Costco South Africa

South African Global Economy

Ashley Butcher, Lynda Hainlin, Kristi Hoffman, Barbara Jungbauer, Heidi Wolff

St. Catherine University

International Trade and the Global Economy

December 17, 2016

Doing Business in South Africa: Costco Wholesale

Current Costco Demographics

Warehouse Size: 73,000 - 205,000 sq ft

Locations: 715

501 in US & Puerto Rico

214 in Canada, United Kingdom, Taiwan,

South Korea, Japan, Australia, Mexico & Spain

Hofstede's Cultural Dimensions

Power Distance - 49

Uncertainty Avoidance - 49

Long Term Orientation - 34

Individualism - 65

Masculinity - 63

Indulgence - 63

History and Culture:

The Rainbow Nation

Colonialism

Ethnicity

Language

Recommendations for

Costco Wholesale

in

South Africa

Income Growth

91% Black & Other

9% White

Whites

Blacks

Population Growth

2.2%

income over $50,000 USD annually

64% self-identify as religious

80% Christian

Hindu, Muslim, Native Beliefs

Anti-Witchcraft Laws

European control

across continent 1950's

2016 Unconstitutional

Religious

Freedom

Rule of Law

Trust

Economic Drivers

Planning

Government

and

Politics

Westernization

• Increasing

Urban vs. Rural Communities

Etiquette

Urban

• Materialism
• Individualism

Rural

• Farming
• Collectivism

• Business
• Meetings
• Gifts

South African Cultural Identity and Norms

Family

Structure

Cuisine

• Meat Based
• Influenced by Colonization

• Nuclear
• Extended
• Tribes

Economy: The Stats

Economic Statistics

Trade Highlights

• Population : 54.96 million
• GDP : $312.8 billion
• Exports : 30.9% of GDP
• Imports : 31.9% of GDP
• GDP Growth : 1.3%
• Inflation : 4.6%
• Unemployment : 25.5%

Top 3 Exports

1. Coal

2. Platinum

3. Petroleum (non-crude)

Top 3 Imports

1. Petroleum oils

2. Petroleum (non-crude)

3. Radio trans apparatus

Top 3 Countries

• China, Germany, US

Harbors

Capitals and Important Cities

Natural Resources

7 Harbors

Capable of Import/Export Traffic

Port of Ngqura

Newest Commercial Port

Nickel

Phosphates

Tin Rare Earth Elements

Uranium

Gem Diamonds

Platinum

Copper

Gold

Chromium

Antimony

Coal

Iron Ore

Manganese

Vanadium

Salt

Natural Gas

Cape Town - Legislative

Bloemfontein - Judicial

Pretoria - Administration

Johannesburg

Economic Developments

Largest

Climate Regions

Location

Geography

Plateau

Rugged Hills/Narrow Coastal Plain

Lacking River and Water Sources

Heavy drought

Heavy Air Pollution

Erosion and Desertification

Active Volcano

One Forming on Marion Island

Southern Tip of African Continent

Land space 472,000 sq miles

Water space 4,620 sq km

Land Use

Border Countries

Agricultural: 79.4%

Arable Land: 9.9%

Permanent Crops 0.3%

Permanent Pasture 69.2%

Forest: 7.6%

Other: 13%

Botswana

Lesotho

Mozambique

Namibia

Swaziland

Zimbabwe

Climate

Subtropical Coastline

Semiarid

Semi-dry

Less than 20" of rain annually

Women in

South Africa

Women in Work and Leadership

Hope for

the Future

Gender Inequality Index

• Value - 0.407
• Rank - 83rd out of 155
• Parliament - 40.7%
• Labor Force - 44.5%
• Over 25 with

Secondary

Education - 72.7%

Historical Perspective

Costco South Africa

Our Question

Expansion Opportunity