Globalisation

Table of Contents

1. Introduction 2

2. Background 4

3. Strategic Plan 6

4. Australian Business Culture and Climate 10

5. Entry Mode 13

6. Organisational Structure 15

7. Strategic Alliance Partner/s 17

8. Action Programme 19

9. Conclusion 21

10. Bibliography 23

Introduction

The following discussion is based on the potential exploitation of global markets by a relatively large South African electrical installation firm. The company specializes in the electrical installation of large projects and has already successfully completed projects within the SADC region.

The company is in the arguably advantageous situation of being the flagship company within a group that is already involved in numerous global ventures. In preparation for its marketing strategy as a powerful role-player prior to its proposals for involvement in local development for the 2010 construction drive, the company has already identified the need to strengthen its portfolio with a track record of successfully completed international projects.

The South African construction industry is presently experiencing a boom as attested to by political leaders and the abundantly visible construction projects. However, this boom has also resulted in dramatically reduced margins and an ever-increasing demand for skilled human resources.

Skills development and staff empowerment whilst being at the forefront of government initiatives have still not yielded the increased skill pool envisioned and increasingly staff are looking for opportunities that not only increase their earnings but also those that add to their arena of expertise and differentiate them from others.

The booming construction industry with its reduced margins has also created a situation were less financial resources can be allocated to development and training even though these are crucial to the sustainable development of the South African construction industry.

The South African construction industry has also been faced with the problem of competing with employers able to pay skilled staff in American Dollars thus creating remuneration structures unviable for South African companies. It has also become apparent that skilled project management services have become crucial but the industry is unable to fund the retention of the required skill.

Though often debated, experience has highlighted that the Australian construction industry has cost of construction costs closely related to the South African industry on a unit to unit basis. This implies that while local cost structures will not yield significantly higher returns on a unit basis, profit earned in Australian Dollars will be significantly higher than those earned in South African Rands when returned to the South African company due to the increased value of the currency.

Projects within the Australian construction industry will also allow South Africans to afford to their employees the opportunity of international exposure and the associated opportunities of personal growth and self-fulfilment. They would also benefit financially as the company could remunerate according to the Australian industry standards with South African employees enjoying the same benefit of earning in a stronger currency as the company.

It is with this intention in mind that the following proposal is presented as a means to meeting the changing requirements of the current employer employee relationship and to maximise the company's return on investment and experience portfolio.

Background

The electrical installation firm in question has traded for almost 30 years and has been involved in most of the prestigious and landmark developments in South Africa including the Durban International Convention Centre, Sandton Convention Centre, Gateway Theatre of Shopping, Midlands Mall and the Suncoast, Sibaya, Golden Horse, Monte Vista and Welkom casino projects.

The company has successfully ventured into Maputo, Nigeria and Kenya but has not yet worked outside of Africa. However, as mentioned previously, the company is the flagship company of a group of companies that have business interests across the globe. As such it has at its disposal the professional consulting services of business managers with vast global business management experience.

Its South African success has been based largely on its ability to forge working relationships with all role players within the local environment. It is this proven formula that must be extended into the global arena.

The Australian market is attractive because it represents one that commands rates well above South African norms, is experiencing growth at present and is relatively stable. The onslaught of development especially within the accommodation market prior to the 2000 Sydney Olympics resulted in a somewhat subdued development industry. This has however changed in recent times with numerous industry surveys predicting strong and steady growth for at least the next three to five years. The Australian Construction Forecast Council, ABS Energy Research and IBIS World are just some of the organisations that hold this opinion. The Australian Government is also actively promoting development by partnering with the private sector to ensure successful development of projects ranging from residential to major public projects such as the recently completed Adelaide International Convention Centre.

The highlighted company has forged many successful relationships by coordinating and bringing together the efforts of designing engineers, and manufacturing companies. This in South Africa is still a competitive advantage of the firm and it is envisioned that this could be exploited as an advantage within the Australian market.

The rationale behind this is that to date no installation firm within the Australian market has attempted this and that one of the major manufacturing partners of the company is actually an Australian based company having being founded there over 80 years ago and still has its largest manufacturing plant