CBS8 ASSIGNMENT 1 MANCOSA JAN 2025 (Corporate & Business Strategy) Question 1 (25 Marks) The article suggests that the FMCG (manufacturing and retail) has had minimal stagnated growth. Examine the competitive pressures that FMCG companies face becaus

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MANCOSA: BBA (HONS) Corporate & Business Strategy Assessment

A class-based discussion with model answers to Assignment 1 Corporate & Business
Strategy (CBS8)

Model Solutions provided in this document are not intended for cheating, rather to
provide a starting point.

All solutions were presented based on class discussion.

Further breakdown are given for each question to give students a comprehensive
starting point and keep on referencing to the relevant areas.




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Table of Contents

Introduction ........................................................................................................................... 4

Question 1: Competitive Pressures in the FMCG Sector ....................................................... 4

Question 2: Woolworths' Competitive Strategy .................................................................... 15

Question 3: Dual Market Strategy ....................................................................................... 34

Question 4: Sustainability and Strategic Execution ............................................................. 41

Conclusion .......................................................................................................................... 50

References ......................................................................................................................... 51




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Introduction

The fast-moving consumer goods (FMCG) sector is experiencing significant shifts due to
evolving market conditions, consumer behavior, and competitive pressures. This assessment
examines the key challenges faced by FMCG companies, particularly Woolworths, and
explores their strategic positioning using Porter's Generic Competitive Strategies. Additionally,
the assessment evaluates Woolworths' differentiation strategy, dual-market penetration
approach, and sustainability initiatives, offering insights into their strategic success and future
recommendations.

Question 1: Competitive Pressures in the FMCG Sector

Question 1 in brief:

Area Examined: External market dynamics impacting FMCG growth.
Discussion
The FMCG sector in South Africa faces stagnated growth due to economic
polarization, regulatory constraints, and evolving consumer preferences. Woolworths
operates in a market where 60% of consumers belong to lower Living Standard Measure
(LSM) groups, while the remaining 40% are affluent (Silke, case study). This bifurcation
creates asymmetric demand, forcing companies to adopt hybrid strategies.

Competitive Pressors

The Fast-Moving Consumer Goods (FMCG) sector faces significant competitive pressures
due to evolving market dynamics, contributing to sluggish growth. These pressures can be
analyzed using Porter’s Five Forces framework and additional external factors:

1. Intense Rivalry Among Existing Competitors:
o The FMCG industry is saturated with numerous players, leading to fierce
competition. Companies engage in price wars, aggressive marketing, and
frequent product innovations to retain market share.
o Brand loyalty is diminishing as consumers increasingly prioritize value-for-
money and convenience, forcing firms to invest heavily in differentiation
strategies.

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