The development of a strategic framework for South African explosives companies expanding business activities into sub-Saharan countries

Abstract

The pressure on the current mining sector in South Africa has forced South African explosives companies to expand their activities into Sub-Saharan countries in order to sustain and grow their sales and profits. The purpose of the research was to assess the efficiency of the existing strategic frameworks presented by the literature and deployed by the explosives companies expanding operations in Sub-Sahara and to understand if and how they need to be adapted to suit the explosives market. The research was thus guided by the following research questions: How effective are actual strategic frameworks for the development of an African strategy for South African explosives companies willing to expand operations in Africa? Why aspects of current strategic frameworks do not apply to the commercial explosives business in Africa? Why would it be necessary to include other key variables in existing strategic frameworks to develop an effective strategy for the explosives business? How do other non-manageable variables such as politics, legal, cultural and administrative barriers impact on the shaping of the final strategy for South African explosives companies willing to expand their operations into Africa? The research method followed was a single case study research approach leading to the conclusion that, despite developing different strategies by existing explosives suppliers, they performed well and showed growth in sales and profits. Notwithstanding their success, the investigation revealed that some challenges and specific aspects of the explosives market were not addressed by either the explosives companies’ strategies or the main strategic frameworks described in the literature. Furthermore, the analysis identified external factors, such as commodity prices, which contributed more to the success of explosives companies than the strategies they implemented. The results of the analysis described above led to the development of a strategic framework which included the elements of strategies used by explosives companies, relevant model elements from existing strategic frameworks, external factors (rival explanation) such as commodity prices and variables which take into account the challenges encountered by explosives companies in Sub-Saharan Africa as well as specific aspects of the explosives market. It is believed that the strategic framework developed in the last section of the present research takes into account the particular aspects of the explosives market and empowers South African explosives companies with a framework which addresses the specific aspects of the explosives markets to develop successful businesses in Sub-Saharan Africa.