BEE Partner, South Africa Economy Watch

The skills development levy was designed to force entities to invest in skills development by paying money to a SETA. This money is recoverable from that SETA when the company invests in skills development. A large majority interpreted the skills development levy as a pure tax, paid the money to the SETA and never reclaimed it. This approach results in zero return and becomes, as mentioned, a straight tax.

The objective of BEE is to stimulate growth, not to invoke taxes. If the skills development initiative is not going to result in a return for the business then it is likely to result in unsubstantial skills training. If it is unsubstantial, then the trainee is not going to be any closer to participating in the mainstream economy and the exercise lacks substance. Strictly speaking, BEE contributions that lack substance are not measurable.

An investment implies that the employee will return from training with the ability to make more money for the company than prior to the training. Whether that training entails operating a computer programme more efficiently or part-time study for a university degree is particular to each business. But it must result in a return for the company greater than the initial investment. Read the rest of this entry »

The Practical Application of Preferential Procurement

The practical application of preferential procurement is better discussed in conjunction with the practical application of enterprise development. The two elements should work together. Where a business chooses to contribute to and therefore be measured on the preferential procurement element, it should also choose the enterprise development element. By choosing the elements together it can capitalise on the enhanced recognition offered to purchasing from enterprise development beneficiaries and, more importantly, try to create a stronger BEE strategy. Read the rest of this entry »

High risk indicators

High risk indicators include the following:

• An enterprise claims that Black people are shareholders, executives or management, but the Black people are unaware or uncertain of their roles in the enterprise. If Black people are not given responsibility in keeping with their titles then there is unlikely to be any substance behind the claim.
• Black people who serve in executive management positions are paid significantly lower rates than the market standard. Unless all salaries in that enterprise are lower than market standards they are probably empty titles with no responsibility and further investigation will be conducted. Read the rest of this entry »

South African business organisations now find themselves in a global environment that is characterised by a number of trends, which increasingly shape strategic thinking. Given that the object of business strategy is to continually place a company and its products in a more favourable position In themarket place relative to its competitors, and to do so where it matters most, namely in the mind of the customer, it follows that these trends should be considered by any South African strategist. Over the past decade, the global business environment has witnessed a major shift from mass markets, and even mass customisation, to micro-markets. This has had major ramifications for strategists, as many organisations either have had to reinvent themselves, or, at the very least, revisit the fundamentals of their business to take cognisance of this shift. McDonald’s is a good example.’ Read the rest of this entry »

Fortunately, management realised that if things continued in the _way they had for decades, the company would be vulnerable to attack by global predators. This was of particular concern, as foreign competitors were beginning to eye South Africa’s small but potentially good pickings. In addition to this, global customers such as Johnson & Johnson were beginning to demand justification for their local _subsidiary retaining its South African supplier, instead of plugging into the global supply network.

Essentially, it took threats from major customers to bring home to this company the gravity of the situation. Persuading management to think carefully on how they saw themselves, the company and its role in the marketplace, solved the problem. After careful thought, management reached the conclusion that its company was more than simply a manufacturer and distributor of packaging. Read the rest of this entry »

The obvious starting point for the marketing of South Africa is to decide what the marketing objectives are. This presupposes that the right ‘product‘ has been created to suit the requirements of the target customers. What does the nation not just want, but need in order to attract tourists, investors, immigrants, etc.? Fancy slogans and logos will do nothing for the country if South Africa Inc., the product, is not right, and the strategists have not paid sufficient attention to what the country needs to achieve in this context.

Moreover, the people of South Africa should be brought into the process to support this initiative, and they have to be made aware of the importance of their role in trying to attract and keep customers for the country. Internal marketing therefore has a role to play in shaping the perceptions, beliefs and actions of the citizens of this country in a collective effort to make the country more competitive in the global marketplace. Read the rest of this entry »

The domestic investor is yet another class of customer. In June 2004, Allister Sparks, veteran journalist and political commentator, asked the following question: ‘Why do our business leaders seemso reluctant to invest in the new South Africa?’ In marketing terms, his question was really, ‘Why don’t our domestic investors want to buy South Africa, the product?’ Sparks quoted a figure of R392 billion — nearly a third of South Africa’s GDP — which is sitting in the balance sheets of South African corporations and that could be invested in the country. The truth of the matter is, as a custome_rof the country, a domestic investor is going to weigh up the kind of returns to be received and the risk to be faced before this ‘product‘ is consumed. Read the rest of this entry »

A well-known marketing adage states that a bad product will not last very long in the marketplace. No amount of sales, advertising or promotional effort will do it any good if people simply do not want to buy it. As any first-year marketing student knows, and in the words of famed marketing guru Philip Kotler, the marketing concept states that ‘the key to achieving organisational goals consists in determining the needs and wants of target markets and delivering the desired satisfactions more effectively and efficiently than competitors’: In today’s bitterly contested global marketplace, countries have customers and competitors too. South Africa is no exception. Read the rest of this entry »