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Champagne collectables for those beguile... |
Working at keeping up in the global race
Businesses have had to adapt to a more competitive environment. DON ROBERTSON looks at their priorities
THE need for industry and business groups to become globally competitive is uppermost in the minds of leading executives following South Africa's acceptance into world markets. According to a survey conducted by business consultancy Perry & Associates, global competitiveness, ranked only 27th out of 29 management considerations before the general elections in February 1994, now ranks as number one. Affirmative action, which ranked number one in February 1994, slipped to 18th spot in May 1995, but, because of threatened legislation, has resurfaced as the second most important strategic issue facing blue chip executives. "Affirmative action was viewed with apprehension prior to the election and declined in importance immediately after. It appears that top management agreed on an affirmative action policy and left it to middle management to implement," says managing director Mike Perry. "But since May 1995 it became apparent that it was not being inplemented successfully and that the marketplace demanded it. Tender business, privatisation and the award of new licences are now heavily dependent on the increased role of black management and partners," he says. Perry believes that affirmative action could become the major issue ahead of the next general election in 1999. The desire to become globally competitive relates not only to cost and quality aspects, but also to "how we do business in competition with them (multinationals)", says Perry. In most instances, multinational groups are entering into alliances with local companies rather than using their proven marketing expertise to take on local opposition. They are also looking at southern Africa as a whole, while SA companies are more likely to focus on domestic markets, a focus which could cost them between 10% and 20% in sales volumes. Examples of multinational food groups which have entered the domestic market are Heinz, Corn Products, Pillsbury, Ola, Pepsico, SHV, Nabisco and Proctor & Gamble. They will operate in combination with local companies such as Tongaat Foods, Foodcorp, Clover, Simba, Makro and Royal Beechnut. The local industry, therefore, has to reassess its marketing tactics, distribution, packaging, technology and other strategies, says Perry. The need to identify and establish new markets is third on the list of the top 10 strategic issues facing executives. The need to become cost competitive is next, followed by industrial relations and labour issues, the use of management information systems and the improvement of skills. Perry says management groups need to accept that there have been significant changes in the country in recent years, not only on the political front but in how business is conducted. The need to provide quality products and customer service is number 10 on the strategic issues list. Surprisingly, crime as it affects business operations, rather than the individual, is ranked only 12th.
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