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IN THE recent IMD World Competitiveness Rankings, South Africa dropped a further 8 places to 52nd out of 59 surveyed economies. A similar report from the World Economic Forum (WEF) saw South Africa slide from 45th to 54th in their rankings.
In short, South African businesses are becoming less competitive.
The reasons identified for this are varied and include higher level economic policy, but one organisation bucking the trend is local bourse operator JSE Limited. In the WEF report, the JSE was ranked number one in the world in the category of regulation of securities exchanges.
This in part has seen it emerge as a highly successful business over the last decade and provides an interesting role model for smaller entrepreneurs.
One of the cornerstones of the JSE's success has been its investment in technology infrastructure, with the group having spent R157m in the previous financial year ensuring that it stayed current with latest trends.
Commenting at the presentation of the group's financial results, outgoing CEO Russell Loubser noted: "It is becoming clearer that in a globally competitive environment markets with strong regulation, solid infrastructure and thriving institutions will be better positioned to attract sustainable capital flows."
While most small businesses would love even 1% of that amount to invest in technology, the lesson is applicable even on a smaller scale: investment in technology is required to keep your business competitive.
Focus on service excellence
You don't become one of the world's most admired exchanges with weak client services and this is a factor which can also provide a lesson to entrepreneurs. It is not simply a case of being good in South Africa, but excellent on the world stage.
Leading marketing guru Scott Cundill from Majestic Interactive told Fin24 that apart from technology, it comes down to client relationships if you want to make your business competitive.
"We need to focus on key relationships with those customers, big or small, who are clearly passionate about us and our business offering. It is the strength of our core brand community that make us strong."
This is a view shared by head of Sanlam Business Market Jannie Rossouw, who believes that entrepreneurs can make a difference through service excellence.
"Good client service practices are simple – just consider the basic expectations you have of the businesses where you spend your hard-earned money and apply them in your own business," says Rossouw.
He makes the point that businesses should act on useful feedback and suggestions by clients, and make a point of rewarding good feedback and correcting bad experiences. If the client's contact information is available, it will create a good impression if you personally indicate what you had done with their feedback.
Diversify your client base
One of the criticisms of the JSE is that it has been overly dependent on equity trading products for revenue growth. While this focus has served it well in recent history, analysts have now begun to criticise management for not growing other revenue segments.
While it is important for businesses to focus on market segments they are good at, entrepreneurs should always be looking for opportunities to diversify earnings from their existing client base to ensure they remain competitive.
In its monthly newsletter to clients, multinational small and medium enterprise financier Grofin includes a number of tips for entrepreneurs.
Bill Crew, general manager of GroFin Oman, notes that lack of a diverse client base is a no-no."Relying on one big contract or firm for most of your sales is incredibly risky. Any small business with sales of 25% or more from one client or contract is at risk."
The JSE has proven once again that South Africa can develop businesses which are competitive against the world's biggest and best - and that on its own should serve as inspiration for other local entrepreneurs.
- Fin24
In short, South African businesses are becoming less competitive.
The reasons identified for this are varied and include higher level economic policy, but one organisation bucking the trend is local bourse operator JSE Limited. In the WEF report, the JSE was ranked number one in the world in the category of regulation of securities exchanges.
This in part has seen it emerge as a highly successful business over the last decade and provides an interesting role model for smaller entrepreneurs.
One of the cornerstones of the JSE's success has been its investment in technology infrastructure, with the group having spent R157m in the previous financial year ensuring that it stayed current with latest trends.
Commenting at the presentation of the group's financial results, outgoing CEO Russell Loubser noted: "It is becoming clearer that in a globally competitive environment markets with strong regulation, solid infrastructure and thriving institutions will be better positioned to attract sustainable capital flows."
While most small businesses would love even 1% of that amount to invest in technology, the lesson is applicable even on a smaller scale: investment in technology is required to keep your business competitive.
Focus on service excellence
You don't become one of the world's most admired exchanges with weak client services and this is a factor which can also provide a lesson to entrepreneurs. It is not simply a case of being good in South Africa, but excellent on the world stage.
Leading marketing guru Scott Cundill from Majestic Interactive told Fin24 that apart from technology, it comes down to client relationships if you want to make your business competitive.
"We need to focus on key relationships with those customers, big or small, who are clearly passionate about us and our business offering. It is the strength of our core brand community that make us strong."
This is a view shared by head of Sanlam Business Market Jannie Rossouw, who believes that entrepreneurs can make a difference through service excellence.
"Good client service practices are simple – just consider the basic expectations you have of the businesses where you spend your hard-earned money and apply them in your own business," says Rossouw.
He makes the point that businesses should act on useful feedback and suggestions by clients, and make a point of rewarding good feedback and correcting bad experiences. If the client's contact information is available, it will create a good impression if you personally indicate what you had done with their feedback.
Diversify your client base
One of the criticisms of the JSE is that it has been overly dependent on equity trading products for revenue growth. While this focus has served it well in recent history, analysts have now begun to criticise management for not growing other revenue segments.
While it is important for businesses to focus on market segments they are good at, entrepreneurs should always be looking for opportunities to diversify earnings from their existing client base to ensure they remain competitive.
In its monthly newsletter to clients, multinational small and medium enterprise financier Grofin includes a number of tips for entrepreneurs.
Bill Crew, general manager of GroFin Oman, notes that lack of a diverse client base is a no-no."Relying on one big contract or firm for most of your sales is incredibly risky. Any small business with sales of 25% or more from one client or contract is at risk."
The JSE has proven once again that South Africa can develop businesses which are competitive against the world's biggest and best - and that on its own should serve as inspiration for other local entrepreneurs.
- Fin24
