Question

A number of challenges exist for management not only within the Southern African region, but globally as well. Discuss FIVE (5) challenges to management within the Southern African region.

Porter (1979) argues that the nature of competition within an industry is not only determined by competing organisations within the industry, but is established through the prevalence of five forces. Discuss these FIVE (5) forces.

Answer 1

Five challenging issues in South African region:

1. Bureaucratic governance and delayed in licensing
2. Stringent FDI norms and compliance
3. Lack of skilled labor
4. Racial discrimination issues highly prevalent
5. Fluctuations in forex rates and high taxation regime.

Porters Five forces can be described as below:

1. Bargaining power of buyers is ability of custimer to put firms under pressure
2. Bargaining power of suppliers is ability of firms to pressurize and charge suggested price due to lack of substitution
3. Threat of new entrants is fierce competitive market structure that could arise
4. Threat of substitution is the ability of customers to substitution and consumption of alternative
5. Competitive Rivalry is the degree of competitiveness the firm enters in.