SM0269 Global & International Business Context
Nurhuda Binte Md Yassin
Student ID: 12034616
Word count: 3,189 words
This report aims at facilitating the company’s decision-making process concerning the consideration of expanding its international operations in food retailing to South Africa. The overall competitiveness and investment attractiveness will be based on the extended version of Porter’s National Diamond and supplemented with key management issues of South Africa food retail industry, to which the company can tailor its strategy. The analysis recommendations will be made, that need to be considered by the company before deciding in opening its operations in South African food retail industry.
Brief Summary of South Africa Food Retail Industry
|South Africa, a growing retail market with a population of around 49 million people, possesses a modern infrastructure supporting relatively | |efficient distribution of goods to urban centres, townships and rural areas throughout South Africa and Southern Africa (Ntloedibe, 2010). South | |Africa have been identified among the ten new markets most likely to appeal to multinational store groups, along with four other African countries -| |Algeria, Kenya, Morocco and Nigeria (Ventures Africa, 2012). | | | |5 Largest Retailers In South Africa | | | |Shoprite Holdings Ltd | |Pick ‘n Pay | |Massmart Holdings Ltd | |SPAR Group | |Metcash Trading Africa (Pty) Ltd | | | |Food industry contributes 1.2% growth in August – October 2011 to August – October 2012 with the sales of Rand 18,075 million, making it the most | |profitable industry in South Africa (SAS, Oct 2012). Nevertheless, the industry also faces a number of critical environmental, social and governance| |issues and challenges (Sustainalytics, 2012). | | | | | | |
PART 1: SOUTH AFRICA PORTER’S NATIONAL DIAMOND ANALYSIS
1. Factor Conditions
1. Transportation System
With the current population of 50,586,757 (South Bank, 2011), South Africa...
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Population (Census 2011): 51.77-million
Area: 1 219 090 square kilometers
Head of state: The President is elected by the National Assembly. Under the Constitution, the President is permitted to serve a maximum of two five-year terms. The current President is Jacob Zuma, who was sworn in on 9 May 2009 (BBC, 2004).
With 13 parties in Parliament, South Africa has a vibrant political system. The African National Congress is the governing party, and strongly in the majority, though the opposition parties are robust and vocal (Sustainalytics, 2012).
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