Introduction 2 Part 1: Porter’s National Diamond Analysis 2 Factor Conditions 2 Demand Conditions 3 Related and Supporting Industries 4 Firm Strategy, Structure and Rivalry 5 External Variables 6 Part 2: Contemporary Management Issues 7 Part 3: Market Entry Strategy 10 References 12 Appendices 17
Abstract
This report focuses on the competitive advantage of food industry of one of the fastest emerging economies of the world, South Africa. The report uses Porter’s National Diamond model’s attributes factor conditions, demand conditions, related and supporting industries and firms strategy, structure and rivalry and external variables to evaluate the competitive advantage of South African food industry. The analysis shows that the South Africa is self sufficient to meet its domestic food needs, has high domestic demand with increasing paying capacity, possess relatively well developed supporting industries and has high competition among the companies operating in the food industry. South Africa however lacks basic infrastructure, has a shortage of skilled workforce and has high unemployment and inflation rate. The Porter’s national model thus shows that the South African food industry does not have all the attributes to possess the competitive advantage in the food retail industry. However, the government’s plan to invest in infrastructure and related industries is expected to improve the situation in the next few years and thus could be a good option to enter the South African food retail industry. The report also evaluates the management issues that a foreign company could face while entering and operating in South Africa.
Introduction
South Africa (henceforth SA) is Africa’s biggest economy (Maylie, 2012) and is a part of BRICS (Brazil, Russia, India, China and South Africa) group that now accounts for the 28% of the world economy (BBC, 2012). This report will analyse one of SA’s fastest growing industry, food
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