<p align="justify">The Solidarity Fund (the Fund) was established in March 2020 by a business group in South Africa to support the South African Government’s response to the COVID-19 pandemic. By September 2022, the Fund had proven highly effective and helped stabilize the healthcare system, provided economic support to the most vulnerable, and also encouraged the population to get vaccinated. Gloria Serobe, the Fund’s chairperson, was happy to have seen it succeed and complete its objectives. She pondered its future as lockdowns eased and the initial hardships of the pandemic slowly dissipated. The President of the Republic of South Africa personally contacted Serobe and asked that the Fund not be closed so that it could be maintained for future crises. Serobe and the board of directors needed to determine what options were available for the Fund—should it remain dormant or be closed?
GRW Engineering (Pty) Ltd. (GRW) is a road transport equipment designer, manufacturer, and servicer based in South Africa. With GRW facing increased competition in 2022 when one of GRW’s major suppliers buys out a local competitor, Gerhard Van der Merwe, co-founder of GRW and chief executive officer since its inception in 1996, knows that GRW must now compete directly against a giant multinational and develop an appropriate strategy. Van Der Merwe must decide whether to compete directly with the international firm or to internationalize. If GRW were to internationalize, he will need to determine whether to focus GRW’s energies on Sub-Saharan Africa or to manufacture in Europe.
Farmer Lee Farms was a family-owned farm 70 kilometres from Johannesburg, South Africa. The farm was founded in 2005 by Jimmy Botha, a sixty-year-old, first-generation Black commercial farmer. From 2005 to 2017, the farm had experienced steady growth and was recognized as a Black business success story in post-apartheid South Africa. During this period, the farm had a clear target market of high-end food packaging houses and food retailers and specialized in the supply of high-quality, high-value fresh produce. However, a severe hailstorm in 2017 destroyed important infrastructure on the farm that was crucial for growing the farm’s temperature-sensitive products. The capital required to repair the infrastructure was not available. As a result, the farm lost key off-take agreements with high-end retail customers and Botha had to change his crops to hardier but lower-value cash crops. In November 2020, the farm urgently needed to re-evaluate its strategy to avoid bankruptcy, for which Botha was considering four options: continue growing cash crops and hope for a market turnaround, apply for a bank loan for funds to repair the damaged infrastructure, access the available government grants to carry out repairs to the infrastructure, or change his farming methods entirely and learn an alternative farming technique known as hydroponics.
In May 2021, the chief executive officer of Telkom SA SOC Limited (Telkom) in South Africa was facing a dilemma. Fifth generation (5G) technology was about to be introduced to the country’s communications industry. While Telkom had fared well during the COVID-19 global pandemic, even managing to gain market share from its much larger competitors, the anticipated release of additional coverage spectrum for the new 5G technology was going to put pressure on Telkom’s finances and business model. The chief executive officer, appointed in 2013, had helped transform the company’s business model from a struggling state-owned enterprise with a monopoly and unhappy customers to a thriving business in open competition with complementary strategic business units. However, with continuous evolution in the industry, Telkom was forced to innovate again and possibly reposition its strategic business units.
In October 2019, the interim chief executive officer of Air Traffic and Navigation Services SOC Limited (ATNS) in South Africa faced a dilemma regarding talent management. ATNS’s talent pipeline was unbalanced, and there was insufficient progression into more senior positions within the air traffic controller division. ATNS had been recruiting from disadvantaged communities through a bursary program, which trained recipients to become air traffic control officers (ATCOs). However, it took a minimum of eight years to become qualified at the highest level of ATCO, which was a requirement for more complex tasks and leadership roles at ATNS. Many bursary recipients preferred to remain in the lower levels due to the time it took to progress and also because of their potential to earn at lower levels due to the pay structure within the division. ATNS also faced the prospect of losing the highly skilled upper-level ATCOs to international air traffic services. Should ATNS redesign its talent pipeline?
The head of the South African subsidiary of the US consulting firm McKinsey & Company (McKinsey), has to address the implications of the firm’s involvement in a corruption scandal. The South African office was implicated in a scandal involving its local partner, Trillian Capital Partners (PTY) Ltd. (Trillian), and Eskom, a South African state-owned enterprise (SOE). McKinsey was required to partner with a local company as a condition of any contract with a South African SOE. McKinsey took on Trillian as its local partner after Trillian was recommended by a former client. Trillian was, however, associated with the Guptas, a family that the South African Public Protector (an ombudsman) had accused of using its influence with the South African president, Jacob Zuma, and his family for corrupt activities. The partnership (first with a company named Regiments Capital (PTY) Ltd. [Regiments] and then, following restructuring, with Trillian) directly benefited the Gupta family. More than three years into the relationship, McKinsey claimed to have discovered that its partner was politically exposed and under investigation by the South African authorities. McKinsey’s new global managing partner attempted to limit the damage to the company’s reputation by issuing an apology. However, the South African public appeared skeptical about the apology, and questions remained regarding McKinsey’s integrity. The questions left unanswered included the following: Was Sneader’s apology enough to enable McKinsey to quell the attack on its reputation? Should McKinsey do more to enhance its standing within the South African business community, or should it accept that its reputation had suffered irreparable harm?
Serge Belamant was the founder and chief executive officer of Net1 UEPS Technologies (Net1), a US$600-million company that had a contract with the South Africa government to pay social grants to the poor. The contract was controversial from the start and was under scrutiny through multiple legal challenges and three different investigations, including by the US Securities Exchange Commission and the US Department of Justice. When Belamant discovered a paper describing a conspiracy theory alleging that he and Net1 were involved in a form of corruption known as state capture, he believed he could be the victim of a disinformation campaign and wondered what to do.
The owner of Inverroche Distillery established a viable business incorporating fynbos, the unique flora growing around the remote community of Still Bay, South Africa, into her premium gins. She grew Inverroche Distillery into the dominant brand in the artisanal gin segment of the South African gin market and beyond. In 2018, she was facing key decisions about taking her business forward. Should she grow Inverroche Distillery by actively focusing on expanding her business internationally, or should she instead focus on growth in the domestic market? If she decided to go global, was the US market the best choice for expanding her business? If she were to enter the US market, what mode of entry would be most appropriate, taking Inverroche’s firm-specific resources into account?
In late 2015, South African telecommunications giant MTN was fined US$5.2 billion by the Nigerian authorities for a mass of improperly registered subscribers—the largest fine of its kind ever imposed in the industry anywhere in the world. MTN was an emerging-market multinational corporation with a track record of successfully operating in some of the toughest, riskiest emerging markets. Thus, it was surprising that MTN had been unable to avoid a fine of this magnitude. Three factors had preceded the fine and changed the business environment in Nigeria leading up to 2015: the first was the war against the Boko Haram movement in Nigeria, which led security forces to demand the registration of prepaid phone cards; the second was the economic crisis caused by the impact of falling oil prices; and the third factor was a change in government. In light of these political risks and government regulations, how could MTN recover and move forward from this difficult situation?
The entrepreneur owner of Proof Engineering is facing a difficult decision: whether to sell his family business to a large corporation and shift to a corporate career or abandon the deal and continue as an entrepreneur. Following a setback from a previous deal in which he sold 50 per cent of his company, the entrepreneur has managed to grow Proof Engineering into a successful international enterprise. However, this second offer presents many potentially lucrative opportunities. There are a number of motivations involved in the decision to sell — including personal, financial and business considerations.
A retired Swiss banker has decided to bring primary healthcare to Africa by using a cooperative business model that brings together complementary firms. The model has proven successful in the United Arab Emirates, Zambia and Ghana. He now faces the decision of whether to expand into new African countries, and if so, which countries to enter, how to select partners and how to recruit country managers. The case also illustrates the challenges and misconceptions of doing business in Africa.
This case deals with the problems that Platmin faces as it heads toward full production at a new open-cast mine in Pilanesberg, South Africa. Platmin is in a very difficult situation that is affecting the viability of the operation. The main issue is the timing of the production — investment in mining is typically heavy in the beginning, but when the mine starts producing, payback of loans is usually substantial. Any delay in production has an exaggerated effect on the payback period and, by extension, the viability of the mine. The second major issue is the economic downturn, which has seen the price of platinum decline substantially; however, this may benefit Platmin because it is a low-cost producer, and the downturn has led to some competitors leaving the industry or “mothballing” operations that are not viable at the current platinum price. On the other hand, while Platmin is seeing a shakeup in the industry, it is experiencing pressures on its margins, and this also has an effect on its capital funding.
In 2008, the acquisition of the General Healthcare Group (GHG) in the United Kingdom had propelled Netcare Limited (Netcare) from a predominantly South African operation into one of the largest private hospital groups in the world. One of Netcare's key long-term goals was to deliver innovative, quality health-care solutions to patients in every continent. Recent South African parliamentary legislation had introduced the potential for regulated pricing and collective bargaining in medical centres, which could change the industry structure and possibly affect Netcare's strategy. As acquisition at home would be increasingly subject to stringent scrutiny from competition regulators, Netcare wondered what the impact of global acquisition would have on executing its strategy. What lessons could be learned from the GHG acquisition, how could those lessons be leveraged for further international growth, and what continent would be best suited to expansion? The case illustrates the international expansion strategies of Netcare, and illustrates the challenges of operating in an emerging market. The ability to overcome these challenges is the basis of a competitive advantage when entering developed markets.