Group strategy

A systematic, structured and integrated strategic planning process throughout the group culminates in the group’s strategy and its regular review.

Strategic Profile

Barloworld is a distributor of leading international brands providing innovative rental, fleet management, product support and logistics solutions.

The core divisions of the group comprise:

  • Equipment and Handling (earthmoving, power systems, materials handling and agriculture)
  • Automotive and Logistics (car rental, motor retail, fleet services, used vehicles and disposal solutions, logistics management and supply chain optimisation).

We offer flexible, value adding, innovative business solutions to our customers backed by leading global brands.

Barloworld has a proven track record of long-term relationships with global principals and customers.

We have an ability to develop and grow businesses in multiple geographies including challenging territories with high growth prospects.

One of our core competencies is an ability to leverage systems and best practices across our chosen business segments.

As an organisation we are committed to sustainable development and playing a leading role in diversity and inclusion.

Vision 2020

Our Vision 2020 articulates a balanced ambition to create shared value for all stakeholders, while recognising the primacy of shareholders as the owners of the company. It is deliberately broad in its scope to encompass our diverse business units and stakeholder groupings. It envisages innovative and customised solutions that make a ‘World of Difference’ for our respective stakeholder groups.

Central to our vision is a broader concept of value creation where economic value creation results in value creation for a broad range of stakeholders and ultimately benefits society at large. It aims to enhance business competitiveness while simultaneously advancing social and environmental outcomes.

Strategic focus areas (SFAs)

While our vision paints a picture of what we would like to become, our strategy will articulate how we aim to achieve it.

In order to achieve our Vision 2020 we have identified six SFAs relevant to each of our divisions and business units.  These represent the aspects that we will focus on in order to deliver shared stakeholder value. Specific 2020 targets have been identified for each SFA against which progress will be measured and reported.

Innovative customer solutions

Strategic Intent
To drive market leadership by ongoing transformation of our business model from product-focused to service and solutions-focused, leveraging technology to deliver productivity & performance benefits to our customers

People

Strategic Intent
To attract, develop and retain the people and skills required to deliver on our strategies and create shared value through innovation, collaboration and continuous improvement

Diversity & inclusion

Strategic Intent
To maintain and enhance our competitiveness, credibility and legitimacy in the eyes of all stakeholders by leading in diversity and inclusion across all of our businesses

Sustainable development

Strategic Intent
To lead in sustainable development through respectable corporate citizenship and by delivering products, services and solutions that generate sustainable outcomes and realise commercial opportunities for revenue enhancement & cost savings

Profitable growth

Strategic Intent
To double revenue and achieve targeted growth in total shareholder returns (TSR) over the 5 years to 2020

Financial returns

Strategic Intent
To achieve financial returns above our cost of capital through the cycle and in the top quartile of our peer group in each of our strategic business segments

Overall strategic framework

The elements of our strategic framework are consolidated in a holistic and concise overview. It reflects our vision; the nature of our shared value ambitions; our strategic growth segments and the industries in which we participate; our strategic focus areas which focus attention throughout the group on six central aspects underpinning our value creation; and our Barloworld Worldwide Code of Conduct which informs our behaviour and the manner in which we conduct business.

Group strategy
Financial Value Model
Strategic Planning Model
Employee Value Model

 Shared Value

  • Shareholders
  • Employees
  • Principles
  • Customers
  • Communities
  • Suppliers

 Growth Segments

  • Mining
  • Infrastructure
  • Power
  • Agriculture
  • Automotive
  • Logistics

 Strategic Focus Areas

  • Innovative customer solutions
  • People
  • Diversity and inclusion
  • Sustainable development
  • Profitable growth
  • Financial returns

 Worldwide Code of Conduct

  • Integrity
  • Excellence
  • Teamwork
  • Commitment
  • Sustainability

This framework is appropriately replicated at divisional level ensuring alignment while accommodating flexibility, and the diverse nature of our operations.

Growth Opportunities

The industries and regions in the table below have been identified to provide growth opportunities for the group into the future.

  • Mining

    Mining

    Growth driver: Emerging market industrialisation driving long-term demand for commodities (Geography : southern Africa, Russia)
  • Infrastructure

    Infrastructure

    Growth driver: Infrastructure backlogs and rapid urbanisation in developing economies (Geography : southern Africa, Russia, Iberia)
  • Power

    Power

    Growth driver: Increasing demand in electricity, marine, petroleum and industrial power segments (Geography : southern Africa, Russia, Iberia)
  • Agriculture

    Agriculture

    Growth driver: Importance of food security, growing demand for biofuels and rich agricultural potential across southern Africa (Geography : southern Africa)
  • Automotive

    Automotive

    Growth driver: Increasing need for flexible vehicle usage solutions in private, corporate and government segments and exposure to the growing tourism market (Geography : southern Africa, east Africa, west Africa)
  • Logistics

    Logistics

    Growth driver: Growing regional trade and trend to outsource supply chain management activities (Geography : Southern Africa, Middle East)

2020 Group aspirational targets

We have set aspirational group targets for 2020 for each of our Strategic focus areas.

Our group aspirational intensity-based targets are set against a business-as-usual scenario that tracks revenue as a proxy for business activity.

We will regularly review our targets to ensure that they remain relevant and appropriate in light of legislation and regulation, and that they balance the intents of our six strategic focus areas over the five year period.

See table of Aspirational Group-level 2020 Targets in our 2015 Integrated Report.

Implementing our strategy

The group’s strategic planning process is a combination of its ”top-down” strategic framework with the overall group structure and major investment decisions being made centrally, complemented by strategic and operational planning and execution decentralised into its divisions. The divisional strategic plans are consistent with the group framework and guided by an aligned process. The robust and systematic identification of risks and opportunities is central to our strategic planning process.

Divisional plans are presented to the group executive on an annual basis and key aspects are consolidated into a group strategic plan which is presented to the board for review and endorsement. Through a consistent strategic framework and an aligned approach, strategies are efficiently and effectively executed throughout the group addressing stakeholder issues and group risks.

The board monitors the implementation of the group plan and divisional executive teams are accountable for fulfilling their strategic plans, meeting objectives and achieving key performance indicators.

Strategic plans are executed using our Integrated Employee Value Model (IEVM) to access, harness and direct the group’s collective wisdom. This includes a structured performance management system linked to top imperatives and value drivers that enables employees to benefit appropriately from value created. An Integrated Financial Value Model (IFVM) highlights areas of focus to optimise value drivers that enhance the group’s value creation capability.