Global & International Business Contexts

[SM0269]

[Word Count 4643]



Table of Content

Outline of the Paper3

Introduction8

1. Factor Conditions9

1.1 Threats10

1.1.1 Decline in Manufacturing Sector10

1.2 Opportunities11

1.2.1 Infrastructure11

1.2.2 Availability of Talented Pool12

1.2.3 Rise in GDP & Urban Population17

2. Demand conditions19

2.1 Market Demand19

3. Related and supporting industries21

3.1 Availability of related and supporting industries21

3.2 Bargaining power of suppliers22

3.3 Bargaining power of buyers22

4. Firm strategy, structure and rivalry22

4.1 Cultural impact on firm strategy and structure23

4.1.1 Power Distance Index23

4.1.2 Individualism24

4.1.3 Masculinity24

4.1.4 Uncertainty Avoidance Index24

4.1.5 Long Term Orientation25

4.2 Threat of new entrants25

4.3 Threat of substitutes25

5. Government25

5.1 Government-related political risk25

5.2 Corruption27

Part 2: Contemporary Management Issues28

6.1 Management Issues28

6.1.1 Education and skilful employees28

6.1.2 Corporate Governance29

Part 3: Sales strategy29

7. Market Entry Strategy29

8. Recommendations32

9. Conclusion32

References33

10. Appendices36

10.1 General Relevant Facts36

10.2 PESTLE Analysis36

10.2.1 Political Factors36

10.2.2 Economic Factors37

10.2.3 Social Factors37

10.2.4 Technological Factors38

10.2.5 Environmental Factors38

10.2.6 Legal Factors39

Outline of the Paper

Part 1: Contextual Analysis of South Africa and the South African Fast Food Industry

Introduction

1. Factor Conditions

The term “Factor Endowment” can be defined as the availability of four factors of production. These four factors of production primarily found in the form of Land, Labour, Capital and Entrepreneurship.

1.1 Threats

1.1.1 Decline in Manufacturing Sector

The decline in retail trade catering will also affect the food business because the catering business offer products which are considered as supporting products for the food industry.

1.2 Opportunities

1.2.1 Infrastructure

The improvement of transportation, storage and communication sector along with improvement in constructing activities showed that massive development in infrastructure which is very important for establishing new businesses.

1.2.2 Availability of Talented Pool

The people of South Africa are capable to join multinational companies and make their operations successful.

1.2.3 Rise in GDP & Urban Population

It can be inferred that the fast food business can make heavy revenues in because most of the population is in urban areas which is easy to reach. The spending rate is also high which provide impetus to growth in fast food business.

2. Demand Conditions

2.1 Market Demand

If the demand level is too low or the buyers possess the bargaining power then the seller will act as per the demand of customer which is usually emerging as costly for the business.

3. Related and Supporting Industries

3.1 Availability of Related and Supporting Industries

It is a fact that the related and supporting companies for a retail food industry are available in South Africa.

3.2 Bargaining Power of Suppliers

The bargaining power of supplier is low in South Africa.

3.3 Bargaining Power of Buyers

The population of the South Africa is continuously moving to urban area which indicates that the numbers of buyers are expected to increase in urban areas.

4. Firm Strategy, Structure and Rivalry

National performance in particular sectors is unavoidably dependent to the structure and the strategies of the firms in that particular sector.

4.1 Cultural Impact on Firm Strategy and Structure

4.1.1 Power Distance Index

This shows the power distance among society members.

4.1.2 Individualism

This indicates the level of individual freedom.

4.1.3 Masculinity

This indicates the characteristic of society in term of gender.



4.1.4 Uncertainty Avoidance Index

This indicates the risk aversion level of any society.

4.1.5 Long Term Orientation

This indicates the focus of the society and commitment ...