TRYMPH EDUCATION (Formerly RORA TUTORIALS)

MNG4801: STRATEGIC MANAGEMENT

CASE STUDY GUIDELINES
Compiled By Rolland Simpi Motaung
MOBILE/WHATSAPP: 0848317417
EMAIL: [email protected]

MNG4801 CASE STUDY PACK 2020 Page 1

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IT’S A BREAK DOWN OF POSSIBLE EXAMPLES FROM THE CASE STUDY THAT CAN BE LINKED
TO THE THEORITICAL CONCEPTS IN THE SYLLABUS.

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MNG4801 CASE STUDY PACK 2020 Page 2

 TOPIC 1:
DEVELOPMENT OF STRATEGIC MANAGEMENT AS A MANAGEMENT APPROACH

Discuss Mintzberg’s view on the nature of strategy/ Discuss the five Ps of strategy Refer to
SG pg 10 and TB pg 16

1. Strategy as a plan- Provide theory discussion and examples from the case study

Possible examples from PicknPay: The strategic turnaround plan developed under Richard
Brasher, CEO of Pick n Pay, included a revised strategy to restore the business to a position
of long-term sustainable growth.

2. Strategy as a position- Provide theory discussion and examples from the case study

Possible examples from PicknPay: Deliver a first-class fresh, convenience and grocery
offering, which gives customers unbeatable prices, value and service.

3. Strategy as a perspective- Provide theory discussion and examples from the case
study

Possible examples from PicknPay: Improving the efficiency of the business in all areas, by
completing the centralisation of supply chain operations, increasing productivity in stores
and ensuring that support office functions are delivered to benchmark levels of
effectiveness and efficiency.

Possible examples from King Price: Gideon Galloway started King Price with the idea of
being the only insurer in South Africa that offers premiums which decrease monthly as car
values drop.

Discuss the measurements of strategic success Refer to SG pg 36

1. Strategic competitiveness- Provide theory discussion and examples from the case
study

Possible examples from PicknPay: Deliver a first-class fresh, convenience and grocery
offering, which gives customers unbeatable prices, value and service.

Possible examples from King Price: Gideon Galloway started King Price with the idea of
being the only insurer in South Africa that offers premiums which decrease monthly as car
values drop.

Possible examples for King Price: King Price entered the highly-competitive South African
insurance market with a world-first customer-centric insurance model that automatically
decreased comprehensive car premiums monthly in line with the cars’ depreciating values

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Possible examples for King Price: We’ve got the most favourable reinsurance terms in the
market, and our reinsurer has a better credit rating than South Africa’s big four banks, which
gives us the foundation we need to grow this side of the business quickly. It also gives our
clients peace of mind that paying out big claims isn’t an issue.”

2. Competitive advantage- Provide theory discussion and examples from the case
study

Possible examples from PicknPay: Another 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.

Possible examples from PicknPay: Pick n Pay’s Smart Shopper 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.

Possible examples for King Price Today, broker sales make up 25% of our business. By
emphasising value and service and treating our brokers at the same level as our direct
channel, we’ve been able to grow our broker business to a half-billion Rand business in the
past 3 years,” said Finch.

Possible examples for King Price: Lean and mean-We look after our cents so that we can
pass real Rand savings on to our clients. We're efficient, we find solutions fast, and we do
things right the first time round. We innovate, we improve, we adapt. And we don't waste
talent or time... Because it all adds up to us being the king of price.

Possible examples for King Price: King Price has industry-leading technology and an award-
winning company culture and customer experience approach that will unlock significant
value for all stakeholders.”

Possible examples for King Price: King Price was named the brand that delivers the best
customer experience in South Africa at Corinium’s inaugural Customer 360 Africa 2019
Awards.

Possible examples for King Price: In the same week, International Business Magazine
named King Price Best Place to Work For SA 2019, Most Innovative Insurance Company SA
2019, and Fastest Growing Insurance Company SA 2019.

3. Above-average returns- Provide theory discussion and examples from the case study

Possible examples from PicknPay: By 2019, investors seem to think Pick n Pay is the retail
turnaround story of the decade. Richard Brasher, the CEO, unveiled its best annual results
in a decade, as its pretax profit grew 24.4%.

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 Strategic management terminology

-Profit maximisation- Provide theory discussion and examples from the case study

Possible examples from PicknPay: Richard Brasher, the CEO, unveiled its best annual results in
a decade, as its pretax profit grew 24.4%.

Possible examples from PicknPay: The problem is, Pick n Pay’s trading margin of 2.4% is still
nowhere close to that of Shoprite which, in one of its worst trading periods in years, still
produced a profit margin of 4.4%.

Possible examples from PicknPay: Another 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.

Possible examples from PicknPay: The half-year results of 2017 represented the 7th
consecutive reporting period of substantive profit growth for Pick n Pay.

Possible examples from King Price: 94% year-on-year growth in the 2018 financial year

-Wealth maximisation- Provide theory discussion and examples from the case study

Possible examples from PicknPay: This is part of the reason why, amid something of a
meltdown in retail over the past year, Pick n Pay’s share price has slid only 13.9%,
compared with rivals like Shoprite (down 28.6%) and Woolworths (down 25%).

Discuss the Corporate Social Responsibility elements involved in an organisation

Possible examples from King Price: King Price are not only in the business of insurance but
also in the business of #MakingADifference by being “a force for good”.

Possible examples from King Price: Our business is insurance, but we're also in the business
of making a difference. We don't just do it for the profit. We're here to change the world...
For our clients, our country and our staff. We're all about paying it forward. We're here to
leave a legacy...

Tip: Take note of- The case/arguments against CSR and The case/arguments for CSR

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Discuss the Strategic Paradoxes evident in the case study provided TB pg 37

Paradox 4: Inside-out or outside-in driven strategy- Provide theory discussion and

examples from the case study

Possible examples from PicknPay: Pick n Pay management said its results were
“underpinned by strong operational and financial discipline, with tight expense control in
an inflationary economy.”

Possible examples from PicknPay: The company noted that its track record between 2014
and 2017 of greater operating efficiency and improved customer focus has provided a
strong platform for growth.

Possible examples from King Price: Believing that the industry was ripe for change, Gideon
Galloway started King Price with the idea of being the only insurer in South Africa that offers
premiums which decrease monthly as car values drop.

Paradox 5: Profitability vs Sustainability- Provide theory discussion and examples from the
case study

Possible examples from King Price: King Price are not only in the business of insurance but
also in the business of #MakingADifference by being “a force for good”.

Possible examples from King Price: Our business is insurance, but we're also in the business
of making a difference. We don't just do it for the profit. We're here to change the world...
For our clients, our country and our staff. We're all about paying it forward. We're here to
leave a legacy...

NB: You are welcomed to apply the other Paradoxes to the case studies

TOPIC 2: BUILDING BLOCKS OF STRATEGIC PLANNING

Strategic direction

-Vision Statement

NB:
Evaluate the Vision Statement using Characteristics and Shortcomings: Refer to Table 2.1
and Table 2.2 Study Guide

Possible examples King Price: King Price’s vision is “Lower premiums: Higher purpose”

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-Value Statement- Provide theory discussion and examples from the case study

Possible examples from King Price: The company operates like a tightknit, fun-loving family
and stands by the following “family values”: Customer is king, Fun with a little madness,
Courageous freedom, Lean and mean, Together we can, Be real and Live with purpose

Explain what stakeholder analysis and its purpose SG pg 77

Possible examples from PicknPay: Its Buy Better programme has deepened its relationship
with its suppliers, allowing for greater efficiency

Possible examples from PicknPay: Pick n Pay’s Smart Shopper 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.

Possible examples from King Price: We’re here to change the world… For our clients, our
country, and for our staff, suppliers and shareholders”

Possible examples for King Price: Customer is king-We treat all our clients like royalty. We
started off by promising royal service and we delivered. Really, we've won stuff for our royal
service. We take service seriously. Your wish is our command.

Internal environmental analysis

1. The various categories of resources and capabilities in a Resource Based View

(RBV) model Refer to TB pg 235

RESOURCES

1. Tangible resources- Provide theory discussion and examples from the case study

Possible examples from PicknPay: Pick n Pay’s has 1,795 stores and 719 are franchises.

Possible examples from PicknPay: Pick n Pay aims to improve the efficiency and cost-
effectiveness of its employee costs, both in stores and in its head office structures,

Possible examples from PicknPay: Pick n Pay aims to improve the efficiency and cost-
effectiveness both in stores and in its head office structures, while minimising increases in
rentals, rates, electricity, water and other charges.

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 2. Intangible resources: Provide theory discussion and examples from the case study

Possible examples from PicknPay: Pick n Pay’s Smart Shopper 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.

Possible examples for King Price: King Price has industry-leading technology and an award-
winning company culture and customer experience approach that will unlock significant
value for all stakeholders.”

Possible examples for King Price: King Price was named the brand that delivers the best
customer experience in South Africa at Corinium’s inaugural Customer 360 Africa 2019
Awards.

Possible examples for King Price: In the same week, International Business Magazine
named King Price Best Place to Work For SA 2019, Most Innovative Insurance Company SA
2019, and Fastest Growing Insurance Company SA 2019.

3. Human resources Provide theory discussion and examples from the case study

Possible examples from PicknPay: The strategic turnaround plan developed under Richard
Brasher, CEO of Pick n Pay,

Possible examples from PicknPay:

Pick n Pay aims to improve the efficiency and cost-effectiveness of its employee costs,

Possible examples from PicknPay:

Pick n Pay management said its results were “underpinned by strong operational and financial
discipline, with tight expense control in an inflationary economy.”

Possible examples for King Price Fast forward 7 years, and the company has grown into a
R3.3 billion company with 750 employees

Possible examples from King Price: Nobody in the industry gave us a chance,” says Finch,
the chief financial officer and founding member.

Possible examples from King Price: We like our people the same way you like your royal
savings... Real. We wouldn't have hired them if we didn't think they're all special to start
with. But mostly, we love them because they're one-of-a-kind.

Possible examples from King Price: chief executive Gideon Galloway. King Price,

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CAPABILITIES

1. Distinctive capabilities-Provide theory discussion and examples from the case study

Possible examples from PicknPay: Its Buy Better programme has deepened its relationship
with its suppliers, allowing for greater efficiency and squeesing out R500m of value in the
year.

Possible examples from PicknPay: Pick n Pay’s Smart Shopper 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.

Possible examples from King Price: Gideon Galloway started King Price with the idea of
being the only insurer in South Africa that offers premiums which decrease monthly as car
values drop.

Possible examples for King Price: King Price entered the highly-competitive South African
insurance market with a world-first customer-centric insurance model that automatically
decreased comprehensive car premiums monthly in line with the cars’ depreciating values

Possible examples for King Price; King Price has signed more than R200 million in
commercial business this year alone, in what’s largely a broker-driven market.

Possible examples for King Price Today, broker sales make up 25% of our business. By
emphasising value and service and treating our brokers at the same level as our direct
channel, we’ve been able to grow our broker business to a half-billion Rand business in the
past 3 years,” said Finch.

Possible examples for King Price: Galloway said one of the company’s key differentiators
since its launch had been its use of advanced data analytics and technology to streamline its
processes and deliver better service and prices to its customers.

2. Dynamic capabilities

Possible examples from PicknPay: Another bright side to the results: after years of effort,
Pick n Pay also appears to finally be getting its supply chain right. Three-quarters of its stock
now trundles out of centralised locations, up from 65% a year ago.

Possible examples from PicknPay: The company noted that its track record between 2014
and 2017 of greater operating efficiency and improved customer focus has provided a
strong platform for growth.

Possible examples from PicknPay: A turnaround in the newly introduced logistics

operations, as well as a reduction in management and consultant costs.

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The VRINE model supplements the resource-based view analysis by focusing on a single
resource or capability that contribute to the competitive advantage. Refer to SG pg 96

a. Value- Provide theory discussion and examples from the case study

Possible examples from PicknPay: Pick n Pay’s Smart Shopper 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.

Possible examples for King Price: Customer is king-We treat all our clients like royalty. We
started off by promising royal service and we delivered. Really, we've won stuff for our royal
service. We take service seriously. Your wish is our command.

Possible examples for King Price: Lean and mean-We look after our cents so that we can
pass real Rand savings on to our clients. We're efficient, we find solutions fast, and we do
things right the first time round. We innovate, we improve, we adapt. And we don't waste
talent or time... Because it all adds up to us being the king of price.

b. Rarity- Provide theory discussion and examples from the case study

Possible examples for King Price: King Price entered the highly-competitive South African
insurance market with a world-first customer-centric insurance model that automatically
decreased comprehensive car premiums monthly in line with the cars’ depreciating values

Possible examples for King Price: We’ve got the most favourable reinsurance terms in the
market, and our reinsurer has a better credit rating than South Africa’s big four banks, which
gives us the foundation we need to grow this side of the business quickly. It also gives our
clients peace of mind that paying out big claims isn’t an issue.”

Possible examples for King Price: King Price has industry-leading technology and an award-
winning company culture and customer experience approach that will unlock significant
value for all stakeholders.”

c. Inimitability and Non-substitutability- Provide theory discussion and examples from

the case study

Tip: Argue if the unique elements of PicknPay/King Price, can be easily copied by competitors
or competitors may find it difficult

d. Exploitability- Provide theory discussion and examples from the case study

Possible examples from PicknPay: Getting Pick n Pay’s distribution right has been a big catalyst to
cutting costs that will take them a long way to getting close to that 4.5% margin.
Possible examples for King Price: King Price has industry-leading technology and an award-
winning company culture and customer experience approach that will unlock significant
value for all stakeholders.”

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NB: Take note of- resource determinants of strategic significance of value identified (TB pg
pg 229) and Value Chain Analysis (SG pg 94/TB pg 240)

External environmental analysis

Discuss PESTEL Factors in the macro-environment evident in the case study

Economic factor: Provide theory discussion and examples from the case study

Possible examples from PicknPay:

Food prices in SA are expensive relative to people’s take-home income too.

Possible examples from PicknPay:

Pick n Pay management said its results were “underpinned by strong operational and
financial discipline, with tight expense control in an inflationary economy.”

Possible examples from PicknPay:

This is part of the reason why, amid something of a meltdown in retail over the past year,
Pick n Pay’s share price has slid only 13.9%, compared with rivals like Shoprite (down
28.6%) and Woolworths (down 25%).

Industry analysis

Discuss Porter’s five forces to analyse the industry

1. Rivalry among existing organisations- Provide theory discussion and examples from
the case study

Possible examples for King Price: The insurance industry is incredibly cut-throat and there’s
heavy competition from bigger companies.

Possible examples for King Price: King Price entered the highly-competitive South African
insurance market with a world-first customer-centric insurance model that automatically
decreased comprehensive car premiums monthly in line with the cars’ depreciating values

Possible examples for King Price: King Price’s competitors didn’t expect them to last longer
than three months. After 7 years, King Price is not just surviving, but thriving.

Possible examples for King Price: We’ve got the most favourable reinsurance terms in the
market, and our reinsurer has a better credit rating than South Africa’s big four banks, which
gives us the foundation we need to grow this side of the business quickly. It also gives our
clients peace of mind that paying out big claims isn’t an issue.”

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 2. Threat of new entrants- Provide theory discussion and examples from the case study

Possible examples King Price: The logic behind the King Price model is that car values
depreciate every month, so why don’t all insurers decrease car insurance premiums
monthly? All insurers pay out the insured value if something happens to a car (under
comprehensive insurance), so why charge more?

Possible examples King Price: The insurance industry is incredibly cut-throat and there’s
heavy competition from bigger companies. King Price entered the highly-competitive South
African insurance market with a world-first customer-centric insurance model
.
Tip: Argue if it’s easy or difficult to enter this industry

3. Substitutes- Provide theory discussion and examples from the case study

Possible examples We’ve got the most favourable reinsurance terms in the market, and our
reinsurer has a better credit rating than South Africa’s big four banks, which gives us the
foundation we need to grow this side of the business quickly.

Tip: Argue how the banking industry could be an indirect competitor to the insurance
industry

Discuss any key success factors in an industry (3Cs) TB pg 195

Customers-

Possible examples for King Price: The insurance industry is incredibly cut-throat and there’s
heavy competition from bigger companies. King Price entered the highly-competitive South
African insurance market with a world-first customer-centric insurance model that
automatically decreased comprehensive car premiums monthly in line with the cars’
depreciating values and the company has carved a niche market approach which offers
consumers what they really want; which is more cash in their pockets.

Possible examples for PicknPay: Pick n Pay’s Smart Shopper 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.

Competition-

Possible examples for PicknPay: This is part of the reason why, amid something of a
meltdown in retail over the past year, Pick n Pay’s share price has slid only 13.9%,
compared with rivals like Shoprite (down 28.6%) and Woolworths (down 25%).

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Possible examples for King Price: The insurance industry is incredibly cut-throat and there’s
heavy competition from bigger companies. King Price entered the highly-competitive South
African insurance market with a world-first customer-centric insurance model

Corporation-

Possible examples for PicknPay: Another key to Pick n Pay’s success and improved revenue
growth is its relentless focus on price,

Possible examples for PicknPay: Another bright side to the results: after years of effort,
Pick n Pay also appears to finally be getting its supply chain right.

Possible examples for King Price: King Price has industry-leading technology and an award-
winning company culture and customer experience approach that will unlock significant
value for all stakeholders.”

Discuss the success factors in technology-intensive industries TB pg 198

Possible examples for King Price: Galloway said one of the company’s key differentiators
since its launch had been its use of advanced data analytics and technology to streamline its
processes and deliver better service and prices to its customers. This technology would
“transform” the Alexander Forbes short-term book and open significant growth
opportunities,

Possible examples for King Price: King Price has industry-leading technology and an award-
winning company culture and customer experience approach that will unlock significant
value for all stakeholders.”

Strategy selection

Explain the different Levels of strategy in an organization TB pg 263

1. Corporate level

Possible examples from PicknPay: The strategic turnaround plan developed under
Richard Brasher, CEO of Pick n Pay,

Possible examples from PicknPay: After bringing in new leadership in 2013, the Pick n Pay
Group devised a strategic long-term recovery plan in 2014,

Possible examples from King Price: “Nobody in the industry gave us a chance,” says Finch,
the chief financial officer and founding member.

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Possible examples from King Price: Gideon Galloway, CEO of King Price insurance had
vision

Possible examples from King Price: King Price announced in April 2019 an ambitious bid,
thought to be up to R2 billion, for Alexander Forbes’ short-term insurance business.

2. Business level

Possible examples from PicknPay: The business is also developing a strong multiplatform
and multi-channel retail offer, including standalone clothing and liquor stores and an online
business.

Possible examples from PicknPay: Pick n Pay aims to continue to build its Boxer business
into a thriving national limited-range discount format, and to continue to grow sales
outside South Africa in a planned and prudent way.

Possible examples from King Price: King Price has expanded its personal lines products to
include cover for everything consumers needed covered, launched a successful business
insurance division, and built a thriving business in Namibia.

3. Functional level

Possible examples from PicknPay: Centralisation of Pick n Pay’s supply chain and other
services, reducing the cost and improving the accuracy and responsiveness of distribution.

Corporate strategies

Discuss the growth corporate level strategies TB pg 335

Possible examples from PicknPay:

The business is also developing a strong multiplatform and multi-channel retail offer,
including standalone clothing and liquor stores and an online business.

Possible examples from PicknPay:

In addition, Pick n Pay aims to continue to build its Boxer business into a thriving national
limited-range discount format, and to continue to grow sales outside South Africa in a
planned and prudent way.

Possible examples from King Price: King Price has expanded its personal lines products to
include cover for everything consumers needed covered, launched a successful business
insurance division, and built a thriving business in Namibia.

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Possible examples from King Price: King Price announced in April 2019 an ambitious bid,
thought to be up to R2 billion, for Alexander Forbes’ short-term insurance business.

Tip: Identify the Corporate Level strategy, give theory and elaborate on the case study
example

Discuss the various defensive corporate level strategies TB pg 349

Possible examples from PicknPay:

After bringing in new leadership in 2013, the Pick n Pay Group devised a strategic long-term recovery
plan in 2014, recognising that a return to sustainable long-term growth could not be achieved
overnight.

Possible examples from PicknPay:

The sustainable recovery strategy needed to be achieved in a planned, considered and balanced way
over a number of years, avoiding short-term actions which might weaken the business in the longer
term.

Possible examples from PicknPay:

Between 2017 and 2019 Pick n Pay continued to work on the second phase of its recovery
strategy and to recover sales and to get the business to the next level.

Possible examples from PicknPay:

By 2017, Pick n Pay was already delivering on its turnaround strategy by cutting costs in a
bid to regain lost market share.

Tip: Identify the Corporate Level strategy, give theory and elaborate on the case study
example

Business-level strategies
Discuss the business level strategies that an organisation can use to compete/ Explain
Porters generic competitive strategies

Possible examples from PicknPay:

The business is also developing a strong multiplatform and multi-channel retail offer,
including standalone clothing and liquor stores and an online business.

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 Possible examples from PicknPay:
In addition, Pick n Pay aims to continue to build its Boxer business into a thriving national
limited-range discount format, and to continue to grow sales outside South Africa in a
planned and prudent way.

Possible examples from King Price: King Price entered the highly-competitive South African
insurance market with a world-first customer-centric insurance model that automatically
decreased comprehensive car premiums monthly in line with the cars’ depreciating values
and the company has carved a niche market approach which offers consumers what they
really want; which is more cash in their pockets.

Possible examples from King Price: King Price has expanded its personal lines products to
include cover for everything consumers needed covered, launched a successful business
insurance division

Possible examples from King Price: Galloway said the fact that King Price played only in the
short-term insurance market made it “the perfect fit” for the Alexander Forbes short-term
assets,

Tip: Identify the Business Level strategy, give theory and elaborate on the case study
example

Explain the considerations to evaluate a strategic option for an organisation TB pg 280

a. Appropriateness (suitability): is concerned with whether a strategy addresses the

key issues of the organisation’s strategic position.

Tip: Argue if the strategies used at PicknPay or King Price are addressing the key issues of
the organisations

b. Desirability: relates to assessing the ability of the strategy to produce results in

either the short terms or the longer term in light of the needs and priorities of the
organisation.

Possible examples from PicknPay: The sustainable recovery strategy needed to be achieved
in a planned, considered and balanced way over a number of years, avoiding short-term
actions which might weaken the business in the longer term.

Possible examples from King Price: If successful, the bid would double King Price’s existing
business, said chief executive Gideon Galloway.

c. Feasibility: means that the organisation is capable of carrying out the proposed
strategies. Questions asked include: do we have the resources to implement this
strategy? ; and is the strategy capable of achieving the objectives that it addresses?

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 Possible examples from PicknPay The strategic turnaround plan developed under Richard
Brasher, CEO of Pick n Pay, an Englishman who joined after spending 26 years at UK
supermarket giant Tesco, included a revised strategy to restore the business to a position
of long-term sustainable growth.

Possible examples from King Price: This technology would “transform” the Alexander
Forbes short-term book and open significant growth opportunities,

d. Consistency: when an organisation considers consistency, it looks at wheather the

strategy option is in accordance with the strategic intent and orbjectives of the
organisation

Tip: Argue if PicknPay or King Prices strategies are linked to the organisation vision

e. Validity: means that the calculations and the other assumptions on which the
strategy is based are well grounded and meaningful. These assumptions can be
based on valid and relevant business information

Tip: Argue if PicknPay’s turnaround strategy is based on well-grounded assumptions or not

Possible examples from King Price: King Price believes the bid for 40% would be the “best
fit” for the business in the local market.

f. Attractiveness to stakeholders: entails the organisation determining if the strategy

is appealing to those people whose needs need to be satisfied.

Possible examples from PicknPay: Deliver a first-class fresh, convenience and grocery
offering, which gives customers unbeatable prices, value and service.

Possible examples from King Price: If successful, the bid would double King Price’s existing
business, said chief executive Gideon Galloway. King Price, as at the end of its 2019 financial
year in June, will see annual premium of R1.8bn.

TOPIC 3: THE BUILDING BLOCKS OF STRATEGY IMPLEMENTATION

Strategic Leadership

Discuss the competencies of a Strategic Leader Refer to TB 417

a. Strategic thinking-- Provide theory discussion and examples from the case study

Possible examples from PicknPay:

The strategic turnaround plan developed under Richard Brasher, CEO of Pick n Pay, an
Englishman who joined after spending 26 years at UK supermarket giant Tesco, included a revised
strategy to restore the business to a position of long-term sustainable growth.

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Possible examples from PicknPay: Retailers and producers need to come up with a better
solution, says Brasher.

Possible examples from King Price: Gideon Galloway, CEO of King Price insurance had vision
and he wanted to make it a reality

Possible examples from King Price: Gideon Galloway started King Price with the idea of
being the only insurer in South Africa that offers premiums which decrease monthly as car
values drop.

Possible examples from King Price: King Price’s founders believe “we’re only getting
started,” and “there’s more to come from this kingdom yet.”

b. Emotional intelligence and behavioural complexity- - Provide theory discussion and

examples from the case study

Possible examples from King Price: Gideon explained that he “used all my investments and
the income from all the companies I’d built over the years. I invested every cent and lost a
lot in the process. All my savings were gone, and I had two kids and a wife to take care of
but I never heard God telling me to stop, and so I didn’t.”

c. Transformational leadership-- Provide theory discussion and examples from the case
study

Possible examples from PicknPay: The strategic turnaround plan developed under Richard
Brasher, CEO of Pick n Pay, an Englishman who joined after spending 26 years at UK
supermarket giant Tesco, included a revised strategy to restore the business to a position of
long-term sustainable growth.

Possible examplesKing Price: Believing that the industry was ripe for change, Gideon
Galloway started King Price with the idea of being the only insurer in South Africa that offers
premiums which decrease monthly as car values drop.

d. African leadership-- Provide theory discussion and examples from the case study

Possible examples from King Price: We aren't just another insurance company. We're a
family... A bright, talented, passionate, committed, happy family. We put our heads, hands
and hearts together and make things happen.

Possible examples from King Price: King Price are not only in the business of insurance but
also in the business of #MakingADifference by being “a force for good”. We’re here to
change the world… For our clients, our country, and for our staff, suppliers and
shareholders”

Tip: Argue how these actions occurred under Gideon Galloway’s leadership.

MNG4801 CASE STUDY PACK 2020 Page 18

The role/ tasks of strategic leaders Refer to SG pg 162 and TB pg 430-440

1. Strategic leader is firstly responsible for setting the strategic direction of the
organisation.

Possible examples from PicknPay: The strategic turnaround plan developed under Richard
Brasher, CEO of Pick n Pay, an Englishman who joined after spending 26 years at UK
supermarket giant Tesco, included a revised strategy to restore the business to a position of
long-term sustainable growth.

Possible examples from King Price: Gideon Galloway started King Price with the idea of
being the only insurer in South Africa that offers premiums which decrease monthly as car
values drop.

2. A second task that the strategic leader is responsible for driving the strategy.

Possible examples from PicknPay:

The sustainable recovery strategy needed to be achieved in a planned, considered and
balanced way over a number of years, avoiding short-term actions which might weaken the
business in the longer term.

Possible examples from King Price: Galloway said one of the company’s key differentiators
since its launch had been its use of advanced data analytics and technology to streamline its
processes and deliver better service and prices to its customer

3. Strategic leadership are also responsible for developing social capital.

Possible examples for King Price Fast forward 7 years, and the company has grown into a
R3.3 billion company with 750 employees

Possible examples from King Price: We like our people the same way you like your royal
savings... Real. We wouldn't have hired them if we didn't think they're all special to start
with. But mostly, we love them because they're one-of-a-kind.

Possible examples from King Price: King Price has industry-leading technology and an
award-winning company culture and customer experience approach that will unlock
significant value for all stakeholders.”

4. Strategy implementation also requires that strategic leaders build and make use of
the core competencies of the organisation.

Possible examples from PicknPay:

Deliver a first-class fresh, convenience and grocery offering, which gives customers unbeatable
prices, value and service.

MNG4801 CASE STUDY PACK 2020 Page 19

Possible examples from King Price: Galloway said one of the company’s key differentiators
since its launch had been its use of advanced data analytics and technology to streamline its
processes and deliver better service and prices to its customer

Possible examples from King Price: King Price has industry-leading technology and an
award-winning company culture and customer experience approach that will unlock
significant value for all stakeholders.”

5. Strategic leaders are also responsible for creating organisational alignment and
analyse the organisational culture

Possible examples of King Price: We believe that a fun workplace = a happy workplace, and
that happy staff = happy clients. It's that simple! Look, we work really (really, really) hard
but, if we're not having fun while we're doing it, we're doing something wrong.

6. Strategic leaders must also lead and manage these changes. This may, however,
prove to be a challenging task because of resistance to change.

Possible examples from PicknPay: The sustainable recovery strategy needed to be achieved
in a planned, considered and balanced way over a number of years, avoiding short-term
actions which might weaken the business in the longer term.

Organisational architecture, systems and processes

Components of the Lee, Venter and Bates (2004) model for organisational architecture
Refer to TB pg 455

 Organisational Structure: Provide theory discussion and examples from the case
study

Possible examples from King Price: After 7 years, King Price is not just surviving, but
thriving. King Price has expanded its personal lines products to include cover for everything
consumers needed covered, launched a successful business insurance division, and built a
thriving business in Namibia.

 Organisational Culture: Provide theory discussion and examples from the case study

Possible examples of King Price: We believe that a fun workplace = a happy workplace, and
that happy staff = happy clients. It's that simple! Look, we work really (really, really) hard
but, if we're not having fun while we're doing it, we're doing something wrong.

 Knowledge, skills and abilities (KSAs): Provide theory discussion and examples from
the case study

MNG4801 CASE STUDY PACK 2020 Page 20

Possible examples from PicknPay:
The strategic turnaround plan developed under Richard Brasher, CEO of Pick n Pay, an
Englishman who joined after spending 26 years at UK supermarket giant Tesco, included a
revised strategy to restore the business to a position of long-term sustainable growth.

Possible examples of King Price Gideon Galloway, CEO of King Price insurance had vision
and he wanted to make it a reality. Gideon explained that he “used all my investments and
the income from all the companies I’d built over the years.

Possible examples of King Price: King Price has industry-leading technology and an award-
winning company culture and customer experience approach that will unlock significant
value for all stakeholders.”

 Processes are central to the organisational architecture and are instrumental in

delivering the capabilities. There are three categories of processes

a. Management processes

Possible examples from PicknPay:

The strategic turnaround plan developed under Richard Brasher, CEO of Pick n Pay, an
Englishman who joined after spending 26 years at UK supermarket giant Tesco, included a
revised strategy to restore the business to a position of long-term sustainable growth.

b. Operational processes

Possible examples from PicknPay: Improving the efficiency of the business in all areas, by
completing the centralisation of supply chain operations, increasing productivity in stores
and ensuring that support office functions are delivered to benchmark levels of
effectiveness and efficiency.

Possible examples from PicknPay: Pick n Pay management said its results were
“underpinned by strong operational and financial discipline, with tight expense control in
an inflationary economy.”

Possible ex amples from PicknPay: The revised strategy. It entailed a major reduction in
costs, a turnaround in the newly introduced logistics operations, as well as a reduction in
management and consultant costs.

c. Support processes

Possible examples from PicknPay: In other words, getting Pick n Pay’s distribution right has
been a big catalyst to cutting costs that will take them a long way to getting close to that
4.5% margin.

MNG4801 CASE STUDY PACK 2020 Page 21

 TOPIC 4: BUILDING BLOCKS OF STRATEGIC CONTROL

Discuss the Strategic control methodologies and approaches

1. Assumption/premise control- Provide theory discussion and examples from the case
study

Possible examples from PicknPay:

The strategic turnaround plan developed under Richard Brasher, CEO of Pick n Pay, an
Englishman who joined after spending 26 years at UK supermarket giant Tesco, included a
revised strategy to restore the business to a position of long-term sustainable growth.

Tip: Discuss how PicknPay COULD use this control system to check if their corporate strategy
is still relevant or maybe they should change strategy

Possible examples from King Price: Believing that the industry was ripe for change, Gideon
Galloway started King Price with the idea of being the only insurer in South Africa that offers
premiums which decrease monthly as car values drop.

Possible examples from King Price: King Price announced in April 2019 an ambitious bid,
thought to be up to R2 billion, for Alexander Forbes’ short-term insurance business. King
Price believes the bid for 40% would be the “best fit” for the business in the local market.

Tip: Discuss how King Price COULD use this control system to check if the niche market they
targeting is still relevant or maybe they should change strategy

2. Environmental scanning/strategic surveillance - Provide theory discussion and

examples from the case study

Possible examples PicknPay:

Pick n Pay management said its results were “underpinned by strong operational and
financial discipline, with tight expense control in an inflationary economy.”

Possible examples PicknPay:

Food prices in SA are expensive relative to people’s take-home income too. In the end,
customers end up paying for inefficiencies in the consumer goods production line.

Possible examples from King Price: The insurance industry is incredibly cut-throat and
there’s heavy competition from bigger companies. King Price entered the highly-competitive
South African insurance market

Tip: Discuss how PicknPay or King Price COULD use this control system to check for
opportunities or threats in its environment

MNG4801 CASE STUDY PACK 2020 Page 22

 3. Implementation control-

Possible examples PicknPay:

The sustainable recovery strategy needed to be achieved in a planned, considered and
balanced way over a number of years, avoiding short-term actions which might weaken the
business in the longer term.

Explain the role of the balanced scorecard in strategic control SG pg 209/ TB pg 502

1. Finances- Provide theory discussion and examples from the case study

Possible examples PicknPay: the half-year results of 2017 represented the 7th consecutive
reporting period of substantive profit growth for Pick n Pay.

Possible examples PicknPay: Another key to Pick n Pay’s success and improved revenue
growth is its relentless focus on price,

2. Customers- Provide theory discussion and examples from the case study

Possible examples PicknPay: The company noted that its track record between 2014 and
2017 of improved customer focus has provided a strong platform for growth.

Possible examples PicknPay: Pick n Pay’s Smart Shopper 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.

3. Internal business processes- Provide theory discussion and examples from the case
study

Possible examples PicknPay: The company noted that its track record between 2014 and
2017 of greater operating efficiency has provided a strong platform for growth.

Possible examples PicknPay: Pick n Pay management said its results were “underpinned by
strong operational and financial discipline, with tight expense control in an inflationary
economy.”

Possible examples PicknPay: In other words, getting Pick n Pay’s distribution right has been
a big catalyst to cutting costs that will take them a long way to getting close to that 4.5%
margin.

4. Learning and innovation- Provide theory discussion and examples from the case
study
Possible examples PicknPay: Another bright side to the results: after years of effort, Pick n
Pay also appears to finally be getting its supply chain right.
..................................................................END..............................................................

MNG4801 CASE STUDY PACK 2020 Page 23

 ****EXTRA TIPS****

 NB: In regards to EVALUATION questions, apply CRITICAL THINKING in making judgements

of the decisions in the case study. Construct solid arguments that support or disagrees with
the decisions using theory and case study examples

 NB: PLEASE AVOID COPY AND PASTE OF THE CASE STUDY EXAMPLE. Use them as a seed to
drive your discussion or arguments to demonstrate your critical thinking, understanding of
the concepts and judgements of decisions

…………………………………………………………….

NB:

PLEASE NOTE, THESE GUIDELINES ARE NOT THE MEMO FOR THE EXAM PAPER,
IT’S A BREAK DOWN OF POSSIBLE EXAMPLES FROM THE CASE STUDY THAT CAN BE LINKED
TO THE THEORITICAL CONCEPTS IN THE SYLLABUS.

THEREFORE DON’T CRAM THIS DOCUMENT, PLEASE STUDY TO UNDERSTAND HOW TO

DISCUSS THE THEORY AND HOW TO APPLY THE CASE STUDIES

..............................................................................

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MNG4801 CASE STUDY PACK 2020 Page 24