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South Africa’s Factors for International Investment Research Paper


Introduction

South Africa is a country found in the southern part of the African continent. It has an estimated population of seventy million people. Its economy grows at an average rate just like the emerging economies. The high population provides a good opportunity to companies trading in fashion products. Various controllable and uncontrollable features that characterize this country are worth noting especially to an international investor.

Controllable Factors and ways of adapting to them

Several marketing mix factors play part when considering fashion design business in South Africa. The company can succeed in establishing itself in the market if it designs goods that suit the needs of the target clients. South Africa has a broad and diverse cultural background. This country comprises of people who are of different races. In addition, the indigenous ethnic communities highly value their culture. People who dress in their traditional regalia attend most of the events, which include official government functions. Being a country whose people have different traditional dress codes, the company stands a better chance to niche out its share of the market in the fashion design industry (Gregory 54). The citizens of South Africa highly appreciate dressing in a way that reflects their culture; this means that the company will have a head start, as the citizens have positive buying habits.

South Africa is a middle-income economy country where the population in employment strives to move up the socio-economic ladder. This group of buyers always tries to strike a balance between retaining culture and appearing to be wealthy. A larger portion of their disposable income is spent on clothing. South Africa is a secular state and everybody has permission to exercise freedom of worship. The company stands to gain from the right that is entrenched in the constitution because the independent denominations, cults and sects also don their regalia sometimes even at the place of work. The company will adjust its products to fit the unique nature of the market.

In implementing promotion as another marketing mix, the company will have to take into account the different languages spoken across South Africa. The official language is English while the national language is Zulu. However, being a vast nation, some parts are very remote and local languages have to be adopted in the advertisements (Hass 77). The biggest advantage the company will get is that the literacy and exposure levels are very high. This means that English will be the main language to be used in promotion. Some adverts can be imported directly from the mother country. The reason behind this strategy is to make sure that the message reaches the target market and that different cultural communities are reached. South Africa is the only country in Africa where commercial advertisements are established. This includes the pay television stations. This is in addition to both the print and electronic media. All these outlets increase the promotional opportunities for the company.

The other international factor that the company will consider while settling in South Africa is the price determination mechanism. In arriving at the best system to use in setting prices, the company will check among others the following factors, the currency of trade where in this nation all the international currencies are accepted along with the local South Africa Rand (Mark 69). Furthermore, import duties, tariffs, and the stability of the exchange rate are also important. The company shall derive two benefits from this. The political leadership has liberalized trade and as such opening up the economy. The market sets its own prices and competition from neighboring countries is non-existent

The uncontrollable factors

South Africa has various factors that sometimes appear uncontrollable. Some of them are political. These risks could be events, activities, and decisions that affect the business climate. Just like many African countries, few months preceding elections are filled with tension. Political temperatures rise very fast as ethnic communities prefer their candidates. This situations lead to slowed business growths and fluctuating exchange rates. Civil society movements at times carry out activities against the law and yet the government fails to mete out justice as they are considered an important voting block. These actions result into technical breakdowns, reduced market share, wastage due to delays as demonstrations hinder transportation of goods, and significantly financial loss (Yarbrough 112). The company can protect itself for instance by being insured as insurance firms even offer insurance covers for loses caused by political violemce.

Operation risks fall in the category of uncertainty risks. The government can change monetary policies that affect the company in a number of ways. This includes government regulations, new taxes, and restrictions affecting imports. They interfere directly with the company imports. Since the company would operate as a foreign investor, it could be charged a fee on profits that are repatriated. Depending on the levels and areas of operations, the company could face some problems in technology.

Works Cited

Gregory, Albaum. International marketing and export management. New York: Pearson prentice Hall, 2011. Print

Hass, Richard. Bureaucratic Entrepreneur. New York: Brook Institution Press, 1998. Print.

Mark, Amstuz. International Ethics and Concepts. New York: Rowman & Littlefield Publishers, 2008. Print.

Yarbrough, Beth. Trade and Finance. New York: South Western college Publishers, 2002. Print.

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IvyPanda. (2020, September 5). South Africa's Factors for International Investment. Retrieved from https://ivypanda.com/essays/south-africas-factors-for-international-investment/

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"South Africa's Factors for International Investment." IvyPanda, 5 Sept. 2020, ivypanda.com/essays/south-africas-factors-for-international-investment/.

1. IvyPanda. "South Africa's Factors for International Investment." September 5, 2020. https://ivypanda.com/essays/south-africas-factors-for-international-investment/.


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IvyPanda. "South Africa's Factors for International Investment." September 5, 2020. https://ivypanda.com/essays/south-africas-factors-for-international-investment/.

References

IvyPanda. 2020. "South Africa's Factors for International Investment." September 5, 2020. https://ivypanda.com/essays/south-africas-factors-for-international-investment/.

References

IvyPanda. (2020) 'South Africa's Factors for International Investment'. 5 September.

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