Exam (elaborations)
MAC3703 Assignment 2 semester 2 of 2024
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Question 1(a)
Orchestration: Tight
The financial services sector, including mortgage brokerage, is heavily
regulated. This ensures consumer protection and market stability but also
imposes strict guidelines on operations.
Tebogo's business is "tied" to a large bank, significantly limiting the range
of products he can recommend. This constraint is a clear indicator of tight
orchestration, as it restricts the broker's autonomy in product selection.
The ability to approach lenders is limited, further demonstrating the tight
control within the market.
The requirement to ensure loan affordability adds another layer of
orchestration, as it dictates specific procedures and criteria for loan
approval.
Complexity: High
The "plethora of rules" mentioned requires extensive knowledge and
ongoing education to ensure compliance.
Financial products, especially mortgages, can be complex with various
terms, conditions, and features.
Understanding the broader financial market, interest rate trends, and
economic factors adds to the complexity.
Evaluating client needs, financial situations, and matching them with
appropriate products requires sophisticated analysis.
The garden design market demonstrates loose orchestration:
While Tebogo chose to retrain, the absence of required qualifications
indicates less regulatory control.
The ability to freely collaborate with other specialists (tree surgeon, paving
stone specialist) suggests a more open and flexible market structure.
The freedom to provide customized solutions indicates less
standardization and control in the market.
Complexity: Low to Medium
The garden design market presents a low to medium level of complexity:
While design principles and horticultural knowledge are necessary, they
are generally less complex than financial regulations.
Working with specialists adds some complexity in project management
and coordination.
Offering comprehensive services increases complexity slightly, as it
requires managing various aspects of garden design and implementation.
(b)
1. Mortgage Brokerage Market: Lion's Pride
, Building and maintaining strong relationships with the orchestrator (the
large bank) is crucial. This involves understanding their products
thoroughly, aligning with their goals, and consistently meeting their
standards.
Given the tight regulatory environment, a robust compliance framework is
essential. This includes regular staff training, implementing strong internal
controls, and staying updated with regulatory changes.
In a tightly controlled market, differentiation through superior customer
service becomes vital. This could involve offering more personalized
advice, faster processing times, or better post-sale support.
The high complexity of the market necessitates ongoing education and
training. This ensures that Tebogo and his team remain knowledgeable
about products, regulations, and market trends.
Garden Design Market: Wolf Pack
In a loosely orchestrated market, building a strong network of
collaborators (like the tree surgeon and paving specialist) is crucial. This
allows for offering comprehensive services without needing to develop all
skills in-house.
With numerous competitors, developing a strong personal and business
brand becomes essential. This could involve showcasing unique design
styles, emphasizing eco-friendly practices, or highlighting Tebogo's friendly
personality.
The lower complexity allows for more experimentation. Tebogo could
differentiate by offering unique design concepts, using innovative
materials, or implementing cutting-edge landscaping technologies.
(c) Market Skimming Pricing Strategy
Market skimming involves setting high initial prices for a new product or
service, often accompanied by heavy promotion. This strategy can be
appropriate under the following circumstances:
When a product offers significant advantages over existing alternatives,
early adopters may be willing to pay premium prices.
In markets with few or no direct competitors, a company can charge
higher prices initially.
When the target market is less sensitive to price changes, usually due to
the product's perceived value or necessity. Luxury goods or essential
medical treatments often fall into this category.
Question 2
(a)
Acknowledge the report
Thank the team member for bringing the matter to your attention. This
encourages a culture of transparency and accountability within the
organization.
Document the report
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