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
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
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.
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
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%