Introduction To The Shoprites Micro Environment

Shoprite’s mission is to ensure that they sell their products to their consumers at the lowest price that they possibly can and they want to be in a destination that the consumers are able to reach. They receive their products from South African and international manufacturers and by this being done, they have to then order or buy their products in bulk. Shoprite works with distribution centers that are sophisticated when it comes to their equipment which then focuses on the goods that they sell in the stores that are in the continent of Africa.

‘The guiding mission of the Shoprite Group of Companies is to be the consumers’ preferred shopping destination, by retailing food and non-food products at the lowest prices from conveniently located outlets in an environment that is conducive to shopping.

The Group realises its low-price policy by continuously finding ways to reduce costs in the supply chain. Shoprite buys in bulk from both local and overseas manufacturers, it cuts out the middle-man by buying directly from suppliers; and it operates 17 technologically advanced distribution centers from which central delivery of grocery products, non-food and fresh produce to stores all over Africa takes place in a cost effective way.’

Organisational Structure:

With regard to their company structure, Shoprite has many directors and they are involved in many different aspects of the company. They are as follows:

CEO

Deputy Managing Director

Division Manager

General Manager: Marketing & Product Development

General Manager: Furniture Division

General Manager: Retail Investments

General Manager: Hungry Lion

General Manager: Group Finances

Chief Operating Officer

Vice-chairman of Pepkor

Non-executive director audit and risk committee

Alternate director

CEO: the Chief Executive Officer is the person that is in charge of the business overall, in this instance, the CEO is in charge of all the Shoprite’s throughout the country. They have to ensure that the business is running smoothly, and they have power over all the employees. They make the final decisions.

Deputy Managing Director: this person falls right under the CEO, and they take charge if the CEO is not available. They do not have as much power as the CEO, however they have to ensure that everything is under control and they have to make sure that all petty issues are dealt with before they reach the CEO.

Division Manager: this person is in charge of taking controlling all the separate divisions within Shoprite. They have to ensure that the different divisions are under control and that there is nothing that is acting as an hindrance in these divisions.

General Manager: Marketing & Product Development: this person is to control all the Shoprite’s throughout the country, and control the functioning of the Marketing and Production Development. They also have to ensure that the marketing and production is under control and that there is nothing wrong with either.

General Manager: Furniture Division: this person is to decide the type of furniture that is being distributed to the different Shoprite’s. They also have to ensure that the furniture is of good quality and that it is distributed at the right time.

General Manager: Retail Investments: this person is in charge of the of all the retail investment throughout the country throughout all the Shoprite’s. They have to ensure that the retail investment is under control and that there is nothing that is a hindrance.

General Manager: Hungry Lion: this person is in control of all the Hungry Lion’s throughout the country, as Hungry Lion is a smaller business that belongs to Shoprite. This person also has to ensure that everything within each Hungry Lion goes well and that all the Hungry Lion’s throughout the country are at the same level and that they are all doing things in the same way.

General Manager: Group Finances: this person had to ensure that the finances within the business are all balanced and that they as a business are making a profit rather than a loss. This person also has to ensure that they as a business have enough money to carry through with their Corporate Social Responsibilities.

Chief Operating Officer: this person is in charge of all the different Shoprite’s, and the way in which they operate.

Non-Executive Director Audit and Risk Committee: the risks in which they take as a business should have a committee that will help to come up with solutions. They also have to review all that is done by the business and ensure that all the Shoprite’s are operating at the same level and that they are all doing the same thing in terms of functioning.

Alternate Director: is the person that is in charge of the different areas in Shoprite, and they have to ensure that the different directors within the Shoprite’s. (on a smaller scale). They also have to ensure that the different areas have a director.

CEO

Deputy Managing Director

Division Manager

GM: Marketing and Product Development

GM: Retail Investments

GM: Furniture Division

GM: Hungry Lion

GM: Group Finances

Chief Operating Officer

Vice- Chairman of Pepkor

Non-executive audit and risk committee

Alternate Director

Corporate Social Responsibility and Sustainability:

When it comes to their Corporate Social Responsibilities, Shoprite’s main focus is women, children and the elderly of the country. They as a Group are involved in six corporate social responsibilities, and they are:

Mobile Soup Kitchens (this is when they feed the poor people of the country directly)

Cuppa for CANSA (this is where they sponsor and support all those that are suffering with cancer)

Projects aimed at Children (this is a project where they support children and they try to improve their lives)

Shoprite Community Work (here, they focus on areas that need a lot of attention, however, since they are not able to provide them with this attention, they then donate money to a particular area)

Play Pumps (in this section, they ensure that villages have running water)

Strokes for Genius (here they focus on those that are involved in fine arts and they find means to support them in this CSI as well).

Shoprite does not have set Corporate Social Responsibilities; they are involved in many different responsibilities and which could be viewed as a positive and ethical factor, in the sense that they want to do as much as they can in terms of helping the community and helping the country in terms of its development. This, however, may be viewed (by critics) as a negative factor as they would not be focusing on one set responsibility but they would be focusing on many different ones which may then make the other feel neglected, in the sense that they are not getting the proper attention. However, Corporate Social Responsibilities are not responsibilities that each and every business has to be involved in, it is the duty of the government, and for some companies to undertake Corporate Social Responsibilities is simply there for them to do what they feel is right. (Some businesses only undertake Corporate Social Responsibilities for the image of the business.)

When it comes to sustaining the Corporate Social Responsibility, they as Shoprite will not continue with a CSR that is expensive for the community or the environment. When having said this, one realised that they (Shoprite) meant that they would not continue with an expensive Corporate Social Responsibility, they meant that if the CSR is too costly for the people of the community to maintain, then they will have to find a different one. When it comes to sustaining their CSR, they want to ensure that they are able to sustain it for all the generations to come.

Socio-Economic Issues and Strategies:

In 1996 Shoprite founded the Women of the Year awards. These awards were founded to commemorate women for the work that they done in that particular year. The awards end in an awards ceremony that is very glamorous and the women are treated very well at this awards ceremony. Speeches are delivered and the women that are nominated then stand and they then award the winners.

The women are nominated for these awards and this shows the humility that they have, as they do not see what they do as being able to change the country, and being a small way in which they change the world. There are different categories in which these women are chosen and they are as follows:

Health Care-Givers

Educators

Corner Shop to Big Business Makers

Good Neighbours

Youth Movers

Another sign of the humility of these women is that they win R100 000 and they then donate this money to a programme or organisation of their choice. However, people feel as though too much money is being spent on the award ceremony, and they therefore feel as though the money should be spent on their Corporate Social Responsibilities rather than the award ceremony. There has not been an alternative to the award ceremony and therefore they are coming up with different ideas as to how they will commemorate these women, therefore the award ceremony is still the only way they can commemorate them.

CODE OF ETHICS

The Group’s Code of Ethics commits it to the highest standards of integrity, conduct and ethics in its dealings with all parties concerned, including its directors, managers, employees, customers, suppliers, competitors, investors, shareholders and the public in general. The directors and staff are expected to fulfil their ethical obligations in such a manner that the business is run strictly according to fair commercial competitive practice. A notification of the “closed period” regarding trading in the securities of the Group is circulated to all directors and senior executive managers of the Group and its subsidiaries in June and December every year. Closed periods are as follows:

Interim results

Year-end results

Trading in securities

25 December until profit announcement on SENS

25 June until profit announcement on SENS

Discussions with analysts

1 December until profit announcement on SENS

1 June until profit announcement on SENS

All dealings in Shoprite Holdings Ltd shares by both Company and subsidiary company directors are reported on the JSE News Service (SENS) within 48 hours of the trade having been made. All such trades must be pre-approved by an authorised director of the holding company.

(http://www.shopriteholdings.co.za/pages/1019812640/corporate-responsibility/corporate-governance/business-ethics.asp)

Bibliography:

http://www.shopriteholdings.co.za/pages/1019812640/corporate-responsibility/sustainability/csi.asp (this website contained information on the different corporate social responsibilities that Shoprite is involved in and the way in which they sustain these corporate social responsibilities.)-18 April 2006

http://www.shopriteholdings.co.za/pages/1019812640/corporate-responsibility/community-involvement/Cuppa-for-Cansa.asp (one of the corporate social responsibilities in which Shoprite is involved in is Cuppa for Cansa, and this website provides information on the involvement of Shoprite in the responsibility)-12 May 2010

http://www.womanoftheyear.co.za/( Women of the Year Awards is one of Shoprite’s main focus, and the following two websites contain information on the awards as well as Shoprite’s involvement, mainly the second website, as well as the history of the awards.)-3 May 2010

http://www.womanoftheyear.co.za/pages/79568134/2010/About/History.asp

http://www.shopriteholdings.co.za/pages/1019812640/corporate-responsibility/community- (involvement/Mobile-Soup-Kitchens.asp (this website contains information on the Mobile Soup Kitchen and Shoprite’s involvement there.)30 April 2010

http://www.strokesofgenius.co.za/ (the next two websites contain information on Strokes of Genius which is another one of Shoprite’s CSR’s and these websites contain information on themselves as well as Shoprite’s contribution.) -29 April 2010

http://www.strokesofgenius.co.za/pages/449909228/v2/About-Us.asp

http://www.shopriteholdings.co.za/pages/1019812640/investor-relations/Annual-Report.asp (this annual report gives information on Shoprite’s organisation structure and the members as well as their participation and the functions of their jobs and responsibilities.)-21 April 2010

http://www.shopriteholdings.co.za/pages/1019812640/corporate-responsibility/corporate-governance/business-ethics.asp (this website is where one received the code of ethics)

(http://www.shopriteholdings.co.za/pages/1019812640/customer-care/Customer-Care.asp) (this website is where on received the vision and mission of Shoprite)- 16 April 2010

SPUR

Choice of Company:

The reason as to why I chose Spur as one of the companies to research is because it is a trusted company and people do not often know or worry about what it is that happens in the company. (They do not worry themselves with what happens within the business). Another reason as to why I chose Spur is because I felt that it would be interesting to research two trusted and popular companies and to see which of the two really runs well, in the sense that they live up to their mission statement, their code of ethics and all the other bits that are in between. Comparing the two companies would be very interesting, and as mentioned earlier, people may disregard companies that they should not disregard, as they do not know whether these specific companies both treat their customers in the same manner or one may treat their customers better than the other. Therefore, the reasons given are the reasons as to why i chose to research Spur against Shoprite.

Introduction Spur’s Micro Environment:

Spur’s vision is to be the best business there is in the same industry as theirs. (to be the best family restaurant). Their mission is to be devoted to both their employees and their customers and to provide food that is up to standard, at all times.

‘Our vision is to be the best family sit-down restaurant in the markets in which we trade.

Our mission is to be dedicated at all times to our customers and employees – to provide a “taste for life” for our customers and be a “great place to work” for our employees.’

The strategy in which they will then have to undertake in order to put all of this into practice and to ensure that they are all working towards the same goal is as follows:

‘We plan to continue our restaurant expansion across Spur Steak Ranches, Panarottis Pizza Pasta and John Dory’s Fish & Grill in South Africa, while growing our international operations on a sustained basis as we enter some new and unchartered markets.

We regularly encounter the question as to whether the Spur brand and its restaurant base have reached saturation point in the local market. Our response is an unequivocal “no”. Along with the growth in the size of our market and potential customer base, new opportunities arise as the population demographics of the country shift. An outlying area, where a restaurant may not have been viable in the past, could grow to support the opening of a Spur. This is particularly relevant in peri-urban areas. The opening of shopping malls and entertainment destinations always create scope for new outlets, while restaurant relocations and refurbishments also provide an opportunity to increase customer volumes.

We are constantly reinventing ourselves, innovating and adapting to changing customer needs and expectations. We see continued scope for strong growth well into the future’.

(http://www.spurcorporation.co.za/about_overview.aspx)

Organisational Structure:

When it comes to the organisational structure, Spur’s structure is as follows (these people are in order of their importance):

Executive Chairman

Executive Director

Deputy Director

Managing Director

Financial Director

Non-Executive Director

Independent Non-Executive Director

The Executive Chairman is a person who ensures that oversees everything that is happening in the business and they have to ensure that nothing gets decided without their knowledge. (all ideas and decisions have to be passed by them, and they have the final say). He is also just under the founder of Spur.

The Executive Director is another name for a CEO, and this person’s job is to lift the weight of the workload off the shoulders of the Executive Chairman, therefore they seem to do a lot more work than the other people of the business. They have to ensure that everything within the business runs smoothly and that there are no hindrances.

The Deputy Director is under the Executive Director and they have to work well with their Executive as they both make decisions and come up with ideas together, as they have to ease each other’s work load.

The Managing Director is the one that works in a particular Spur and runs the Spur. They have to ensure that the customers are happy and that the waiters and waitresses are treating the customers well and they are acting in an ethical manner I everything that they do.

The Financial Director’s job is to ensure that the money that comes into the business is a profit rather than a loss. (these people take care of all the finances of the business as to ensure that they as a business do well). The Financial Director’s job is also to keep track and record of all the finances of the different Spur’s around the country, and they are also in charge of the financial managers of the different Spur’s.

The Non-Executive Director is a member if the leadership of Spur and they are a representative on behalf of the customers, however, they have to listen to all that the customers say about the business and they can therefore give feedback to the other people in the managerial positions on what the customers think of the business.

The Independent Non-Executive Director is a person that takes care of the stock exchange of the business. They have to give feedback to their fellow colleagues on what is happening in the country’s JSE.

Executive Chairman

Executive Director

Non-Executive Director

Independent Non-Executive Director

Financial Director

Managing Director

Deputy Director

Corporate Social Responsibility:

Let’s Play was founded by SuperSport, and it was created so that they could focus on children and their needs. Spur then showed their support by joining in the CSR, they joined about a year and a half ago. This CSR is focused on children and helping them with regard to physical education as it is said that 20% of children in the country are overweight. Another function of this CSR is to feed the children as more often than not they are not getting the necessary foods as well as nutrition. It is also focused on keeping the children fit and ensure that they are active as to not put their lives into jeopardy for the future.

Code of ethics

Spur Corporation has adopted a code of ethics which requires employees to maintain the highest moral and ethical standards

in their relationships with stakeholders. The principles contained in the code are integrity; honesty and good faith; impartiality;

transparency and openness; and accountability and responsibility.

The board is satisfied that no material breaches of ethical behaviour occurred during the year and confirms that the group

continues to comply with the highest standards of business practices.

(http://www.spurcorporation.co.za/assets/dyn_pdf/AnnualReport2006.pdf)