Class notes

Business Studies Grade 12

Business Strategies – Summary Notes


1. Types of Business Strategies

- Integration (forward, backward, horizontal)

- Intensive (market penetration, development, product development)

- Diversification (concentric, horizontal, conglomerate)

- Defensive (retrenchment, divestiture, liquidation)


2. Porter's Generic Strategies

- Cost Leadership: Becoming the cheapest supplier.

- Differentiation: Offering unique features.

- Focus Strategy: Targeting a niche market.


3. Defensive Strategies

- Retrenchment: Reducing staff to cut costs.

- Divestiture: Selling parts of the business.

- Liquidation: Closing the business entirely.


4. Forward/Backward Integration

- Forward: Buying a distributor to control sales.

- Backward: Buying suppliers to control raw materials.


5. How to Evaluate Strategies (Criteria)

- Suitability

- Feasibility

- Profitability

- Risk level

- Time frame


6. Exam Tips

- Compare strategy types.

- Provide examples: e.g., “Shoprite uses cost leadership.”