Exam (elaborations)
CAS3701 Assignment 12 2024 - DUE 4 October 2024
- Institution
- University Of South Africa
CAS3701 Assignment 12 2024 - DUE 4 October 2024 QUESTIONS AND ANSWERS
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[Date]CAS3701 Assignment
12 2024 - DUE 4
October 2024
QUESTIONS WITH ANSWERS
,CAS3701 Assignment 12 2024 - DUE 4 October 2024
QUESTION 1
1. INTRODUCTION Rhino Cellular Ltd (“RhinoCell”) is a South African based
manufacturer and retailer of low-cost smart phones. RhinoCell was founded in
2011 in response to the uptake of smart phones in the South African market. The
company quickly saw a market opportunity for a low-cost smart phone that
provides a basic version of features when compared to other high-end smart
phones manufactured in South Africa and other African markets. RhinoCell has a
31 August financial year-end. The board of RhinoCell expects to authorise the
annual financial statements of RhinoCell for issue on 14 December 2023. The key
to RhinoCell’s competitive advantage is its locally based supply chain. RhinoCell
manufactures its products at the Maluti-A-Phofung Special Economic Zone
(“SEZ”) in Harrismith, Free State Province. The Maluti-A-Phofung SEZ is a key
logistic link by road and rail to South Africa’s economic and industrial heartland,
with key links to Gauteng, the Port of Durban, and the Bloemfontein-Cape Town
route. RhinoCell sources its main materials from South Africa and other African
countries and employs workers from the Harrismith community. This strategy
allows RhinoCell to procure materials at competitive prices and pay lower wages
to its employees, as the cost of living in Harrismith is lower when compared to
urban centres such as Johannesburg, Durban, and Cape Town.
2. MARKETING AND SALES STRATEGY The smart phone industry is
dominated by a few international companies that manufacture their products
mainly in South-East Asia and the Americas. The strong expansion program by
these companies, coupled with the rollout of 5G internet, has allowed global
, consumers to make increased use of the internet in their daily lives. RhinoCell has
identified Sub-Saharan Africa as an underdeveloped market for smart phones and
believes that low priced smart phones are the industry future, considering the
affordability constraints that plague consumers in the region. According to the
Global Systems for Mobile Communications Association (GSMA), 49% of
consumers in the Sub-Saharan African region have access to 4G mobile
technology, whilst only 17% of consumers have access to 3G mobile technology.
The lack of penetration in the Sub- Saharan African region provides RhinoCell
with a strong opportunity to capture a sizeable portion of the market. RhinoCell’s
Africa expansion strategy includes a newly developed smart phone, named
“EnduroPro94”, which has a 48-hour long battery life and will be capable of
utilising 5G mobile technology. The longer battery life is in response to the
electricity challenges that affect most of Sub-Saharan Africa. EnduroPro94 will be
targeted at the lower end of the market. RhinoCell initially plans to sell the smart
phone for R1 300 (excluding VAT) in Sub-Saharan Africa.
3. MANUFACTURING AND SUPPLY CHAIN The product's battery is the key to
manufacturing a smart phone with a battery life of 48 hours. In its earlier products,
RhinoCell used nickel-metal hydride batteries sourced from China. These batteries
made the smart phones bulkier as they had low energy density and only allowed
eight hours of battery life. The battery for the EnduroPro94 will be manufactured at
RhinoCell’s Harrismith facility. It will use lithium-ion batteries that are lighter in
weight and higher in energy density, meaning they can store more energy in a
smaller space. The main material used in lithium-ion batteries is cobalt, sourced
from the Democratic Republic of Congo (DRC), Russia and Australia, with the
DRC making up 70% of global cobalt production. On 16 August 2023, the
management of RhinoCell had received and signed a proposed agreement with a
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