Question 1 [45] 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 Founder and chairman Riaan Stassen said to me: "Our strength has always been in terms of what it does and does focused 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) 1.5 The article mentions the term disruptive innovation. Briefly explain this term and why it is important for competitors to recognise it. (4) 1.6 In table format, differentiate between red ocean strategies and blue ocean ocean se Blue OC strategies. vare (10) 1.7 Critically evaluate the strategies of Capitec and say whether Capitec is (2) Red occa following a red or a blue ocean strategy, 1.7 Critically evaluate the strategies of Capitec and say whether Capitec is (2) 1.8 Capitec also used innovation opportunities at the bottom of the pyramid (BOP). Explain this statement by referring to the bank's focus on the four. As (5) of a BOP 1.9 Explain how Capitec used market development as an organic growth strategy (5) to expand in the current market