Exam (elaborations)
CAS3701 Assignment 12 2024 - DUE 4 October 2024
- Institution
- University Of South Africa (Unisa)
QUESTIONS WITH ANSWERS CAS3701 Assignment 12 2024 - DUE 4 October 2024
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CAS3701 Assignment 122024 - DUE 4 October
2024
QUESTIONS WITH ANSWERS
[School]
[Course title]
,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 businessperson, based in the Lubumbashi region in the
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