13.1 STRATEGIC AND CHANGE MANAGEMENT
QUESTION 1 
Read the following and answer the questions that follow:
Save your time - order a paper!
Get your paper written from scratch within the tight deadline. Our service is a reliable solution to all your troubles. Place an order on any task and we will take care of it. You won’t have to worry about the quality and deadlinesOrder Paper Now
If there is a lesson to be learnt from Naspers, it is that it pays not to put all your eggs into one basket. Having captivated local and international investors with its 337% growth since 1997 – from a market capitalisation of R3.5 billion to R11.8 billion – Naspers continues to prove why its rise has not been a fluke.
In 2009 alone, in a year when its local rivals and international counterparts were taking a beating in revenues, the media giant almost doubled both its market capitalisation (from R6.3 billion to R11 billion) and its share price (R156.50 to R292.56).
So why does this company thrive despite the recession? More than a decade ago, Naspers decided to diversify its interests from its predominantly print operation – with titles such as Beeldand Rapport – and become a multimedia company.
The idea: to hedge against the risk of depending on just one market, in this case, South Africa for revenue. The strategy has clearly worked. The company now owns print,pay-TV, Internet and technology assets in South Africa, India, Latin America, Asia, sub-Saharan Africa, and Eastern Europe.
Naspers was the only media company in 2009 to report revenue growth above 5%. Operating profit grew by 19% to R2.8 billion. Although more than 50% of its revenue comes from South Africa, driven by the evidently recession-proof pay-TV (MultiChoice accounts for 60%), income from its offshore subsidiaries is also growing rapidly.
Foreseeing the value in pay-TV, in 2007 Naspers bought out the 38% stake that media group Johnnic Communications (now Avusa) had in M-Net/Supersport for R3.3 billion. MultiChoice’s revenue has grown 15%, largely from subscription growth of 54%.
Adding to the numbers is MultiChoice’s growing penetration of the African continent, particularly in Nigeria, where it has about one million customers. Naspers has also defended its pay-TV turf from new competitors by offering specially packaged DStv bouquets for the various consumer segments.
But it is Naspers’s gamble on Tencent that has inspired confidence in the direction Naspers is taking. The company owns 10% of Tencent, China’s biggest Internet portal and the best performer on the Hong Kong Securities Exchange. Tencent’s strength is instant messaging. It owns over 80% of this market. In 2009, Tencent brought in 56% (R2.2 billion) of the R4.1 billion revenue of Naspers’s Internet division. Tencent’s core target market is the 15-35 age group, which is the biggest user of the Internet and all its offerings in China. This is not the case in Africa, where Naspers is exploring opportunities in mobile usage growth. It has launched mobile TV and owns 30% of Mxit.Master of Business Administration Academic Calendar July 2013
REGENT Business School48
Many credit Naspers meteoric rise To MD Koos Bekker (57), who took over the reins in 1997. A witty but private personality whose success has come mostly from his reliance on instinct. Naspers’s top management comprises mavericks who possess an appetite for calculated risks.
Although Naspers has been a growth story through the recession, it has not been immune to the downturn. Its revenue growth in 2011 of 6% was a shadow of the 22% recorded in 2010. Its print assets, housed under Media24, also took a knock from depressed advertising spend, forcing closure of a few titles. A number of staff members in the print division were also retrenched.
With a price to earnings ratio of 33.88 – higher than the sector’s 30.58 – Naspers may be considered an expensive buy, but investors can expect long-term rewards.Adapted from: Louw and Venter (2010) Strategic Management Developing Sustainability in Southern Africa 2nd edition. Oxford
1.1 Discuss the factors that affect the strategic choice(s) available to Naspers. (12)
1.2 Identify and discuss the various corporate strategies Naspers has pursued. (10)
1.3 Discuss the appropriateness of these strategies in terms of strategic intent and the long-term goals of Naspers. (8)
1.4 Discuss the characteristics of strategic leadership that Bekker would have displayed in implementing the various strategies at Naspers. (10)
QUESTION 2 
A company has a competitive advantage over its rivals when its profitability is greater than the average profitability of all companies in its industry. It has a sustained competitive advantage when it is able to maintain above-average profitability over a number of years (Hill and Jones, 2009:77).
With reference to this, discuss the sources of competitive advantage and superior profitability and explain the link between strategy, competitive advantage and profitability.
QUESTION 3 
3.1 Discuss the role of organisational culture in strategy implementation (10)
3.2 Discuss the reasons why companies enter into strategic alliances (10)
QUESTION 4 
The diagnostic phase of change management is mainly a data gathering or research activity aimed at producing useful information upon which subsequent intervention decisions can be based
With reference to this, discuss the main aim(s) of organisational diagnosis and describe the steps in the diagnostic process.