CASE STUDY

READ THE CASE STUDY AND ANSWER THE QUESTIONS THAT FOLLOW:

Title: Exploring the internal and external of Shoprite Holdings Ltd$.$

Internal business environment of Shoprite Holdings Ltd

The internal business environment of Shoprite Holdings Ltd$.$ includes the factors related to the

structure of the organization and based on these factors the Board of Director $($BOD$)$ of the company

make vital decisions. The management decisions or the decisions of BOD support the company to run

in the right direction and these are also important for keeping effective control over the organization.

The internal business environment of the concerned company is comprised of the resources of the

organization. Moreover, these resources are vital for determining the strengths and weaknesses of

the company. The competencies, as well as capabilities of the business firm, can be recognized by

gauging the strengths and weaknesses associated with the resources of the company. The resourcebased view regarding the respective organization is founded on the base of $3$ classification criteria,

which are subsequently infrastructure, human resources, and technologies. The management of

Shoprite Holdings Ltd$.$ makes important decisions for the organization based on the following

elements:

Objectives: The objective of the company is to provide its customers world$-$class shopping experience

at an affordable cost and the management$$s decisions are formed based on this objective.

Structure: The organizational structure is also an important factor to make management decisions.

The organizational structure of Shoprite Holdings Ltd$.$ indicates the ways by which the managers

communicate with the people of the organization through the specific system and procedures within

the company.

Technology: Technology plays a vital role in the organization as it massively influences the supply chain

of the company.

People: People are the most important resources within the company as the skill and capabilities of

the people provide a significant contribution to the strengths and weaknesses of the organization. The

internal environment is mostly based on the people of the concerned company Shoprite Holdings Ltd$.$

The internal environment of the company is greatly influenced by domestic small suppliers of the

company which is in distress in the turbulent situation where the South African Currency is weakening.

Besides this, rigid labour laws in South Africa also obstruct the company to remain competitive in the

international market $($Shoprite holdings, $2020).$

External business environment of Shoprite Holdings Ltd

The external business environment of the concerned company Shoprite Holdings Ltd$.$ is very critical at

this moment as the fluctuation of exchange price and downsizing of the South African economy due

to the outburst of the Covid$-19$ pandemic impose critical negative impacts on the business. The

company is influenced by these external environmental factors, but these cannot be controlled by the

organization.

$4$

The external environment of Shoprite Holdings Ltd$.$ is influenced by the strong competition in the food

market of South Africa. The weak performance of the South African economy is also a critical factor

along with the energy issues in the country. A hike in the tariff of electricity and fuel price in South

Africa would have critical impacts on the performance of the company. The emergences of the Covid$19$ pandemic and subsequent lockdown and social distancing norms affect the retail business as

people are now more interested in buying foods online instead of the supermarket $($Shoprite holdings,

$2020).$

QUESTIONS:

$$For organisations to be able to understand the present and predict the future, an integrated

understanding of the external and internal environments of an organisation is essential.

The strategic management process is a way of aligning the unique resources and capabilities of an

organisation with the constantly changing and increasingly competitive external environment in

pursuance of its goals.$$

$1.$ With reference to the above statement, critically analyse the macro, industry and

internal environments of Shoprite holdings Ltd$.$ Expound on the variables of each

environment and support your analysis with relevant examples. $[45$ MARKS$]$