Independent Institute of Education - Assessment 2otz

1.1 Explain the difference between a supply chain and a value chain' Make sure to

include all relevant definitions and diagrams for each' (20)

(LU 7. Source: Strydom, W'J" Nel' D'' Bothma' C" Van Heerden' C'H" Van

Scheers, T. & Grove' T' (2OOg) Distribution Manaoement 2"d edition'

Pretoria, Van Schaik Publishers'Pp' 22-25'

llse discretion, each valid point only gets 7 mark'

4 marks defining suPPIY chain'

4 marks for diagram suPPIY chain'

4 marks defining value chain'

4 marks for diagram value chain'

4 marks for explaining the difference')

Supolvchain:Startsfromtheoriginsoftherawmaterials(1)usedintheproduction of products and ends once the product has been discarded or

recYcled. (1.)

Thephysica|,financiaIandinformationnetworksthatinvo|vethemovementof materials, (-1) funds and related information through the full logistics

Process'fromtheacquisitionofrawmateria|stothede|iveryoffinishedproducts to the end-user' The supply chain includes atl vendors' service

providersrcustomersandintermediaries'(1)andendsoncetheproducthasbeen discarded or recYcled'

A varue chain: rs the systematic approach to examining the development of

competitiveadvantage'(1,)Itisatooltoidentifyhowmorecustomervaluecan be created (I) in the distribution channel (supply chain)'

It formF part of the design, production' marketing' delivery and support (l)

of products.

Aschematicana|ysisusedtoidentifywhereincrementa|costsoccurandwhere more customer value is created in a corporate structure' (J)

Manufac-

turing Plant(1)

Retailers'

resellers or

customers (I)

@ Independent Institute of Education (Pty) Ltd 2012 Page 3 of 13

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Independent Institute of Education - Assessment

I.2 Sketch the flow of the international distribution system for Coca Cola and briefly

2072

explain with examPles. (10)

(LU 7. Source: strydom et al, 2oo9t p. 37. Provide 7 mark for each of the 5

steps indicated below and assign the other 5 marks as follows:)

overseas franchisor: (J) would be the coca-cola company in the usA; (1)

Local manufacturer: (l) would purchase the licensing rights to bottle coke

in South Africai (1)

Local wholesaler: (-1) Would receive on nation-wide scale; (1)

Local retailer: (1) Anything from Pick n Pay to corner caf6's and spaza

shops; (1.)

consumer: (1) The stakeholder who purchases the product in, for example,

a 34oml can. (1)

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@ Independent Institute of Education (Pty) Ltd 2012Page 5 of 13

Independent Institute of Education - Assessment 2012

There are three (3) main decisions a company must make in selecting its distributionstructure: intensive, selective or exclusive. which one (1) of these three (3) haveCoca Cola used in South Africa? Define the distribution structure you have selectedand provide one (1) good reason why you know this is the distribution structureused? ().,

(LU 7, Source: Strydom et al, 2OO9: pp. 6O-61.)

Intensive distribution structure; (I)rntensive distribution involves the placement of products (usuallyconvenience products) (1) in as many rocati ons (1) by using the optimumnumber of intermediaries possible; (1)coke is sold practicaily on every street corner in south Africa. (1)

What type of franchising model would Coca Cola have used in South Africa and whv?

r'q \\"/

(LU 3. source: strydom et al, 2oo9: p. llo. Award I mark for identificationof the eorrect type of franchising and 4 marks maximum for theexplanation,)

Product and trade-name franchisingi (1)Because a sales relationship has been established between coca cola andAmalgamated Bottling rndustries (l) where the last mentioned is grantedthe right to sell coca cola's product (r) in exchange for fees or royalties (l)as welf as the obligation to sell the franchisor,s product (1)- i,e. coca colaprovides Amalgamated Bottling rndustries with the recipe (syrup) to makethe product. (I)

In south Africa, as a developing country, continued success of the cash-and-carrywholesaler would be evident. Provide two (2) reasons for thls and discuss usinq CocaCola as example.

(LU g. Source: Strydotm et al, 2OO9: p, ll3.)

(s)

Manufacturers are increasingly confronted with rising distribution costs(l) such as delivery costs and the high risk of credit provision, (l) whichmeans they tend to foist these marketing functions on to the cash-and-carry wholesaler who is able to perform them more cheaply. (1)The smaller retailers are experiencing problems purchasing products fromthe full-service wholesalers because the latter do not sell smallconsignments. (1)

1.3

L4

1.5

@ Independent Institute of Education (pty) Ltd 2012Page 6 of 13