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BES712S -SME STRATEGY - 2ND OPP - JAN 2020 |
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NAMIBIA UNIVERSITY
OF SCIENCE AND TECHNOLOGY
FACULTY OF MANAGEMENT SCIENCES
DEPARTMENT OF MANAGEMENT
QUALIFICATION: BACHELOR OF BUSINESS MANAGEMENT
QUALIFICATION CODE: 07BBMA
LEVEL: 7
COURSE CODE: BES712S
COURSE NAME: SME STRATEGY
SESSION:
JANUARY 2020
PAPER:
THEORY
DURATION:
3 HOURS
MARKS:
100
SUPPLEMENTARY / SECOND OPPORTUNITY EXAMINATION QUESTION PAPER
EXAMINER(S) DR. CHRIS VAN ZYL
MODERATOR: MIR. RAINER RITTER
INSTRUCTIONS
1. Answer ALL the questions.
2. Write clearly and neatly.
3. Number the answers clearly.
PERMISSIBLE MATERIALS
1. Business calculator
THIS QUESTION PAPER CONSISTS OF 3 PAGES (Including this front page)
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QUESTION 1
(a) Rank the critical success factors (CSF’s) provided in the table below according to the
most important through to the least importance. Do you agree with the allocated
importance ratings (IR’s) in the table? If so, why do you agree? If not, change the
importance ratings according to your own perception(s) of what should be the most
important to what should be the least important. Justify all your decisions for the
changes that you suggest.
[10 marks]
(b) Assume you are the main decision-maker of company “B” in the international bus
passenger industry as indicated in the table. Explain exactly what you will do to
improve the competitiveness of company “B” relative to companies “A” and “C”. Be
specific with regards to your improvement strategies considering the mentioned
industry.
[15 marks]
CPM: COMPETITIVE PROFILE MATRIX
CSF's (critical success factors)
IR
1 Access to working capital
0.25)
2 Located in a busy shopping center
0.07]
3 Employee skills and experience
0.08]
4 Marketing of products and services
0.15]
5 Profitability
0.03}
6 Target market and revenue model
0.10)
7 Brand value
0.09}
8 Application of high-tech equipment
0.05)
9 Customer satisfaction
0.06]
10 Environmental sensitivity and sustainability | 0.12]|
1.00
A
|PR} WS]
3 | 0.75]
1 | 0.07}
2 |0.16//
4} 0.6]
4 | 0.12]
4] 04]
2 |0.18]
1|0.05]
4)0.24)
3 |0.36])
2.93
B
PR| WS |
2 | 0.5
2 | 0.14]
1 | 008}
2 | 03
3 | 0.09]
1] O01
3 | 0.27)
2] O21
1) 0.06)
1 | 0.12)
1.76
Cc
PR | WS
4
1
4 |0.28
3 |0.24
1 {0.15
2 | 0.06
2 | 0.2
4 |0.36
3 |0.15
2 |0.12
4 | 0.48
3.04
QUESTION 2
A public company listed on the NSX has to decide which option of financing would be the best
for obtaining funds for investing in a very lucrative project. The amount of funds needed to
invest in the project is NS1 550 000. The company has a yearly turnover of NS2 110 000 dollars;
their share price is currently NS53 per share; the number of outstanding shares is 23 500 114;
the bank interest rate is 14% and the company’s tax rate is 28%. Calculate which alternative
would be the best option to obtain the funds for the investment: a) selling more shares for the
full amount, or b) taking out a loan from the bank for the full amount, or c) taking out a loan
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from the bank for 8% of the required amount and 92% of the required amount from the selling
of more shares, or d) taking out a loan from the bank for 73% of the required amount and 27%
of the required amount from the selling of more shares? Show all your calculations and
indicate how you interpret the findings in each situation.
[25 marks]
QUESTION 3
Calculate the SPACE Matrix coordinates from the information provided in the table below.
Plot the vector and list the suggested alternative strategies. Which specific strategies would
you implement if the enterprise operates within the small stock farming industry?
FS: |Access to capital is a problem|
The exchange rate is deteriorating
CA: | High quality services provide competitive advantage
Located favourably in the center of town
Highly qualified and experienced team
IS: | Reluctance of companies to pay for services renderred
Business environment is highly disruptive currently
ES: | Very few competitors are active in this segment of market
Low GDP figures are forcasted
Rating:
2
2
-4
-3
-5
L
3
-2
-6
|Resultant: | Coordinates:
y-axis
x-axis
[25 marks]
QUESTION 4
Consider the following information. Interpret and plot the relevant coordinates onto an IE
Matrix. Which alternative strategies are recommended? If you are the owner of a broom
manufacturing enterprise, convert the suggested alternative strategies into specific and
realistic strategies.
[25 marks]
IFE: INTERNAL FACTOR EVALUATION
KPI's (key performance indicators)
1 Offers a high quality value proposition
STRENG THS
2 Sufficie nt access tostart-up & working capital
3 Owner-manager is well experienced in business|
1Employees are not reliable
WEAKNESSES |2 The equipment oldandrequire regularservicing|
3 Factory rent is very high
OPPORTUNITIES|
THREATS
EFE: EXTERNAL FACTOR EVALUATION
KPI's
1The export marketis lucrative
2 Access to many potential aistomers
3 Barriers of entry for this productis high
1 Political uncertainties in potential target market|
2 Export markets are highly volatile
3 Distributors need large storage Facilities
[|
IR
PR
ws
0.25
3
0.75
0.15
4
0.60
0.10
4
0.40
0.20
2
040
0.18
2
0.36
0.12
2
O24
1.00/CWS:| 275
IR
PR
ws
0.31
4
1.24
0.15
4
0.60
0.20}
4
0.80
0.16
1
0.16
0.08
1
008
0.10
1
0.10
1.00|/CWs:] 298
TOTAL MARKS: 100