Micro-economic drivers of the South African foundry industry

• Published in: South African journal of economic and management sciences 2023, Vol.26 (1), p.1-12
• Main Authors: Phiri, Luckson, Tolmay, Aletta S., Van Schalkwyk, Riaan Dirkse
• Format: Article
• Language: English
• Subjects: Business; Business, Finance; Casting; Communication; Competition; Economics; Foundries; GDP; Gross Domestic Product; Literature reviews; Management; Manufacturing; micro-economic drivers, explanatory sequential mixed-method, foundries closing down; Mixed methods research; OEM; Productivity; Profit margins; Profitability; Public Administration; R&D; Raw materials; Research & development; South African foundry industry; Sustainable Competitive Advantage
• ISSN: 1015-8812; 2222-3436; 2222-3436
• DOI: 10.4102/sajems.v26i1.4758

Background The foundry industry plays an important economic role in South Africa and all efforts should be made to sustain the industry. However, the problem is that many foundries are closing down due to economic factors.Aim The primary research objective was to identify from literature the micro-economic drivers applicable to the sustainable competitive advantage (SCA) of foundries in South Africa. The secondary objectives were to benchmark the perceptions of stakeholders in the most prominent micro-economic drivers identified from literature.Setting With micro-economic drivers identified, management can then compile a SCA strategy to retain the industry. Foundry representatives from foundries located in all nine provinces of South Africa were invited to participate in the study.Method An explanatory sequential mixed-methods approach was followed by first employing a quantitative approach, followed by a qualitative approach to identify the most prominent micro-economic drivers. Descriptive data analysis was utilised for the quantitative data and thematic analysis was utilised for the qualitative phase.Results It was found that the most prominent micro-economic drivers are product quality, the ability to innovate, employees’ skills development, and investment in plant infrastructure.Conclusion and contribution The article contributes towards the deficiency in literature by presenting the most prominent micro-economic drivers for the South African foundry industry. The article also makes recommendations on SCA strategies for foundries in South Africa based on the four micro-economic drivers.