2.1 Name any TWO types of defensive strategies - NSC Business Studies - Question 2 - 2022 - Paper 1

Diversification strategies provide several key advantages:

1. Increased Sales and Business Growth: By entering new markets or industries, businesses can enhance their revenue streams and reduce dependence on a single product.

2. Risk Reduction: Diversification spreads risk by not relying heavily on one product or market, which can mitigate losses during economic downturns.

3. Brand Improvement: A diversified product range can enhance the brand image and reputation, attracting a wider customer base.

4. Economies of Scale: Businesses can increase efficiency and lower costs by producing a wider range of products.

5. Adaptability: Companies that diversify can adapt more easily to market changes, using their varied portfolios to respond to different economic conditions.

2.3.1 Social Element: Many customers cannot afford their products due to low income levels, which directly affects sales.

2.3.2 Technological Element: The lack of internet facilities limits customer access to online purchasing options, reducing potential sales.

2.3.3 Economic Element: The increase in fuel prices raises delivery costs for Simmy Traders, impacting their ability to deliver goods profitably.

The steps in strategy evaluation include:

1. Examine the Underlying Basis: Assess the foundational aspects of a business strategy to ensure alignment with the overall business goals.

2. Look Forward and Backward: Analyze the implementation process by reviewing past actions and future objectives to identify discrepancies.

3. Determine the Reasons for Success or Failure: Investigate outcomes to establish why certain strategies succeeded or failed.

4. Decide on Desired Outcomes: Clearly articulate what the outcome of implemented strategies should be.

5. Consider Impact of Strategic Implementation: Evaluate the internal and external environments to gauge how well the strategy has integrated with overall business operations.

1. Consumers have the right to receive information in an understandable language.

2. Consumers have the right to access and challenge their credit records.

The National Credit Act has several impacts on businesses, including:

1. Transparency in Credit Processes: Businesses must ensure transparency in their lending processes, improving trust between customers and companies.

2. Responsibility for Clients: Companies are now required to know their responsibilities regarding credit approvals, which may incur additional administrative costs.

3. Risk Management: The Act compels businesses to develop better risk management practices when offering credit, thus reducing default rates.

4. Compliance Costs: Companies may incur costs related to compliance with the Act, impacting their financial performance.

Overtime provisions under the BCEA include:

1. Compensation for Extra Hours: Workers who exceed standard working hours are entitled to overtime pay, typically at a higher rate than their regular hourly wages.

2. Work-Hour Regulations: Employers must adhere to specified overtime regulations, ensuring workers are compensated fairly for extended hours.

3. Requesting Overtime: Employees can only work overtime if requested or agreed upon by both the employer and employee.

2.7.1 Power of Buyers: Assess how the bargaining power of buyers influences pricing and quality demands. Businesses should analyze buyer dependence and price sensitivity to optimize their offers.

2.7.2 Threat/Barriers to New Entrants: Identify obstacles that may deter new competitors from entering the market. This includes analyzing capital requirements, brand loyalty, and regulatory standards which can protect established businesses.