PGDA 674
STRATEGIC PLANNING AND DECISION MAKING
PRACTICUM 1
SUGGESTED SOLUTION
Identify the resources and competences of Phaka ya Kitso Technology Marks
Park (PKTP) and discuss how and if it creates a competitive
advantage.
1 The purpose-built campus of PKTP adheres to the minimum
(1)
requirements of their customers and can be considered difficult to imitate.
It supports the competitive advantage of PKTP as follows:
(1)
1.1
 Excellent connections to utilities is of value to clients as they require
steady and reliable power supply
(1)
(a)
1.2
1.3
1.4



The scope to upgrade utilities if the need arises could be considered
rare and imitable.
Access to a campus computer network facility that is linked to a secure
server with off-site hot back-up which include data storage fees at
additional cost to customers is of value to clients as they require high
speed data links and the ability to transfer large files.
The grounds that are kept to a high standard could be of value to
clients as they would want to be associated with well-kept facilities.
This signifies that PKTP’s organisational support enables the full
use of their resources.
1.5
1.6
1.7
2
2.1
2.2
2.3
3
3.1

PKTP operates a 24 hour reception desk that allows for tenants to be
assisted on demand.
 PKTP employs two cyber-security specialists safeguarding their
tenants to the risk of cyber attacks
 PKTP applies regular health and safety checks to adhere to the OHS
regulations, creating a safe operating environment for their tenants.
PKTP seems to have satisfied and happy clients which can be considered
difficult to imitate. Their satisfied client base is evidenced by
 High occupancy rates of both the larger and sub-divided rental
spaces.
 Most tenants lease for at least two years, but some have leased for
as long as 10 years.
 Smaller tenants wish to be associated with PKTP for reputational
reasons. OR
This can be considered a core competence that is difficult to imitate
on its own.
The physical location of PKTP can be considered rare and/or difficult to
imitate. The location of PKTP presents the following competitive advantages:
 The close proximity of PKTP to the Cape Town International Airport is
of value to. PKTP’s clients who includes multi-national firms.
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
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(1)
3.2
3.3
4
4.1
4.2
4.3
4.4
5
6
6.1
6.2
7
7.1
7.2
7.3

Several large hotels are close to PKTP which is of value to PKTP’s
clients as they use this for conferences and/or to accommodate
visitors
 Several universities are located within a comfortable traveling
distance of PKTP. This is of value to PKTP’s tenants as it provides
them with the opportunity to develop mutually beneficial contacts.
The convenience provided by working from the PKTP campus and
making use of the wide variety of services available can be considered
rare.
 PKTP offers a bus service to and from the airport
 PKTP also offers a subsidised bus service to SWU
 PKTP offers a flexible range of rental options
 PKTP offers convenient business services and/or data management
and storage services
PKTP has a close working relationship with SWU that enables many
good networking connections for their tenants. There have also been
many successful collaborations between PKTP tenants and other
universities. This is of value to clients, rare and difficult to imitate and
therefore increases the competitive advantage of PKTP.
PKTP seems to manage their client base well which is a important to remain
competitive..
 The risk of overreliance on tenant rentals as the main source of
revenue (63% of total revenue) is mitigated by a varied composition
of tenants.
 Tenants are vetted carefully through amongst other things rigorous
financial checks and sound rental agreements. This speaks of
organisational support that enables the optimal benefaction of tenants
The following competences speaks of the organisational support of PKTP.
 PKTP has a large staff complement of 970 employees directly
involved in the operation and management of the campus; and
 The marketing department maintains the company profile amongst
tenants and liaise with tenants to ensure their needs are known and
understood in pursuit of contract renewal.
 Background checks are performed on employees to ensure
competent employees are employed.
Available marks: 31
Identification marks limited to 8
Max marks
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
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(1)
(1)
15
Marks
(b) Analyse to what extent the press release of Sypark Corporation poses
a threat to PKTP
1 The large government grant of R300 million that was awarded to Sypark
(1)
Corporation would enable them to easily expand and invest in state-of-the-art
facilities, lowering capital barriers to entry into the bigger Cape Town region
2 The government funding gives Sypark an unfair advantage over PKTP, which
relies more on private funding and rental income.
(1)
3 The Cape Town expansion will increase their footprint across the biggest part
(1)
of South Africa, threatening PKTP’s current large-scale advantage.
4 Although PKTP’s tenants are contractually bound, the rental agreements are
generally 12-month contracts. The press release creates enough time for
5
6
7
8
9
10
11
12
(c)
1
2
3
4
5
6
7
8
9
10
11
PKTP tenants to move to the SAIH as it will only be established from 2026
onwards.
The SAIH clusters on AI, biotechnology and software development will
provide a direct alternative to large corporations, mid-size enterprises and
start-up incubator tenants of PKTP, threatening up to 85% of their tenant
income (54% of total income)
The knowledge exchange programme with international research universities
and institutes also provides an alternative to PKTP’s tenants who valued their
connections with SWU and several other universities.
PKTP’s tenants could more easily be persuaded to move their business to the
SAIH.
The alternatives presented by the establishment of the SAIH in Cape Town
will increase the bargaining power of PKTP’s customers.
The increased scale would enable SP to compete on tenancy rates given the
benefits they can obtain from economies of scale OR
PKTP’s current benefit obtained from economies of scale are threatened
The establishment of the SAIH in Cape Town significantly increases the
competitive rivalry between PKTP and SP, and
If successfully established, stands to shift industry leading status to SP.
Other acceptable and motivated arguments (1 mark per comment)
Available marks: 12
Max marks
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
6
Critically evaluate PKTP’s strategic response to the establishment of Marks
a South African Innovation Hub (SAIH) by Sypark Corporation.
The introduction of an AI and Data Analytics Support unit is suitable as it
(1)
seeks to address the specific needs of many of PKTP’s clients.
(1)
Integrating this unit into its tenant retention strategy by means of discounted
fees for long-standing clients and priority access to pilot projects is also
feasible as PKTP has always managed their client base well.
(1)
This would sustain the buoyant demand for PKTP rental space and varied
(1)
complimentary services by expanding the variety of available services to
the tenants with lucrative offers aimed at retaining tenants.
It will reinforce PKTP’s role as premier technology hub, protecting their
(1)
existing competitive advantage.
Although it answers to arguably the most prominent feature of the SAIH (the
(1)
first AI intelligence park in SA),
it is aimed at the AI segment of the market only. The SAIH comprises
(1)
promising clusters in other areas as well, could see PKTP lose some
customers.
The introduction of AI and Data Analytics Support unit appears to be
feasible, because
(1)
The strategy seems to resemble a product-development strategy, which is
(1)
feasible because:
8.1 PKTP enjoys a strong brand and
(1)
8.2 a willingness to adopt new technologies.
(1)
PKTP enjoys a strong working relationship with SWU and has a track record
of successful collaborations with them
PKTP is located close to SWU and has a subsidised bus service to and from
the university.
Although PKTP has a large staff complement, it is not clear to whether the
existing staff will have the capacity to serve the new support unit.
(1)
(1)
(1)
12
13
14
15
16
17
18
19
20
21
22
(d)
1
2
2.1
2.1.2
2.1.3
2.1.4
2.1.5
2.2
2.2.1
PKTP would have to consider staff requirements and expertise in this
regard.
It is also an acceptable strategic response as it aligns with the company
values of innovation, community, flexibility and responsiveness.
Key stakeholders affected by this strategic response are SWU, tenants and
employees.
The strategic response in also acceptable to students as a stakeholder as
students can benefit from work-experience and exposure to AI.
The SWU and the tenants stand to benefit from this unit and would likely
accept the response.
However, consideration should be given to how the staff as stakeholders
will be managed regarding the introduction of the new support unit. They
could possibly resist the unavoidable change that comes with this new
support unit.
The introduction of the new AI support unit does not seem to be capital
intensive. It does not require large infrastructure investments.(viable)
This means that PKTP will be able to beat SP to the market in terms of AI
support as the establishment of the SAIH is a very large capital project and
would take a lot of time to build.
20.1Given the apparent pressure on profit margins and
20.2 liquidity from 2023 to 2024,
20.3 this strategy also seems viable.
There is no indication from the available information that the strategic
response of PKTP will harm the environment or community in any way,
Therefore, the strategic response of PKTP also seems sustainable.
Available marks: 29
Max marks
Y2: Critical thinking
Total
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
15
(1)
16
i. Considering the strategic response of PKTP to the competition from Marks
Sypark, identify and explain three important stakeholder groups of
PKTP, using Mendelow’s Matrix.
Mendelow’s matrix assesses stakeholder influence based on power and
interest.
(1)
The following stakeholders are key stakeholder groups that play a crucial
role in PLTP’s strategic direction:
The South African Government
(1)
The government, through the Department of Innovation & Technology,
influences the technology sector by providing funding and regulatory
(1)
support. While PKTP does not currently receive the same level of funding
as Sypark, it benefits from its established reputation and academic
(1)
partnerships
The government is considered to have high power over the environment in
which PKTP operates, because it can influence industry funding,
regulations and innovation policy.
(1)
However, it seems as though the Government might only have medium
interest in PKTP as they are currently more focused on the Sypark Initiative.
(1)
Therefore, the SA Government would be classified as a “keep satisfied”
stakeholder according to Mendelow’s Matrix.
(1)
Tenants
(1)
PKTP’s tenants are its primary revenue source.
(1)
2.2.2 Their power is high, because tenant satisfaction impacts PKTP’s occupancy
and revenue.
2.2.3 Their interest is high because PKTP provides essential infrastructure (and
services) to their operations.
2.2.4 Therefore, the tenants of PKTP would be classified as “key players”
according to Mendelow’s Matrix.
2.3 The South West University
2.3.1 The SWU is a 20% shareholder and research collaborator with PKTP’s
tenants.
Its strong academic network provides credibility to PKTP and supports
innovation through research partnerships and talent pipelines.
2.3.2 The SWU has high power, because they can influence PKTP’s innovation
strategy
2.3.3 The SWU also has high interest, because it has a financial and academic
stake in PLTP’s long term success
2.3.4 Therefore, the SWU would be classified as “key players” according to
Mendelow’s Matrix.
2.4 Investors and private equity holders
2.4.1 PKTP is partially owned by private equity firms, which seek financial returns
and stability.
2.4.2 While they have high power due to their financial influence,
2.4.3 their interest is moderate as long as PKTP remains profitable.
2.4.4 Therefore, the equity holders of PKTP would be classified as “keep
satisfied” according to Mendelow’s Matrix
2.5 Employees
2.5.1 PKTP has a very large staff compliment
2.5.2 Employees have a high interest in the strategic response as the ability of
PKTP to remain the industry leader has an impact on their employment
security
2.5.3 Given the nature of PKTP’s service offering, employees have moderate
power. If they resist the change and the response fails, PKTP stands to lose
market share and make losses.
2.5.4 Employees are therefore a “keep satisfied” stakeholder group.
Available marks: 27
Max marks
X1: Communication skills – presentation; layout and structure
Total
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
(1)
12
(1)
(13)