Essay Sample on South Africa Transport Infrastructure Market Opportunity

A market opportunity is a forecast of demand for a product or service in a market that firms in the market are not meeting fully or completely missing in the market. South Africa is one of the rapidly developing markets in Africa which is a market opportunity for many countries (Fedderke & Bogetic, 2006). In a growing economy, there are many transport infrastructure development opportunities for construction businesses (Hlotywa & Ndaguba, 2017). This paper will assess transporting infrastructure as a market opportunity in South Africa's growing economy and create an infrastructural development organization strategy to venture into the market to meet the existing demand for transport infrastructure.

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Transport Infrastructure Market Opportunity Analysis

The analysis of the potentiality of a market involves the use of a screening process that promotes a holistic approach to identify the potential of the market. Understanding the existence of a market opportunity is not enough, but there is a need for a more extensive analysis to determine the characteristics which help a potential investor to make decisions that are in alignment to the business environment. The following is a market potential analysis for transport infrastructure in South Africa.

Identification of Basic Appeal

The basic appeal refers to the underlying demand for transport infrastructure in South Africa is very high due to the rapidly growing economy. In a growing economy, transport infrastructure such as roads is on high demand to transport raw materials from the rural areas to the industrial centers and the finalized products from the industries to the consumers. As a developing nation, South Africa's demand for transport infrastructure is very high, and a transport infrastructure company will thrive in the market (Fedderke & Bogetic, 2006). The country has multiple universities that offer engineering and technical courses, and there is a surplus of labor and ready skilled labor for the organization which reduces the overall cost of operations in the country (Hlotywa & Ndaguba, 2017). The government offers lucrative incentives and subsidies to the infrastructural development companies which a transport infrastructure can take advantage of to get a head start in the African nation.

Assessment of the National Business Environment and Market Potential

The political environment in South Africa is amiable for investment in a transport infrastructure organization. The country has an excellent international image being viewed by many global brands as an opportunity for external expansion in Africa due to its rapidly developing economy as well as strong political leadership that is development-oriented (Hlotywa & Ndaguba, 2017). A transport infrastructure company will significantly benefit in the South African business environment by providing transport services to many international businesses as well as its developing industries. The country has developed legal institutions and recognized private property with little government interference which makes the market a potential opportunity to set up a transport infrastructure business (Hlotywa & Ndaguba, 2017). The transport infrastructure business in South Africa has a significant potential of expansion in the future due to the developing economy and the strategic position of the country as the doorway for the countries of the south in Africa.

Reason for Selecting South African Market for Transport Infrastructure Business

Secondary research shows that South African rapid economic and industrial development, as well as the existence of a skilled pool of workforce, makes it ideal for many international businesses seeking to invest in the area and other parts of Southern Africa (Hlotywa & Ndaguba, 2017). Therefore, selecting South Africa to set up a transport infrastructure business has a significant potential for future expansion, and currently, there is a ready market for transport infrastructure in the rapidly growing economy.

Top-Level Organization Strategy

A transport infrastructure services and products organization strategy refers to the process of identifying organization objectives and goals and deciding how the organization will achieve them. A new transport infrastructure investment company in South Africa has a high chance of success by creating a competitive advantage.

Identification of the Organization's Goal

The primary goal of the transport infrastructure organization in the South African market is becoming a premier company that provides value to the businesses and industries in the country (Wild, 2015). Being a new organization in the market it is good for the organization to offer price friendly services and products to ensure that the organization gradually acquires a market share in the South African transport infrastructure services and products. Besides, the organization objectives will align with the nation infrastructural transformation to expand and further open the South African market.

Core Competency and Value Creation

The new organization will concentrate on providing transportation infrastructure products and services in South Africa to serve businesses and companies setting camp in the country due to its strategic location. The government provides an enabling environment for the transport infrastructure organizations with the aim of expanding the economy which will benefit the new organization to set up in the market. Besides, the South African government is keen on looking for employment for the high number of unemployed skilled youths in the country. Therefore, low competition, high quality, and affordable transport infrastructure services, and products will create value for the organization to acquire a good market share. Besides, the organization will set up hood customer service which will add value to the organization and increase service and product consumer loyalty.

Strategy Formulation

The organization will adopt a multinational strategy where the products and services will be aligned to the national market local preferences to ensure that they meet the local expectation. The following are the organization strategy in its operations in the South African economy.

Differentiation Strategy and Focus Strategy

The transport infrastructure organization will invest in differentiation by ensuring that the services and products in transport infrastructure are tailored to the local market. Besides, the organization will concentrate on road transport infrastructure which is the product that is highly required in the South African developing economy (Cheteni, 2013).

Conclusion

South Africa is a potential destination for transport infrastructure investment due to the organization rapidly growing economy. A transport infrastructure organization can significantly benefit by setting a multinational business that focuses on providing transport infrastructure services and products required by manufacturers and companies in the country. South Africa has a good investment environment due to its stable government, legal agencies, and skilled labor. The country is in need of transport infrastructure to transport goods and services from the industries to the markets and also raw materials to the manufacturing areas. The country is encouraging transport infrastructure investment companies to open up the economy and make the nation a transport hub and gateway to the region.

References

Cheteni, P. (2013). Transport infrastructure investment and transport sector productivity on economic growth in South Africa (1975-2011). Mediterranean Journal of Social Sciences, 4(13), 761.

Fedderke, J. W., & Bogetic, Z. (2006, October). Infrastructure and growth in South Africa: Direct and indirect productivity impacts of nineteen infrastructure measures. In Accelerated and Shared Growth in South Africa: Determinants, Constraints, and Opportunities. The Birchwood Hotel and Conference Centre Johannesburg, South Africa.

Hlotywa, A., & Ndaguba, E. A. (2017). Assessing the impact of road transport infrastructure investment on economic development in South Africa. Journal of Transport and Supply Chain Management, 11(1), 1-12.

Wild, J. J. (2015). International business: The challenges of globalization, student value edition. Place of publication not identified: Prentice Hall.