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Date: 16 10 2020

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200 Words

OPEN BOOK EXAM QUESTIONS START ON THE NEXT PAGE

 Question 1 15 Marks

(450 words)
The level of competition by the organisation varies, based on its geographical location and the
demand for a particular product by its customers. With the number of other retail stores similar to
Courts on the market, we still stand out above the rest, to be the best in the overall market. The
level of competition out there, is not stiff at all, whereby we have fully gained a great understanding
of our customer’s needs and wants. The other competitors on the market can’t be compared to
Courts for its well-known product margins and affordable prices after our weekly external
benchmarking.

Our product prices based on what our customers are searching for is just right, with great promotions
which is very attractive. Example: offering discounted items, cheaper payment plans, etc.

The organisation have gained a higher competitive advantage over all the other similar retail
competitors, especially with its low set prices for customers, be it the average or middle class.

Before coming up with any ideas, we focused on some of porters generic strategy, using more than
one quadrant

cost leadership by becoming the lowest cost provider to satisfy its customers. This is achieved by
utilising all resources to generate the most efficient cost possible and liaising with its suppliers.

Differentiation – overall differentiation having unique, better brand value of items where customers
know they are paying to get value for their money

Prices are set and does not live room for competition even though the products are identical and
with a slight variation in appearance

Customers are knowledgeable about the product and prices everything is the same as seen,
meaning there is no fabrication.

The organisation have made the bold move to diversify into the motorcycle industry, realising that
there are no other dealers on island selling motorcycles. The sale of motorcycles is minimal where
there is a demand for it on island. There are no distributors on island and customers import
motorcycles on their own and must pay a hefty cost along with the shipping charges and taxes.
Customers are at a higher risk, because there are no distribution outlet to go to locally, if the
motorcycle have a problem, such as need a new part, tyres, servicing, faulty motorcycle (can’t be
driven upon receival), etc.

Price volatility mean price fluctuation of products or services. With the pandemic virus (COVID-19)
in circulation in 2020, there is an adverse supply shock where the demand for certain products or
services have decreased drastically with items such as; refrigerators, sofa sets, dining tables, etc.
This sudden change has affected the equilibrium price of the products and services or price level,
temporarily. When the economy gets back to normality, maybe the price of the items will increase.

450 words
 Question 2 25 Marks

(750 words)
PESTLE is a framework use to examine the macro environmental factors of the external
environment affecting a business such as; its competitors, customers, suppliers, strategic partners
(RASCO Tyre company signs a contract with the organisation, so that the customers who wants to
purchase tyres can go to RASCO’s tyres for a purchase order with criteria needed, then the
organisation will honour the request by offering it to the customers on hire purchase and the
organisation will be receiving a certain percentage from RASCO Tyre company based on what ever
is negotiated), etc. This will impact on the business performance either as an opportunity or threat.
No matter what the end results are, the organisation is taking the chance going forward aiming for
a positive out come. PestIe is an external analysis which looks at the macro environment and its
economic factors affecting a business.

The aim of pestle, is to collect information about the macro economic factors to gain insight to make
better decisions. Pestle means; political, economical, social, technological, environmental, and legal
influence. Pest is a short form used to analyse the strategic implications for the organisation and it
also is the four different external factors arising from my out puts discussed.

For instance; the organisation is looking to expand on opening a new store on the east coast in St
Lucia and offering or adding a new product (motorcycle) to its list. But first, we need to decide
which opportunity is good before tackling this project and having a knowledge of the changing world
presently. This could have a very great impact on bringing motorcycles with affordable prices to its
targeted audience.

Political factors for example: because of this pandemic, COVID-19 there are new protocol measures
for all businesses which must be honoured in other to be operational. It is all about how government
intervenes in an economy and whether it is favourable to them. Motorcycles are exempted from
customs duties, by government offering a waive on import duties. It determines the extent to which
the government can or may influence an economy. Example; foreign trade regulation, tax policy, etc

Economic factors for example again; because of the global pandemic (COVID-19), all businesses
are shut down on a twenty-four hour curfew, for seven days in other to help control the spread of
the virus and to understand the severity of the virus which have infected people globally, no matter
what is their gender, age or nationality. There, boarders are closed affecting the tourism industry,
businesses are not in operation causing the drive for sales to diminish. Meaning, no customers, no
revenue income, this can even drive employers to dismiss some staff causing unemployment, etc.
With this being imposed on the island, it slows down the economic growth, causing a reduced
inflation rates and hoping it will increase (only essential business were in operation), affecting
customers net pay, etc. These factors had a direct purchasing impact on the demand of products
or services in the business affecting high purchasing power.

Social, meaning the general environment, such as; its cultural issues, income levels, etc. this is of
great importance when targeting customers and the local workforces and their willingness to work
under curtain conditions such as the pandemic global issues (COVID-19 causes restriction) which
arise from January 2020 in St Lucia, and still present continuing to increase the spread rapidly.

Technological; due to the COVID-19 pandemic globally, meaning, locally and worldwide, there is a
rapid change in technology, whereby everyone looking to now adopting new ways of using
technology better than ever before the pandemic. For example; using technological platforms, such
as; using the website to boost online sales, etc. Communicating via the media using social
platforms, to keep customers informed of the side curb pick ups within twenty four hours of purchase,
supervisors and managers informing staff of everything happening in the business via email, etc.

After carrying out such various researches and using their decision making skills this will help
structure a better form of the organisation drive, bringing value to our customers as our aim. With
the economical challenges at hand, this will help the organisation take advantage of the
opportunities to increase growth within the business, since there are no competitions at present on
island for such a product (motorcycle), nor having accessories for the new product line which the
organisation is introducing to the market. The organisation have again gained its reputation for
excellent service every time, whilst avoiding competition or threats to the business.

750 words
 Question 3 30 Marks

(900 words)
Internal environment are “event which occur within an organisation. Internal environmental factors
are easier to control such as; management and cultural changes, employee morale, financial
changes and or issues ” (Robert Gazy).

Environment is the soundings or conditions where activities are executed. Internal environment is
a very important part in a business and for determining business strategies, where it does not exist
or function as it is supposed too. The organisation will lack the foresight in achieving any strategic
tasks. This comprises of different areas of the business micro environment, which entails its assets,
employees, technology, etc., which may influence the organisation’s strategies and other decisions
under the organisation such as its;

Mission statement
Vision statement
Organisational structure
Organisational culture
Values

Mission statement
Mission statement is what a business stands for, like what it is about and the reason for its existence.
For example the organisation mission statement is, “to be the leader in the retailing of home
appliances, electronics, furniture and other products, in the markets where we operate, by meeting
our customers’ needs with the dedication and care that they deserve, through innovative products
and financial services. We will promote a professional environment for the development for our
associates and our suppliers, as well as serve our communities and achieve sustainable growth to
meet shareholders’ expectations.”

Vision statement
The organisation vision statement is the next level of the business to bring relief to people if they
don’t have cash, they can purchase an item on hire purchase or I can say, it means the business
future position. Its vision statement is, “to be a retail and financial service organisation that achieves
its business and social goals through exemplary industry leadership in a professional and diverse
environment fostering integrity, honesty and respect for others.”

Organisational structure
Is a layout of how the company is being operated. There, we have the board of directors (which
overseas tasks handed over to the manager and intern they may have their own vision as to how
the company should operate based on economic activities at hand.), managers (to ensure that the
board of directors visions/plans are executed.), supervisors (direct corelation with managers to see
a smooth execution of duties which are handed out to the line staff.), and functionable line staff.
Which includes a break down of department which oversee after each section, with the aim of
achieving the Company’s objectives and goals. The organisation has a functional structure with
rules, roles and responsibilities.

Organisational culture
An organisational structure are common core values, ideas and beliefs which guides employees
and management of their behaviours in the business. At the organisation, the internal environment
includes elements within the organisation, to achieve its economic and social well-being, whereby;
to generate new opportunities for employees, its partners, suppliers and the communities as part of
its culture.
Value
Our core values are as follow; teamwork, responsibility, customer service (providing excellent and
exceptional service every time), loyalty, integrity, and leadership.

By using Porter value chain (1985) framework, is an important and effective tool to use to help
growth within the organisation internal environment and to bring in substantial value to the
organisation on a daily basis, with its primary activities (inbound and outbound logistics, operations,
marketing and sales and services. Supportive activities will help the business achieve its primary
goals. Without the support activities of the human resource management, technology, and
procurement the business cannot achieve its primary goals.

The organisation have diverse into a new market share based on Porter’s value chain work. In
other to create value for the business by the organisation introducing the sale of motorcycle as a
new product to the market.

It is important to do a SWOT analysis when examining the internal aspects of a business for its
internal strengths and weaknesses to help managers and supervisors to better understand the
business environment which can lead to competitive advantages.

The organisation cost structure, have to do with the various aspects of the merchandise that the
business is looking to put up for sale for its customers, which will help satisfy their needs, based on
what they are interested in purchasing. In other to achieve an effect cost structure, the following
must be taken into consideration;

Cost of items from supplier in other to create a competitive price in other for the business to record
its gains in financial strength and profitability.

Competitive strength - enabling the business to be remaining at a competitive position on the market
by always improving its trend in sales which will also improve the organisation’s overall performance.

Strategic implications could be derived from micro and macro economy by lack of research, whereby
there will be consequences from not having knowledge of the approaches needed to get products
on the market. For example, the organisation brought motorcycles as parts and it is an issue to get
it registered through the proper channels because of the lack of procurement or information based
on product by the organisation. This will further enhance the implication process by the delays being
encountered in trying to get the right documentation or registration to have those items on the
market. This is one of the negative factors hindering the value Porter’s value chain (1985). This
clearly shows that, proper research was not done before diversifying into this new product.
Management, should have done due diligence to avoid such embarrassment to the board of
directors which will further affect the company’s profit. Because products not sold within a specific
time frame, could be seen as dead stock.

914 words
 Question 4 30 Marks

(900 words)

The organisation might be able to gain a competitive advantage by pursuing each of the four
marketing strategic options from Ansoff’s Growth Model (1957) by focusing more on the elements
such as; market penetration, market development, product development and diversification and
also assessing the relative risk of each of those choices.
Market Penetration

It is the lowest risk strategy where the business sells existing products to the existing market to
enhance a product or service for its loyal and new customers. This strategy is often used when a
business focuses on expanding sales of existing product within a well-known market. It does not
have to creating new products or move into a new market. It ventures to increase market shares
using the services or products, by lowering the price of an item or increasing its marketing efforts to
turn its loyal customers away from the other everyday competitors.

To grow bigger and better in this tough pandemic time (COVID-19), where sales is slow, the
organisation may have to increase market shares by finding ways to have customers purchase
more.

For example, run promotions for a month like; “something for everyone.”

Bedding department a free or discounted item, relating to the purchase

Optical department introducing affordable frame and lens packages for the entire family with free
eye examinations or buy any complete pair of glasses and get 50% off contact lenses. With this
strategy it will help by understanding what customers need or want. the organisation will be able to
set their prices lower than their competitors on frames and lenses and offer free eye exams for all
to attack more customers and bring in referrals.

Electronics & household items buy one and get half off any item of similar value

Ready cash existing customers get fifty dollars on loan payments for every referral and new
customers get twenty-five dollars on their first payment

Due to the attractive prices introduced by the organisation, competitors will be discouraged to enter
the market

Drive credit sales purchases and achievement of targets set for the month.

Product Development

Ansoff Matrix (1957) “this is an example of a new feature which has been added on the existing
model aimed at the existing market.”

Is a moderate risky strategy where a business sells in an existing market to target customers by
introducing new products. There, the business broadens its product range by carrying out research,
launching new products to targeted customers.
For example; the organisation extending a new bicycles on the market for new and existing
customers and looking to target motor cycle lovers and also introducing other new products and
accessories such as; tyres of all sizes and safety gears.

New products are introduced because of the desires (need or want) customers have for them.
Keeping customers happy by offering new items.

In neighbouring island (Martinique), the island is being flooded with stolen motorcycles which has
become a problem for law enforcement. By introducing this product this will help the organisation
customers continuing purchasing a product of want instead of seeking another risky avenue. This
will help the company bring in more revenue by further introducing motorcycle package promotion
deals like; “buy now and pay nothing down for the next thirty days.” The new product will be of great
benefits to both new and existing customers.

Selling points:

• Affordable
• Financed at point of sale
• Insurance Partner
• Available in Market
• Access to Parts

Targeted audience:
• Delivery Companies
• Couriers
• Bike Enthusiasts
• New Riders
• Clubs

This approach will help by achieving stability in the demand of introducing motorcycles.

With this new product introduced, the organisation will be able to generate high margins by selling
large volumes of motorcycles and will revert to a normal pricing strategy once customers loyalty is
been established.

Market Development

Is where a business sells existing products or services into a new market to generate new customers
in other to expand and extend its business geographically. the organisation can open a new store
along the east coast.

This can encourage customers within the communities to swamp the store by applying for the
services being offered. The risk of selling the service to the customers in this region are eliminated,
because of customers don’t have to travel far. Example; one of the organisation service “cash loan.”
It is quick and convenient; customers can apply for a cash loan and application will be approved in
less than twenty-four hours. Customers in this new location will no longer have to go to the bank.
Therefore, this objective can be achieved drastically:

✓ Promotional motorcade - advertisement

✓ Acquiring new customers

✓ To retain customers
 ✓ Full objective achievements

Promotional mechanics would be:

Referrals – you and your friend will receive $40.00 installment on your accounts and installments
will be paid on loans that are booked and disbursed
Diversification

Targets a new geographic market in the east coast, there are no competitors within a 15 mile radius.

New product is in demand. This strategy can offer potential increase in revenue as it opens a new
revenue flow for the organisation.

Demand for customers will be reduced and since it is conveniently located for the community.

Bringing brand new product line into the market, targeting the customers in the new location in other
to gain potential for growth.

Example of diversification. It began as a trading company with electronics and furniture, later
expanding into a technical service store, optical, and cash loans.

901 Words
Reference list

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Appendix (optional)