Pestel Analysis on South Africa Retailindustry
6 Assignment 1 Sept 2013
SECTION A (60 MARKS)
Note to student: You will be penalised for the copying of theory without explanation/application to the scenario provided. You should use the theory in support of your own answer. Non-application will result in a zero mark being awarded.
Read the case study below and conduct your own research on Shoprite Holdings Ltd. Following your investigation answer the questions in Section A. South Africa and the global economic environment Since our previous report, there has not been any material improvement in the global environment in which South Africa trades. In the European Union, collectively the country’s largest trading partner, the crisis seems to be deepening as the fear of member countries defaulting spreads from Greece to Italy to Spain. In the East, the Chinese economy has slowed and so has the demand for raw materials. The one area of steady growth, albeit off a low base, has been Africa. The IMF predicts that for at least the next five years, Africa will remain the focus of the fastest economic growth, with seven of the world’s ten fastest developing economies now on this continent. South Africa, the continent’s largest economy, has not been faring quite as well. Exports to traditional markets so far this year have been below 2011 levels. Economic growth has been lacklustre and official projections for the year have been adjusted downwards more than once. Structural problems in the economy and labour regime constraints are but two of the factors hampering growth. Unemployment amongst those actively seeking jobs, dropped marginally from 25,2% to 24,9% in the second quarter of this year but remains unacceptably high. Employment initiatives announced by the Government in February this year are hopefully still to take effect. In the meantime, the number of recipients of social grants has increased to 15,3 million. Although unsustainable at this level in the long run, given the country’s limited tax base,
SECTION A (60 MARKS)
Note to student: You will be penalised for the copying of theory without explanation/application to the scenario provided. You should use the theory in support of your own answer. Non-application will result in a zero mark being awarded.
Read the case study below and conduct your own research on Shoprite Holdings Ltd. Following your investigation answer the questions in Section A. South Africa and the global economic environment Since our previous report, there has not been any material improvement in the global environment in which South Africa trades. In the European Union, collectively the country’s largest trading partner, the crisis seems to be deepening as the fear of member countries defaulting spreads from Greece to Italy to Spain. In the East, the Chinese economy has slowed and so has the demand for raw materials. The one area of steady growth, albeit off a low base, has been Africa. The IMF predicts that for at least the next five years, Africa will remain the focus of the fastest economic growth, with seven of the world’s ten fastest developing economies now on this continent. South Africa, the continent’s largest economy, has not been faring quite as well. Exports to traditional markets so far this year have been below 2011 levels. Economic growth has been lacklustre and official projections for the year have been adjusted downwards more than once. Structural problems in the economy and labour regime constraints are but two of the factors hampering growth. Unemployment amongst those actively seeking jobs, dropped marginally from 25,2% to 24,9% in the second quarter of this year but remains unacceptably high. Employment initiatives announced by the Government in February this year are hopefully still to take effect. In the meantime, the number of recipients of social grants has increased to 15,3 million. Although unsustainable at this level in the long run, given the country’s limited tax base,