Strategy

Business strategies

Strategy choices include integration, intensive growth and defensive moves: buying along the chain, selling more or something new, or cutting back.

CAPS

Grade 12 · Business Studies · Strategy

Business Studies answers in business language, applied to the scenario.

  • The papers

    Paper 1 is business environments and business ventures. Paper 2 is business roles and business operations. Each paper is 150 marks.

  • A 40-mark essay

    Introduction 2 marks: say what the essay will deal with. Body: facts from the scenario, each with an explanation of the impact or the solution. Conclusion 2 marks: a decision, not a new fact. Insight is 4 marks for layout, analysis, synthesis and originality.

  • How a marker reads it

    A common mix-up is calling a second branch vertical integration, when vertical means moving up or down the supply chain, not opening another outlet of the same shop.

Quotes from a scenario must be used, not copied as decoration. A definition with no link to the business in the question stays in the low marks.

Worked theory

Worked theory. A chicken takeaway in Mamelodi buys the small broiler farm that supplies its birds. That purchase is backward vertical integration, because the business moved back down the chain to its supplier. Opening a second takeaway two suburbs away, still selling the same quarter chicken and chips, is market penetration, not integration. The farm changes control of inputs. The second shop tries to sell more of the same meal in the same kind of market. If that second shop later fails and is sold while the first stays open, the sale is divestiture, not liquidation of the whole business.

More worked examples

  • Stellenbosch farm-gate stall

    A cellar in Stellenbosch has always sold its bottles through shops in Cape Town. It then opens a tasting stall at the farm gate and sells straight to visitors. That move is forward vertical integration, because the producer took the next step and started selling. It is not penetration of the city shops it already supplied. The wine is the same, but the strategy is about owning the step closer to the drinker.

  • Durban vegetarian bunny

    A curry restaurant in Durban is already full on Fridays and adds a vegetarian bunny chow at R45 for those same customers. No new suburb is opened and no farm is bought. That is product development: a new product for the existing market. If the owners later close the doors, sell the pots and pay the debts, that ending is liquidation. Liquidation is a defensive strategy, not a growth one.

In ordinary words

Backward vertical integration buys a supplier, forward vertical integration buys a distributor or shop, and horizontal integration joins a competitor at the same stage. Intensive strategies keep growing: market penetration sells more of the current product in the current market, market development takes the same product to new customers or a new place, and product development makes a new product for current customers. Defensive strategies shrink the business. Divestiture sells off a part, while liquidation closes the whole business and sells the assets.

In South Africa

A Mamelodi takeaway counter and the broiler houses behind it now belong to the same owner.

Part 1 / 4

What it is

Strategy choices include integration, intensive growth and defensive moves: buying along the chain, selling more or something new, or cutting back.

More worked examples

Board walkthroughs on this topic. Open one, copy the working, then try the next.

Example 1 / 20

Case study: A cell phone company buys its supplier of screens. Identify the strategy.

How we got there

Read this like a teacher at the board. We go slowly, name every number, and say why we take each step.

Explain in another language · 11

1. What is the question asking?

Read the question twice. Circle the unknown. Underline every number and unit. The paper is asking: Case study: A cell phone company buys its supplier of screens. Identify the strategy.

Before any working — hunt first

Given

Numbers and units already in the sentence: no numbers yet — only a name, a diagram, or a worded unknown. Copy each one into a column. A name without a number is not given.

Missing

After you copy the given, the letter that still has no number is missing. The paper is pointing at: Identify the strategy. Circle that word — that is the missing variable.

Find

We are required to find: Identify the strategy. Write that as a symbol on the left, with a question mark, before you touch a formula.

Calculate

What we need to calculate: Backward vertical integration. Then substitute the given, one line at a time, to get Identify the strategy.

In other words — as if you have never seen this before

If you have never seen this before: Backward vertical integration. We will name a method in words, write the formula with no numbers, then substitute one line at a time.

2. What do we already know?

Integration.

3. Which method — and why this one?

Backward vertical integration.

4. Step-by-step working

  1. 01 / 08

    Step A — Read the question twice

    Slow down. Circle the word that names the unknown. Underline every number and its unit. Do not grab a formula yet — first decide what the paper is actually asking.

    Why this step: If you can say the method in a sentence, you will pick the right formula. First-timers skip this and grab the first equation they remember.

  2. 02 / 08

    Step A2 — Hunt: Given, Missing, Find, Calculate

    Given: Numbers and units already in the sentence: no numbers yet — only a name, a diagram, or a worded unknown. Copy each one into a column. A name without a number is not given. Missing: After you copy the given, the letter that still has no number is missing. The paper is pointing at: Identify the strategy. Circle that word — that is the missing variable. Find: We are required to find: Identify the strategy. Write that as a symbol on the left, with a question mark, before you touch a formula. Calculate: What we need to calculate: Backward vertical integration. Then substitute the given, one line at a time, to get Identify the strategy.

    Why this step: Do not name the letters yet. First hunt: what already has a number (Given), what has no number (Missing), the word the paper wants (Find), and which formula still contains the missing letter (Calculate).

  3. 03 / 08

    Step B — Write the given in a column

    Integration.

    Why this step: A column with units stops you mixing cm with m, or minutes with seconds. Markers can also see you started correctly.

  4. 04 / 08

    Step C — Name the method in words

    Backward vertical integration.

    Why this step: If you can say the method in a sentence, you will pick the right formula. First-timers skip this and grab the first equation they remember.

  5. 05 / 08

    Identify the given

    Backward vertical integration — taking over a supplier.

    Why this step: We only do one job per line so a marker can follow the marks — and so you can find a slip without starting over.

  6. 06 / 08

    Step G — Sense-check the size

    Ask: is this the kind of number a Grade 10–12 paper would want? A speed of 3 000 ms for a learner walking, or a probability bigger than 1, means a unit or algebra slip. Estimate first: round the numbers and do the sum in your head.

    Why this step: Markers write ‘unrealistic’ in the margin when the method is right but the size is wild. A 10-second head check often finds a missing 10² or a unit that never changed.

  7. 07 / 08

    Step F — Box the answer with its unit

    Backward vertical integration.

    Why this step: A number without a unit is half a mark on a Physics paper, and a marker can miss a Maths answer that is buried in working.

  8. 08 / 08

    Step H — What the marker is looking for

    On an NSC memo you usually earn: (1) a method mark for naming the right formula or idea in words, (2) an accuracy mark for substituting the given numbers with units, (3) an accuracy mark for the boxed answer with its unit. Write those three lines even if you are unsure of the arithmetic — blank pages score zero.

    Why this step: First-timers chase the final number and leave the method blank. The memo still pays out for the idea and the substitution even when the last line is wrong.

5. The answer

Backward vertical integration.

Copy onto your answer sheet — in this order

Answer: Backward vertical integration.

6. Check it like a marker

Forward: taking over distributors.

7. A trap first-timers fall into

First-timers often grab the first formula they remember, mix units (cm with m, minutes with seconds), or drop a minus sign. Write the formula in words first: “this equals that, because…”

Ntsako · fx-991ZA PLUS. Tap to calculate.