MAC4863 Assignment 2 (QUALITY ANSWERS) 2024

This document contains workings, explanations and solutions to the MAC4863 Assignment 2 (QUALITY ANSWERS) 2024. For assistance call or us on 0.6.8..8.1.2..0.9.3.4.... Question 1 (25 marks) (This question comes from the Jan/Feb 2024 supplementary exam) Eagle Logistics (EL) was started many years ago when its founder Amir Singh, invested his retrenchment package into establishing the business. Amir has retired and handed over the business to his two sons, Hassan and Rohan. EL is a specialist in international logistics solutions with its head office in South Africa with international branches in Mauritius, Australia, Germany, Netherlands, UK, Hong Kong, and China. EL owns no physical assets. Over 80% of their earnings come from outside of South Africa and across multiple major trade routes. As the company gets larger its ability to aggregate client volumes and logistics needs increases, allowing them to leverage their network for cost-effective solutions compared to asset-heavy competitors. EL has achieved success by providing a very differentiated service to its customers. EL’s strategic objective has been to exploit market opportunities to achieve a high level of return on investment. Father and Sons have been very involved in the business where they carried out all the strategic planning and operational management activities. One could call their approach to strategic planning as Freewheeling opportunism. Now that their Father has retired, Hassen and Rohan know that to continue to grow the business they will need to raise more capital, and they will have to appoint other senior managers to maintain the operational side of the business. This will free up the brothers to focus more on the strategic development of EL. The brothers are considering raising new capital through listing on the Johannesburg Stock Exchange (JSE) REQUIRED: a) Explain how the strategic planning of EL might alter if the organisation raises additional funds by listing on the JSE. (Do not provide a theory dump on the strategic process, no marks will be awarded). (13 marks) b) Discuss the most appropriate strategic planning process that EL should adopt in order to satisfy its organisational objectives following the public issue of shares on the JSE (12 marks) [25 marks] MAC4863/A02 5 Question 2 (25 marks) Peri Peri is a fast-food chain that specialises in flame-grilled chicken. It operates over 1200 outlets in over 20 countries. The group owns all of the outlets; it has previously explored, but rejected, the concept of franchising operations and joint ventures. The strategic advantages of Peri Peri include its well-known worldwide brand, skilled management, knowledge of site development, and cutting-edge technological systems. In the 20 nations that Peri Peri has already grown in, its fundamental strategy has proven effective. Although menus are tailored to local tastes, the products are largely comparable. Experts concur that its profitability stems from its ability to be inventive and efficient. The group’s vision is to be the world’s favourite grilled chicken restaurant through service, cleanliness and value. The group’s three main strategies are as follows: • Building on core competencies to attain profitable growth • To make every customer in every restaurant happy • To be a reputable employer in every town where it operates (Although some critics claim employees are untrained and poorly compensated). The goal is to keep expanding into new markets and to take advantage of worldwide opportunities. Peri Peri does understand that the external environment is unpredictable, and therefore never expands into new locations or countries without first conducting thorough research. You are part of the strategic steering committee which is responsible for researching the key factors concerning Peri Peri’s entry into new markets and countries. The PESTEL analysis is one of the models used when undertaking this research. Global Map of where Peri Peri restaurants are currently situated. 6 REQUIRED: a) Review the above map then recommend and discuss in which country/countries should Peri-Peri expand to next. (5 marks) b) Produce a PESTEL analysis on the country you selected in a). (10 marks) c) Discuss the pros and cons of using the PESTEL framework at Peri Peri. (10 marks) [25 marks] MAC4863/A02 7 Question 3 (25 marks) In many small towns across South Africa you will always see a gift shop on the main street. However, these stores have been battling against the larger supermarkets and pharmacies that also sell gifts. A ray of hope emerged three years ago when a company by the name of Pepper Tree Collective (PTC) came to the rescue, whereby these small gift shops could join and become members of PTC . The gift stores could benefit from bulk discounts on certain items where PTC would purchase items in bulk directly from the manufacturers and store them in regional hubs. Deliveries to these hubs were made by supplier courier companies chosen for their reliability and competitive rates. Despite PTC not having its own brand, each of the regional hubs had the ability to repackage supplies into smaller amounts that were appropriate for each store. Local couriers were then dispatched to the member stores with their orders. A sizeable amount of the savings was transferred to the member stores of PTC after the group negotiated sizable discounts with manufacturers. In comparison to buying directly from wholesalers, stores saved 10% on average, according to a recent survey. Beyond cost savings, PTC offered additional benefits:  Personalised marketing kits: These kits included promotional flyers which are perfect for local distribution.  Distinctive shop signage: The signage incorporated a common design element that gave a sense of community and brand recognition, while still allowing each store to retain its unique charm.  Customisable display units: Stores could choose from a variety of in-store display units for certain goods featuring the PTC logo. Not every product is available from PTC. Store owners committed to buying core items from PTC, but they found unique products and perishables, such as fresh flowers on their own. Deliveries are made every two weeks to member stores using a standing order for products agreed between the member and their PTC sales representative at a meeting they hold every three months. Variations to this order can be made by telephone, but only if the order is increased. Downward variations are not allowed. Members cannot reduce their standing order requirements until the next meeting with their representative. 8 PTC initially thrived, however, according to recent reports, its members are becoming increasingly dissatisfied. These are their concerns:  The need to continually review prices to compete with supermarkets and pharmacies  Low brand recognition of PTC and its members  A desire for more flexibility in ordering specific products beyond the core products In response to this feedback, PTC is re-evaluating its business model with a particular focus on the supply chain to address these issues and ensure the continued success of its member stores around the country. REQUIRED: a) Identify and discuss the primary activities of the value chain for PTC. (5 marks) b) Explain how PTC should reorganise its upstream supply chain to solve the issues mentioned in the above scenario. (10 marks) c) Explain how PTC should reorganise its downstream supply chain to solve the issues mentioned in the above scenario