This document discusses factors to consider when assessing national business environments and potential markets for international business. It identifies political, legal, economic, infrastructure, and competitive factors to evaluate in countries. It also provides examples of how to measure potential in industrialized markets like market size, growth, and consumption capacity, and in emerging markets like infrastructure, economic freedom, and country risk. Secondary sources of country data and methods of primary research like surveys, interviews, and trade shows are also reviewed.
1. SUMMER INTENRSHIP PROJECT
CARRIED
OUT AT
“NATIONAL ENGINRRRING INDUSTRIES LTD.
JAIPUR [RAJ]”
MJRP UNIVERSITY JAIPUR
SUBMITTED BY: SUBMITTED TO:
Surendra Kumar Saini CORDINATOR
MJRP UNIVERSITY
2. ACKNOWLEDGEMENT
NATIONAL ENGINEERING INDUSTRY Ltd. Is considered one of
the best bearing manufacturing firms in entire Asia. The technology
used here is considered most advanced. So training at N.E.I. has been
great experience of my life. I was exposed to new and advanced
technology and right kind of industrial training and industrial
atmosphere.
I would like to express my sincere thanks to Technical Training
Centre N.E.I for carrying out my two months industrial training at
such a prestigious organization.
I would like to pay my gratitude to Mr. D.K Sharma [Manager, HRD]
for his guidance and support. I am extremely grateful and convey my
deep sense of gratitude to Mr. Binoy Verghese ,& Mr Annunay to my
project guide ,Mrs. Monika Joshi and Mr Pradeep Dixit for their
suppprt and professional assistance because of which I have
opportunity to understand the technical aspects and appreciate the rich
professional culture more carefully.
Surendra Kumar Saini
3. DECLARATION
I, Surendra Kumar Saini student of B.B.A [2008-2011], MJRP University
Jaipur. Here by declare that this project report titled “Global
Marketing” has been originally prepared by me and pertains to my
original work done during the summer training tenure, for “National
Engineering Industries Ltd., Jaipur “. One copy of this project report
has been submitted to NEI other than that this report has not been
submitted to any other organization.
Surendra Kumar Saini
4. OBJECTIVE
“To Identify the various aspects of marketing of bearing in
Global Market & associate the opportunity in South African
Market”.
• South Africa's automotive industry
South Africa's automotive industry is a global, turbo-charged engine
for the manufacture and export of vehicles and components. The
5. sector accounts for about 10% of South Africa's manufacturing
exports, making it a crucial cog in the economy.
With annual production of 535 000 vehicles in 2007, expected to rise
to 630 000 in 2008, South Africa can be regarded as a minor
contributor to global vehicle production, which reached 73-million units
in 2007.
But, locally, the automotive sector is a giant, contributing about 7.5%
to the country's gross domestic product (GDP) and employing around
36 000 people.
The government has identified the automotive industry as a key
growth sector, with the aim of increasing vehicle production to 1.2-
million units by 2020, while significantly increasing local content at the
same time.
• Growth
• Investment
• Ford, GM, Mercedes-Benz, Toyota, VW ...
• Motor Industry Development Programme
• Competitive advantages
• Auto component manufacturers
• Spoilt for choice
Growth
South Africa has been one of the best performing automobile markets
in the world in recent years. New vehicle sales figures soared to
record-breaking levels for three years in succession, from 2004 to
2006. In 2006, sales increased by 14.4% to just under 650 000 units,
generating revenue of R118.4-billion.
Sales dropped by 5.4% in 2007, and are expected to drop further in
2008 as higher interest rates and rising prices curb spending.
However, major export programmes are likely to keep the local
industry buoyant. Vehicle exports were around 170 000 units in 2007,
and the National Automobile Association of South Africa (Naamsa)
expects this to jump to 285 000 in 2008. This is extraordinary growth,
especially when compared to 1997, when the number of units exported
was below 20 000.
South Africa currently exports vehicles to over 70 countries, mainly
Japan (around 29% of the value of total exports), Australia (20%), the
6. UK (12%) and the US (11%). African export destinations include
Algeria, Zimbabwe and Nigeria.
Investment
All of the major vehicle makers are represented in South Africa, as well
as eight of the world's top 10 auto component manufacturers and
three of the four largest tyre manufacturers. Many of the major
multinational companies use South Africa to source components and
assemble vehicles for both the local and overseas markets.
Between 2000 and 2006, the industry's investment in production and
export infrastructure quadrupled, from R1.5-billion to R6.2-billion,
before slowing to R3-billion in 2007. Capital investment is expected to
be around the R4-billion mark in 2008.
Most of this has been foreign investment, with the parent companies
of local car manufacturers expanding local operations to improve
production capacity, export facilities and supporting infrastructure.
All of the large manufacturers in the country have launched major
export programmes in recent years - the latest (in January 2008)
being Ford Motor Company of South Africa.
Ford, GM, Mercedes-Benz, Toyota, VW ...
Ford
In January 2008, Ford Motor Company of Southern Africa announced
plans to invest more than R1.5-billion to expand its operations in
South Africa for the production of Ford's next-generation compact
pickup truck and Puma diesel engine.
The local arm of the US car giant said the new investment would start
in 2009 and be split between its assembly plant in Silverton, Pretoria
and engine facility in Struandale, Port Elizabeth, with most of the
vehicles produced earmarked for export.
7. GeneralMotors
General Motors South Africa, which is based in Port Elizabeth in the
Eastern Cape, markets the brands Chevrolet, Opel, Isuzu, Saab,
Cadillac and Hummer. In 2005, the company was awarded a six-year
contract to assemble and export the Hummer H3, resulting in a
US$100-million investment in its Struandale plant.
GM South Africa is building a new multimillion-rand vehicle conversion
and distribution centre and is investing another R481-million in its
operations, upgrading its production facilities and tooling in 2008.
Mercedes-Benz
Mercedes-Benz South Africa manufactures Mercedes-Benz and
Mitsubishi
vehicles at its manufacturing plant in East
London in the Eastern Cape. The company's headquarters are located
in Gauteng province, from where the
Mercedes-Benz, smart, Maybach, Mitsubishi Motors, Freightliner,
Western Star and FUSO brands are marketed and financed.
Mercedes-Benz SA recently spent about R2-billion on upgrading its
manufacturing plant, and now produces both right- and left-hand
drives versions of the latest Mercedes-Benz C-Class car for domestic
and export markets.
Toyota
Toyota South Africa recently completed a five-year, R2.4-billion
modernisation and revitalisation programme. Its Prospecton facility,
just south of Durban, is now one of the most technologically advanced
Toyota facilities in the world outside of Japan, and is capable of
producing around 220 000 units a year.
As a global production facility, Toyota South Africa has transformed
from a purely local supplier into an effective export base to supply
vehicles into markets in Europe and Africa. The company, which
exports to more than 40 destinations, says it expects to export around
140 000 units in 2008, or almost 60% of total automotive exports
from South Africa.
8. Volkswagen
Volkswagen South Africa is located at Uitenhage near Port Elizabeth in
the Eastern Cape. In 2007, the company celebrated its 56th
anniversary in South Africa - and its 2.5-millionth vehicle off the
production line. It is a local leader in the passenger market,
accounting for around 21% of all new vehicle sales.
Between 2000 and 2008, Volkswagen South Africa invested around
R6-billion in new models, a new paint shop and a new truck and bus
assembly plant.
Motor Industry Development Programme
The catalyst for this phenomenal growth has been the government's
Motor Industry Development Programme (MIDP). Introduced in 1995,
the programme is legislated until 2009 and will be gradually phased
out until 2012.
The MIDP has boosted exports by enabling local vehicle manufacturers
to include total export values as part of their local content total, then
allowing them to import the same value of goods duty-free. This has
allowed auto makers to concentrate on manufacturing certain vehicles
or components for export, while importing other models.
The programme also grants a production-asset allowance to vehicle
manufacturers that invest in new plants and equipment, giving them
20% of their capital expenditure back, in the form of import-duty
credits, over a period of five years.
The government plans to introduce a successor to the MIDP, which will
be aimed aimproving the domestic value chain. The new programme,
which will last until 2020, will focus on value addition while being
consistent with
South Africa's multilateral obligations. It is likely to take the form of a
subsidy to production.
The Department of Trade and Industry says the new support
programme will result in more jobs as well as the long-term
sustainability of the industry. The plan will support production and
investment plans that "intend to reach a minimum volume of output
for each platform of 50 000 units a year within a reasonable period of
time".
9. Competitive advantages
South Africa's automotive industry offers a number of competitive
advantages to international concerns. These include a world-beating
cost ability on short- or low-volume runs, competitive tooling costs,
and a high degree of manufacturing flexibility. The local industry also
has good access to southern hemisphere and African markets.
The South African industry boasts several unique technologies, such as
differential locks for off-road vehicles, aluminium welding technology
for radiators, and the ability to design components, such as air
cleaners and air conditioners that can cope with the higher
temperatures and dust levels in Africa.
The country's first-world production facilities are coupled with access
to raw materials and relatively cheap electricity, as well as stable
transport and telecommunications infrastructure.
The Automotive Industry Development Centre and the Gerotec testing
centre near Pretoria are world-class facilities for research, design,
testing and training.
New investment opportunities are being created for the industry by the
introduction of free trade agreements with the European Union and the
South African Development Community, as well as the US
government's African Growth and Opportunity Act.
Auto component manufacturers
There are more than 200 automotive component manufacturers in
South Africa, and upwards of another 150 that supply the industry on
a non-exclusive basis. The component industry has a turnover of about
R50-billion, or approximately 2% of the country's GDP, and is looking
to strong growth as export potential continues to increase.
South Africa exported R30.3-billion worth of auto components in 2006,
a 32% increase over 2005. Catalytic converters continued to be the
country
most exported vehicle part, accounting for almost half of all
componenexports.
Other key exports include engines, silencers and exhausts, radiators,
wheels and tyres, stitched leather car seat covers, car radios and
sound systems, and axles, especially for heavy trucks.
10. Germany, Spain, the UK, the US, France and sub-Saharan Africa are
the leading destinations for South African auto parts exports.
Spoilt for choice
There are a "staggering" 1 390 variants of cars, recreational vehicles
and light commercial vehicles on South Africa's showroom floors,
according to a report by business website Fin24.com.
The choice available has more than doubled over the past 10 years. In
1997, soon after the re-entry of Alfa Romeo, Renault and Chevrolet
into South Africa - and when locals first got a taste of Mahindra,
SsangYong, Dacia, Kia, Hyundai, Daewoo, Saab and Subaru - there
were 37 manufacturers offering 595 different models.
Since then, Bentley, Cadillac, Citroën, Dodge, Maybach, Mini, Proton,
TVR, GWM, Lexus and Tata have established dealerships in South
Africa, either independently or by joining forces with established
distributors and related group companies.
However, despite the new entrants, the majority of South African
buyers tend to choose the well known, established brands such as
Toyota, Volkswagen, Ford, Mazda and BMW. These brands together
still account for more than 80% of new vehicle sales in the country.
11. Competitive Environment and International Business
EXTERNAL INFLUENCES OPERATIONS
PHYSICAL AND
SOCIETAL FACTORS OBJECTIVES
COMPETITIVE
ENVIRONMENT
• Major advantage in price, STRATEGY
marketing, innovation, or
other factors
• Number and comparative
capabilities of competitors
• Competitive differences
by country MEANS
1-11
12. The Usual Pattern of Internationalism
Internal versus
Impetus for
HIGH external handling of
international A
foreign operations
business B
Active search MEDIUM Company handles
for opportunities
its own foreign
operations
Passive LOW Other firms
response to handle external
proposals Domestic contracts
Business Limited foreign
Moderately production and
Quite Limited
similar multiple functions
similar foreign Mode of
E Very One functions, operations
Degree of Extensive C
dissimilar usually
similarity Several production
export/
between abroad with
import
foreign and FDI and all
Many
domestic functions
countries D Number of foreign countries in
which a firm does business
1-13
13. Chapter Preview
• List each key factor to assess in national
business environments
• Discuss measuring potential in emerging and
industrialized markets
• Identify three key market research difficulties
• Explain the usefulness of each secondary data
source
• Describe each method of primary research
15. National Forces: Political/Legal
Government regulation
Investment barriers
Profit repatriation
Government bureaucracy
Administrative delays
Political stability
Unforeseen political change
16. National Forces: Economic/Other
Country finances
Trade and
investment policies
Currency and liquidity
Logistics
Country image
17. National Forces: e-Business
Infrastructure,
market access
Internet access
Content and standards
Legal matters
Privacy and security
Intellectual property
Financial issues
Electronic payments
Tariffs and taxation
23. Secondary Data Sources
International organizations
Government agencies
Industry/Trade associations
Service organizations
Internet and World Wide Web
24. Methods of Primary Research
Trade shows and missions
Interviews and focus groups
Surveys
Environmental scanning
25. Review
• List each key factor to assess in national
business environments
• Discuss measuring potential in emerging and
industrialized markets
• Identify three key market research difficulties
• Explain the usefulness of each secondary data
source
• Describe each method of primary research
26. Comparison of Foreign Market Entry Modes
Conditions Favoring this
Mode Advantages Disadvantages
Mode
Limited sales potential in
target country; little product
Trade barriers &
adaptation required
Minimizes risk and tariffs add to costs.
investment.
Distribution channels close
Transport costs
to plants
Speed of entry
Exporting
Limits access to local
High target country
Maximizes scale; information
production costs
uses existing
facilities. Company viewed as
Liberal import policies
an outsider
High political risk
Import and investment
barriers
Lack of control over
Minimizes risk and
use of assets.
Legal protection possible in investment.
target environment.
Licensee may become
Speed of entry
competitor.
Licensing Low sales potential in target
country. Able to circumvent
Knowledge spillovers
trade barriers
Large cultural distance
License period is
High ROI
limited
Licensee lacks ability to
become a competitor.
Joint Import barriers Overcomes Difficult to manage
Ventures ownership
Large cultural distance restrictions and Dilution of control
cultural distance
Assets cannot be fairly Greater risk than
priced Combines resources exporting a &
27. High sales potential
of 2 companies.
Some political risk
licensing
Potential for learning
Government restrictions on
Knowledge spillovers
foreign ownership
Viewed as insider
Partner may become a
Local company can provide
Less investment competitor.
skills, resources,
required
distribution network, brand
name, etc.
Greater knowledge
Import barriers Higher risk than other
of local market
modes
Small cultural distance
Can better apply
Requires more
specialized skills
Direct Assets cannot be fairly resources and
Investment priced commitment
Minimizes
knowledge spillover
High sales potential May be difficult to
manage the local
Can be viewed as an
Low political risk resources.
insider
28. SOUTH AFRICA ECONOMY SYSTEM
Economy
SA recession unlikely: Old Mutual
Despite gloomy forecasts for inflation and economic growth over the
next 12 to 24 months, Old Mutual believes South Africa is unlikely to
experience a recession, due to strong public and private sector
investment, as well as fast-growing consumption spending by the
country's public sector.
Infrastructure
World-class infrastructure - including a modern transport network,
low-cost energy, and sophisticated telecommunications facilities.
Key sectors
Manufacturing, automotive, tourism, finance, agriculture, ICT and
electronics ... South Africa's economic sectors are primed for growth.
Economic policies
South Africa's macroeconomic policies, regulatory institutions, financial
system and controls, labour legislation, latest budget statements, and
more.
Economic development
Job creation, skills development, urban regeneration ... South Africa is
on an economic development drive.
29. South Africa's automotive industry
• South Africa's automotive industry is a global, turbo-charged engine
for the manufacture and export of vehicles and components. The
sector accounts for about 10% of South Africa's manufacturing
exports, making it a crucial cog in the economy.
Manufacturing in South Africa
South Africa has developed an established, diversified manufacturing
base that has shown its resilience and potential to compete in the
global economy.
The manufacturing sector provides a locus for stimulating the growth
of other activities, such as services, and achieving specific outcomes,
such as employment creation and economic empowerment. This
platform of manufacturing presents an opportunity to
significantlyaccelerate the country's growth and development.
Manufacturing in South Africa is dominated by the following industry:
• Automotive
Automotive industry
The automotive industry is one of South Africa's most important
sectors, with many of the major multinationals using South Africa to
source components and assemble vehicles for both the local and
international markets.
Despite its distance from some of the major markets Africa, and
particularly South Africa, produces high quality products at prices
competitive with other automotive manufacturing and assembly
centres.
The South African automotive and components industry is growing
rapidly and is perfectly placed for investment opportunities. Vehicle
30. manufacturers such as BMW, Ford, Volkswagen, Daimler-Chrysler and
Toyota have production plants in the country, while component
manufacturers (Arvin Exhust, Bloxwitch, Corning, Senior Flexonics)
have established production bases in the country.
The industry is largely located in two provinces, the Eastern Cape
(coastal) and Gauteng (inland). Companies with production plants in
South Africa are placed to take advantage of the low production costs,
coupled with access to new markets as a result of trade agreements
with the European Union and the Southern African Development
Community free trade area. Opportunities also lie in the production of
materials (automotive steel and components).
South Africa's aim is to become an automotive investment destination
of choice. Modernisation and upgrading of key elements in the
automotive industry are required to keep pace to achieve international
competitiveness.
Interest rates are currently at historic low levels, reducing the cost of
investments. It is significant to note that most major multinational
vehicle manufacturers are currently represented in SA, which means
that international developments also impact on the country.
The outlook for the vehicle industry is bright in terms of both exports
and the domestic market. A key challenge will be to raise local
content, particularly in the vehicles now being exported in large
volumes.
• National Association of Automobile Manufacturers of SA
• Automotive Industry Export Council Automotive Industry
Development Centre .
• Following four successive record years, domestic new vehicle sales
during 2007 fell principally on the back of substantially lower new car sales
and, during the last quarter, progressive weakness in light commercial
vehicle sales.
For the year as a whole, primarily due to weakness in the new car market,
NAAMSA reported sales had declined by 33 859 units or 5,2% to 612 707
vehicles compared to the 646 707 units sold during 2006.
NAAMSA annual industry sales by sector, for the past four years, were as follows
–
31. 2007/2006
Sector 2003 2004 2005 2006 2007
% Change
Cars 247 259 301 151 376 845 426 822 384 411 - 9,9%
Light Commercials 104 884 127 629 160 723 186 664 191 227 + 2,4%
Medium 12 243 15 168 + 6,5%
6 372 8 636 14 246
Commercials
Heavy Commercials/ 15 163 21 901 + 16,3%
9 955 12 178 18 834
Buses
Total Vehicles 368 470 449 594 564 974 646 566 612 707 - 5,2%
Sales of new vehicles not reported in detail through NAAMSA added 63 390 units
(2006 : 67 759 units) to the 2007 figures comprising 50 222 cars and 13 168 light
commercial vehicles. This effectively translates into a 2007 aggregate South
African domestic new vehicle market of 676 097 vehicles – which represents a
decline of 5,4%, in aggregate terms, compare to total industry sales of 714 325
units in 2006.
Despite the year on year decline, the industry’s 2007 overall sales represented
the second highest annual sales total on record. Over the past four years (2004
– 2007), nearly 2,5 million new vehicles were sold in South Africa compared to
about 1,5 million vehicles sold over the previous four years (2000 – 2003).
Currently, South Africa’s vehicle population was in excess of 8 million vehicles.
2007 industry export sales figures, compared to the previous three years, were
as follows –
2004 2005 2006 2007 2008
Projection
Cars 100 699 113 899 119 171 106 485 180 000
Light Commercials 9 360 25 589 60 149 64 128 75 000
Medium, Heavy Trucks and 448 424 539 647 750
Buses
Total Exports 110 507 139 912 179 859 171 260 255 750
2007 industry exports at 171 260 vehicles reflected a decline of 8 599 vehicles or
4,8% compared to the 179 859 vehicles exported in 2006. The fall was primarily
due to the fact that the Mercedes-Benz factory in East London had been
refurbished during the year and as a result no vehicles had been produced for
export for about five months during 2007.
32. South Africa has established itself as a centre of growth in Africa and is on target
to become an increasingly important part of the global automotive industry.
South Africa’s track record as a manufacturer and supplier of vehicles and
automotive components has been firmly established over recent years. For
2008, industry export sales were projected to exceed 255 000 vehicles. The
projected substantial increase in exports of South African produced motor
vehicles would boost the industry’s total domestic production from 542 000
vehicles in 2007 to about 620 000 vehicles in 2008.
Policies
· State boost for local industry
The Department of Trade and Industry is working with state-owned enterprises to build
the competitiveness of South African suppliers, to ensure they reap the benefits of the
massive infrastructure spending programme under way in the country.
How the world rates South Africa
Despite a fair amount of local scepticism - brought on partly by political uncertainty and
the energy crisis - South Africa is maintaining its strong showing in world rankings, with
33. a series of recent international reports highlighting and supporting the country's strengths
as an investment destination.
Budget: SA 'stays the course'
Despite a 0.5% drop in projected GDP growth for 2008/09, Finance Minister Trevor
Manuel has once more unveiled a "sunny" Budget for South Africa, announcing another
surplus, lowered taxes and increased spending as the government moves to tackle skills
and infrastructure constraints.
Non-compliant listed companies targeted
The South African government is to embark on a drive within the next few weeks to
ensure that companies listed on the JSE comply fully with employment equity legislation,
with the offenders being taken to the Labour Court.
BUDGET 2008/09
South Africa 'stays the course'
Despite a 0.5% drop in projected GDP growth for 2008/09, Finance Minister Trevor
Manuel unveiled a "sunny" Budget for South Africa, announcing another surplus, tax cuts
and increased spending to tackle skills and infrastructure constraints.
Entry mode in South African market
•
Regulations for importers
South Africa is a member of the World Trade Organization (WTO) and
follows the Harmonized System (HS) of import classification.
34. There is free exchange of trade between South Africa and the other
four countries (Botswana, Lesotho, Namibia, and Swaziland)
comprising the Southern African Customs Union (SACU). There will
also be substantially free trade between South Africa and the European
Union by 2008 as a result of a Free Trade Agreement. The Southern
African Development Community (SADC) Free Trade Agreement should
also allow the free exchange of goods among the 14 countries of the
region when it comes into full effect.
Traders are subject to exchange control approval, administered by the
South African Reserve Bank. The Department of Trade and Industry is
also empowered to regulate, prohibit or ration imports to South Africa
in the national interest but most goods may be imported into South
Africa without restrictions.
Import permits are required only for specific categories of goods and
are obtainable from the Director of Import and Export. Importers must
possess an import permit prior to the date of shipment. Failure to
produce a required permit could result in the imposition of penalties. A
summary of main import regulations are:
• Certain goods imported into South Africa require an import
permit, which may be obtained from the Director of Imports and
Exports Control.
• The list of goods requiring import permits is specified each year
in the annual Import Control Program.
• Permits are valid for imports from any country.
• Foreign Trade Zones: No Foreign Trade Zones or Free Ports are
established in South Africa.
• South Africa uses the Harmonised System of Classification.
• Samples are dutiable unless they are cut samples of cloth,
leather, linoleum and wallpaper in book form and not for
distribution as advertising matter. Samples that have no
commercial value because of mutilation in some way are also
allowed duty-free access.
• The South African Government has viewed countertrade as a
second-best alternative to be engaged in only when normal trade
cannot be conducted.
• Bonded warehouses are available at various points of entry.
• South African banks can accommodate all international
transactions and are situated throughout the country.
35. • General rebates of duty are available for specific situations, and
duties may be rebated on goods on re-export.
• The Reserve Bank plays a pivotal role in the economic and
financial sectors.
• Some imports may require permission from the Department of
Agriculture, Health or Environment Affairs.
• Specific excise taxes are levied on alcoholic and non-alcoholic
beverages, tobacco and tobacco products, mineral waters, some
petroleum products and motor vehicles. South Africa is an
adherent to the Customs Valuation Agreement negotiated under
GATT/WTO. The dutiable value of goods imported into South
Africa is calculated on the F.O.B. price in the country of export.
In conformance with its WTO commitments, South Africa has
lifted import surcharges.
Trade with South Africa
Trade relations
South Africa participates in a number of preferential trade
relationships, both regional and bilateral. It was a founding member of
the General Agreement on Tariffs and Trade (1947), and is an active
member of the World Trade Organisation.
Trade with SA: who can help
South African chambers of commerce and industry, foreign chambers in SA, and
other trade and business organisations geared to offer assistance.
• | Distribution & sales in South Africa
South Africa offers foreign suppliers a variety of methods to distribute
and sell their products, including using an agent or distributor, selling
through established wholesalers or dealers, selling directly to
department stores or other retailers, or establishing a branch or
subsidiary with its own sales force.
36. • Wholesalers
Consumer goods requiring maintenance of stocks and industrial raw
materials are often exported to South Africa through established
wholesalers.
• Retail organisations
Many exporters of consumer goods sell directly to South African
retail organisations - including consumer corporations, department
stores, chain stores, and co-operative groups of independent
retailers - which assume the functions of wholesale buying, selling
and warehousing.
• Consumer retail
South Africa offers the full spectrum of retail outlets: neighborhood
convenience stores; small general dealers; specialty stores handling
a single product line (such as clothing, electronics, or furniture);
exclusive boutiques; chain stores (groceries, clothing, toiletries,
household goods); department stores; cash and carry wholesale-
retail outlets; and co-operative stores serving rural areas.
About 90% of the consumer trade inventories of these stores are
domestically sourced.
A major phenomenon in South Africa has been the evolution of
supermarketes or hypermarkets, which sell large quantities of almost
all consumer goods on a self-serve basis.
The hypermarkets, located in suburban shopping centres, have
disrupted the traditional distribution chain by purchasing directly from
manufacturers and bypassing the wholesaler, with low margins
achieving high turnover, thereby placing price pressure on all
competing outlets.
• After-sales agents
For products of a technical nature, it maybe necessary to appoint
an official after-sales agent in South Africa. This may be a
company that does not import or market the product in question,
but rather, because of its geographical reach, technical ability
and goodwill in the market, acts as the certified service agent.
Appointing an appropriate after sales agent is crucial in ensuring that
the product develops a respected reputation in the South African
market.
The US Commercial Service's Country Commercial Guide South Africa
2003 offers more information on selling factors and techniques.
37. • Agents & distributors
In South Africa, the terms "agent" and "distributor" have a very
specific meaning.
Agents. In the strict legal sense, "agent" means a person who, for and
on behalf of a principal, either introduces a third party to the principal
by soliciting orders from the third party, or concludes contracts with
the third party on behalf of the principal. The normal reward for an
agent is a commission, which is received from the principal.
Key considerations in appointing an agent in South Africa are:
• You need to appoint an agent who knows your market well. The
South African business sector is relatively small, and companies
have established methods of procurement that differ from sector
to sector.
• You need to consider national distribution. South Africa is a large
country, with nine provinces. Smaller agents tend to operate
provincially, as they do not have the infrastructure to support
operations in other provinces. You may need to appoint an agent
in each of the larger cities - Johannesburg, Cape Town, Port
Elizabeth and Durban - to cover each of the respective
provinces. Larger companies who take on agencies often have an
office in each of the major centres, making any agency
agreement easier to control.
• For certain products, South Africa is a trading hub for the
southern African region, and you need to consider whether your
South African agent should handle business in these countries on
your behalf.
Distributors. A distributor buys and holds stock of a product. In
return, s/he is usually granted an exclusive right to sell the product in
a particular area or to a particular type of customer. An agreement
with a distributor is similar to an agreement with an agent, except that
price and delivery terms will differ because the distributor is a
principal. When appointing a distributor in South Africa, the same
considerations apply as when appointing an agent.
38. • Various Bearing companies in South africa
• Company Profile
The SKF Group is the leading global supplier of products, customer
solutions, and services in the business of rolling bearings and seals.
The Group's main competencies include technical support,
maintenance services, condition monitoring and training. SKF also
holds an increasingly important position in the market for linear
motion products, as well as high precision bearings, spindles and
spindle services for the machine tool industry and lubrication systems.
The SKF business is organized into three divisions; Industrial,
Automotive and Service. Each division serves a global market, focusing
on its specific customer segments.
39. SKF has 100 manufacturing sites distributed all over the world. With
its own sales companies in 70 countries, supported by some 15 000
distributors and dealers worldwide, its e-business marketplace and
global distribution system, SKF is always close to its customers for the
supply of both products and services.
SKF supplies the following products:
• Ball and Roller Bearings • Needle Roller Bearings
• Ball Bearings Units • O-Rings
• Bearings Bushes • Piston Seals
• Bearings Housings • Precision Bearings
• Bearings Seals • Radial Shaft Seals
• Combined Needle Roller • Rod Seals
Bearings • Roll End Bearings
• Cylindrical Roller Bearings • Roller Ball Bearings
• Cylindrical Roller Thrust • Shaft Seals
Bearings • Slewing Bearings
• Deep Groove Ball Bearings • Slewing Rings
• Double Row Deep Groove • Spacing Washers
Ball Bearings • Spherical Bushings
• Hybrid Bearings • Spherical Roller Bearings
• Hydraulic Seals • Spherical Roller Thrust
• Industrial Shaft Seals Bearings
• Linear Ball Bearings • Taper Roller Bearings
• Magnetic Bearings • Taper Roller Thrust Bearings
• Mechanical Seals • Thrust Ball Bearings
• Mechanical Shaft Seals • Y-Bearings
• Mechatronic Bearings Units • Needle Roller Ball Bearings
40. Creating stable processes
Six Sigma is about creating stable processes
Design for Six Sigma and Lean Six Sigma
Six Sigma at SKF has been extended to incorporate Design for Six
Sigma (DfSS) and Lean Six Sigma besides the well established
traditional Six Sigma.
Awarding work
During the year of 2006, SKF received a number of awards and forms of
recognition for its work with Six Sigma.
NSK South Africa (Pty) Ltd
41. Products & Services
Mechanical > Bearings, Bushes & Wheels >
• Automotive Bearings
• Ball and Roller Bearings
• Ball Bearing Units
• Bearing Grease
• Conveyor Bearings
• Hanger Bearings
• Linear Way Bearings
• Needle Roller Bearings
• Pillow Block Bearings
• Plane Bearings
• Plummer Blocks
• Rod and Spherical Bearings
• Roll End Bearings
• Screw Conveyor Bearings
• Screw Conveyor Hanger Bearings
• Self Lubricating Bearings
• Sleeve Bearings
• Slewing Rings
• Split Roller Bearings
• Steel Balls & Rollers
• Super Precision Bearings
• Taper Roller Bearings
• Thin Section Bearings
• Thin Walled Bushes
• Turntable Bearings
Power Transmission > Plain Bearings >
• Air Bearings
• Dry Bearings
• Magnetic Bearings
Power Transmission > Rolling Bearings >
•
• Ball Bearing Slewing Rings
• Ball Bearings: Angular Contact Ball Bearings
• Ball Bearings: Deep Groove Ball Bearings