145] Read the article below and answer the questions that follow: How Capitec became South Africa's biggest bank by Freek Vermeulen October 10, 2018 The consumer banking industry is notoriously difficult to enter, not least because most customers rarely switch banks. In some countries, people change spouses more often than they change banks. The banking industry in South Africa was no exception; for decades the industry was dominated by "the Big Four" (Standard, FNB, Nedbank and Absa). However, in 2000 a new player entered the industry, called Capitec, which started establishing branches rapidly. By 2007 it broke through the barrier of 1 million active customers; 10 years later it had more than 10 million clients and about 800 branches. It is now the largest bank in the country. Capitec gets many things right in terms of its strategy, including its market positioning, internal operations and organisational culture. Yet three things stand out that enable it to grow and prosper. Resisting revenue temptations innovative entrants may one day disrupt company still relies heavily on unsecured loans, a business that is notoriously risky and hard to value. But, so far, Capitec's growth strategy has revealed some lessons for any company that is trying to grow in a crowded, competitive market. It is a story of focused evolution, based on bravely shedding the outdated practices of the industry's dominant incumbents. 1.1 Discuss the concept of a low-cost leadership strategy to build and sustain competitive advantage. (4) 1.2 Explain, using examples from the above article, how Capitec used low-cost leadership strategies to build and sustain its competitive advantage. (2) 1.3 Louw and Venter (2019:257) state: "The cost leadership strategy carries a risk that the cost leader may be so focused on reducing costs that it may lose sight of what the customers actually want." List the changes that Capitec introduced in customer services that are different from the traditional banks to ensure their customers are satisfied. (3) 1.4 Capitec introduced not only low-cost leadership strategies but also a focused strategy to secure a competitive edge. Discuss this statement by explaining the concept of a focused strategy. (10) innovation. Briefly explain this term (4)