In Part 3, respondents reveal the strategies and goals they have set for their own businesses in 2002, including projections for company profits, revenues, work force expansion, capital financing, company growth and regional and international commercial activity.

Revenues and Profits

Respondents were asked to indicate whether and the extent to which they expect turnover and profits to change in 2002

Thirty-four or 83% of the survey respondents indicate that the expect their companies' profitability to increase but only twenty-three or 57% anticipate increases in their turnover.

 

Eight percent of the respondents did not know whether to expect increases or decreases in turnover while 27% anticipate a decrease.

 

 

Seventeen percent of the respondents expect a decrease in profitability in 2002.

Ram & McRae's Comments

Even though they are not optimistic about the economy, respondents were generally confident about the prospects for their own businesses. The percentage of businesses that expect a fall in turnover is significant and, coming after the modest results for 2001, is a cause for serious concern.

Over the past three years respondents' expectation of the performance of their business has been as follows:

						2000	2001 	2002
						  %	  %	  %
Turnover to increase				  78	  76	  57
Profitability to increase 			  80	  82	  83
Turnover to decrease 			          13	  12	  27
Profit to decrease 				  15	  18	  17
No increase or decrease in turnover	           4	   6	   8
Don't know					   2	   6	   8

However, while respondents consistently and overwhelmingly expect their profitability to increase, the percentage that expect turnover to increase has fallen significantly to just over half.

Respondents were asked whether they expect competition from imported products to increase in 2002.

Twenty respondents (46.5%) consider that competition will increase in 2002. Fourteen (32.6%) expect the level of competition to remain the same. None of the respondents expect a decrease. Nine respondents (20.9%) either did not know or did not answer the question.

Respondents were asked to identify the likely sources of the expected increase in turnover

The respondents who expect their turnover to increase attribute the principal reasons for this to improvement in their products/services quality (33.3%), competitive pricing (32%), increased productivity (30.5%), and acquiring competitors' market share.

Other main sources for the anticipated increase include bringing new products and services to the market, entering new markets, and increased consumer spending/confidence. Government policy is not considered a significant catalyst for increased turnover.

Ram and McRae's Comments

Improvement in products and services offered which was identified as the top issue last year and fourth two years ago is once again identified as the most likely reason for increases in turnover.

Respondents were asked to identify from eight choices, areas which they would most likely cut back in the event of limited financial resources

On a weighted average basis, cutting back on capital investment programmes (41%), advertising and PR (28.7%), research and development programmes (24%), employment cost (21%) and employment levels (20%) will be the top choices for companies faced with financial difficulties.

Ram & McRae's Comments

Despite concerns about retaining key personnel, respondents identified high possibilities for cutting back on Employment and Employee Levels. Consistently, Capital Investment Programmes have been the number one choice for cuts in the event of scarce resources.

Respondents were asked what initiatives their company might consider in an effort to cushion the effects of the recent economic difficulties.

Cost reduction exercises (71%), entering new markets (60%), developing new products (50%) and investment in equipment and technology are identified as the key initiatives to cushion the economic downturn.

Other important initiatives include more training for employees (48%), diversification of operations (48%) and public relations and advertising (29%). Interestingly, none of the companies identified liquidation as an option.

 

Human Resources

Companies were asked about the areas in which they allowed participation by employees

Five questions were specifically geared to ascertain the importance of employees in companies. The responses reveal the following:

Percentage offering performance related pay 		- 	89.5%
Percentage offering company-wide bonus 			- 	83.8%
Percentage sharing financial results with employees 	- 	75.7%
Percentage offering equity participation for employees 	- 	21.9% 			
Percentage offering incentives other than those above	- 	64%