Costing and Marketing as a Source of Rivalry in the Road

Abstract

The focus of this study was to assess why a large South African based road freight company (Carrier X) was now losing market share and what strategic actions it might consider to remedy this. There is a high dependence on road freight transport in the South African economy’s supply chain so there is opportunity for road freight companies to profit but there are also continual challenges to being chosen as the freighter of choice by customers. The study was conducted with Carrier X staff and conveniently selected freight industry customers in Gauteng, over a period of 4 months. A total of 18 participants were engaged through one-on-one, qualitative, semi-structured interviews by two researchers, one focusing on Carrier X cost analysis additionally assessing the opportunity for the introduction of ABC costing analysis, the other, on Carrier X marketing opportunities. The findings of the study revealed intense competition exists in the road transport industry in South Africa developed over the past decade. Carrier X had not anticipated and strategically planned to manage this competition. This paper makes recommendations on advantages that could be gained by competing on improved cost management and strategic reviewing marketing options to improve the company’s long term sustainability.