One of the most popular trends in business today is the convergence of industry sectors; the erupted evolution of companies that can offer multiple crossing services rather than the traditional trait of singular services per business. Today, a telecommunications company can also become a bank, a clothing store can also become a loan operator, a supermarket can also become an insurance company, and the possibilities are endless. This is a global phenomenon not unique to the continent, and thus, businesses are competing for the defining edge on a global scale. According to Hein Boegman, Territory Senior Partner for PwC (Pricewater Coopers); “The success of a diversification strategy can be measured through job creation, profitability and exports, together with the stable growth in revenue and returns on investment.”
African countries that have seen successes and sustained growth in diversification are Kenya, South Africa, and the United Arab Emirates (UAE). As part of the UAE, Dubai provides incentives to attract foreign direct investments. These nations have been remarkably successful in diversifying their economies and their export structures. The Kenyan economy has been one of the most diversified in Africa for a long time. Diversification in Kenya has been effectively implemented through traditional sectors such as agriculture and tourism. South Africa has a well-established manufacturing base which remains a key driver of its economic growth and diversification.
One of the successful diversification establishments with heightened convergence is the Bidvest Group, owning or having significant holdings in over 300 companies, and offering wide range of services in trading and distribution, financial and banking services, automotive and car rental services, insurance, office and print, employing approximately 114,000 people and contributing to the development of a high performing workforce in the continent.
Diversifying GE has industries all over Africa, developing the workforce and growing in market returns. GE has a manufacturing plant in Onne, Rivers State in Nigeria. In Pretoria, South Africa, GE has a facility which supplies Transnet; Africa’s largest freight and logistics company, with locally assembled locomotives. In Kenya, GE is working with the country’s Ministry of Health in an arrangement which resulted in a radiology tranche of Kenya’s Managed Equipment Service programme. The company has seven years to deliver and install the technology then train the users by providing skills training and ensuring a high performing workforce. The global giant has already equipped the radiology departments at 97 of the 98 hospitals across 47 counties, with over 560 trained health workers.
One of the challenges in diversification and convergence within companies is how to measure and communicate success and growth. The innovative organisations are noted by their leadership, exploring new ideas, and collaborations to commercialise innovations. The measure and success of the diversification becomes more than just the financial profit, but about the built value and trust communicated to the audience, consumers and among other groups and stakeholders.
Dr. Charles Kimei, CEO of one of Tanzania’s leading banks, told PwC expert analysts that; “Not all stakeholders will read your annual report or integrated report,” he said that they “believe” they are doing good things, solely based on the effective implementation of tools to diversify the workplace.