Economy grew

SA’s economy grew much more than expected in the second quarter — by a seasonally adjusted and annualised 3.3% — after a 1.2% contraction in the first quarter. The economy expanded by 0.6% in the second quarter of 2016 compared with the second quarter of 2015, Statistics SA data showed on Tuesday.

Markets had expected growth of 2.7% in the second quarter compared with the first. Manufacturing and mining and quarrying were the main contributors to gross domestic product (GDP) as measured by production in the second quarter, data showed. Mining and quarrying grew by 11.8% largely as a result of higher production of platinum group metals. Only agriculture, forestry and fishing; and electricity, gas and water contracted in the second quarter.

On the expenditure side, spending on GDP grew 3.4% in the second quarter. Spending by households and government increased but gross fixed capital formation — mainly a proxy of spending by the private sector — fell by 4.6% in the second quarter. This was its third consecutive quarterly decline. The main reasons for the decline were falls in spending on construction works, and on machinery and other equipment.

Net exports contributed positively to total spending on GDP, data showed. Exports were up 18% while imports fell by 5%. There was a R23bn drawdown of inventories in the second quarter after a R1bn build-up in the first quarter.

[Read full article]

Customer Experience Management

Customer Experience Management (CEM) has matured rapidly in South Africa and has become an inescapable, must-have for any company hoping to get ahead of the pack, according to Shannon Mackrill, joint managing director of Kinetic, a key strategic information provider to the IT and Telecoms sector. Kinetic presented the 5th annual CEM Africa Summit at the Century City Conference Centre in Cape Town last week. It was attended by over 440 customer experience (CX) professionals.

Customers must feel they can make decisions and be in control of the money they spend with a company. The loyalty of existing customers should be rewarded, while future customers are interested as well.

Customer experience management is not just a department. It is the basis for a sustainable customer experience. Bring the voice of the customer into the boardroom. Hear the customer’s voice on a daily basis. Do not compete with the rest, rather fix the basics. Deliver above and beyond and work towards leadership.

During the summit three game-changers on how to get CEM right became clear. These are that human interaction is very important, that there is a rise of the experience economy and a need for complete CEM transformation throughout an organisation.

[Read full article]

To buy or lease commercial property?

Of course there are benefits to leasing as well. Most commercial tenants sign 3-year leases which give them some stability, but also, more importantly, flexibility to move if the business grows bigger. Compare this to the problem if you realise you bought the wrong property.

The issue of deposits

Another advantage of leasing is that a deposit on a lease is usually much less than having to provide 30% or 40% of a purchase price. Another pro of leasing is that, while you as the tenant would have to see to maintenance in the inside, the landlord has to worry about things like the gutters and the roof.At the same time that value of the rental market remains very important, especially in an entrepreneurial environment where cash flow is important.

Measuring returns on property

There are two ways of measuring returns on property and the two are complementary. The first is the income yield, which is the expected first year’s net income divided by the purchase price. That tends to be, in most places, a pretty low yield. Then, on top of that, you hope to get capital growth.When comparing buying with renting you should look at the combined return of these two – that is the total return.

Another factor to consider

There is another factor to consider at the moment though. Currently industrial buildings and office buildings in SA are “quite cheap” in real terms, so the down side potential capital-wise is very low.

Another factor to consider is can you buy cash or do you need a mortgage bond? When the company has enough liquidity to buy cash, the argument in favour of buying is strengthened. But when you have to make use of a mortgage bond, the risk (variability of return) is multiplied.

Strategic management important

Strategic Management is an important concept for managers, decision makers and business owners alike, and entails the action-oriented and results-driven evaluation of business goals, objectives and plans for the future, as well as a concrete strategy for addressing them.

Every business owner wants to make the right decisions for their growing companies, but most are at a loss of where to begin. Identifying a problem within the company is only half the battle, but how do decision makers go about solving them?

A strategic management process is most often comprised of five distinct stages:

Goal setting

A company can’t decide on a good course of action without first knowing where it wants to get to – which makes goal setting a crucial initial step in the strategic management process. Goal setting is a perfect opportunity to assess and evaluate the mission or vision of your business.

Analysis

This is the point where businesses gather as much information as they can on what it will take to accomplish their vision. Strategists need to take stock of any internal and external factors that might get in the way, and identify projects that may help it come closer to its goals.

Strategy formulation

Having considered the information gathered, it is time to form a strategy. To determine the best way to spend a company’s resources on its pressing issues, it is a good idea to prioritise them based on their importance to the organisation’s success.

Strategy implementation

Now that the master-plan is in place, attention needs to be turned to making it happen. Every person within the organisation must be informed of their responsibilities and duties when it comes to taking action to implement the strategy and achieve the business’s goals.

Evaluation and control

This is the final step of the strategic management process, where an organisation determines whether their chosen strategy is bearing fruit. It is a good idea to include a third party, such as a business coach, in the evaluation to ensure an objective opinion, and solid experience and knowledge to draw upon. Performance needs to be measured, and remedial or corrective action needs to be taken if aspects of the strategy are not working as well as expected.

[Read full article]