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Questions and Answers

Which strategy aims to protect core operations by reorganizing nonviable segments?

Defensive (correct)

Diversification

Integration

Intensive

The Employment Equity Act focuses on enhancing competition in the market.

False

What is the purpose of diversification in business strategies?

To reduce risk by expanding into related or unrelated areas.

Compliance with legislation fosters ______, legal security, and ethical standards.

sustainability Signup and view all the answers

Match the business strategy with its primary characteristic:

Integration = Controlling supply chains Intensive = Encouraging growth through new markets Diversification = Expanding into related areas Defensive = Protecting core operations Signup and view all the answers

What does the 'E' in PESTLE stand for?

Environmental Signup and view all the answers

The Labour Relations Act encourages unfair employment practices.

False Signup and view all the answers

What is the primary focus of the secondary sector?

Transforming raw materials into finished products Signup and view all the answers

The _____ Development Act requires businesses to pay a skills levy.

Skills Signup and view all the answers

Match the following business strategies with their descriptions:

Market penetration = Growing market share in existing markets Backward vertical integration = Gaining control of raw materials Product development = Introducing new products into current markets Diversification = Expanding into completely unrelated ventures Signup and view all the answers

Which of the following is NOT a factor in PESTLE analysis?

Cultural Signup and view all the answers

The Basic Conditions of Employment Act sets minimum employment standards.

True Signup and view all the answers

Name one type of intensive strategy.

Market penetration, market development, or product development Signup and view all the answers

The _____ Act protects consumers through fair business practices.

Consumer Protection Signup and view all the answers

Which strategy involves scaling down to stabilize operations?

Retrenchment Signup and view all the answers

The Tertiary sector includes activities like mining and agriculture.

False Signup and view all the answers

What is the main aim of the Broad-Based Black Economic Empowerment Act?

To redress economic imbalances. Signup and view all the answers

Porter’s Five Forces helps analyze industry _____ and competitiveness.

rivalry Signup and view all the answers

Match the legislation with its purpose:

Skills Development Act = Invest in workforce training National Credit Act = Regulate credit provision Employment Equity Act = Eliminate unfair discrimination Consumer Protection Act = Ensure fair business practices Signup and view all the answers

Study Notes

Macro Environment and Strategies

Macro environment factors affect businesses beyond their control.
PESTLE analysis considers Political, Economic, Social, Technological, Legal, and Environmental factors.
Recent legislation impacts businesses significantly (Skills Development Act, Labour Relations Act, Employment Equity Act, Basic Conditions of Employment Act, Broad-Based Black Economic Empowerment Act, National Credit Act, Consumer Protection Act).

Strategic Management Process

Formulation: Setting objectives, analyzing SWOT, and aligning strengths with opportunities.
Implementation: Resource allocation, structural alignment, and communication.
Evaluation: Measuring performance, identifying gaps, and refining strategies.

Industrial Analysis Tools

SWOT Analysis: Identifying internal strengths & weaknesses and external opportunities & threats.
Porter's Five Forces: Analyzing industry competitiveness (rivalry, new entrants, substitutes, supplier & buyer power).
PESTLE Analysis: Examining external environmental factors for risk mitigation and opportunities.

Business Strategies

Integration Strategies: Forward, backward, and horizontal integration.
Intensive Strategies: Market penetration, market development, and product development.
Diversification Strategies: Concentric, horizontal, and conglomerate diversification.
Defensive Strategies: Retrenchment, divestiture, and liquidation.

Strategy Evaluation & Recommendations

Continuous monitoring of strategic effectiveness is important.
Performance measurement includes quantitative (financial) and qualitative (feedback) data.
Adapting strategies to market changes, technology, and legislation is critical.
Integrating sustainability and social responsibility into strategies is essential.

Business Sectors

Primary Sector: Extracting or harvesting resources (mining, agriculture).
Secondary Sector: Transforming raw materials into finished products (manufacturing, processing).
Tertiary Sector: Providing services (retail, healthcare, transport, hospitality).

Interaction, Challenges, and Application

Each sector has unique challenges concerning resource availability, market access, technology, and compliance.
Sectors often collaborate in supply chains and distribution networks.
Businesses apply integration, intensive, diversification, and defensive strategies across these sectors.
Compliance with employment law, environmental regulations, and consumer protection is crucial.