Exam (elaborations)
MAC3702 Assignment 02 Semester 01 year 2022
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Exam (elaborations) MAC3702 (mac3702)
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MAC3702 ASSIGNMENT 2 – SEMESTER 1 OF2022
(a) SWOT Analysis of CUP A SOUPLTD
Strength
The company is listed on the Johannesburg Stock Exchange which makes it
easier to raise finance as shares can be issued to the public resulting in access
to a larger pool of capital;
CAS adheres to the guidelines and legal requirements set out in the various Acts
regarding food safety which reduces the possibility of compliance risk;
CAS noodle products tested negative for listeriosis which can lead to increased
demand as the customers will have confidence in the entity`s products;
cas pays careful attention to its recruitment process and ensures that its staff has
the required skills and expertise which makes. This reduces the risk of problems
in the production processes, increases efficiency and effectiveness of the
operations of CAS;
CAS strives to maintain positive staff morale by ensuring that employees are well
compensated and satisfied with their working conditions which boosts the morale
of the employees and can improve the performance of the entity;
Replacement of ordinary light bulbs with LED and energy efficient globes which
can reduce energy costs and improve power saving;
Installation of a medium pressure wash – down system which ensures efficiency
in water consumption at the production plants. The envisaged reduction of water
usage by 30% can save costs of water and can promote sustainability of the
environment which can portray the company as a responsible investor with a
possibility of improving customer numbers and loyalty resulting in improved
profitability;
Acquisition of new e – learning platform to facilitate further training and
development of staff. This will in turn improve the efficiency and effectiveness of
operations and can possibly improve the morale of employees as they can feel
capacitated.
Weaknesses
The company has a large number of policies and procedures in place which
result in a very lengthy and complex decision – making process which might
result in the company failing to respond early to change considering the dynamic
business environment currently prevailing;
, CAS is highly reliant on its personnel which means an failure by employees to
comply to requirements might negatively affect the entity, for example employees
might bring infected food in their lunch tins which can affect CAS`s products;
Increased greenhouse gas emissions with a potential to raise the eyebrows of
green revolutionists of which in the worst case scenario might result in product
boycotts; and
High electricity costs due to higher consumption of electricity. Too much reliance
on the traditional Eskom might result in reduced production due to increased
power cuts.
Opportunities
The possibility of acquiring ROYCOO (Pty) Ltd provides an opportunity for CAS
to combat the problems caused by bacteria as ROYCOO (Pty) sells various
products to food manufacturers which are known for preventing, eliminating and
treating various bacteria usually found in food products;
The possible acquisition of ROYCOO (Pty) Ltd provides an opportunity for
diversification and growth considering the growth potential of ROYCOO Pty ;
The possibility of capturing the market of the competitors which suffered from the
effects of poisonings considering that the company was not affected; and
The growing population and increased migration has the effect of increasing the
demand for CAS`s products; and
Economic problems in neighbouring Zimbabwe has the potential of creating
market space for CAS.
Threats
The industry is highly regulated through legislation by a number of government
departments especially the Department of Health which requires that all food
products should be safe for human consumption in terms of the Foodstuffs,
Cosmetics and Disinfectant Act, the National Health Act of 2003 and the
International Regulations Act of 1974. In as much as CAS adheres strictly to
guidelines and legal requirements set out in the various Acts regarding food
safety, there is a possibility of failing to comply unconsciously with various
legislation which can result in hefty fines and denting of the image of the entity;
The outbreaks in South Africa can reduce demand and some countries may stop
importing the noodles from South Africa and some South African clients may
contemplate stopping consumption of noodles and turn to substitutes;
Increased competition as there are an increased number of entrants and stronger
competitors competing for a depressed market with customers having decreased
disposable incomes;
Potential changes and strengthening of legislation in the wake of recent
outbreaks might require additional and costly controls to combat infections;
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