FEEDBACK TUTORIAL LETTER. 1st SEMESTER 2018 ASSIGNMENT 1 ADMINISTRATIVE MANAGEMENT 3A ADM710S

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1 FEEDBACK TUTORIAL LETTER 1st SEMESTER 2018 ASSIGNMENT 1 ADMINISTRATIVE MANAGEMENT 3A ADM710S 1

2 Dear Students This was the second and last assignment and these two assignments give you admission to the examination (or not). Most of you have gone through the chapters which were indicated and I found the answers on the whole satisfactorily. Although I must state that there were some students who did not read the questions properly and gave me answers which were totally wrong. Remember to always read a question twice before answering it. The class average for this assignment was 72.9%. The highest mark was 92%. Eight (8) students obtain 80% and higher. Well done! Students are once again reminded to study the relevant chapters in your prescribed book. Wish you good luck for the examination. COMMENTS ON ASSIGNMENT 1 QUESTION 1 [4] Feedback This question was answered well by most of the students. Give any two factors in the macro environment that can pose a threat to the organization, and briefly explain each factor given. Legislation: new laws can provide either opportunities or threats, hence it is important for an organization to be aware of government s operations. Technology: New technology can make things easier, thus providing new opportunities, or making it easier for competitors to enter the market. Political instability: markets react to the politics of a country. 2

3 The more unstable a country is, the more the economy will be affected. Another factor is rampant inflation, as it could make purchases expensive and planning for the future difficult. Natural disasters are another factor. Other issues such as changing environment, dynamic social tastes also influence the opportunities and threats faced by an organization. Question 2. Feedback: This question was answered well by the majority of students. Nam Stores has experienced exponential growth in the past decade. However, the last two years have indicated a noticeable slowing of its growth. Advise management on what two internal and two external growth strategies the company can utilize to revitalize its growth. Briefly elaborate on each strategy [8] Internal growth strategies Concentration improving on what one is already doing look at known product in known market etc. Can be through increasing consumption of existing customers, attracting new ones, poaching from competition etc Susceptible to new competitors and innovations Market development organisation sells its present products in new markets by opening new additional units or attracting other market segments Product development modification of existing products or additions to existing products egg hybrid cars innovation continuously searching for original or novel ideas egg first bank that started with cell phone banking. External growth strategies Integration Backward vertical integration to increase control over supply egg Sappi acquiring a plantation Forward vertical integration closer to customer egg paper producer buying a bookstore. Good if organisation receives bad service from distributor Horisontal integration taking over one or more similar organisations for scale of operation benefits and larger market share new markets an get rid of competition Diversification for organisations that cannot achieve growth objectives in current industry with 3

4 their current products and markets Concentric diversification addition of a business related to an organisation i.t.o. technology, markets or products. Must be highly compatible with current business. Can use one of distinguished strengths egg Knowledge- Nandos selling sauces to Retail chain like shoprite Conglomerate diversification acquiring business with most promising investment opportunity. Can be to off set deficiencies, lack of cash etc Question 3 Feedback This question was answered well by the majority of students. 3.1 Briefly define the term BCG Matrix and discuss the any two criticisms leveled against the BCG matrix (7) BCG Matrix (or growth-share matrix) is a corporate planning tool, which is used to portray firm's brand portfolio or SBUs (strategic business units) on a quadrant along relative market share axis (horizontal axis) and speed of market growth (vertical axis) axis. Criticisms Market growth rate is only one factor in industry attractiveness, and relative market share is only one factor in competitive advantage. The growth-share matrix overlooks many other factors in these two important determinants of profitability. The framework assumes that each business unit is independent of the others. In some cases, a business unit that is a "dog" may be helping other business units gain a competitive advantage. The matrix depends heavily upon the breadth of the definition of the market. A business unit may dominate its small niche, but have very low market share in the overall industry. In such a case, the definition of the market can make the difference between a dog and a cash cow. Criticism on the BCG matrix. Notwithstanding the fact that the BCG matrix is applied by many businesses, it has also been criticized: The market share of the matrix does not guarantee profitability. The BCG matrix does not consider decreasing markets enough; Cash Cows could disappear without reason. Benefits of BCG (not required) One of the more obvious benefits of the BCG matrix is its level of simplicity in that it only has two dimensions and four quadrants and its easy ability to recall the four quadrants due to their descriptive names Limitations (not required) The first concerned with the BCG matrix actually stems from its biggest advantage, which is its overall 4

5 simplicity. It uses two surrogate measures for its dimensions namely relative market share (a measure of competitive strength) and market growth rate (a measure of market attractiveness) these two measures are too simplistic and narrow for the purpose of what they trying to measure and identify. As you probably know, there are multiple factors that determine a firm s competitive strength and while market share is one of those factors there are many others that also need to be considered such as, brand equity, retailer relationships, logistics, financial support, product line, customer loyalty, and so on. 3.2 There a number of strategic tools available to managers who seek to improve their organizational performance. The BCG Matrix is one such tool. Plot and complete the diagram below by plotting all the quadrants, and briefly explain what each quadrant represents. (10) High Stars Select few Question marks Remainder Divested Low Cash Cows High Dogs Harvested/liquidated Low Stars are rapidly growing markets with large market shares businesses are quite profitable Requires large investment to maintain market share Cash cows low market growth but high market share generates large amounts of cash can be used to support other SBUs egg question marks Question marks high growth, low market share require lot of cash to maintain. Should we invest more or phase out? Dogs Low market share and growth candidate for divestiture or liquidation. Is in saturated, mature market with intense competition and low profit margins Question 4 [12] 5

6 Feedback There was evidence of some confusion in candidates' responses. You must elaborate on the major Strengths, weaknesses, opportunities and threats of your own or any local business/organisation. You also need to focus on current successful strategies in the organisation: growth (Increasing level of operations); Stability (No changes needed); retrenchment (reducing size of operations, staff, etc.); Combination of strategies. You are asked to undertake a SWOT analysis of your own organisation's position. Consider the main opportunities facing your organisation and whether current strategies are appropriate to take advantage of them. (1 page) Question 4 SWOT Analysis Strengths Weaknesses Indicate two strengths 2 Weaknesses Opportunities Threats 2 opportunities 2 threats What are the current strategies: Internal Growth Strategies: Focus on what the organization does well already: Concentration: Continued with current successful and profitable development (attracting new customers, new package to customers known skills and capabilities. Focus on current product, current market and current technology. Market Development: sell present product in new markets new outlets or attracting other market segments. Product development: Modification of existing products/additions to present products to increase market penetration within current customer groups. Innovation: search for new ideas. Question 5 [9] Feedback: This question was answered well. Read the Case Study and answer the questions below: 6

7 For nearly 10 years, Julius Matengu had worked as assistant registrar, finance, for one of the bigger universities in Namibia. The bureaucratic university environment had become so frustrating that he finally decided to apply for a position in the private sector. Julius was well qualified with a BCom (Hons) in accounting from Univeristy of South Africa, as well as a good employment history. He accepted a position as an investment analyst with an insurance company in Windhoek. After a few weeks in this position the following conversation was overheard: I just cannot win. I accepted this new position because I was being strangle with red tape at the University. I thought I could escape that by accepting a position in private sector. Now I findout that it is even worse. I was under the impression that private industry did not have the bureaucratic problems that we had at the University. Where can I go to escape all the rules and impersonal treatment? 5.1 Would you say that Julius is a chronic complainer, typical of most employees in similar types of organisations and positions? (3) No, we cannot say that Julius is a chronic complainer. It rather seems that he is an innovative kind of person who will always find it difficult to work in a bureaucratic environment Universities tend to have bureaucratic structures His dissatisfaction with the insurance company may be due to his character that resists rules, procedures and policies, etc. 5.2 What kind of advice would you give to Julius? (4) My first advice to Julius would be to settle down. Find his niche within his environment and. Deliver the work output required from him. If this advice is not acceptable, I would recommend a smaller business with less structure. or else that he considers starting his own business 5.3 Can you give two examples of organisations that are highly bureaucratic? (2) University of Namibia State departments/ministries/etc. (Indicate name of Department/Ministry). GENERAL REMARKS: GUIDELINES FOR THE EXAMINATION Please students: study hard for the examination. All units have to be studied. Attempt to write the first opportunity. You put yourself under great stress if you keep postponing one subject. The format of the question paper will be: Four (4) questions are given and you have to answer all four (4) questions. The total marks for the examination are

8 Your first 10 minutes after receiving the examination paper should be spent familiarising yourself with the questions. Make sure your give the answer as set by the examiner. Students sometimes fail because they do not answer the question. Start soon and follow a study plan: Develop a formal schedule allowing you to start reviewing your work well in advance of the examination date. Doing smaller sections of the work at regular intervals over a period of time aids the quality of the recall and it also lessens the stress you may experience on the day. Should you have any further queries please contact my at the telephone or stated below. We wish you success in the June 2018 examination session. DDJ Fredericks LECTURER: OFFICE MANAGEMENT AND TECHNOLOGY defredericks@nust.na Tel: during office hours 8