TAKE HOME EXAM
BUSINESS MANAGEMENT AND ADMINISTRATION
20108326
TSIA MASELOA
QUESTION 1
1.1
1.2
1.3
1.4
1.5
Price skimming is a pricing approach where the first release of a product the
price will be high, this is to attract the better off people and to make the
product more desirable and as time goes on the price of said product slowly
decreases to attract the rest of the population. This is evident with products
like phones , and very notable in specifically Iphones/ apple market.
Penetration pricing is essentially the opposite of price skimming , where by
the initial price of a product during its launch is extremely low in order for that
product to attract a vast amount of customers , ( penetrating ) the market. This
pricing strategy is evident in products like the Vuse epod 2.
This is a marketing process separating the target market into smaller
segments with the goal to target each of the new segments with a different
product or message. This strategy is used by companies such as the VW
group.
A cash discount is only offered to customers who pay their debts in full or
early as a type of incentive to get them pay sooner. A trade discount is simply
a discount on the product.
This is a marketing strategy where the marketing is directly to the individual
customer instead of using a third party. A company that utilizes this marketing
style is amazon.
QUESTION 2
2.1 Public relations is very important to a business because it manages the
stakeholders view of the business it too devises plans to build beneficial
relations with stakeholders.in the extremely competitive business market a
businesses image is crucial and with that fact need to make sure the
businesses image is always perfect. In a nutshell public relations controls the
messages between the business and the public in order to help / uplift the
businesses corporate identity.
2.2 It is important to manage a businesses reputation because it literally
determines success or failure of a business venture. When a business has a
good public image people are more inclined to spend at these businesses and
tend to enjoy the products of these businesses more. A bad public image
could end up getting the business boycotted by consumers which makes the
business loose a lot of possible revenue. Businesses also need a good image
to attract investors in the business.
2.3 ‘ a practical corporate governance framework is essential to the successful
running of a company. It is the system of rules , practices and processes by
which a company is run. Corporate governess epitomizes the principles of
responsibility , accountability , fairness and transparency.’1
2.4 Investors would be interested in World Explorers Pty Ltd ‘s financial ratios to
see if the investment will yield a profit. Management will also need these in
order to plan for the future of the business.
QUESTION 3
3.1 The environmental ( planet), relates to the businesses attempts to lower the
environmental impact and use of energy and waste, lower their carbon
footprint. An example of this could be how most automobile companies are
beginning to manufacture electric vehicles in order to reduce the total
emissions.
3.2 The marketing mix consists of
• Product ; this describes the scope of the companies products.
• Place ; placing is essentially where the business is placed. This
however is very detailed due to it needing to be in a location which is
efficient for them to get goods to the customers and for them to receive
goods from suppliers and for any part of them dealing with
intermediaries.
• Price ; this deals with which pricing strategy will be used by the
business which there are a few ie ; price skimming and penetration
pricing.
• Promotion ; this deals with how a business will promote its goods in
order to attract customers to the business. This is also mut be planned
meticulously.
3.3 performance management is a tool used by managers which helps them
monitor employees work. Its goal is to make an environment where
employees can perform to their highest potential and produce top quality work
with the most efficiency.
QUESTION 4
4.1 Synchronic integration lets a business gain short term advantages. Examples
, cost reduction , risk reduction, efficient and rapid product development and
delivery and time to market. Diachronic however allows for long term benefits
for example , constant innovation , future orientation , fundamental overhauls
of the whole information systema and long term sustainability.
4.2 These systems are subsystems where one cannot fully complete or
effectively do its job without the other, for example management needs to
1
https://www.mondaq.com/southafrica/shareholders/1033964/the-importance-of-corporate-governance {
accessed 15 July 2021}
create a new plan where the organisation spend less money due to low sales
this year. The manager would have firstly needed to see the businesses
financials to determine such a decrease which is part of the informational
system. The two systems work interchangeably.
4.3 Centralised purchasing is a system where all the businesses purchases
happen from one point within the business. All the business departments go
and submit their respective requirements and at a designated time one very
large order of all that is required from the business is placed with a preferred
supplier. This type of purchasing practice makes purchasing easier and faster
and over time will decrease cost.
Decentralised purchasing this system each department in the business is
responsible for its own purchasing / contracts. The good from this system is it
allows for fast decision making and responses and it enhances staff creativity.
The two are essentially opposites of one another.
QUESTION 5
5.1 SWOT analysis , this is Strengths , Weaknesses, Opportunities and Threats.
Next there is PESTLE , Political , Environmental , Social , Technological ,
Legal and Economic. The next is porters 5 forces these 5 forces are , threat of
new entrants , threat of substitutes , bargaining power of suppliers ,
bargaining power of buyers and rivalry among existing firms. These are all
used when doing environmental scanning.
5.2 Competitors , this is where two businesses sell similar goods and are in a
constant competition of sort to get the most customers , ie Nike v Adidas.
Next is suppliers , suppliers are the people whom supply stores with goods
and example is Durban sand and stone supplies build it Pinetown with sand
bags and stone bags which they sell. Lastly is customers , customers are the
individuals whom purchase the goods being sold , a consumer could be said
an example is people heading to get groceries are the consumer / customer.
These are all parts of the market environment.
5.3 Labour , land , capital and entrepreneurship.
5.4 Advantages
• It is easier to raise capital.
• It is relatively easy to set up and register
• Team solidarity is easier to achieve
Disadvantages
•
•
Unlimited liability
High risk.
5.5 consultive management ; this is where when a manager relies on
feedback from employees when decision making. Democratic management ,
this management style relies on a majority vote to make decisions like in a
political democracy.
BIBLIOGRAPHY
1
https://www.mondaq.com/southafrica/shareholders/1033964/the-importance-ofcorporate-governance { accessed 15 July 2021}
Baumgardt.j et al ; business management & administration ; second edition ( 2017) .
https://www.stlouisfed.org/education/economic-lowdownpodcast-series/episode-2-factors-o
https://creately.com/usage/environmental-scanningtechniques-tools/
https://www.gartner.com/en/informationtechnology/glossary/system-integration
https://en.wikipedia.org/wiki/System_integration