Chinese market are having a positive on GDP, and the exports are greater than imports. The imbalance in the balance of trade have an economic counterweight in the balance of payments in Namibia. This concept relates to capital flows between China and Namibia. Chinese markets imports a lot of goods and is sending money abroad, since the foreigners and Chinese foreigners who sell the imports are receiving the importing country currency in exchange. Nowadays, the foreigner’s holders of capital use their money to invest in the country, buying government bonds or investing in business in Namibia. Many companies in Namibia such as Air Namibia, Pep Stores, Ackerman’s, Edgars and many more as well as many international companies are outsourcing their manufacturing to China, because of focus on economies of scale. To make business, investment, and strategic decisions, you need timely useful information.
Political factors such as tax rates when their importing their products in Namibia will affect them as the organisation might end up paying high tax rate tariffs’. Namibia is political stable, although Pepkor distribution centre are in South Africa the uncertainty and recession might affect the organisation, but the government is stable at the moment. Economic factors such as recruitment process and labour issues might affect them the way they want their working hours maybe they want to operate 24 hours and the labour restrictions and employment policy will affect the business operation, working visas, immigration issues, the gross demand product, unemployment they might not get enough customers to meet their profits and reach their targets.
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3.2 Ethical and Social
Social factors such as population size might affect their profit, age group of people who buying the products, the cultural or ethnic mix of people. Today the world has changed, global warming, cultural norms and expectations which can affects the benefit and profit of the business.
3.3 Technological Factors
Technological factor such as development of the product, Pepkor could enhance its innovation and technology in the process of logistics. Further there could be innovation which can help in bringing adaptability, one imperative perspectives is the capacity to eliminate lead time, where forms are rearranged, documentation isis minimised and red tapes and bureaucracies eliminated.
3.4 Environmental Factors
Environmental factors such as reducing waste, health and safety issues to make sure employees and customers are safe and working in a safe environment. “Environmental policies also can affect the business to continue its operation. There is a huge impact of the environmental factors on the organisation.” (De Wit, 2010) This environment can be the internal or the external it have quite an influential effect on the business.
3.5 Legal Factors
Legal factors such as trade policies, import and export policies can affect their business. Namibia has a legal system that is organised, transparent and efficient.
Market factors such as meeting customer demands, although demand cannot be determined in a free market place, while China market in Namibia are letting customer demands down by reducing their price and increasing customer demands to buy their products product, because of cheap prices which are not value for money and the poor quality products. However, demand forecast have proven to be difficult, which led the Pepkor “considering the concept of Quick Response Logistics’ (Pepkor, 2011).
While the consideration in the development of global logistics and its implementations of supply chains are different in China and India with the focus staying on basis factors such as lead times and government policies as well as the financial institutions, the consideration in China and India are more taking global logistics and supply chain management to the next level of operational and economic efficiency through optimal use of technology. ‘Complicating the analysis is the fact that, while both China and India are more labor-abundant than developed, economies, relative factor blessings and wage levels differ considerably crosswise over districts inside these nations’ (Martin, 1993)
Global competition and need for competitive pricing, threat of competition has always been on between Pep Stores, China market and other retailer in the industry. Especially in a globalised economic model, where imports from China tend to be much cheaper than the South Africa Pepkor locally manufactured products. This necessitates cost savings and efficiency need to be the new balance of trade and it could be squeezed into business activities. Pepkor needs interests in data innovation and in information administration go into expanding business proficiency, which could go far in boosting the upper hand of business as against worldwide coordinations rivalry from low-cost producers from China, India and around the globe (Pepkor, 2011).
4. Conclusions and Recommendations
Global logistics has brought with it inherent risks. Business loathe vulnerability, speak to hazard. ‘In this way it is imperative for the business to distinguish the dangers, profile them and look to comprehend them with the goal that the business can be better arranged to oversee them going ahead’ (Chiruby, 2014). The impact of global logistics has meant while in the past only companies such as Pepkor could import goods in to Namibia, now goods are imported directly through the port of Walvis Bay, by the Chinese traders. These has let to and increase competition for this companies and reduction in market share.
In order for these companies to survive they should become active participants and source goods directly from the Chinese manufacturers and because of the economies of scale they can source them at better prices than the individual traders. Pepkor Namibia can be become part of Team Namibia, which is aimed at promoting local manufacturing and distribute Namibian products as preferred products to the Chinese product.
