and Cape Town.
2. MARKETING AND SALES STRATEGY The smart phone industry is
dominated by a few international companies that manufacture their
, products mainly in South-East Asia and the Americas. The strong
expansion program by these companies, coupled with the rollout of 5G
internet, has allowed global consumers to make increased use of the
internet in their daily lives. RhinoCell has identified Sub-Saharan Africa as
an underdeveloped market for smart phones and believes that low priced
smart phones are the industry future, considering the affordability
constraints that plague consumers in the region. According to the Global
Systems for Mobile Communications Association (GSMA), 49% of
consumers in the Sub-Saharan African region have access to 4G mobile
technology, whilst only 17% of consumers have access to 3G mobile
technology. The lack of penetration in the Sub- Saharan African region
provides RhinoCell with a strong opportunity to capture a sizeable portion
of the market. RhinoCell’s Africa expansion strategy includes a newly
developed smart phone, named “EnduroPro94”, which has a 48-hour long
battery life and will be capable of utilising 5G mobile technology. The longer
battery life is in response to the electricity challenges that affect most of
Sub-Saharan Africa. EnduroPro94 will be targeted at the lower end of the
market. RhinoCell initially plans to sell the smart phone for R1 300
(excluding VAT) in Sub-Saharan Africa.
3. MANUFACTURING AND SUPPLY CHAIN The product's battery is the
key to manufacturing a smart phone with a battery life of 48 hours. In its
earlier products, RhinoCell used nickel-metal hydride batteries sourced
from China. These batteries made the smart phones bulkier as they had
low energy density and only allowed eight hours of battery life. The battery
for the EnduroPro94 will be manufactured at RhinoCell’s Harrismith facility.
It will use lithium-ion batteries that are lighter in weight and higher in energy
2024 - DUE 4 October 2024
QUESTIONS WITH ANSWERS
,CAS3701 Assignment 12 2024 - DUE 4 October 2024
QUESTION 1
1. INTRODUCTION Rhino Cellular Ltd (“RhinoCell”) is a South African
based manufacturer and retailer of low-cost smart phones. RhinoCell was
founded in 2011 in response to the uptake of smart phones in the South
African market. The company quickly saw a market opportunity for a low-
cost smart phone that provides a basic version of features when compared
to other high-end smart phones manufactured in South Africa and other
African markets. RhinoCell has a 31 August financial year-end. The board
of RhinoCell expects to authorise the annual financial statements of
RhinoCell for issue on 14 December 2023. The key to RhinoCell’s
competitive advantage is its locally based supply chain. RhinoCell
manufactures its products at the Maluti-A-Phofung Special Economic Zone
(“SEZ”) in Harrismith, Free State Province. The Maluti-A-Phofung SEZ is a
key logistic link by road and rail to South Africa’s economic and industrial
heartland, with key links to Gauteng, the Port of Durban, and the
Bloemfontein-Cape Town route. RhinoCell sources its main materials from
South Africa and other African countries and employs workers from the
Harrismith community. This strategy allows RhinoCell to procure materials
at competitive prices and pay lower wages to its employees, as the cost of
living in Harrismith is lower when compared to urban centres such as
Johannesburg, Durban, and Cape Town.
2. MARKETING AND SALES STRATEGY The smart phone industry is
dominated by a few international companies that manufacture their
, products mainly in South-East Asia and the Americas. The strong
expansion program by these companies, coupled with the rollout of 5G
internet, has allowed global consumers to make increased use of the
internet in their daily lives. RhinoCell has identified Sub-Saharan Africa as
an underdeveloped market for smart phones and believes that low priced
smart phones are the industry future, considering the affordability
constraints that plague consumers in the region. According to the Global
Systems for Mobile Communications Association (GSMA), 49% of
consumers in the Sub-Saharan African region have access to 4G mobile
technology, whilst only 17% of consumers have access to 3G mobile
technology. The lack of penetration in the Sub- Saharan African region
provides RhinoCell with a strong opportunity to capture a sizeable portion
of the market. RhinoCell’s Africa expansion strategy includes a newly
developed smart phone, named “EnduroPro94”, which has a 48-hour long
battery life and will be capable of utilising 5G mobile technology. The longer
battery life is in response to the electricity challenges that affect most of
Sub-Saharan Africa. EnduroPro94 will be targeted at the lower end of the
market. RhinoCell initially plans to sell the smart phone for R1 300
(excluding VAT) in Sub-Saharan Africa.
3. MANUFACTURING AND SUPPLY CHAIN The product's battery is the
key to manufacturing a smart phone with a battery life of 48 hours. In its
earlier products, RhinoCell used nickel-metal hydride batteries sourced
from China. These batteries made the smart phones bulkier as they had
low energy density and only allowed eight hours of battery life. The battery
for the EnduroPro94 will be manufactured at RhinoCell’s Harrismith facility.
It will use lithium-ion batteries that are lighter in weight and higher in energy
