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.”
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.”
