A competitive intelligence framework for the sustainability of metals manufacturers in South Africa

Abstract

South Africa is a country rich in mineral resources. It has more than 50 underground commodities with the world’s largest reserves of manganese, chrome, vanadium and platinum. It also holds major reserves of titanium, iron ore and coal. In addition, South Africa has an abundant labour resource, good infrastructure and world-class manufacturing expertise. However, the economic growth rate − more than 20 years after democracy − is lower than what many South Africans may have hoped for. One of the strategies to improve the economic growth rate is to export less of South Africa’s mineral resources at a low value-adding factor and to promote the export of value-adding products. Metals manufacturers, being part of the manufacturing industry in South Africa have a good upstream commodity supply and a good logistics chain for the acquisition of unprocessed products for further processing, and can fulfil an important role in adding value to mineral resources while contributing to South Africa’s economic growth. Despite seemingly favourable conditions, the metals manufacturers in South Africa are barely surviving or are suffering severe losses. The main reason for this is that metals manufacturers are not competitive, according to the “new” and increasingly stricter global competitiveness yardstick. The main problems that this study addressed are: 1) that the competitive intelligence practices by metals manufacturers are currently unknown; and 2) it is unknown to what extent and how the competitive intelligence of metals manufacturers can be improved to lead to business sustainability. The main objectives of this study were to identify current practices and develop a competitive intelligence framework that can aid metals manufacturers in South Africa to improve sustainability. Competitive intelligence focuses on the external environment of companies whereas integrated intelligence includes the elements of competitive and customer intelligence and integrates with other disciplines in the supply chain such as finance and the planning cycle of companies. This research study made use of an explanatory sequential mixed methods design. The empirical study consisted of a quantitative phase followed by a qualitative phase. For the quantitative phase a new questionnaire was developed and used to collect primary data from employees of metals manufacturers in South Africa to test for competitive intelligence practices, a competitive intelligence framework and theories. The Kaiser-Meyer-Olkin coefficient from a total of 63 responses from metals manufacturers was good and the sampled data were adequate for this research. Frequencies, descriptive statistics, factor analysis, analysis of means and correlation analysis of the collected data enabled the testing of the results during the quantitative phase against the objectives of the questionnaire. This in turn, enabled the development of an appropriate interview guide that was used during data collection in the qualitative phase. The seven representatives from the metals manufacturing fraternity who were interviewed confirmed or clarified aspects that transpired from the quantitative phase of this research. The results from the qualitative empirical phase enabled the formulation of conclusions. The information and insights gained from the literature reviews and the empirical phases of this research enabled the development of a competitive intelligence framework that is scalable and can be implemented by small to large metals manufacturers in South Africa. This competitive intelligence framework − when used as indicated in the description of its building blocks − contributes to the increased competitiveness and sustainability of metals manufacturers in South Africa. Competitive intelligence practices and a framework to aid the metals manufacturers in South Africa with competitive intelligence have not previously been researched. In practical terms: the increased competitiveness and sustainability of metals manufacturers in South Africa will contribute to the South African economy, job creation and security and lastly, the South African National Development Plan