An Analysis of the Major Internal and External Environmental Factors Affecting Actopen in the Context of Hyperinflation in Zimbabwe and an Evaluation of How the Organisation Is Positioning Itself to Deal with the Issues.

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Executive Summary

This report contains an analysis of major internal and external environmental factors affecting Actopen, and especially how the organization is positioning itself to deal with these factors.

Actopen is a wholly owned subsidiary of AXIGEN Corporation, a conglomerate listed on the Zimbabwe stock exchange. Major shareholders of AXIGEN are seated at corporate office, which share the same building as Actopen. This geographical closeness, together with uncertainty in the Zimbabwe environment has prompted continuous and frequent shareholder interest in the short-run activities of the business.

In this brief, an analysis of the external (mega) environment was done using the PECLIST model. The task environment was appraised using Porter’s Five Forces theory. The internal (micro) environment of Actopen was appraised using the SWOT analysis.

The brief also identifies Actopen’s shortfalls in dealing with environmental factors of heaviest impact. To overcome the shortfalls, it is recommended that Actopen develop exports into the Southern Africa region, develop products for other market segments and pursue cost leadership as a generic strategy.

The report further discusses implementation issues to be dealt with if recommendations are to be effective. These border on culture, structure and shareholder issues that promote successful change.

Table of Contents
ContentsPage
Cover page 1
Affirmation of own work2
Executive summary3
Table of contents4
Introduction6
The environment defined7
The Macro-environment8
Political factors9
Economic factors10
Legal factors10
The task environment11
Porter’s five forces model on Actopen12
The Micro/Internal Environment13
Strengths, weaknesses, opportunities, threats14
Strategic positioning for Actopen15
Conclusion18
Recommendations20
Implementation Issues20

ContentsPage
References26

Appendices
Appendix 1: Actopen value chain28
Appendix 2: Porter’s Five Forces Model applied on Actopen29 Appendix 3: Actopen SWOT Analysis30
Appendix 4: Ansoff Matrix31
Appendix 5: Writing Instruments Market Index32
Appendix 6: Central Statistical Office inflation figures33
Appendix 7: Business Monitor International economic forecasts34

List of figures
Figure 1: Composition of a business environment 8
Figure 2: Porter’s generic strategies15
Figure 3: BCG Matrix17

Introduction

Actopen is a Zimbabwean based manufacturer of writing instruments wholly owned by AXIGEN Corporation Ltd. The company makes a wide range of writing instruments classifiable into four broad categories as follows:

Average annual sales volumes Pens 42 million units Markers 1.2 million units

Refills 3.8 million units Rulers 2.4 million units (Source: Actopen annual report for year ending September 2005, (2005))

Actopen’s payoff line is ‘total writing solutions’. The organisation’s vision is to become the leading writing instruments manufacture and distributor in Sub-Saharan Africa come 2010. The organisation’s mission is to: “Satisfy customers through design, manufacture and distribution of quality writing instruments at a superior return to stakeholders”

Key objectives of Actopen are:
Return On Equity: 20% above inflation
Cash generation above 80%
Retention of local market share above 85%
(Source: Actopen 2004/5 strategy document – August 2005, p. 3)

The key asset for the business are the strong brands. Most popular brand is the Actopen 15M® pen over 25 years old, Lighty Mark® and the Maxi Marker®. The target market segment for Actopen products is mainly the scholastic market. This is comprised of school-going children ranging from 3 to 20 years. Because of strong brand...
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