Marketing

Ann Marie Alvarez

MAR4156

SOUTH AFRICA

Factor Conditions

South Africa is the 25th largest country in the world and is located at the southern tip of the continent of Africa. It is home to over 57 million people, making it the world’s 24th most populated nation. In 2017, South Africa had a gross domestic product (GDP) of $349.3 billion, which is equal to $767.2 billion purchasing power parity. South Africa reported a total labor force size of 22.19 million individuals and has an unemployment rate of over 27.5%, one of the highest in the world.

Most of the South African workforce is employed in the mining sector as it is reported to be the 5th largest contributor to the national GDP. South Africa has an abundant supply of natural resources and is the world’s largest producer of platinum, gold, and chromium. Other significant industries in South Africa include the industrial sector, the manufacturing sector and export economy.

South Africa has modernized infrastructures in place, making distribution of goods to urban areas achievable and efficient. However, the challenge that they face is the unstable electricity supply caused by corruption, mismanagement and debt. Also, South Africa faces skilled labor shortages and work interruptions due to strikes, limiting its economic growth. On the upside, South Africa happens to be the most technologically advanced country in Africa. Their infrastructure is excellent for manufacturing. The climate is semiarid, meaning that it mostly dry but does have more rain than a desert climate, with sunny days and cool nights. Some natural hazards that South Africa faces include prolonged droughts and volcanism.

Demand Conditions

South Africa’s home demand for the textile and apparel industry continues to grow. There is some degree of sophistication among South African buyers when it comes to clothing. Below is a graph showing how South Africans spend their annual income. (Picture is in Rands - 75.65 Rands = $5 USD). In terms of clothing, they spend almost 5% of their annual income.

2. Demand Conditions – this is a nation’s nature of home demand for the industry’s product or service.

a. List and discuss specific influences that exist in this country in the development of industry capabilities and discuss how sophisticated and demanding customers in this country are that result in increasing competition among existing firms.

3. Related and Supporting Industries – this is the nation’s presence or absence of supplier industries and related industries that are internationally competitive.

a. List and discuss specific related or supporting industries that exist in this country. Can a spillover effect take place and contribute to other industries (i.e. technological know-how, etc.)? Are there any successful industries in this country that are grouped in clusters in this country? Please discuss in detail.

4. Firm strategy, structure, and rivalry – this is a nation’s condition that govern how companies are created, organized, and managed, and the nature of domestic rivalry.

a. List and discuss the different management ideologies that affect the development of national competitive advantage in this country. Does domestic rivalry exist in this country that creates pressures among firms to innovate, to improve quality, to reduce costs and to invest in upgrading advanced features? Please discuss in detail.

Central Intelligence Agency

https://www.cia.gov/library/publications/the-world-factbook/geos/sf.html

Statista

https://www.statista.com/outlook/249/112/apparel/south-africa

Brand South Africa

https://www.brandsouthafrica.com/south-africa-fast-facts/south-africans-spend-income