USING local skills instead of expats and maintaining business flexibility are some of the secrets to global expansion, according to some South African companies that have done well internationally.
Jacko Maree, group CEO of Standard Bank, said at the launch of Going Global, a book featuring 12 SA companies that have achieved success abroad, that it is important not to underestimate the force of local competition and the importance of local skills and knowledge.
"When you are a foreigner in another country, you have to try hard to be seen to be local, if you are appealing to a consumer base," he said.
"We take a strong view wherever possible not to have South African or British expats in CEO positions [in other countries]. Sometimes when you make acquisitions you have to get the change through, but we have a very small number of people who have been deliberately transferred from SA to Nigeria or wherever else.
"You have to cultivate local management and try to have the benefits of diversity."
However, the initial fight for market share in a new market often requires skills developed in a company's original market, according to Nic Kohler, CEO of Hollard.
"In some ways the skills that have been developed in a company that has fought for market share (in its own country) [make it] better equipped from a learning point of view to go into a new market and start that process of scrapping for market share again than a company that has been dominant in its domestic market," Kohler said.
Maree said it does make a huge difference to have an exportable skills set when expanding, but said the customer interface of a business should be close to the local market.
Kohler said while it is important for a company to export its values, it is not always possible to export a company's culture. Hollard operates in nine countries outside SA, including India, Pakistan and China.
"You need to allow flexibility for a culture to evolve and respond and adapt to the local environment," Kohler said.
MTN is one of the South African companies that has made very successful inroads into Africa and also into the Middle East in countries such as Syria, Yemen and Iran.
The group has come under severe scrutiny this year amid allegations that it paid bribes to secure its operating licence in Iran.
MTN CEO Sifiso Dabengwa said his company has been "very clear about governance" in other countries.
So what about the book?
Going Global was compiled by Moky Makura of MME Media, in association with the Gordon Institute of Business Science.
It features the stories of SABMiller, MTN, Sappi, Dimension Data, Hollard, Imperial Holdings, Standard Bank, Barloworld, Naspers, Old Mutual, Tiger Brands and Anglo American and also includes a chapter on the JSE, as it "fuelled the ability of many of the global players in the book to enter new markets".
The companies' stories are mostly written by local financial journalists, which gives the stories depth.
However, the sequence of events in some of the companies' stories are presented somewhat haphazardly. Also, while the stories do tell of the mistakes some companies have made in their expansion, it paints the companies, which agreed to be featured in the book, mostly in a positive light.
Still, it is a good read and gives great insight into SA's corporate landscape and history, for those who have forgotten things like SAB once owning OK Bazaars.
Going Global is available in paperback for R265.
* This article was first published in Sunday Times: Business Times
Post a comment