Report title: South African food retail industry investment initial feasibility report
Table of Contents
1.0 Executive summary……………………………………………………………….....…4
2.0 Part 1: Porter’s National Diamond Analysis…………………………………..…..…4 2.1 Introduction…………………………………………………………………….…....4 2.2 Extended version of PND…………………………………………………….…….4 2.2.1 Factor conditions……………………………………………..………….….4 2.2.2 Demand conditions…………………………………………………….…..5 2.2.3 Related and supporting industries………………….…………….………6 2.2.4 Firm strategy, structure and rivalry…………………………………….…7 2.2.5 The role of chance……………………………………………………....…8 2.2.6 The role of government……………………………………………….…...8
3.0 Part2: Contemporary Management Issues…………………………….…………....9 3.1 The first contemporary management issue- International human resource management………………………………………………………………….…………….9 3.1.1 Why the issue of international human resource management should be considered? ................................................................................................................9 3.1.2 Explain how to make the international human resource management efficiency…………………………………………………………………………………....10 3.2 The second contemporary management issue- Logistic supply chain management…………………………………………………………………………….…11 3.2.1 Why the issue of logistic supply chain management should be taken into account? ...................................................................................................................11 3.2.2 Explain how to manage logistic supply chain as a multinational company…………………………………………………………………...….…………….11
4.0 Part3: Market Entry Strategy………………………………………………………....12
5.0 Conclusion and recommendation……………………………………………….…...13
6.0 List of references……………………………………………………………………....15
1.0 Executive Summary
The main purpose of this report is to analyse the South African food retail market, and to make a commercial evaluation and feasibility report for the expansion of the MNE’s international operations to South Africa. This report analyse the construction of South Africa according Porter’s National Diamond which include factor conditions, demand conditions, related and supporting industries, firm strategy, structure and rivalry and the role of chance and government. Then, the report identifies and explains contemporary management issues according to the characteristics of the multinational enterprises and food retail industry. Finally, the report discusses and justifies a possible market strategy according to the research of the industry-specific industry, firm-specific factors and institutional factors.
2.0 Part 1: Porter’s National Diamond Analysis
2.1 Introduction
South Africa is the south of Africa with 9 provinces. It is a multinational state with various languages and custom culture. South Africa is the largest economy with relatively high per capita income (Wikipedia, 2012).
In recent years, South African food retail industry has developed rapidly. Research shows (MarketLine, 2012) that the growth rate of the food retail industry in South Africa was 8.9% and the market value achieved $73.9 billion in 2011. In addition, the market value of food retail industry will continue to grow and is predicted to reach approximately $98 billion in 2016. The main channels of distribution are discounters, supermarket and hypermarket which represent 36.7 per cent. By contrast, the shares of 31.6 per cent are sold by food and drinks specialists.
2.2 Extended version of PND 2.2.1 Factor conditions
First of all, the factor conditions in South Africa mainly include natural resource, for example, developed agriculture, animal husbandry and aquaculture industry. In South Africa, the soil which is suited to grow crops is account for 13 per cent of the whole ground and the high-quality of the land is occupied
