Question 1 - Eskom
At the heart of an electricity utility, such as, Eskom, is the responsibility to supply the electricity on which modern society depends.
Eskom's power stations operate 365 days a year. Like most other power utilities, Eskom's Generation Group maintains a varied portfolio of plants: gas turbine-, hydroelectric-, pumped storage- and nuclear units, in addition to the coal-fired plant.
In recent years, the South African population has become used to a principle of "load sharing" due to excess demand for electricity. This requires Eskom to consider its corporate strategy to provide the current and future South African, as well as customers in neighbouring countries, with sufficient electricity.
You have been instructed to provide the management of Eskom with a comprehensive report on the use of corporate strategies at the various electricity generating plants across South Africa. Eskom indicated that the following strategies would be used at the various plants:
- Coal-fired plant: Turnaround strategy;
- Hydroelectric plant: Growth strategy;
- Diesel generators and "solar farms" operated by corporates in SA: Co-operative or corporate combination strategy.
In your report, which should be at a maximum of 900 words, you are expected to cover the following elements of each strategy:
- Each strategy should be comprehensively explained to Eskom management;
- Motivate why the chosen corporate strategy is the most appropriate for the plant type;
- Through the use of examples, explain how Eskom could employ the chosen strategy at each of the plant types.
Question 2 - Sanlam
According to their website, Sanlam is one (1) of the largest financial services groups in South Africa. They have business interests elsewhere in Africa, as well as in Europe, India, Australia and the United States.
Sanlam, like all the other major insurance companies in South Africa, mainly makes use of two (2) distribution channels to sell their products: a network of independent brokers and branches with direct agents employed by Sanlam. All insurance companies find competition extremely fierce and sales of their various products are under pressure.
In 2009 Sanlam introduced a new initiative called Blue Star Business Units. These units have the objective of consolidating a broad spectrum of Sanlam services into independently owned and managed business units, which are still trading under the protection of Sanlam.
A unique benefit this model presents to clients is that if a client's agent dies or resigns from the industry the Blue Star business unit still provides continuity of services to the client; they do not become "orphan" policy holders.
Additional reading:
- Sanlam Sustainability Report 2013, which forms part of Sanlam's annual reporting on their website (p.62). Refer to the section called "Contact a Blue Star Financial Adviser" on the Sanlam website.
Write an essay of approximately 1 500 words in which you critically analyse and evaluate the Value Innovation strategy that Sanlam opted for in their 2009 Blue Star Financial Adviser initiative.