Competitive horizon

Citation

(2008), "Competitive horizon", Strategic Direction, Vol. 24 No. 2. https://doi.org/10.1108/sd.2008.05624bab.001

Competitive horizon

The European Commission (EC) is set to launch a series of measures in 2008 aimed at boosting the European food sector. Food and drink is the largest single manufacturing industry in Europe with an annual turnover that exceeds €800 billion. The European Union (EU) is also world leader in the import and export of food products. But a recent EC survey has indicated that the industry faces increased competition not only from major rivals US and Canada but also from nations such as Australia and Brazil. According to a report published by Food Navigator (www.foodnavigator.com), decreasing competitiveness is impacting on the ability to innovate and to realize the profit levels needed to reinvest in order to protect or increase share of domestic and international markets. The measures build on an earlier initiative focusing on research and development (R&D) in areas such as quality, manufacturing, supply chain management, communication, health, and food safety. Levels of investment in R&D are currently lower in the EU than in competing nations.

Diamond sparkle set to continue

Soaring demand from India and especially China may see diamond prices reach an all-time high that could last until 2015, according to a report published by the New Zealand Herald (www.nzherald.co.nz). Around 40 percent of women in China now select diamond wedding rings, while consumer demand in India increased by 26 percent in 2006. These figures are predicted to rise considerably further over the next few years. The demand in China for polished stones saw imports increase by 180 percent over the first half of 2007 compared to the previous year and it is anticipated that import levels will double within three to five years. BusinessWeek (www.businessweek.com) reports that jewelry industry insiders expect the Chinese market to reach $2.5 billion by 2010. China imports rough stones to cut and polish and China’s Diamond Administration believes that a stable environment characterized by low wages and few strikes makes the country an ideal place to outsource diamond processing.

Ghana to focus on improving exports

Recognition that exports are crucial to the economy in Ghana has led to government initiatives to boost the sector. Export growth of 15 percent in 2006 brought earnings of $893 million, more than double the figure recorded five years previously. Despite this growth, ministers acknowledge that constraints prevent the sector from realizing its full potential and the initiatives launched aim to tackle these constraints. Developments are set to include better port and airport storage and refrigeration facilities to improve fresh produce and quality. This will be further ensured by packing food at strategic sites boasting hygienic conditions, a report published by All Africa (www.allafrica.com) claims. In addition, the government will help small and medium Ghanaian producers by establishing export trade houses to market their products and a fast-track system to enable exporters to meet specific orders. Law changes are also proposed to allow exporters greater access to investment funds but some ministers also want tighter laws to deal with traders who fail to comply with export regulations.

All eyes turn to Russia

A report published by Russia Today (www.russiatoday.ru) claims that foreign investors are clamoring to buy into Russian companies. This growth in mergers and acquisitions (M&A) has seen foreign interest spread into a range of different industries in the country. Last year the growth was seen mainly in energy and metals, but interest is also increasing within rapidly growing sectors such as retail and investment banking. But some analysts predict the most significant boom of all will occur in real estate. The M&A industry grew to over $100 billion in 2006, more than double the previous year. The report also claims that strong domestic growth in retail businesses is expected during 2008 and that this will see Russian investors seeking out potential acquisitions in Europe. However, many economists believe that Russian growth depends heavily on foreign investment if the country’s economy is to diversify and become less reliant on gas and oil. The belief is that M&A activity during 2008 will therefore involve competition between domestic and foreign players looking to invest.