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Gray Security: Building a South African Services Firm

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Submitted By ikefor
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The major changes happening in South Africa in 1999 can be subdivided into the following:-
Economic Changes
Significant depreciation in the rand – There was a depreciation of the rand from 2.27R/$ in 1988 to about 5.86R/$.In addition, the rand suffered its most turbulent time following a sequence of political and economic rumors, combined with some concrete events such as the resignation of the finance minister.
Social Changes
Fall of Apartheid: - South Africa was recovering from apartheid, haven endured sanctions from international community leading to the release of Nelson Mandela, the first general election and a successor in 1999.
ANC rise – The period saw the rise to power of the black majority African National Congress party (ANC) as changing the face of South Africa.
Insecurity: - There was a high level of insecurity and clear segregation by wealth.

Industry Changes
Globalization effects: -The industry was globalizing as multinational companies tried to reduce the number of suppliers they relied on, whether for goods or services.
Willingness to Change: - Between 1994 and 1999, relations between Afrikaners and previously disadvantaged groups were characterized by a surprisingly constructive attitude. Both sides seemed eager to build a new South Africa.

Political Changes
Wealth Redistribution: - There was pressure for the redistribution of South Africa’s wealth in favor of previously disadvantaged groups changing the way business was conducted across many fronts

The business model is underpinned upon a healthy cash flow, minimal capital requirement and hiring policy that attracted entrepreneurs.
Healthy Cash Flow
The company was able to meet its short-term obligations, as they collect 70% of the revenues for a given month’s service by the seventh of the month. With negative working capital; this company quickly generates cash as customers

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