MAC4863
Assignment 3
(COMPLETE
ANSWERS)
2024 (504821) -
DUE 20 May
2024
CONTACT: biwottcornelius@gmail.com
, 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
a) If Eagle Logistics (EL) decides to raise additional funds by listing on the Johannesburg
Stock Exchange (JSE), several changes in their strategic planning might occur:
1. Increased Scrutiny and Accountability: As a publicly listed company, EL will
be subject to regulatory requirements and shareholder expectations. Their
strategic planning process will need to be more transparent and accountable to
shareholders and regulatory bodies.
2. Focus on Shareholder Value: With shareholders expecting returns on their
investment, EL's strategic planning may shift towards maximizing shareholder
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