Exam (elaborations)
VERIFIED MNG4801: STRATEGIC MANAGEMENT EXAM PACK: 2023 MEMO
- Institution
- University Of South Africa
Exam of 36 pages for the course MNG4801 - Strategic Management at University of South Africa (EXAM PACK)
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TRYMPH EDUCATION (Formerly RORA TUTORIALS)VERIFIEDN MNG4801: STRATEGIC
MANAGEMENTEXAM PACK: 2023
MEMO
Compiled By Rolland Simpi Motaung
MOBILE/WHATSAPP: 0848317417
EMAIL: trympheducation@gmail.com
MNG4801 EXAM PACK: 2020 MEMO TRYMPH EDUCATION 2020©
Page 1
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MNG4801 EXAM PACK: 2020 MEMO TRYMPH EDUCATION 2020©
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, JAN/FEB 2020
QUESTION 1
1.1. Define organisational capabilities and then identify and discuss one (1) threshold
capability and one (1) distinctive capability evident in the Pick n Pay case study. (6)
Refer to TB Chapter 7 page 235
Organisational capabilities are the organisation’s capacity to combine resources into
productive activities. Capabilities represent complex combinations of assets, people, and
processes that organisations use to transform inputs into outputs
Threshold capabilities are the minimum capabilities needed by the organisation to compete
in a market. They do not provide competitive advantage since all competitors need these
capabilities.
Possible example: PicknPay’s threshold capabilities are the abilities to deliver a first-class
fresh, convenience and grocery offering, which gives customers unbeatable prices, value
and service.
Distinctive capabilities are also referred to as core competencies. These capabilities are
unique, valuable, and provide a basis for competitive advantage. They form the basis of
strategic innovation and they are difficult to imitate by competitors.
Possible example: As per case study a key to Pick n Pay’s success and improved revenue
growth is its relentless focus on price, monitoring 2,500 prices across the sector each week
to make sure that it remains competitive. Therefore this shows that price is the distinctive
capability PicknPay had that gained them some level of competitive advantage
Possible example: Pick n Pay’s Smart Shopper loyalty scheme can be argued as a distinctive
capability. The loyalty scheme reaches more than 7-million active customers each week,
offering discounts of about R6.6bn on items that are relevant to the customer. This also
allowed PicknPay to stay afloat during its turnaround strategy implementation period.
Possible example: To gain some form of competitive advantage Pick n Pay was able to get
its distribution right as a big catalyst to cutting costs that will took them a long way to
getting close to that 4.5% margin. This distinctive capability allowed them to achieve their
strategic goals as part of its turnaround strategy and show a level of superior innovation in
the retail industry
MNG4801 EXAM PACK: 2020 MEMO TRYMPH EDUCATION 2020©
Page 3
, 1.2. Briefly discuss the macro-environmental Economic factor or force influencing Pick n
Pay. Support your discussion by giving two (2) examples of this economic factor in the
case study. (4)
Refer to TB Chapter 5 page 163-174/SG page 101
Economic factor: Closely related to the general economic performance is the inflation rate.
Other variables in the economic environment include government’s monetary and fiscal
policy and interest rates.
Possible example: According to the case study Pick n Pay management said its results as
part of the turnaround strategy were “underpinned by strong operational and financial
discipline, with tight expense control in an inflationary economy.” This indicates that the
retailer was able to exploit some opportunities despite a tough economy in the country.
Possible example: The case study also indicated that food prices in South Africa are
expensive relative to people’s take-home income too. Hence PicknPay’s strategic goals were
to reduce costs in order to offer affordable prices to their customers who are under strained
due to a tough economy. Therefore PicknPay was able to carve out some opportunities from
its macro-environment
1.3. Had Richard Brasher not been able to successfully implement a turnaround strategy at
Pick n Pay, what other defensive strategies (and forms) could he have considered for Pick
n Pay? (5)
Refer to TB Chapter 10 page 352
Divestiture strategy focuses on healthier divisions or raising cash rapidly. Corporate
strategic actions that can be employed in divestiture strategies are internal divestiture,
selling part of the business, harvesting or focusing on a niche.
Selling part of the business entails selling off a business unit that is not performing well or
investments required to maintain that business unit are not viable in terms of the potential
profits.
Harvesting also termed asset reduction entails disposing of a subsidiary once it has
maximized returns from it. When the corporate parent wants to withdraw from a declining
industry, the harvesting option is most appropriate. Divestment may be voluntary and may
take the form of harvesting a business that lacks synergy or is non-core.
Focus on niche targets segments or “pockets of demand” that remain promising or better
suited to its talents. A multi-business organization may also redirect its energies into one or
more niches.
MNG4801 EXAM PACK: 2020 MEMO TRYMPH EDUCATION 2020©
Page 4
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