...Into Africa Institutional investor intentions to 2016 An Invest AD report written by the Economist Intelligence Unit Into Africa Institutional investor intentions to 2016 Contents Foreword 2 Preface 3 About this research 4 Key findings 5 I. Introduction: a North-South role reversal 6 II. A hopeful decade: Africa’s changing image 8 III. Barriers to investment 11 IV. The new investment case for Africa 15 V. Investor perceptions versus market reality in key markets 18 Conclusion 20 Appendix: survey results 21 1 © Economist Intelligence Unit Limited 2012 Into Africa Institutional investor intentions to 2016 Foreword Africa is no longer a leap of faith Even well informed observers have written off Africa as riven by war, corruption and poverty, but since the emergence of China and India as economic growth engines, many are now asking whether this continent of one billion people can also achieve its own “economic miracle” . These are still early days but there is no doubting the promising signs, politically and economically. At a time of huge change, societies are showing that they can adapt, on the whole, peacefully. In the last year, Nigeria, Tunisia, Zambia and Rwanda have held elections hailed as free and fair by international observers, while a referendum created the new nation of South Sudan. Along with greater political stability, has come policy continuity and improved ...
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...Walmart’s Expansion in Africa: A New Exploration Strategy Introduction/Objectives: Follow the footsteps of several large enterprises, WAL-MART is trying to expand into the African market. The Walmart was founded by Sam Walton. And the most famous point for company is the “ Every Day Low Prices ” This world's largest retailer proposed $23 billion acquisition of South Africa Massmart holding share company. The Massmart is the third largest retailer enterprise on the Johannesburg stock exchange. Africa, owns many popular brands, such as Game, Makro (Makro), Dion wired, Jumbo and Builders Warehouse and so on. Massmart annual income in Africa area was up to $60 billion. It operates in 13 countries, and for Africa operates 290 stores. Massmart provides access to Africa market as the perfect springboard for WAL-MART for America retail giant through taking control of the company, so as to WAL-MART ranks among the three major retailers Africa is easy. WAL-MART have a great influence in the enterprise. The company annual sales is more than $4000 billion a year, almost is the two times of the South African’s GDP ( $2270 billion). As the world's largest retail enterprise, WAL-MART can make very simple global retail price plan. It is extremely successful business model is based on low price strategy, although the price prospects for consumers may be very attractive, but from the general direction,suppliers, retail labor and groups will lose. Critical Issues/challenges...
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...South Africa: Stuck in the Middle? | 2014 | 1. Why is South Africa stuck in the middle? 2. Please find at least three problems to answer the first question. 3. Give your opinion for solving each of the problems mentioned in second answer. | | Contents Africa is experiencing extraordinary growth 2 Challenges 2 Challenge #1 Education 2 Challenge #2 Unemployment 3 Challenge #3 South Africa's growth path is highly resource intensive and hence unsustainable 4 Solutions 4 Solution # 1 - Improve education form the bottom up 4 Solution # 2 – Address unemployment from a new angle and become More attractive to Global business and entrepreneurship 6 Solution # 3 - Reduce the need for commodities and Invest in technology and entrepreneurship 8 Conclusion 8 Africa is experiencing extraordinary growth, In fact this decade has seen more growth for Africa than any other time in history making it six in the world’s 10 rising economy’s. Life expectancy is improving and HIV rates are down almost 30%. Malaria is also down and despite SA having the highest concentration of HIV in the world, African children born today are increasing their life expectancy one year for every three years over the last a decade. Education rates are increasing 25%, and more young educated man are entering the South African workforce. Yet despite these growth factors South Africa, and the continent of Africa as a whole...
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...It’s been 10 years now since Goldman Sachs’ Jim O’Neill first coined the acronym “BRICs” in his November 2001 research paper, “The World Needs Better Economic BRICs.” O’Neill’s forecast of the importance of these markets was prescient. For example, even after their advances over the past decade, China, India, and Russia are predicted to triple spending power by 2018, and Brazil is not far behind, according to a recent report by Business Monitor International.1 While South Africa, by most accounts, has become a fifth member of the BRICS (signified by the capital “S”), these countries no longer sufficiently represent the rise of emerging markets. Global gross domestic product (GDP), factoring in purchasing power parity, now has reached about a 50/50 split between the developed economies and emerging economies. In fact, for the first time since the dawn of the Industrial Age, the global economic engine is being powered by Southern Hemisphere nations.2 Moreover, in the aftermath of the financial crisis and subsequent Great Recession, the emerging markets as a whole—not the world’s debt-ridden developed markets—have been the most resilient in the face of global distress. As Chief Economist and Leader of PwC’s Emerging Markets practice Harry Broadman puts it, “Going through the financial crisis, the most resilient economies—measured by GDP or trade volumes—have been the emerging markets.” Broadman made this comment at PwC’s annual Global Retail and Consumer Leadership Conference held...
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...South Africa is the continent’s second-largest economy and comprises of more than 50 million consumers, a health and quality-conscious middle class, a fairly stable political climate and a sound, effective financial system (South Africa.info 2013). This positive environment seems to provide a solid foundation for Britannia Industries to expand its biscuit segment. However, it is important to conduct a more thorough and accurate analysis in order to have a better comprehension of the possible issues, opportunities and challenges that may occur upon entering the market. 3.3.1 The economic environment Since the 2008 global financial crisis, the South African economy has demonstrated uneven growth, with an average increase of above 2%. This is largely due to the effect of the global economy in addition to the country’s strong ties to advanced economies (Statistics South Africa n.a.). According to Schwab et al. (2013), South Africa was ranked as the 53rd most competitive country worldwide, overtaking Brazil to take second place among BRICS-countries. Regardless of some soft macro- economic indicators such as an extremely high unemployment rate (25.4%) and rising inflation (5.9%) (Trading Economics 2014), direct foreign investments (FDI) continue to flow into the county. As shown in Figure 1, South Africa is ranked as the 13thmost attractive FDI destination globally, coming ahead of Switzerland, Spain and Italy. This positive rating is a result of numerous successful large merger...
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...world and particularly in Africa! The term ‘The BRICS’ was first quoted in Goldman Sachs report which was published in 2001, this term is an acronym for the emerging developing countries which are Brazil, Russia, India, China and South Africa (Wilson & Purushothaman, 2003, p. 2). In the last decade, these countries have been successful in the global economy and many developing countries across the world, predominately Africa are trying to emulate this success. The essay will show a brief overview of how successful the BRICS have become, once these reasons are established, the essay will focus on the core part of the question which is providing evidence showing how the developing world but in particular Africa are imitating the success of the BRICS. Finally the essay will finish with a conclusion which will summarise the main points which have been explained and discussed throughout the essay. The BRICS have been successful in the last decade, but forecasters believe that by 2050, the BRICs could become a very important source of new global spending and by the year 2032 Japan’s economy would become smaller that India’s and USA’s economy could shrink below China’s economy by the year 2041. If the BRICS combined their economies together, it would be larger than the G6 (Japan, United Kingdom, Germany, France, Italy, United States) by the 2039 (Wilson & Purushothaman, 2003, p. 3). Originally the term was the BRIC, however in December 24th 2010, South Africa were formally invited to...
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...An overview Emerging market economies are those economies which exhibit high growth and investment potential. Emerging economies are generally found in East and South Asia, Eastern Europe, South Africa, Latin America and Middle East. These economies are characterized by improving standard of living, other than that they have large growing middle class population who have high aspirations and ambitions for the future. All these characteristics make these economies attractive destinations for exporting goods, investment and outsourcing. Emerging economies of the world possess several advantages which have led to their rise. The major advantages that have been observed in these economies are availability of cheap labour force and highly qualified work force which have made these economies challengers in the global market. Another major characteristic of these economies is that their growth rates are much higher than the developed countries of the world. The new international challengers are the top firms operating in these emerging economies who have now become key contenders of the world market. A very good example of the above discussion is Orascom Telecom - which is an Egyptian telecom provider who on the basis of managerial capabilities and superior technology has become one of the major telecommunication provider in Africa and Middle East . Its business has spread from North Africa to Iraq, Pakistan and Bangladesh. Orascom has around 50 million subscribers and...
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...Metal, Shipping and many other investments in different countries like India, China and United Arab Emirates. Now Oman Oil have satisfied its potential customers in its own country so in search of new customers it has to move on and go global for this purpose Oman oil have decides to move its business to South Africa in the shape of oil marketing company and this investment would be in shape of Foreign direct investments type Green field investment because Oman oil does not have any operation in South Africa now the Marketing company would be a subsidiary of Oman oil and it would be known as OMSA Oil Marketing Company Marketing Company would be known as OMSA Oil Marketing Company Marketing Company would get products from Oman through Imports and the products would be given to oil marketing company OMSA Oil Marketing Company marketing and the strategy and plan would be discussed briefly. Here our target customers are all automobile owner and big forms who use it as a fuel ingredient we have all the products made or produced from crude oil after refining it like gasoline, petrol, carosin oil etc. As we said before we are going to expand it in South Africa and all of the South Africa will be covered through our oil marketing segment although not too backward areas but in all the big cities and towns. After the implementation of plan OMSA Oil Marketing Company is going to get billions of dollars for itself...
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...Fastjet Airlines Words: Keith Mwanalushi Headwinds over South Africa In the past few years the South African domestic market has had a bumpy ride. The local airline industry has witnessed the demise of 10 out of 11 independent private airlines since deregulation in 1990. This raises the question as to how new entrants will survive. 22 FlightCom Magazine Fastjet; entering South African domestic market. A consistent theme across the global airline industry is one of poor return on investments; protected competition; low barriers to entry and the high status associated with owning an airline; an industry that is a soft target for taxes; volatile costs; labour issues as well as increased regulation. South Africa is no exception. “Airlines operating in the domestic South African market face both demand and cost pressures,” says Carlos Ozores, Principal at aviation consultants ICF SH&E. “On one hand, South Africa’s economy is growing very slowly by emerging market locally the industry is challenged by a small market; inexperienced new competitors with inadequate equipment distorting the market; regulatory oversight; monopoly suppliers; state-funded competition; challenges with fuel supply, as well as skill shortages. “The weak economy and poor consumer spend; high oil prices, excessive supplier charges and the weakening local currency all threaten the growth of local air travel. Controlling costs and increasing business ...
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...world. They are Taiwan, Malaysia, Indonesia, US, Uk, Australia and 12 other countries besides South Africa. Chatime has so many flavors for the tea drinks provided to the consumers with unique taste, fresh brewed tea and fresh ingredients. As Chatime decided to introduce its products to the worldwide by becoming a “Global brand with local flavor”, Chatime needs to makes the products with local tastes and meet the cultures in every country. In home country market, Taiwan, The demand for Chatime can be considered high. It is supported by the level of income of Taiwanese people is quite high and the good taste of Chatime products as well. The booming of milktea drinks factor also become the factors why Chatime drinks demand is very high. Since Chatime still does not have the outlets in South Africa, Chatime needs to considerate to open the market in South Africa to expand the business. As now South Africa is a very fast developing. Besides that, there is a local brand tea in South Africa named rooibos which is very popular for South African people. The report from Euromonitor International (2013) indicates that the tea which has benefit for health and such as rooibos will experience a strong consumer demand. Hence, as Chatime has similar taste with rooibos and also could make products with local taste, it would be a good opportunity for Chatime to expand their business to South Africa. Lastly, this report’s purpose is to make a report about the economic and financial,...
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...the investment opportunities in the retail sector in the emerging economies through retrospective tracking of their past experiences and opportunities in the future. The paper analyses the reforms and trends that drove growth in the emerging nations' retail markets and the ones that need to be embraced to sustain and accelerate the growth in the future. The focus of the paper would be the BRICS economies with a brief outlook of other economies like Singapore, Indonesia inter alia. Allowance of foreign investment in the retail sector boosted its volume tremendously in Russia and China and triggered a development of sorts that led to flourishing of foreign as well as local players in the same, providing impetus to the rise in the retail market volume. Brazil developed its retail market by taming inflation and making credit easily available. South Africa improved its distribution networks efficiently causing an improved supply chain management and also cashed in on its demography by catering to the needs of its predominantly young population. Indian retail sector thrives mainly on the unorganized sector with organized sector forming a minor chunk of about 8%. The paper analyses how investment in technology, infrastructure and appropriate reforms can fuel the growth of retail market. With abundant opportunities in the virtual world, adopting ecommerce or getting into online retailing, coupled with lowering of transaction costs for the same, will make room for higher profitability and...
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...Utilities Industry: ATCO Power in South Africa BU606 – Economics Group 7 Amanda Downey - 125824690 Ahmed Youssef - 135819900 Alex Zorzitto - 135823380 Tom Vandemoortele - 135824330 Wafik Moussa - 135808970 Word Count = 2,832 (including titles and citations) Contents 1.0 Executive Summary 3 2.0 Electrical Power Utilities Industry in South Africa 4 2.1 Why South Africa? 4 2.2 Environmental Analysis 4 2.2.1 Social Economic and Political Considerations 4 2.2.2 Macroeconomic Trends 5 2.2.3 Aspects of International Trade/Investment 5 2.2.4 Competition Analysis 6 2.2.5 Market Structure and Firm Entry 6 3.0 Opportunity, Issues and Recommended Strategy 7 3.1 Opportunity Description 7 3.2 ATCO Power Current Strategy: Strengths and Weaknesses 7 3.3 Risk Factors in South African Market 8 3.4 Financial Analysis 8 3.5 Recommended Strategy and Entry Mode 9 4.0 Implementation Plan 9 4.1 Immediate Action Plan: 6 Month 9 4.2 Short Term: 1 Year 10 4.3 Long Term 10 4.4 Contingency Plan 10 5.0 References 11 6.0 Exhibits 13 1.0 Executive Summary ATCO Power is yearning to achieve its global expansion goal and establish itself as an industry leading, reliable and environmentally responsible provider of cost-effective solutions for customers and partners worldwide. In search for an investment opportunity in the underserved market in Africa potential target countries were identified based on electricity demand growth trends, production capacity...
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...sense that people of a communist state earn the same salary regardless of their profession. The Freedom Charter is a document drafted in the early 1950’s. It can be described as a document that contained the aspirations and hopes of black people during the Apartheid era of the kind of South Africa they envisioned to live in some day. Chief Albert Luthuli stated in his biography, Let My People Go, that the Freedom Charter was a statement of aims. It is a classification of the goals of our liberation movement; it was the aggregate of our national democratic aspirations and the new democratic life that we need. On the foundation of the Freedom Charter are the foundation stones of our principles of freedom and democracy. Imperialism can be defined as big states taking advantage of weaker states and exploiting the weaker states for their resources so that the bigger states can expand or grow. The Freedom Charter can be regarded as a communist document and this essay aims to explain why this statement is not true. When the white colonies came to settle in South Africa early in the late 19th century early 20th century, they came with the idea of suppressing the African middle class so as to prevent any growth of any kind. In doing so, they were able to gain full power and control over the rest of the ethnic groups that were there at that time. As time went on, the exploitation of these colonies increased and so they found themselves trapped with no escape. The introduction of Bantu education...
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...all countries where it expanded with very few exceptions. To reinforce its global expansion process Walmart acquired 51% of Massmart, South Africa second biggest retailer. Although the merger of this two large firms unfolds Walmart’s way into one of the world’s biggest potential market it won’t be simple. Poor legal system and weak securities, cultural and infrastructure barriers, financials, rivals criticism, resistance from local group and government will hinder the merger process. Walmart needs to be prepared to face these challenges and develop a strategy. In order to deal with the challenges Walmart should: 1. Learn from previous mistakes in North Korea and Germany. 2. Make use of high GDP growth in Africa and rising middle class. 3. Use Massmart successful network. 4. Create a positive Brand and company name. 5. Do what it is best at “dominate retail market” * Section 2: External environment: Walmart and Massmart are a big part of global discount retail industry. Walmart is one of the world’s biggest retail industry operating in 14 different nations apart from United States with yearly revenue more than $400 billion. Similarly, Massmart sells in 14 African countries with majority of its operations are in South Africa (265 retail stores in South Africa versus 25 in the other 13 countries). The retailing industry ($3.8 trillion annually) is second largest industry in the world in regards...
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...KWV WINES SHAREHOLDER’S REPORT BY: MARINA YUROVA ULKAR NAJAFOVA JIMMY HUMANIA COMPANY’S DESCRIPTION KWV is one of the most famous and leading “wine and spirits” producing company in South Africa. Founded in 1918 as a winemaking co-operative, by wine makers from the Western Cape in South Africa. Today it is well-known global brand producing wine and spirits with a rich historical background and large variety of high quality wine. COMPETITORS The main competitors of KWV are: ● Distell ● Klein ● Simonsig All of them are situated in South Africa but they distribute globally. However, there are a lot of differences in price, quality and beverage range. In positioning maps below we show differences between these rivals. The price of wine selections starts from €8-€140 euro for 750ml of wine bottle. COMPETITIVE ADVANTAGE The competitive advantage of KWV that it operates on is Uniqueness and Marketing & Sales is the main priority followed by Research and Development. Joint venture agreements and wholly owned subsidiaries in the United Kingdom, Western and Central Europe, USA, Canada and the Middle and Far East, have secured a major share of South Africa's wine exports for KWV International. High quality natural and fortified wines and grape juice concentrate are available on international markets through major importers, wholesalers and distributors. GENERIC STRATEGY KWV USES The strategy KWV operates on is Focused Differentiation because they...
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