UNIVERSITY EXAMINATIONS
May/June 2023
MNG4801
STRATEGIC MANAGEMENT
60 MARKS
DURATION: 4 HOURS
EXAMINERS:
FIRST: DR NADINE DE METZ (UNISA)
SECOND: MS LEBOGANG MAMETJA
(UNISA)
THIRD: MS LEBONE NKHUMELENI (UP)
This paper consists of 12 pages.
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are provided on pages 2-4 of this examination question paper. The case study begins
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Open Rubric
MNG4801
Date: 17 May 2023
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UNIVERSITY EXAMINATIONS UNIVERSITEITSEKSAMENS
MNG4801 May/June 2023
Strategic Management
Duration: 4 hours. Submit by uploading immediately after 4 hours.
Marks: 60 Marks
EXAMINERS:
FIRST: DR NADINE DE METZ (UNISA)
SECOND: MS LEBOGANG MAMETJA (UNISA)
THIRD: MS LEBONE NKHUMELENI (UP)
INSTRUCTIONS:
• This examination constitutes the primary assessment for May/June 2023.
• This examination remains the property of the University of South Africa and may not
be distributed to a third party.
• This question paper consists of 12 pages.
• Read the case study and use the contents of this case study to answer all the
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MAYJUNE 2023 EXAM CASE STUDY
Futurelife: Diversifying without losing focus
Futurelife is South Africa’s first high-energy, high-protein, high-dietary-fibre, low-GI
food. The company was founded in 2008 and their mission is to improve the health
and wellbeing of individuals ranging from diabetics to professional athletes
(EntrepreneurhubSA, 2022).
Paul Saad, founder and CEO of Futurelife, graduated from UKZN in 1987 with a
degree in Chartered Accounting. Subsequently, he achieved an equivalent
qualification from London in associated cost and management accounting
(EntrepreneurhubSA, 2022). After working as a chartered accountant, he invested
in a manufacturing company and realised that he enjoyed being involved in
production. From there his desire grew to improve the health and wellbeing of
consumers by developing a nutrient-based food, precooked and ready to eat, by
just adding water. The Futurelife Smart Food has recently been used in an
international study by the British Journal of Nutrition in independent trials on the
impact of nutritional intervention on people with debilitating disease, and the
results proved to be “outstanding” (The African Business Journal, 2017).
Where did it start?
In 2007, Futurelife began primarily as a social project to assist in improving the lives
of malnourished and disadvantaged people in Sub-Saharan Africa. The aim was
to create the most nutritional product at the lowest cost and with total
convenience (Futurelife, 2023). Paul Saad saw the gap in the South African food
market for a nutritious product requiring very little resources. He explains that
“there were a lot of products that had low nutritional value, and you also had
large populations that suffered from malnutrition, so I wanted to create a product
that could combat this situation” (van Rooyen, 2017). He did this by challenging a
multi-disciplinary team of food scientists and technologists, medical professionals,
and dieticians to create a smart food product that was instant, great tasting and at
the same time supports the immune system and is nutritionally balanced
(Futurelife, 2023).
It took two years to develop the Futurelife Smart Food, which is known to be the first
South African “scientifically formulated balanced, nutrient dense food to contain
MODUCARE, a daily immune supplement” (The African Business Journal, 2017).
Saad said that he “wanted to develop something that was nutritionally dense, free
from preservatives, gluten and lactose”. He expressed that the aim was to keep
people fuller for longer and emphasises that people were also not getting enough
protein in their diets (Entrepreneurhubsa, 2022). Saad points out that “I’m a little bit
of a perfectionist when it comes to things,” and says that he tries to empower people
to achieve their maximum in their area of expertise. He explains that although he is
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a chartered accountant, “food and nutrition is my passion” (The African Business
Journal, 2017). “Our team has a desire for knowledge, and this is what differentiates
and drives our success”, he adds (The African Business Journal, 2017).
Growth through diversification and joint ventures
Reflecting on the growth of the company, Saad mentions that “growth brings great
opportunities, but it also brings new challenges and demands” (van Rooyen, 2017).
He explains that to give customers what they want, you need to evolve and diversify.
For example, if people are demanding a product with reduced sugar, then one needs
to respond to that. FutureLife has continued growing and responding to customers’
needs, and now provides drinks, breads, and energy bars as a result of the demand
for these items (van Rooyen, 2017). However, Saad warns that “diversification is
tricky, though” and explains further that even when you grow and diversify, you need
to stay true to your original vision and mission. He explains that you are “only as
good as the products you're selling right now. If quality drops, or you venture too far
out of your focus area, the brand will suffer. You need to live up to customers'
expectations."
In 2014, Clover announced a 50/50 joint venture with Futurelife to launch a range of
functional food products (Bizcommunity, 2014). One of these products was the
launch of a ready-to-drink version of Futurelife, with more variants that followed
(Kaziboni, 2016). In the joint venture with Clover, Futurelife contributes its expertise
in cereals and functional foods, while Clover oversees production, sales, distribution
and merchandising.
Pioneer Food Group (Pioneer) also announced in 2015 that it would be entering into
a joint venture (JV) with Futurelife. Through this strategy, the parties would benefit
from improved product efficiency and learnings. It also provided an opportunity for
both companies to combine their expertise in the food, beverage, and functional
foods sectors, to explore profitable categories outside of traditional markets, and to
unlock new product opportunities. The merger was however, contested by Kellogg’s,
the second largest breakfast cereal producer, as they viewed the transaction as a
removal of an effective competition (Kaziboni, 2016). According to Kellogg’s,
ProNutro and Futurelife are in the same market and this merger would lessen the
competition in the market by reducing each party’s incentives to compete. However,
the Competition Commission concluded that ProNutro and Futurelife operated in
different markets, therefore, did not compete with each other. Subsequently, the
merger was approved by the Competition Tribunal of South Africa on 9 November
2015, subject to certain comprehensive conditions. Behavioural conditions were
enforced on the merging parties to ensure that ProNutro’s development continued
for the next three years and to safeguard competition (Kaziboni, 2016).
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Growth through e-commerce
In 2021, Futurelife launched a direct-to-customer e-commerce platform offering
shoppers access to the wide range of Futurelife products by delivering products
straight to their doors (Bizcommunity, 2022).
In preparation for moving to an online space, the company invited its Facebook
followers to participate in an e-commerce survey. This was to ensure the e-
commerce site would be relevant and meet customers’ needs (Bizcommunity,
2022). The managing director of Futurelife, Mark Bunn, says that by combining the
brand's e-commerce innovation with the traditional bricks and mortar distribution
channels, its customers can choose where they buy their Futurelife products
(Bizcommunity, 2021). Bunn states; “consumers will still be able to find all their usual
Futurelife products in-store but through our online store, our loyal customers will also
have instant access to all of the breakfast cereals, lunchbox favourites and other
Futurelife pantry staples they love” (Bizcommunity, 2021). He further explains that
the platform will give them an opportunity to reach new customers wherever they
are. Bun concludes that the last 18 months have been a unique period of discovery
for them. He notes that “seeing consumers sit at home and starting to get more
comfortable ordering their Futurelife online via various retailers` e-commerce sites
and apps has been really fascinating. As a company, we want to celebrate smart
nutrition with our customers by being in the right place at the right time with the right
choice of food, and our new e-commerce platform allows us to do exactly that”
(Bizcommunity, 2021).
Sustainable solutions for the future through partnerships
Julika Falconer, the CEO of the Futurelife Foundation Trust, joined the organisation
in 2008 to further the organisation’s mission of alleviating hunger among South
African children (aidex, 2023). She remarked that Futurelife had been feeding an
average of 200 000 highly nutritious meals every month and they reached the 10
million meals donation mark by 2017. The Foundation continues to roll out
Smartfood for sustainable improvement for the longer term. They have collaborated
with The Virtuous Circle project to produce packaging that has enabled over 650 000
of Futurelife Smart Food meals to be distributed across South Africa in innovative
dual compartment multilayer pouches designed to optimise transport, storage,
preparation, and consumption. One of the aims of the The Virtuous Circle Project is
to challenge and test innovative methods of creating new products of genuine value
from the recycled multilayer packaging waste. Virtuous Circle is important to help
drive forward Sustainable Development Goals (SDG) 2 (Zero Hunger), SDG 12
(Responsible Consumption and Production) and SDG 17 (Partnerships and Goals)
(aidex, 2023).
In 2021, Futurelife partnered with Dis-Chem Foundation and HOPE worldwide SA
to donate and distribute 200 000 nutritious meals to children affected by the riots
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and unrest that took place across Kwa-Zulu Natal and Gauteng (Mkhize, 2021). At
the time, Mark Bunn stressed that South Africa was “already beset by poverty before
the pandemic. Now, after over a year of Covid-19 and a week of relentless riots,
thousands of jobs have been lost and so many, especially our children, have been
left without food.” He believes that the long-term nutritional needs of children are
where they are best positioned to assist (Mkhize, 2021).
In 2022, The Nelson Mandela Foundation announced a partnership with Futurelife
to distribute 5 million meals to starving children to fight hunger (IOL, 2022). Mark
Bunn said that through this new partnership, they will reach children that would really
benefit from their smart nutrition. The partnership is the start of an ongoing
relationship through which Futurelife will be creating a sustainable programme to
reach more children. He emphasized; “we hope this partnership between the Nelson
Mandela Foundation and Futurelife will provide over 1 million meals of essential
nutrition to children in early childhood development centres across the nation so
they, too, can thrive” (IOL, 2022).
References
Aidex. 2023. Futurelife Foundation Trust – Sustainable solutions to malnutrition through partnerships.
[Online] Available from: https://www.aid-expo.com/feast/11-feast/115-feast-waste-not-want-
not [Accessed: 06/03/2023].
Bizcommunity. 2014. Clover industries deals coming through. [Online]. Available from:
https://www.bizcommunity.com/Article/196/597/111475.html [Accessed: 02/03/2023].
Bizcommunity. 2022. Futurelife goes direct to consumer. [Online] Available from:
https://www.bizcommunity.com/Article/196/162/224305.html# [Accessed: 21/02/2023].
EntrepreneurhubSA. 2022. How Paul Saad turned Futurelife® into a successful multinutrient brand.
[Online] Available from: https://entrepreneurhubsa.co.za/how-paul-saad-turned-futurelife-
into-a-successful-multinutrient-brand/. [Accessed: 15/02/2023].
IOL. 2022. Futurelife and Nelson Mandela Foundation to stave off hunger with more than 5 million
meals. [Online] Available from: https://www.iol.co.za/dailynews/news/kwazulu-
natal/futurelife-and-nelson-mandela-foundation-to-stave-off-hunger-with-more-than-5-
million-meals-6ac6f53d-34b1-4c86-a211-bccc33d37c42 [Accessed: 06/03/2023].
Mkhize, A. 2021. Futurelife® commits to rebuild our future. [Online] Available from: https://social-
tv.co.za/futurelife-commits-to-rebuild-our-future/ [Accessed: 06/03/2023].
The African Business Journal. 2017. The African Business Journal,
Home/2017/June/12/FUTURELIFE. [Online] Available from:
https://www.tabj.co.za/food_drink/futurelife-the_food_of_champions.html. [Accessed:
15/02/2023].
Van Rooyen, G.G. 2017. How Futurelife diversified without losing focus. [Online] Available from:
https://www.entrepreneur.com/en-za/entrepreneurs/how-futurelife-diversified-without-
losing-focus/327805 [Accessed: 15/02/2023].
How to in-text reference the case study:
You may in-text reference the individual authors from the above reference list OR you may
in- text reference the case study as: (Futurelife, 2023)
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Question 1
Question 1 is for 20 marks, and it includes sub-questions 1.1, 1.2 and 1.3. It tests your
understanding of the nature of strategic management. It also tests your understanding of the
stakeholder-inclusive approach, and of strategic direction.
1.1 Critically discuss the inside-out and outside-in perspectives that (8)
strategic leaders adopt when managing strategically. Briefly introduce each
of these perspectives theoretically and argue which one of these has been
adopted by Paul Saad. Use examples from the case study to support your
discussion. No marks will be awarded for drawing figures.
1.2 Explain why it is important for companies like Futurelife to interact with and (6)
consider a broader array of stakeholders. As part of your discussion,
introduce the stakeholder-inclusive approach and discuss how Futurelife
responded to different stakeholders.
1.3 “Paul explains further that even when you grow and diversify, you need to (6)
stay true to your original vision and mission (Futurelife, 2023).”
Consider the above statement, and briefly discuss the benefits of a clear
strategic direction as encapsulated by vision and mission statements and
apply your answer to the practical situation in the case study. Support your
discussion by integrating appropriate application of theory and examples
from the case study.
SUB-TOTAL [20]
Question 2
Question 2 is for 20 marks, and it includes sub-questions 2.1, 2.2 and 2.3. It tests your
understanding of the macro-environment. It also tests your understanding of competitive
forces on competitive advantage and of the strategic importance of resources and
capabilities.
2.1 Identify and briefly discuss the macro-environmental factor that Futurelife (4)
is addressing to obtain a competitive advantage in the food and beverage
sector. Support your discussion by integrating appropriate application of
theory and examples from the case study.
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2.2 Critically discuss the influence of the threat of new entrants as a force that (6)
affects the competitive environment and apply it to the Futurelife case study.
Support your discussion by integrating appropriate application of theory and
examples from the case study.
2.3 Apply theory on the two determinants of resources value: competitive
(10)
advantage and exploitability to the Futurelife case study. In your
discussion, comment on the extent to which Futurelife resources are a
viable source of competitive advantage and the extent to which resources
can be exploited for future growth.
SUB-TOTAL [20]
Question 3
Question 3 is for 20 marks, and it includes sub-questions 3.1, 3.2 and 3.3. It tests your
understanding of corporate growth strategy and business level strategy. It also tests your
understanding of strategic leadership.
3.1 Discuss the decision of Futurelife to diversify and enter into a joint venture (4)
with Pioneer Foods and Clover, by referring to the advantages of a joint
venture and apply them to the Futurelife case study.
3.2 Identify and critically evaluate Futurelife’s business level strategy by (8)
applying Thompson and Martin’s three criteria for evaluating strategic
options. As part of your evaluation indicate whether Futurelife is likely to be
successful or not. Support your discussion by integrating appropriate
application of theory and examples from the case study.
3.3 Critically evaluate Paul Saad as a transformational leader (Louw & (8)
Venter, 2019:427). Conclude your evaluation by commenting (with
motivation) whether Paul Saad can be considered as a transformational
leader or not. Support your discussion by integrating appropriate
application of theory and examples from the case study.
SUB-TOTAL [20]
TOTAL [60]
© UNISA 2023
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