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1) Potential Entrants (Threat of new entrants) – When it comes to the hotel industry there are considered to be several big hotel giants that are already in the market such as Marriott, Hilton, Hyatt, Accor, IHG etc. Therefore if a new hotel chain plans to enter the market the new entrant has to go through a lot of difficulties. Hotel Industry is all about changes in terms of services, products through technology and if a new entrant can possess technology in a unique way to sell its products or services, customers might be impressed with it and might switch in this case so there is always a threat to big chains from new entrants. An example can be seen where Ovolo Nishi formerly known as Hotel Hotel has acquired the market because of its unique ways in terms of services through technology.
Power of Buyers – Consumers, Guests actually known as buyers have the biggest power as hotels cannot make money, profits until and unless their products and services such as rooms, restaurants, bar’s etc are being used. There are considered to be millions of people that use the products/ services of IHG Hotels and therefore

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1. How do sports marketers enhance the perceived value of their commodities?
Cite at least two examples.

Sports marketers enhance the perceived value of their products by selling them
during the the season when the sport is being played, For example if they sell
Florida Gator shirts during football season , it’s more likely to be bought then just
selling them after football season is over. Sports companies use this strategy to
get people that are passionate about their favorite team or just the overall sport
to buy merchandise, Or for a better example say they have children or grandsons
that play these sports ,Sports companies can provide the chance to make and
sell custom apparel so they could make a lot of money.

2. How has the Internet changed entertainment marketing? Is this a positive or
negative change?

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The Internet has changed entertainment marketing which could have a positive
or a negative effect depending on the company. The internet provide ways for a
company to promote their products and/or services on things such as websites
and social media outlets. There are Pro’s and Con’s to promoting your company
on the internet , like one of the pro’s is that it can reach a lot of people in a little
bit of time so you could sell your products and make your company popular faster
via internet. Even tho that sounds promising there still are cons like if you sell
one of your products and the customer don’t like it they have the right to write a
bad review about your product and to tell other people not to buy your product.
To me the cons out do the pros because the internet can be cruel and people
can make up rumors about your company and take your customers away if the
hateful comments go viral.

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1. Corporate strategy used by Bidvest
Bidvest as we know it today has been driven by the entrepreneurial spirit of one of its founders, Mr. Brian Joffe. Throughout its history, Bidvest has applied a strategy of diversification through acquiring companies with good potential but at a lifecycle stage where these companies were struggling and share prices near the bottom – end of the cycle. Adcock is a prime example. Tiger Brands unbundled Adcock in 2008, taking most of the logistics infrastructure and some of the stronger brands with it. This left Adcock in a weakened state and made it an attractive proposition for Bidvest. To understand why Bidvest saw value in Adcock or rather more specifically in the Pharmaceutical industry, we can look at the macroenvironment from a Bidvest point of view back in 2013.

Figure 1

Figure 1 – Interrelationships between the organisation and its external environments (Mellahi, Frynas & Finlay, 2005:34)
“The macroenvironment includes political, legal, economic, socio-cultural, technological demographic and ecological forces at the global level and/or within a country. These forces, whether global, or related to a specific country, originate beyond and are usually irrespective of any single organisation’s operating situation.” (Ireland, Hoskisson & Hitt, 2009:34) In terms of a macroenvironment analysis, Bidvest would have focused on two of the forces indicated in Figure 1 above, namely socio-cultural and demographic.

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1.1 Socio-cultural & demographic factors “Socio-cultural factors and forces in an organisation’s macroenvironment refer to the way in which changing social values, beliefs, attitudes, traditions, lifestyles and other culture-related elements of a nation, society or a group affect an industry, and hence, the organisations within that industry where these changes could create opportunities or threats” (Pearce & Robinson 2009:95)
In terms of lifestyles, the trend of health and wellness has made an impact even in South Africa in recent times. Health clubs, social clubs such as Parkrun, healthfood shops, low GI and freerange foods and various initiatives from bigger corporates to include wellness as a priority for their staff are just examples. Adcock would play a key role in this trend with products such as Bioplus which promotes health and active lifestyles with product ranges available over the counter. HIV/Aids and the anti-retroviral programmes supported by government expenditure would be another trend that Bidvest would not miss an opportunity to take part in. The fact that Adcock won a 14% stake in a tender to supply these anti-retrovirals to patients surely made strategic sense and a leadership team who would be better connected to government than that of Adcock would ensure a bigger portion of the tender base in future. Bidvest would have sensed this opportunity as analysts pointed out that 1 in 4 South Africans between the age of 15 and 49 years are infected with HIV and would need such anti-retrovirals to lead a healthy, normal live and delay the typical symptoms and illness associated with HIV/AIDS infection. Demographic criteria would include variables such as age, life expectancy, gender, race, religion, sexual orientation, social class, level of education and family size. A trend with specific reference to Bidvest’s interest in Adcock would be the fact that the population in general is becoming older over time. “In 2009 in South Africa, 3.7 million people (representing 7.5% of the population) were older than 60 years, and this is expected to increase by some 1.5 million in the next 10 years” (Smit, 2009:23) This most definitely could be seen as an opportunity as an ageing population would be dependent on chronic and other medication for many more years and the medical insurance companies would ensure that the funds are available to their members. Adcock is well positioned to play in this space and would do well to develop and market more prescribed chronic medication for the 60 plus age groups. Based on this analysis and considering the trends found in the demographic as well as socio – cultural factors in the macroenvironment, one would have to admit that Bidvest had a successful strategy based on good analysis and market intelligence and certainly not looking to acquire just any company that seemed like fair value at the time.

2. Why do companies merge?
Growth through mergers ; acquisitions as a strategy
It is well understood that the key strength of Bidvest over the years is to acquire companies with relatively low earnings and in the case of Adhock it was no different. Adhock may not be a typically Bidvest company however Mr Joffe may have seen the opportunity that exists with Mr Louw being president of the Pharmaceutical Industry Association. Below are some of the factors ; enablers of successful growth associated with mergers ; acquisitions transactions.

The first priorities are strategic: They explore how an acquirer must identify specific opportunities created by the deal, develop strategies to capture them, and set financial targets and accountability for growth. The remaining priorities address tactical- the steps required to achieve the deal goals and realise the potential of the acquisition based on the strategic priorities. The timing of the activities around these priorities varies by the acquirer, but successful acquirers generally focuses on these activities before the deal announcement, deploying “clean terms” as required to accelerate planning using completely sensitive data (see figure 4). They then develop clear short-and long-term plans around the initiatives that were most critical to driving growth and had the discipline to see these through to completion. Although unexpected Mr Joffe and the Snr team must have completed strategy definition and associated planning prior to the announcement and draw on some of the lessons learnt in some of the past acquisitions including some of the failed ones namely that of Brandcorp.

Figure 4

Figure 4 – Processes followed during and leading up to announcement (Deloitte issue 11 2012)
2.3Why do some mergers ; acquisitions fail?The reason some mergers and acquisitions fail is because there is no clear objective of the merger/acquisition. The role players do not undertake the SWOT that would be involved in order to make informed decisions on the pros and cons of such a decision. The advantages need to outweigh the disadvantages of the merger to ensure that it is a success. There must be buy-in from both sides including on the stakeholders involved internally and externally. This implies that analysis of both environments should take place. It is also beneficial to benchmark with organisations that have done such through research and engagements with those corporations. Also, insufficiently detailed implementation plans and failure to identify key interdependencies between the many work-streams could bring the project to a halt, or require costly rework, may extend the integration timelines and cause much frustration.
Other reasons of failure:
Flawed intentions
Misgauging Strategic fit
Getting the deal structure or pricing wrong
Not focusing enough on customers and sales (vs.Cost Synergies)