Sisekose Afrika

Value Proposition: A case for:-
Integrated Supply Side Measures that CAN:
Bridge the small and big; informal and formal; rural-urban, 1st and 2nd economy divide
manage construction
process)
(Lead generation, Model home
display, Sales force, Customer
selection of personalized
options)
Closing
(e.g. Customer Financing,
Technology Development
(e.g. Product Design, Testing, Process Design, Materials Research, Market Research)
Procurement
(e.g. Materials, Subcontracted Labor, Advertising, Services)
these deals trickle into the 2nd economy. Various Small Enterprise Development initiatives are not well
coordinated resulting in waste of resources. Too much reliance on what the government does to develop small
Relative volatility of the currency and interplay among main indicators
Barriers to entry and competition in sectors of the economy
Cost and efficiency of national logistics system and some infrastructure
Contract, Title, Closing)
After-Sales Service
(e.g. Warranties, Customer
Complaints)
M a r g i
n
Value
What buyers are willing to pay
Primary Activities
Source: Prof M. Porter, 2007
Current growth context has relied on imports of consumer goods Poorly developed alternative markets available at low income
households Weak capability of new producers & distributors to penetrate existing
INTEGRATED SUPPLY SIDE MEASURES FOR
VIABLE AND COMPETETIVE SMALL BUSINESSES
COMPETETIVENESS
LINK WITH
‘ECONOMIC PERFORMANCE’
Economic Performance Measures
Move from isolated micro projects to scalable interventions Maximize the Procurement potential in both public and private organizations
SMME CHALLENGES
Source: Dreamplus
Big
small/ medium
Micro/ small
TWO ECONOMIES OF SOUTH AFRICA TODAY
100%
Corporate Sector
92% <R80M00apiU.mnPl.yPEWRhCitLeAMSSaleFsirSsttaNnadtaiordnaBlaBnaknk
Good or Bad Business
Industry Structure
- Overall Rules of Competition
Good or Bad Position
Relative Position Within the Industry
- Sources of Competitive Advantage
Most small businesses are not making profit – just surviving. CIPRO is recording the highest number of company/cc registration
in the last 2 years, yet most of these companies are dormant. BEE deals are not redistributive in nature …very small amount of
IDC DBSA
<100 Empl.
Medium
MIDDLE CLASS 78% <R3500p.mA. ll Races
ABSA Nedbank
Landbank Khula
74% <R2500p.m.
Etc.
Etc.
Small
LOWER MIDDLE CLASS Mainly Black
Sustained ROIC Sustained Revenue Growth
同步带 同步轮 进口三角带
Foundations of Economic Performance
Private Limited Co’s Few CC’s, Partnerships
00000 00000
00000000 0 0 00 0 0 0 0 0 0 0 0 0 CC’s, Sole propriety, 0 00 00 00 00 00 00 0 0 00 Unregistered businesses 000000000000000000 00000000000000000000000000 000000000000000000000000000000000 000000000000000000000000000000000000000
Industry Structure in Context
Role of Government
Threat of Substitute Products or Services
Government Policy
Bargaining Power of Suppliers
Source: Prof M. Porter, 2007
Level of entrepreneurship amongst the lowest in the world – at 12% compared to 56% in developing countries. Global Entrepreneurship Monitor Study 2005.
Rivalry Among Existing
Competitors
Threat of New Entrants
Bargaining Power of Buyers
ASGI-SA: Isolating key constraints
Binding constraints that inhibit movement to a higher range of investment, job-creation and thus economic growth
Size of domestic market and distance from major global markets.
Value Proposition: A case for:-
Integrated Supply Side Measures that are:
Demand-driven Enhancing value-chain based mainstreaming Prioritizing economic performance Building on existing potential Adaptive to context, and Optimize/Maximize – Collaborative Strategies
Shortage of suitably skilled labour and disjointed spatial settlement patterns
Regulatory environment and burden on small and medium enterprises
Deficiencies in state organisation, capacity and strategic leadership
Land Acquisition Construction Marketing
& Development
& Sales
(Identify attractive
markets, Secure land, Procure
entitlements and permits, Prepare
site)
(Design, Engineering, Schedule and
Source: Prof M. Porter, 2007