What is the difference between a sole trader and a company?

A sole trader is owned and run by one person — unlimited liability (personal assets at risk), simple to set up, owner keeps all profit. A company (Pty Ltd or Ltd) is a separate legal entity — owners have limited liability, more complex to establish (Companies Act), can have multiple shareholders, subject to more regulation and tax obligations.

What is the Companies Act 71 of 2008?

The Companies Act 71 of 2008 regulates companies in South Africa. It requires companies to register with CIPC (Companies and Intellectual Property Commission), maintain prescribed records, hold annual general meetings, submit annual returns, have directors who meet fit and proper requirements, and comply with corporate governance requirements.

What is business ethics?

Business ethics is the application of ethical principles to business activities. In South Africa, the King IV Report on Corporate Governance sets out principles for ethical and effective leadership. Key ethical issues: conflicts of interest, corporate social responsibility (CSR), environmental sustainability, fair labour practices, anti-corruption compliance.

What is SWOT analysis?

SWOT analysis is a strategic planning tool: Strengths (internal advantages — what the business does well), Weaknesses (internal disadvantages — what needs improvement), Opportunities (external factors that could benefit the business), Threats (external factors that could harm the business). Strengths and weaknesses are internal; Opportunities and Threats are external.

What is corporate social responsibility (CSR)?

CSR is a business model where companies integrate social and environmental concerns into their operations voluntarily, beyond legal requirements. In SA, the B-BBEE (Broad-Based Black Economic Empowerment) framework and the Companies Act encourage CSR through the Social and Ethics Committee. CSR benefits: improved reputation, employee retention, community relations.

What are the factors of production?

The four factors of production are: Land (all natural resources — minerals, water, agricultural land), Labour (human effort — physical and intellectual), Capital (manufactured resources used in production — machinery, buildings, technology), and Entrepreneurship (the ability to combine the other three and bear risk). Each factor earns a return: rent, wages, interest, profit.

Matric Business Studies Grade 12 Practice Questions 2026

Q1/150

What does PESTLE stand for?

Explanation: PESTLE: Political, Economic, Social, Technological, Legal, Environmental. Used to analyse macro-environmental factors affecting a business.

Q2/150

What is a SWOT analysis?

Explanation: SWOT: Strengths + Weaknesses = internal factors (within business control). Opportunities + Threats = external factors (from environment).

Q3/150

What is the difference between an entrepreneur and a manager?

Explanation: Entrepreneur: innovates, takes financial risk, starts ventures. Manager: plans, organises, leads, controls existing operations. Can be both.

Q4/150

What are the characteristics of a successful entrepreneur?

Explanation: Entrepreneurial traits: creative problem-solving, calculated risk-taking, persistence, opportunity recognition, self-motivation, resilience.

Q5/150

What is a sole proprietorship?

Explanation: Sole proprietorship: one owner. Easy to start. Owner and business are legally the same — personal assets at risk for business debts.

Q6/150

What is a partnership?

Explanation: Partnership: 2-20 partners (10 for professional). Joint and several liability. Governed by partnership agreement and Partnership Act.

Q7/150

What is a private company (Pty Ltd) under the Companies Act 71 of 2008?

Explanation: Private company (Pty Ltd): limited liability, separate legal entity, perpetual succession. 1-50 non-employee shareholders. Shares not listed.

Q8/150

What is a public company (Ltd)?

Explanation: Public company: listed on JSE. Unlimited shareholders. Annual reports publicly available. Governed by Companies Act and JSE listing requirements.

Q9/150

What is a cooperative?

Explanation: Cooperative: member-owned. Profits (surplus) distributed to members. Types: worker, consumer, agricultural, financial cooperatives.

Q10/150

What is a franchise?

Explanation: Franchise: franchisee buys right to use established brand. Franchisor provides training, support, systems. Franchisee pays initial fee + royalties.

Q11/150

What is the difference between a formal and informal business sector?

Explanation: Formal sector: SARS registration, company registration (CIPC), employee UIF/tax. Informal: no registration, cash-based, no social protection.

Q12/150

What is CSR (Corporate Social Responsibility)?

Explanation: CSR: beyond profit — consider stakeholders (employees, community, environment). Triple bottom line: People, Planet, Profit.

Q13/150

What is ethics in business?

Explanation: Business ethics: code of conduct. Ethical behaviour builds trust, reputation, sustainability. Includes anti-corruption, fair dealing, transparency.

Q14/150

What is corporate governance?

Explanation: Corporate governance: board accountability, transparency, fairness, responsibility. King IV Report: South Africa's leading governance framework.

Q15/150

What is the King IV Report?

Explanation: King IV (2016): succeed King III. Applies on apply-and-explain basis. Covers: board, stakeholders, audit, risk, ethics, IT governance.

Q16/150

What is the Consumer Protection Act (CPA)?

Explanation: CPA 68 of 2008: right to choose, privacy, disclosure, fair contract terms, product returns (6 months), product liability, right to quality.

Q17/150

What is the National Credit Act (NCA)?

Explanation: NCA: prevents reckless lending. Credit affordability assessment required. Disclosure of all credit costs. Protects over-indebted consumers.

Q18/150

What is the Labour Relations Act (LRA)?

Explanation: LRA 66 of 1995: unfair labour practices, unfair dismissal, strikes, collective bargaining. CCMA resolves disputes. Reinforces constitutional labour rights.

Q19/150

What is the Basic Conditions of Employment Act (BCEA)?

Explanation: BCEA 75 of 1997: max 45 hours/week, 3 hours overtime/day. 21 days annual leave, 30 days sick leave (3-year cycle), 4 months maternity leave.

Q20/150

What is the Employment Equity Act (EEA)?

Explanation: EEA 55 of 1998: no unfair discrimination on 19 grounds. Employers >50 staff: equity plan targeting under-represented groups (AA measures).

Q21/150

What is the BBBEE?

Explanation: BBBEE: scorecard measures ownership, management control, skills development, enterprise development, socioeconomic development. Required for government tenders.

Q22/150

What is market segmentation?

Explanation: Segmentation: geographic, demographic (age, income), psychographic (lifestyle), behavioural (usage). Each segment targeted with tailored marketing mix.

Q23/150

What is the marketing mix (4 Ps)?

Explanation: 4 Ps: Product (what you sell), Price (what you charge), Place (distribution channels), Promotion (how you communicate). Also 3 Ps: People, Process, Physical Evidence (services).

Q24/150

What is a USP?

Explanation: USP: what makes your product/service uniquely valuable. 'We're the only ones who...' Core of competitive positioning.

Q25/150

What is above-the-line vs below-the-line promotion?

Explanation: ATL: wide reach, undifferentiated (billboard, TV ad). BTL: specific targets, measurable ROI (discount coupons, email campaigns, trade shows).

Q26/150

What is a break-even point?

Explanation: Break-even: Fixed costs ÷ (Selling price − Variable cost per unit). Above break-even quantity → profit. Below → loss.

Q27/150

What is gross profit?

Explanation: Gross profit = Revenue − Cost of Sales. Shows basic trading profit. Compare to previous periods and industry benchmarks.

Q28/150

What is net profit?

Explanation: Net profit = Gross profit − Operating expenses. The 'bottom line'. Shows overall business profitability after all costs.

Q29/150

What is cash flow?

Explanation: Cash flow: actual cash movement. Business can be profitable but fail from poor cash flow (customers don't pay on time). Cash is king.

Q30/150

What is a cash flow statement?

Explanation: Cash flow statement: receipts − payments = net cash flow. Projected (budget) vs actual. Identify periods of cash shortage before they happen.

Q31/150

What is working capital?

Explanation: Working capital = current assets − current liabilities. Positive = can pay short-term debts. Negative = liquidity crisis.

Q32/150

What is the difference between fixed and variable costs?

Explanation: Fixed costs: stay same regardless of production (rent, insurance). Variable: rise/fall with output (materials, piece-rate labour, packaging).

Q33/150

What is profit maximisation vs market share as business objectives?

Explanation: Profit max: short-term shareholder value. Market share: long-term competitive dominance (Amazon strategy: grow share before profit). Trade-offs.

Q34/150

What is a business plan?

Explanation: Business plan: roadmap and funding document. Includes: executive summary, company description, market analysis, products/services, financials, team.

Q35/150

What is entrepreneurial risk?

Explanation: Entrepreneurial risk: financial (losing investment), functional (operations), strategic (market changes), liability risk. Reward justifies calculated risk.

Q36/150

What is intellectual property (IP)?

Explanation: IP protection: Patent (inventions), Trademark (brands), Copyright (creative works), Trade secret (confidential business info). SA: Companies and IP Commission (CIPC).

Q37/150

What is a patent?

Explanation: Patent: granted by CIPC. 20 years protection. Invention must be new, inventive, and useful. Must disclose how it works publicly.

Q38/150

What is a trademark?

Explanation: Trademark: ™ (unregistered) or ® (registered). Registered with CIPC. Indefinitely renewable. Protects brand from unauthorised use.

Q39/150

What is human capital?

Explanation: Human capital: intangible asset. Investment in training increases productivity and innovation. Knowledge economy increasingly relies on human capital.

Q40/150

What is talent management?

Explanation: Talent management: integrated HR approach. Includes recruitment, onboarding, development, performance management, succession planning, retention.

Q41/150

What is a trade union?

Explanation: Trade union: COSATU, FEDUSA, NACTU. Collective bargaining for wages, conditions. Protected right under SA Constitution and LRA.

Q42/150

What is collective bargaining?

Explanation: Collective bargaining: union + management negotiate. Result: collective agreement binding all in bargaining unit. Wage agreements, benefit changes.

Q43/150

What is a grievance procedure?

Explanation: Grievance procedure: step 1 immediate supervisor, step 2 HR/manager, step 3 CCMA/Labour Court. Must be fair and documented.

Q44/150

What is a disciplinary procedure?

Explanation: Disciplinary procedure: fair process required by LRA. Verbal warning → written warning → final written → dismissal. Must be fair and consistent.

Q45/150

What is the CCMA?

Explanation: CCMA: independent statutory body. Conciliation first (try to settle). If fails → arbitration (binding decision). Unfair dismissal, unfair labour practice.

Q46/150

What is Porter's Five Forces?

Explanation: Porter's Five Forces: strong forces = less attractive industry. Weak forces = more profitable. Used for industry analysis and strategy.

Q47/150

What is a niche market?

Explanation: Niche market: serve underserved specific need. Example: vegan cosmetics, left-handed equipment. High loyalty, premium pricing, less competition.

Q48/150

What is benchmarking?

Explanation: Benchmarking: internal (compare departments) or external (against industry leaders). Identify performance gaps and adopt best practices.

Q49/150

What is total quality management (TQM)?

Explanation: TQM: customer-focused, employee-involved continuous improvement. Zero defects goal. Plan-Do-Check-Act (PDCA) cycle. Japanese kaizen philosophy.

Q50/150

What is ISO certification?

Explanation: ISO: ISO 9001 (quality management), ISO 14001 (environmental), ISO 45001 (health and safety). Competitive advantage, customer confidence.

Q51/150

What is e-commerce?

Explanation: E-commerce: B2C (Amazon, Takealot), B2B (Alibaba), C2C (eBay, Facebook Marketplace). Reduced costs, global reach, 24/7 trading.

Q52/150

What is supply chain management?

Explanation: Supply chain: raw materials → manufacturing → distribution → retail → customer. JIT, lean management, ERP systems optimise the chain.

Q53/150

What is JIT (Just in Time)?

Explanation: JIT: pioneered by Toyota. Stock arrives when needed for production. Zero waste philosophy. Risk: supply disruption causes production halt.

Q54/150

What is a sole trader's main disadvantage?

Explanation: Unlimited liability: sole trader and business are legally the same. Personal home, car, savings can be seized to pay business debts.

Q55/150

What is limited liability?

Explanation: Limited liability: Pty Ltd and Ltd shareholders only lose their investment if company fails. Personal assets are protected. Key advantage of incorporation.

Q56/150

What is the difference between debt and equity financing?

Explanation: Debt financing: retain full ownership but interest cost, repayment obligation. Equity: give up ownership stake but no repayment. Trade-off: control vs financial risk.

Q57/150

What is a budget variance?

Explanation: Variance: actual vs budget. Favourable (better than expected). Adverse (worse than expected). Analyse causes and take corrective action.

Q58/150

What is profit sharing?

Explanation: Profit sharing: employees receive portion of profits. Motivates staff to improve company performance. Can be cash payment or shares.

Q59/150

What is performance management?

Explanation: Performance management: cyclical. Goal-setting → coaching → formal appraisal → reward/development. Continuous, not just annual review.

Q60/150

What is job enrichment?

Explanation: Job enrichment: vertical job expansion. More responsibility, decision-making authority, variety. Addresses higher-order needs (Maslow/Herzberg).

Q61/150

What is Maslow's hierarchy of needs?

Explanation: Maslow: physiological (food) → safety (security) → social (belonging) → esteem (recognition) → self-actualisation (growth). Unmet needs motivate behaviour.

Q62/150

What is Herzberg's two-factor theory?

Explanation: Herzberg: hygiene (salary, security, work conditions) — absence causes dissatisfaction but presence doesn't motivate. Motivators (achievement, recognition) — truly motivate.

Q63/150

What is autocratic leadership?

Explanation: Autocratic: top-down, fast decisions, clear direction. Works in emergencies, unskilled tasks. Disadvantage: low creativity, morale, buy-in.

Q64/150

What is democratic (participative) leadership?

Explanation: Democratic: collaborative decision-making. Higher buy-in, motivation, creativity. Slower. Works best with skilled, experienced teams.

Q65/150

What is laissez-faire leadership?

Explanation: Laissez-faire: minimal supervision. Works with highly skilled, self-motivated experts. Fails with inexperienced or unmotivated teams.

Q66/150

What is situational leadership?

Explanation: Situational (Hersey and Blanchard): match style to follower's development level. Direct (low skill) → Coach → Support → Delegate (high skill, motivated).

Q67/150

What is the difference between leadership and management?

Explanation: Leaders: vision, influence, change. Managers: systems, processes, control. Best organisations need both. Leaders 'do the right things', managers 'do things right.'

Q68/150

What is job analysis?

Explanation: Job analysis: foundation of all HR. Informs: job description (what tasks), person specification (what skills), selection, training, performance standards.

Q69/150

What is a job description?

Explanation: Job description: the job itself. Title, purpose, duties, responsibilities, reporting lines, working conditions. Used in recruitment and performance management.

Q70/150

What is a person specification?

Explanation: Person specification: ideal person for the job. Essential vs desirable criteria. Skills, qualifications, experience, personality. Used to shortlist candidates.

Q71/150

What is induction training?

Explanation: Induction: first days/weeks. Reduces anxiety, accelerates productivity, improves retention. Company history, values, policies, health and safety, IT systems.

Q72/150

What is on-the-job training?

Explanation: On-the-job: learn by doing. Job shadowing (observe), mentoring (guidance), coaching (targeted feedback), rotation (different roles). Cost-effective.

Q73/150

What is off-the-job training?

Explanation: Off-the-job: external courses, formal qualifications, simulation, e-learning. Can cover material unavailable internally. Higher cost, less job-specific.

Q74/150

What is succession planning?

Explanation: Succession planning: ensures leadership continuity. Identify high-potential employees, develop them for future key roles. Prevents knowledge loss when seniors leave.

Q75/150

What is employer branding?

Explanation: Employer brand: 'Why work here?' Culture, benefits, growth opportunities. Strong employer brand reduces recruitment costs and attracts better candidates.

Q76/150

What is a value chain (Porter)?

Explanation: Porter's Value Chain: primary activities directly create value. Support activities (HR, IT, procurement, infrastructure) enable primary. Identify where competitive advantage comes from.

Q77/150

What is strategic management?

Explanation: Strategic management: Mission → Vision → Objectives → SWOT → Strategy → Implementation → Evaluation. Iterative long-term process.

Q78/150

What is a mission statement?

Explanation: Mission: present-focused. 'What we do and why.' Guides daily decisions. Vision: future-focused. 'Where we want to be.' Both shape strategy.

Q79/150

What is corporate culture?

Explanation: Corporate culture: 'the way we do things here.' Artefacts (visible), values (espoused), assumptions (underlying). Culture drives behaviour more than policy.

Q80/150

What is change management?

Explanation: Change management: identify need → plan → communicate → involve stakeholders → implement → sustain. Kotter's 8-step model. Address resistance.

Q81/150

What is resistance to change?

Explanation: Resistance: normal human response. Causes: fear, loss of control, comfort zone, lack of information. Address with communication, involvement, training.

Q82/150

What is innovation in business?

Explanation: Innovation: product (new item), process (better method), marketing (new approach), organisational (new structure). Schumpeter: 'creative destruction.'

Q83/150

What is a market penetration strategy?

Explanation: Market penetration (Ansoff matrix bottom-left): low risk. Existing product, existing market. Grow share through competitive pricing, marketing, improved service.

Q84/150

What is a product development strategy (Ansoff)?

Explanation: Product development: new product, existing market. Medium risk. Company knows its customers but must develop new offering. R&D, innovation focus.

Q85/150

What is diversification in Ansoff matrix?

Explanation: Diversification: new product + new market. Highest risk. Can be related (same industry) or unrelated (conglomerate). Spreads risk but requires most resource.

Q86/150

What is market development (Ansoff)?

Explanation: Market development: existing product, new market. Medium risk. Expand geographically, target new demographic, find new uses for existing product.

Q87/150

What is the Product Life Cycle (PLC)?

Explanation: PLC: Introduction (low sales, high costs, losses), Growth (rapid sales, profit), Maturity (peak sales, competition, profits plateau), Decline (falling sales).

Q88/150

What is a loss leader?

Explanation: Loss leader: supermarkets sell bread/milk cheaply to attract shoppers who then buy other items. Traffic-driver strategy. Legal (US concerns about predatory pricing).

Q89/150

What is price skimming?

Explanation: Price skimming: Apple, Sony. High initial price → early adopters pay premium → price drops as market matures. Recover R&D costs, signal quality.

Q90/150

What is penetration pricing?

Explanation: Penetration pricing: Netflix, Amazon. Low price attracts mass market quickly. Builds scale and loyalty. Raises prices once established.

Q91/150

What is psychological pricing?

Explanation: Psychological pricing: R99.99 vs R100. Left-digit anchoring. Customers perceive significant difference. 'Odd-even pricing' common in retail.

Q92/150

What is cost-plus pricing?

Explanation: Cost-plus: cost of production + % markup = selling price. Guaranteed margin. Ignores what market will bear. Simple for businesses with many products.

Q93/150

What is competitive pricing?

Explanation: Competitive pricing: monitor competitor prices and position accordingly. Price leader sets price others follow. Follower matches leader. Undercutting risks price war.

Q94/150

What is the Consumer Protection Act right to return?

Explanation: CPA 6-month return: if goods fail to meet quality standards within 6 months, consumer can: repair, replacement, or full refund at consumer's choice.

Q95/150

What is a conflict of interest in business ethics?

Explanation: Conflict of interest: manager awarding tender to own relative. Solution: disclose and recuse. Governance requires declaration of interests.

Q96/150

What is sustainability in business?

Explanation: Sustainability: triple bottom line. Environmental (carbon, water, waste), Social (community, employees), Economic (profit, long-term viability). ESG reporting.

Q97/150

What is the role of advertising in marketing?

Explanation: Advertising: paid, identified sponsor. Creates awareness, informs, persuades. ATL (TV, radio) and BTL (digital, social). Measured: reach, frequency, ROI.

Q98/150

What is public relations (PR)?

Explanation: PR: unpaid media coverage, stakeholder relationships, crisis communication, corporate reputation. Unlike advertising: not paid placement.

Q99/150

What is a value proposition?

Explanation: Value proposition: 'We help [target customer] to [achieve outcome] by [unique approach].' Core of marketing strategy. Answers 'why us?'

Q100/150

What is customer relationship management (CRM)?

Explanation: CRM: Salesforce, HubSpot, SAP CRM. Track customer interactions, sales pipeline, purchase history. Improve retention, identify upsell opportunities.

Q101/150

What is the difference between B2B and B2C?

Explanation: B2B: longer sales cycles, rational decisions, relationship-based, fewer customers, higher value. B2C: emotional, convenience, brand-driven, mass market.

Q102/150

What is market research?

Explanation: Market research: primary (surveys, interviews, observation — new data), secondary (existing reports, census, trade publications). Informs strategy.

Q103/150

What is economic profit vs accounting profit?

Explanation: Economic profit: subtracts opportunity cost (what you gave up). Accounting profit: only actual money costs. Economic profit often lower — shows 'true' profitability.

Q104/150

What is a market economy?

Explanation: Market economy: decentralised. Supply and demand set prices. Private ownership. Competition drives efficiency and innovation. SA = mixed economy.

Q105/150

What is a mixed economy?

Explanation: Mixed economy: private sector + government involvement. Government provides public goods (roads, education), regulates markets, redistributes income.

Q106/150

What is inflation?

Explanation: Inflation: measured by CPI (Consumer Price Index). SA target: 3-6%. Causes: demand-pull, cost-push, monetary expansion. Measured monthly by Stats SA.

Q107/150

What is the Consumer Price Index (CPI)?

Explanation: CPI: basket of goods and services. Stats SA measures monthly. Year-on-year change = inflation rate. Used for wage negotiations, investment decisions.

Q108/150

What is the prime lending rate?

Explanation: Prime rate: prime = repo + 3.5%. Anchor for most consumer lending rates. Rises with repo rate. Affects mortgages, car loans, credit cards.

Q109/150

What is the repo rate?

Explanation: Repo rate: set by SA Reserve Bank's Monetary Policy Committee (MPC). Raised to reduce inflation (less borrowing). Lowered to stimulate growth.

Q110/150

What is monetary policy?

Explanation: Monetary policy: SA Reserve Bank sets repo rate to keep inflation in 3-6% target band. Independent from government. Works through interest rates.

Q111/150

What is fiscal policy?

Explanation: Fiscal policy: National Treasury manages government budget. Expansionary (spend more, tax less): stimulates growth. Contractionary (spend less, tax more): reduces inflation.

Q112/150

What is GDP growth and why is it important?

Explanation: GDP growth: business sales depend on economic growth. Growing GDP = more consumer spending. SA targeting 3%+ growth. Affects investment, employment.

Q113/150

What is unemployment's effect on business?

Explanation: High unemployment: reduced household income → lower consumer spending → business revenue falls → possible retrenchment → spiral. Major SA economic challenge (~32%).

Q114/150

What is a cartel?

Explanation: Cartel: price-fixing, market allocation, bid-rigging. Illegal under Competition Act. Competition Commission investigates. Heavy fines. e.g., bread cartel, construction cartel in SA.

Q115/150

What is the Competition Act?

Explanation: Competition Act 89 of 1998: prohibits cartels, prevents abuse of dominant position, controls mergers above thresholds. Competition Commission investigates.

Q116/150

What is intellectual property infringement?

Explanation: IP infringement: patent infringement (making/selling patented invention), copyright piracy, trademark counterfeiting. CIPC handles SA IP registration.

Q117/150

What is e-commerce payment security?

Explanation: E-commerce security: SSL/TLS encrypts data in transit. Payment gateways (PayFast, Peach Payments). PCI DSS compliance for card data. Never store CVV.

Q118/150

What is data protection under POPIA?

Explanation: POPIA (2021): SA data protection law equivalent to GDPR. Must have lawful reason to collect data. Cannot share without consent. 72-hour breach notification.

Q119/150

What is a non-disclosure agreement (NDA)?

Explanation: NDA: confidentiality agreement. Common when sharing IP, business plans, trade secrets. Breach = civil legal action. Duration usually 2-5 years.

Q120/150

What is a service level agreement (SLA)?

Explanation: SLA: agreed standards (response times, uptime, quality). Measurable KPIs. Penalties for non-compliance. Essential in IT, outsourcing, supply contracts.

Q121/150

What is a shareholder agreement?

Explanation: Shareholder agreement: dividend policy, share transfer restrictions, tag-along/drag-along rights, deadlock resolution. Supplementary to Memorandum of Incorporation.

Q122/150

What is the Memorandum of Incorporation (MOI)?

Explanation: MOI: replaced Memorandum and Articles of Association under Companies Act 71 of 2008. Registered with CIPC. Standard MOI or customised.

Q123/150

What is business continuity planning?

Explanation: Business continuity: identify critical functions, threats, recovery procedures. Business Continuity Plan (BCP) and Disaster Recovery Plan (DRP). Test regularly.

Q124/150

What is scenario planning?

Explanation: Scenario planning: 3-4 plausible future scenarios (not predictions). 'What if' analysis. Prepare flexible strategies for different environments.

Q125/150

What is a PESTLE analysis used for in business strategy?

Explanation: PESTLE: macro-environment analysis. Not controllable. Used in strategic planning before SWOT — understand external context before analysing internal factors.

Q126/150

What is Blue Ocean Strategy?

Explanation: Blue Ocean (Kim and Mauborgne): create new demand rather than fight over existing. Netflix (new space vs video rental). Cirque du Soleil (new entertainment category).

Q127/150

What is a competitive advantage?

Explanation: Competitive advantage: Porter's generic strategies — cost leadership (Walmart), differentiation (Apple), focus (niche). Must be sustainable (hard to imitate).

Q128/150

What is outsourcing?

Explanation: Outsourcing: payroll (Sage), IT support (managed services), cleaning (FM services). Pros: cost, expertise, flexibility. Cons: loss of control, quality risk.

Q129/150

What is offshoring?

Explanation: Offshoring: move operations to another country (manufacturing to China, call centres to India). Lower costs but: quality control, language, cultural issues, political risk.

Q130/150

What is a holding company?

Explanation: Holding company: owns subsidiaries. Risk isolation (subsidiary failure doesn't affect holding). Tax efficiency. SA examples: Naspers (holding for Prosus, Media24 etc.).

Q131/150

What is vertical integration?

Explanation: Vertical integration: forward (retailer buys distributor), backward (manufacturer buys supplier). Control supply chain, reduce costs, ensure quality.

Q132/150

What is horizontal integration?

Explanation: Horizontal integration: merge with/acquire competitor. Increase market share, achieve scale economies, reduce competition. Examined by Competition Commission.

Q133/150

What is a joint venture?

Explanation: Joint venture: parties share investment, risks, rewards and governance for specific project. Common in entering new markets, large projects. Temporary by nature.

Q134/150

What is a strategic alliance?

Explanation: Strategic alliance: sharing resources/capabilities without creating new entity. e.g., airline code-sharing, marketing partnerships. Less commitment than JV.

Q135/150

What is a merger vs acquisition?

Explanation: Merger: equals combine (e.g., Glaxo + SmithKline = GlaxoSmithKline). Acquisition: one buys another. Takeover can be friendly or hostile. Both need Competition Commission approval if large enough.

Q136/150

What is the difference between gross and net profit margin?

Explanation: Gross margin: trading profitability. Net margin: overall profitability after all expenses. Gross always ≥ net. Both expressed as percentages.

Q137/150

What is return on investment (ROI)?

Explanation: ROI: (gain − cost) ÷ cost × 100. Universal measure for comparing investments. Must specify time period. Not the same as ROE (equity-based).

Q138/150

What is economic order quantity (EOQ)?

Explanation: EOQ: √(2SD/H). S=demand, D=order cost, H=holding cost per unit. Minimises total inventory cost. Lower than JIT flexibility but reliable.

Q139/150

What is reorder level?

Explanation: Reorder level = daily usage × lead time (days). When stock reaches tour level, place order. Buffer stock absorbs unexpected delays.

Q140/150

What is a buffer (safety) stock?

Explanation: Buffer stock: insurance against variability. Calculated: (maximum usage − average usage) × lead time. Trade-off: holding costs vs stockout risk.

Q141/150

What is kaizen?

Explanation: Kaizen: 'change for better.' Everyone, every day, everywhere improves something small. Toyota Production System. Opposite of big bang change.

Q142/150

What is the difference between a vision and mission statement?

Explanation: Vision: 'to be the most...' aspirational future state. Mission: 'we exist to...' current purpose and stakeholders served. Both guide strategy.

Q143/150

What is talent retention?

Explanation: Retention: replacing an employee costs 50-200% of annual salary. Causes of turnover: poor management, no growth, underpay, poor culture. Address proactively.

Q144/150

What is an employee wellness programme?

Explanation: Wellness: gym access, counselling (EAP), stress management, nutrition. Business case: reduced absenteeism, improved engagement, lower healthcare costs.

Q145/150

What is flexitime?

Explanation: Flexitime: fixed core hours (e.g., 10am-3pm), flexible start/end. Improves work-life balance, reduces absenteeism, attracts talent. Remote work: ultimate flexitime.

Q146/150

What is a trade creditor payment term?

Explanation: Payment terms: 30/60/90 days net. '2/10 net 30' = 2% discount if paid within 10 days, otherwise full in 30. Manage cash flow by matching terms.

Q147/150

What is accounts payable vs accounts receivable?

Explanation: Accounts payable (creditors): liability — money you owe. Accounts receivable (debtors): asset — money owed to you. Both affect cash flow.

Q148/150

What is debtor management?

Explanation: Debtor management: credit application, clear terms, prompt invoicing, statements, follow-up calls/letters, final demand, debt collection/legal action.

Q149/150

What is a pro forma invoice?

Explanation: Pro forma invoice: pre-delivery invoice. Confirms goods/services, quantities, prices. Used for customs, finance applications, to request advance payment.

Q150/150

What is a statement of account?

Explanation: Statement of account: monthly summary to debtors. Opening balance + invoices + payments − credit notes = closing balance (amount owed).

Matric Business Studies Grade 12

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