May 2013: A series of new shocks hit international markets recently, forcing businesses to become more strategic than ever in order to grow.
It was announced last month that the output from Chinese factories was slowing down slightly, decreasing demand for commodities from maize to steel and copper, and knocking share prices worldwide.
Then the value of gold, one of the major drivers of the South African economy, plummeted by 10% - the greatest loss in 30 years.
These were among the influences that made the rand lose the ground it had gained, to collapse to a four-year low of about R9.44 to the dollar.
Gold prices have since regained a little ground, although the volatility of the markets remains. South African Reserve Bank Governor Gill Marcus said the strong reaction to the “marginal” slowdown in China’s growth showed how fragile the international economy was.
She warned that South Africa faces the risk of “stagflation” – high inflation with weak demand – from which it is extremely difficult to recover. Her warning comes as the IMF slashed the country’s growth forecast for next year from 4.1% to 3.3%. At the same time, the recent meeting of BRICS in Durban is heralding a new world order, where emerging economies are likely to play a far more powerful role.
The only certainties in our current economic climate are that challenges will continue, says Bertus.
“Companies doing business in the traditional way – remaining inflexible in the products and services that they offer, and expecting customers to take the initiative – are likely to struggle in this current climate,” he says. “But businesses with innovative strategies are continuing to grow, and those getting it right are doing extremely well.
“Software companies are a great example of how to run a successful business. They understand the fast-changing needs of their markets, are constantly innovating and react quickly to implement changes for their customers.
“It is frightening that we have to face these challenges, but doing so with vision and creativity brings out the best in a company and its staff.”