CAS3701
Assignment 12
(COMPLETE
ANSWERS) 2024 -
DUE 4 October 2024
,CAS3701 Assignment 12 (COMPLETE ANSWERS) 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.
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, 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
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