Assignment Task

Africa’s largest retailer, Shoprite-Checkers, has enjoyed double-digit sales growth over the past year, despite rolling blackouts and other economic headwinds, while increasing its value proposition to customers and putting more than R13.5 billion back in their pockets at the till point.

Its annual results, for the year ended 2 July, reveal that sales were up by 17% or R26- billion on the previous year to R215 billion. For the new financial year, the retail giant has allocated as much as R8.5 billion to capital expenditure to increase capacity in its supply chain, refurbish and expand existing stores, and fund the group’s digital commerce and technology-related initiatives.

The group plans to add a further 200,000 square metres in new distribution centres over the next two years to support its 2,121 supermarkets in South Africa, with 314 new stores planned. In the year under review, the group in SA opened 340 stores and integrated 94 stores and a meat store acquired from Walmart for R662 million. Those were remodelled as Shoprites (51), Usave (one), and Shoprite Liquor (42). Two of these Walmart stores have not yet begun trading due to a liquor licence transfer issue. About 4,480 positions in the former Walmart stores were retained, bringing Shoprite’s total job increases to 8,131. It has spent R213 million on capital assets to onboard the Walmart stores since its acquisition and expects to spend more to bring the stores in line with the group’s standards.

The group hiked sales by 17% to R215 billion in the 2022/23 financial year, with South African supermarkets up 17.8% to R173.6 billion. Total income was up 15.6%, while total expenses, excluding Shoprite Employees Trust distributions, diesel in SA supermarkets and additional insurance, were up 14.9%

The group’s diluted headline earnings per share increased by 9.7% and its full-year dividend per share by 10.5% to 663c. Group CEO Pieter Engelbrecht said in the context of the country’s power problems, they were pleased to report growth in headline earnings and dividends per share. Had it not been for the additional expense incurred in diesel – R1.3-billion to power generators – their market-leading sales growth would have delivered considerably higher returns for their shareholders and employees would have benefited from a higher Shoprite Employee Trust distribution

Questions

1. The Group gained record levels of market share (Article One)

2. Discuss the reasons for this increase in Shoprite’s market share.

3. Shoprite has turned up the pressure on its rivals’ (Article Two) Shoprite appears to have a significant competitive advantage

4. Explain what competitive advantage is and discuss the source(s) of this advantage and how Shoprite can sustain this advantage.

5. Evaluate the strategies Shoprite has implemented to remain a market leader

6. Provide an explanation of why change management is so important and challenging in contemporary business environments.

7. change management is a leadership competency for enabling change within an organisation” With reference to this, assess the skills required to initiate and implement change in an organisation, and show whether or not they are different

8. Discuss the challenges facing tobacco companies.

9. Identify and discuss the strategies employed by BAT and Philip Morris

Change Management

Although it is sometimes called the soft side of change, managing the people side of a change is often the most challenging and critical component of an organisational transformation. Consider a merger or acquisition. The technical side of the change is certainly complex.

The financial arrangements of the deal have to be worked out, business systems have to be integrated, decisions have to be made about the structure of the new organisation, and more. However, getting people on board and participating in the merger or acquisition can make the difference between success and failure. The reason for this is that individuals will need to perform their jobs differently. The degree to which they change their behaviours and adopt new processes has a significant impact on the initiative. This is why the soft side of change can be the harder side of change.

Change management addresses the people side of change. Creating a new organisation, designing new work processes, and implementing new technologies may never see their full potential if people are not brought along. That`s because financial success depends on how thoroughly individuals in the organisation embrace the change. Change management is the application of a structured process and set of tools for leading the people side of change to achieve a desired outcome. Ultimately, change management focuses on how to help people engage, adopt and use a change in their day-to-day work.

Change Management as a Process

The change management process enables practitioners within organisations to leverage and scale the change management activities that help impacted individuals and groups move through their transitions. The Prosci Methodology includes a robust, research-based

Change Management as a Competency

At the organisational level, change management is a leadership competency for enabling change within an organisation. It is also a strategic capability designed to increase the change capacity and responsiveness of the organisation.

For senior leaders, change management competency means being able to lead change for the organisation, including being an effective sponsor of change and demonstrating commitment to the change, both individually and organisationally. For people managers working with front-line employees, competency relates to effectively coaching direct reports through their change journeys. Although competency varies according to one’s relationship to change, organisations are more effective and successful when they build change management competencies throughout their ranks.

Change management is not just communication and training. Nor is it simply managing resistance. Effective change management follows a structured process and employs a holistic set of tools to drive successful individual and organisational change.

There are two main reasons to employ effective change management on both large- and small-scale efforts.:

• Organisational change happens one person at a time
• Ignoring the people`s side of change is costly

Organisational change happens one person at a time

It is easy to think about change only from an organisational perspective. When managers consider a merger or acquisition, they might focus on financial structuring, data and systems integration, and physical location changes. However, organisational change of any kind occurs one person at a time. That is because an organisation-wide change only occurs when Andre, Becky, Carlos and Dharma do their jobs differently.

Organisations don’t change, people do. It is the cumulative impact of successful individual change that brings about successful organisational change. If individuals don’t make changes to their day-to-day work, an organisational transformation effort will not deliver results.