Pick n Pay Project Red stores will employ a low-price strategy with an emphasis on essentials and fresh produce. Source: Supplied The ambitious strategy is designed to deliver group turnover growth at a compound annual rate of 10% - resulting in market share growth for the group of at least 3%. In addition, the retail group has pledged through the plan to increase its profit before tax (PBT) margin to above 3.0% by FY26. DIFM YEAR 2 ACADEMIC AND ASSESSMENT CALENDAR - DISTANCE REGENT BUSINESS SCHOOL (RBS) JANUARY 2022 12 The five key elements of the four-year strategic plan are the following: New customer value proposition: Introducing Project Red In a bid to redefine its relationship with the customer, Pick n Pay will be organised into two customer-facing brands, each designed around specific customer needs. The new customer value proposition (CVP) is currently in a testing phase, but the core elements are: 'Project Red' stores will be organised to deliver low prices and great quality. They will have a range of around 8,000 SKUs, with an emphasis on essentials, a strong fresh offer, and excellent service, said the company. Project Red stores will have a distinct fresh produce market feeling in the fruit and vegetable section with a focus on bulk offerings and promotions. A dedication aisle will be incorporated specifically for promotional goods, boasting numerous bulk displays to showcase the competitive prices to customers. Pick n Pay stores will offer a depth of range, and an emphasis on quality, innovation, and freshness. These stores will have a range of around 18,000 SKUs, giving customers great value, linked to best quality. They will cater to customer aspirations, including through a fully integrated omnichannel offer. Pick n Pay stores will include an expansive section that allows customers to explore the latest innovations in fresh fruit and vegetables. There will also be prime destinations for butchery, bakery, and cheese & wine. Improved in-store experiences will focus on themes such as health, indulgence, snacking, or hot beverages. "These two Pick n Pay brands, together with the groups Boxer business, will cover the market in a way that meets specific customer needs, and will appeal to the entire South African customer demographic," Pick n Pay said. The CPV refocus was developed on the back of nearly a year in customer research, including over 7,000 customer interviews. Accelerating Boxer growth The group's Boxer retail chain is a prominent limited-range discounter in Africa targeting priceconscious customers. The company is aiming to double Boxers turnover by FY26 through a combination of new store openings (200 over the next three years), and consistent like-for-like growth in existing stores. DIFM YEAR 2 ACADEMIC AND ASSESSMENT CALENDAR - DISTANCE REGENT BUSINESS SCHOOL (RBS) JANUARY 2022 13 "This is great news for customers across the country who are seeking exceptional value, and great news for the growth of our group," Pick n Pay said. Omnichannel leadership Pick n Pay has concluded a commercial services agreement with the Takealot Group which will see the launch of a dedicated Pick n Pay on-demand food, grocery and liquor offer on the Mr D app, which currently enjoys over 2.5 million active customers. The service will launch in August 2022, and will be available nationwide by the end of the current financial year. The group sees this new offer as a decisive initiative in its plan to grow significantly in the fastgrowing online food and grocery market. The new offer will benefit from Pick n Pays expertise in food and grocery, and its nationwide store network. Takealot will bring its industry-leading technology, and unrivalled delivery network. Pick n Pays Smart Shopper loyalty programme will be integrated into the offer, with customers able to earn points when shopping for Pick n Pay groceries on the Mr D app. R3bn in cost reduction Project Future is the groups modernisation and efficiency plan, with savings directed into giving customers lower prices and better value. According to the company, Phase 1 of the plan delivered R1bn in savings over two years. Project Future Phase 2 will reduce costs by a further R3bn over the next three years. "The group is confident that substantial efficiencies can be achieved in areas including store productivity, supply chain and working capital, commercial buying, goods not for resale, modernisation of support offices, and a more sustainable and efficient store state," the company said. Building a future-fit, high-performance team Pick n Pay said that key to the overall plan is a goal to build a future-fit, high-performance team, delivering consistently every day for customers. The group has an intensive people plan in place to achieve this, including new initiatives on talent planning, recruitment and retention, training, DIFM YEAR 2 ACADEMIC AND ASSESSMENT CALENDAR - DISTANCE REGENT BUSINESS SCHOOL (RBS) JANUARY 2022 14 mentoring, and development, effective hybrid working, and innovative staff engagement. Greater diversity is also a priority, building on momentum achieved in recent years. Commenting on the strategic plan, group CEO Pieter Boone said that the goal was to unlock the full potential of the Pick n Pay Group and accelerate the momentum it's built over the past year. I am hugely excited by each element of the plan. Through our new customer value proposition for Pick n Pay, we will give customers a more tailored and personal experience, better prices, and more exciting stores. Boxer is already a phenomenal business, and our pledge to open 200 new stores will be great news for customers in search of the best value in the market. Our commercial agreement with the Takealot Group will transform the market for on-demand grocery, with over 2.5 million customers on the Mr. D app benefiting from a dedicated Pick n Pay food and grocery offer, and Takealots unrivalled delivery network. Project Future is improving our business day by day by making it leaner, more productive, and more modern - with the savings pledged towards even better prices for customers. It is a comprehensive and balanced plan, and a significant new chapter in the Groups history." Source: Pick n Pays big plans: New brands, cost-cutting, Boxer expansion and omni channel growth. Bizcommunity, 18 May 2022. [Online]. Available at: https://www.bizcommunity.com/Article/196/182/227964.html [Accessed 12 June 2022].

QUESTION ONE: [30]

1.1 Analysing a business's value chain can draw attention to the organisation's strengths and weaknesses. A typical value chain divides activities within the business into two broad categories: primary activities and support activities. Discuss the primary activities for a company such as Pick n Pay. Substantiate your answer by referring to the case study. (20)

1.2 For decades, managers have acted from the premise that organisational events can be controlled. However, Chaos Theory, is based on the premise that very rarely can events be controlled, and thus acknowledges the dynamic nature of the contemporary management environment. Relate any five characteristics of the information age to a company such as Pick n Pay. (10)

Question 2

The environment within which the business finds itself changes very rapidly and this necessitates a thorough environmental awareness on the part of management, as well as adaptability with regard its approach to management.

With reference to the case study, discuss how the micro-environment, the macro-environment and the international environment may impact on the operations of Pick n Pay.(20)