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BUSINESS STUDIES

GRADE 10: Case Study

Time: 2 hours Total: 100

Read the following profile on the King Pie Franchise and the complete the tasks below:

King Pie...Winners of FASA Franchisor of the Year Award 2007/08

King Pie, the well known South African household brand, was established in 1993 and changed the pie industry with their revolutionary open plan pie making concept. Within a year, 30 franchises blossomed and currently, the total number outlets have reached 330 with an increasing international footprint in countries such as Malaysia, Canada, Swaziland, Namibia and Mozambique.

Today, King Pie South Africa is without a doubt the biggest and most successful pie franchise in the world and is now a member of the listed Mvelaphanda Group. This has afforded King Pie the necessary means to become an even bigger force within the South African and worldwide fast food market.

Fast food has become prohibitively expensive, with most brands only catering to the top end of the market and few of them offering take – out items for under R10,00! Research has shown that pies are the one food item that appeals to all sectors, and is the most affordable of all take-out food items. By franchising the concept and pioneering the fast food retailing and baking, pies have now become an acceptable and appealing food item.

Freshly Baked

With the art of pie – making becoming a science, there has been a vast improvement in the quality of pies in the South African market and in this respect King Pie leads the field. King Pie South Africa controls the standards and production from the quality of the raw materials, with flour specified and only the best de – hydrogenised pastry fat used, to the optimum weight and content of the filling. The product encompasses three important elements namely: Freshness, Quality and Value for money.

Brand Image

King Pie's brand is constantly on the increase and is reinforced with a specialized business support team and innovative marketing, coupled with top quality products. Both national and regional promotions dominate the advertising calendar, with advertising spend both on radio, television and below-the-line or in-store campaigns. This, together with ongoing competitions, local advertising by franchisees and the sponsorship of national events, ensures that King Pie's name is kept flying high in South Africa.

Finance

The set up cost for a King Pie 2Go / bake - off for a prospective investor will be approximately R400 000-00 to R550 000-00 (vat ex. depending on the size of the premises). 50% of the set-up cost must be available as unencumbered funds. The Balance may be financed. King Pie Holdings however reserve the right to amend (in its discretion) the required minimum unencumbered cash to a lower percentage.

A couple of positive attributes on the King Pie franchise are:

  • Our 2Go outlet requires very little retail space. For example; we can open a 2Go comfortably in premises of between 30 – 50 m². This is an ideal "filler" for any landlord.
  • The King Pie system and certainly in the 2Go stores, are one of the easiest and cleanest in the QSR industry as no production of assembly takes place in the outlet. The product arrives frozen and is then baked in the store on demand. Thus, quick, clean, simple and simply irresistible.
  • The franchisee will undergo training before opening the new franchise. This includes a 5-day franchising course.
  • The products sold by King Pie franchisees are manufactured at one centralized state of the art facility. The products are distributed nationally (and internationally) by way of a dedicated distributor. All our products are baked form frozen, therefore ensuring excellent quality and freshness

Adapted from an article from http://www.whichfranchise.co.za/franchise.cfm?franchisorId=84

Massmart receives ACCA award for Best Sustainability Report – Non-Extractive Industries

Massmart is pleased to announce it has been presented with the Association of Certified Chartered Accountants (ACCA) award for the Best Sustainability Report (Non-Extractive Industries), South Africa.

The award comes at the end of a year of great recognition for the Group, in which Massmart was honored to be named the Top Performer in the JSE Socially Responsible Investment Index (medium environmental impact category), the winner of the FM Top Companies survey, and the Best Retail Performer in the FM Top Empowerment Companies survey. Massmart was also ranked 5th overall on the Employment Equity dimension in the FM Top Empowerment Companies survey and is proud to have been presented 4th place in the E&Y Excellence in Corporate Reporting awards.

Guy Hayward, Massmart's Chief Financial Officer, said "We are delighted to have been recognised in this way by ACCA, particularly given the significant emphasis Massmart places on good corporate governance, transparency and sustainability."

[Adapted from:

http://www.fastmoving.co.za/news-archive/retailer-news/massmart-receives-acca-award-for-best-sustainability-report-2013-non-extractive-industries, downloaded, April 2010]

The Star: (May 15, 2006)

Talented entrepreneur Mmapitso Mokete is from one of the poorest communities in rural Limpopo

She is now able to send her son to technikon as a result of the proceeds she made from the sale of her beadwork, thanks to the involvement of large corporate organisations.

Mmapitso is a member of the Women's Development Businesses (WDB) also known as Women's Development Bank that identifies the poorest household in communities and motivates women in those households to become active in income-generating activities.

In addition to motivating and training women, WDB provides small loans for women's businesses for the purpose of making their household more self-sufficient.

In support of this initiative, Massmart has made available an interest free loan of R1-million to establish a Massmart/WDB Rural Women's Enterprise Development Fund that will be used for providing micro-loans from between R5 000 and R10 000 to rural women in Limpopo and KwaZulu Natal.

The Enterprise Development Fund is for women whose survivalist businesses are at the point where they need extra capital to expand and mature into a more formal arena.

"In addition to the loan, we are supporting the salaries of two WDB field assistants, Thandi Poetse and Tumi Bheki who are responsible for the mentoring and the training of entrepreneurs in business skills."

"Mmatipso's success has been a great revelation to us," says Bernadette Moffat, CEO of WDB. "It can be attributed to the fact that she's a hard worker, intent on producing a top quality product . "With that in mind we have created a display area for crafters at our training centre in Limpopo.

This gives our members an opportunity to, not only engage in profit activities and exhibit their craft, but to compare their work with others and improve quality.

"Towards the end of last year, one of our corporate partners ordered a consignment of gifts for their staff. Mmapitso made a range of beaded necklaces, keyrings, and fridge magnets which brought in a total of R27 000."

"Mmapitso is now training other women in her group and we look forward to empowering the whole village. That will mean we impact our society fundamentally," says Moffat.

LO1: Business Environments - CSI (40)

1.1 Why is it necessary for businesses to get involved in CSI projects? (6)

1.2 Name FOUR social issues that would be relevant in the above community. (8)

1.3 Explain which issue Massmart is addressing, and how they are contributing to the solution of the problem. (6)

1.4 Based on the case study, discuss how another business could get involved in a different way (ie not the same as Massmart in Q1.3). (10)

1.5 Identify ONE social issue in OUR LOCAL COMMUNITY, and how YOU PERSONALLY could get involved in helping to solve it. (10)

LO2: Business Ventures - Contracts (40)

Massmart and the WDB Rural Women's Enterprise Development Fund have signed a contract to finance the development and training of rural woman in order to alleviate poverty. Write a Memo to Thandi and Tumi, the two trainers, explaining the following to them:

  • What a contract is, and the essential elements to a contract.
  • Apply the case study to explain why this meets the requirements for a valid contract.
  • Which conditions could lead to a breach of contract.

LO3: Business Roles - Teamwork (40)

3.1 Why is teamwork usually more effective than individual work? (6)

3.2 Name, and briefly explain each of the FIVE stages a team goes through during the process of completing the project. (10)

3.3 Is Diversity an asset or a liability to the team? Explain. (4)

3.4 Identify a specific FORM OF CONFLICT that you have encountered in one of the teamwork exercises we have done in Business Studies this year. Briefly describe the problem, and how the team resolved it – whether favourably or unfavourably. (10)

3.5 What is your preferred role within a team? Give examples of where you have played this role effectively (this may be outside the class, for example on a sports team) (10)

Read the following case study and then compile a report based on it:

Doing Business in Africa

Trading across borders is a great opportunity for large multinationals to grow their market share and increase their global footprint. For example, Vodafone is running successful operations in very diverse countries ranging from Europe all the way to the Pacific Islands.

Every continent and indeed every country presents its own unique set of challenges and rules which make business operations complex. Every country which Vodafone enters would undoubtedly require extensive environmental scanning in order to minimize unwanted surprises when conducting business within those borders.

Some research has shown that African countries remain amongst some of the most complex to move business operations into. As suggested by an article in The Economist, 'According to the World Bank's annual "Doing Business" report, sub-Saharan Africa is, on average, the most difficult place to do business in the world when it comes to red tape. The report examines regulatory obstacles and ranks performance using criteria such as ease of starting and closing a business, hiring and firing workers, enforcing contracts, getting credit and protecting investors

As a result, over 40% of Sub-Saharan Africa's economy is informal—the highest proportion in the world. Big foreign investors are said often to negotiate special deals while small local entrepreneurs are left to cope with business-unfriendly rules that make it hard for them to survive. And firms of all sorts must contend with the severe problems of political upheaval, war, corruption and an HIV/AIDS pandemic.

Source: The Economist. Doing Business in Africa. Available from: http://www.economist.com/node/4138482 Accessed 06/30/2011