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The Strategic Management
Strategic Management is very important to SABC and it can be defined as, "identification of the purpose of the organisation and the plans and actions to achieve that purpose" (Renard, Rieger, Benade,Van Niuwenzhuizen, Duke. Pg:6):
- It helps with understanding where SABC is at as a business at the moment (Renard et al. Pg: 4).
- It will help give SABC a clear view about where it wants to be in the future (Renard et al. Pg:5)
- SABC will benefit from this strategy because this strategy encourages debate about how the future destination will be reached. (Renard et al. Pg:5)
With plans to cut the employment of 600 employees at SABC, prudent strategic management has to be implemented for them to have long-term sustainability (Gilili 2020)
The SABC won't survive if they don't change with the times and they actually continue sticking with their traditional media (Gilili 2020). They will end losing market share of online media (Gilili 2020)
There are 5 different strategic processes SABC coud use to ensure long-term sustainability (Renard et al. Pg:11)
1. SABC should craft a strategic mission and vision (Renard et al. Pg: 11). The direction of the SABC after retrenching 600 workers would be to move with the times and go digital (Gilili 2020)
2. The SABC establishing long-term goals and objectives (Renard et al. Pg: 11). These goals would be to build up their online value over the next few years (Gilili 2020).
3. Strategy formulation would be developing a strategy to help SABC achieve their objectives (Renard et al. Pg: 11). Using SABC's competitive advantage may help. (Renard et al. Pg: 15)
4. SABC Executing the strategy that they have
formulated. (Renard et al. Pg: 11)
5. Strategic evaluation for SABC would include three key activities such as reviewing, measuring and correcting. (Renard et al. Pg: 12)
Porter's five forces will be used to assess the media environment in which the SABC operates in. (Renard et al. Pg: 68)
This can also help with determining the profit potential the SABC has. (Renard et al. Pg:68)
There are collective forces that determine the profit potential for the SABC. (Renard et al. Pg:68)
- SABC could use the production houses that have shows on their platforms as leverage (Renard et al.: Pg: 70) . Their content is still loved by millions of South Africans.
- However shows like Generations and Uzalo are losing viewership due to the significant change in the media industry with digital being more important. (Krishnasamy 2017)
- SABC could use the power that their suppliers have and perhaps create an app where it is easier for the viewers to watch shows from their phones or laptops in the comfort of their bedrooms or even cars instead of them having to switch on their televisions. (Krishnasamy 2017)
- By creating an app called "SABCTV" and using show suppliers such as Generations and Uzalo, this could be great for income in terms of advertising revenue. (Krishnasamy 2017)
- The SABC have lost their power due to their consumers and it is time to acknowledge that (Gilili 2020)
- The consumers of the SABC have now switched to other products with high quality and low prices such as Netflix and Youtube.(Krishnasamy 2017)
- The SABC should expand collaboration with new media so that you they can also be part of the consumer change which is getting access to things easier and cheaper online. (Krishnasamy 2017)
- SABC is under threat due to the customers switching from their network to another (Renard et al. Pg: 72)
- The threats of the SABC are that the switching
costs to other medians are not high at all (Renard et al. Pg: 72)
- Switching to other medians becomes easier as they are easier to access digitally compared to SABC medians (Krishnasamy 2017)
- Online rivals of the SABC such as Youtube, Netflix and Podcasts don't have operational issues such as old pricing models and inadequate technology infrastructure which give them an advantage over SABC (Gilili 2020). SABC need to significantly improve on this, if you are to elimate the threat of other digital performers. (Gilili 2020)
Traditionally the rivalry for the SABC are privately owned radio stations and other television channels. (Gilili 2020)
However for the SABC since they moving into a new market, the digital market, they will have different rivals (Krishnasamy 2017).
They will be competing with the likes of Youtube, Netflix and social media for market share and advertising.(Krishnasamy 2017)
- The first thing SABC may think is that this is a negative strategy when in fact i would like to see it as a defensive strategy. (Renard et al.Pg: 162)
- The SABC is in a vulnerable position due to poor sales effectiveness, ineffective commercial product, old pricing models and inadequate technology infrastructure (Gilili 2020)
- SABC have already taken the first steps to combat the declining profits by regrouping through cost and asset reduction.(Renard et al. Pg: 162)
- the retrenchment of 600 employees is the first step in this process considering SABC's vulnerable position. (Gilili 2020)
- The SABC is bleeding money, recently the SABC got a R3 Billion bailout (Sibanda 2020). Working with limited resources, shareholders and employees could aleviate the pressure.(Renard et al. Pg: 163)
- The SABC could sell off a division in the company. (Renard et al. Pg: 164)
- A company like the SABC that is bleeding money and living on government favours could beneift hugely from the selling of a specific division within the company. (Sibanda 2020)
- The SABC could raise capital through the sale of specific divisions to private entities (Renard et al. Pg: 164)
- Should the retrenchment and divestiture process not work, the SABC would have to resort to liquidation. (Renard et al.Pg: 165)
- The SABC would have to sell all of its assets in order to attempt to recoup the value of the company. (Renard et al. Pg: 165)
- The selling off of assets could minimize the loss for government since they are the organisations shareholders. (Renard et al. Pg: 165)
- Bankruptcy for the SABC would be the last option, this is when things are no longer looking up for the company. (Renard et al. Pg: 165)
- Should the situation not improve after the retrenchment, divestiture or liquidation process, the SABC would have to file for bankruptcy to avoid crippling debt obligations. (Renard et al. Pg: 165)
- All the money raised from the sale of their assets will go towards the SABC's creditors. (Renard et al. Pg:165)