Corporate trends indicate values paramount

The complexity of the business environment grows with each additional piece of legislation, above-inflation salary and wage increases, low business confidence and sluggish markets in many sectors. Each quarter produces another round of poor GDP figures and weak market-related news. Trends in this tumultuous economic environment are somewhat difficult to read.

The South African consumer faces continued increase in electricity prices, introduction of tolls on Gauteng highways, increase in the cost of food and fluctuations in the cost of fuel, all of which influence the ability to spend.

Corporate and private organisations are in an interesting head space as they watch developed markets enter an age of austerity while at the same time seek opportunities to leverage emerging-market foreign direct investment.

Four corporate consumer trends

• Frugality - many of the companies we work with are exercising caution in their business operations. The trend has moved from revenue focus to bottom line focus with the emphasis on lower turnover but higher profits. We first began tracking this increased productivity trend in 2009, as companies realigned and consolidated processes to ensure higher productivity. This strategy is working for them and is expected to become ingrained in their business behaviour in which companies will focus on increasing or maintaining profitability while containing costs.

• Transparency - above all, the crisis has highlighted the critical role that transparent and accurate business information plays in business. Pre-crisis, many companies we worked with placed a high value on the relationship with clients rather than on their financial figures. The recession has changed this. Companies now focus on financial figures rather than on the individuals running the company. This change in business consumer behaviour has resulted in a greater emphasis on transparency, which has protected many of our clients from potentially risky business deals.

• Service - another interesting trend in business consumer expectations around goods and services is that value for money has become paramount in business interactions. The concept of 'value' has changed from the pre-recession market, where customers expected to pay a premium for premium products, to expectations of excellent products backed by excellent service at reasonable prices. There is a service culture developing, which permeates all operational elements of businesses. This is measurable at an individual and corporate level and is becoming one of the key differentiators of successful companies.

• Company Values - the recession in many cases has been termed a conscience crisis with gross violations of basic moral code and corruption. As such, more emphasis is being placed on the value-drivers of organisations with preference given to those companies adhering to ethical and social drivers such as compliance and corporate social investment.

Opportunities for South African businesses lie in flexibility and focus. The ability to leverage the unique strengths of a business within the changing perceptions of consumers, while being open-minded about controlled risks, such as investment opportunities in growing markets, will assist in ensuring business success in the short to medium term.