Developing a strategy to distribute short shelf life products in the high crime township of KwaMashu in South Africa

[摘要] ENGLISH ABSTRACT: United National Breweries (SA) (PTY) Limited (UNB) has been manufacturing, marketing anddistributing sorghum beer for the last twenty years. Sorghum beer has a short shelf life of fivedays and hence requires an integrated and efficient distribution system to back its productionand marketing. Though the company has changed owners twice during this period, it hasretained its knowledge base. The company has outgrown most of its competitors over the lastfour years, however in order to maintain its leadership, it has identified better marketpenetration through improved distribution as a major area of opportunity.Almost seventy percent of UNB products are sold and consumed in the townships. Theseproducts are almost exclusively consumed by black South Africans. The analysis done by thecompany on the basis of population and market segmentation indicates that the maximumopportunity of product growth lies in townships most of which are affected by high level ofcrime. KwaMashu is one such township in Durban.B B Bakeries (BBB) has been manufacturing, marketing and distributing bread in mostprovinces of South Africa. They are part of Premier Foods. Though their business has beengrowing in KwaZulu Natal for the last three years, they have been focussing on improvingdistribution in these markets. Bread, like sorghum has a short shelf life and hence dependsheavily on an effective and efficient distribution system. New product variations are also beingexplored to gain more market share.The aim of this study project was the development of an effective physical distribution systemfor short shelf life products in crime affected KwaMashu township. 'An analysis of the externalenvironment is undertaken to discover the opportunities and threats that are evolving and thatneed to be addressed by the organization (Drummond & Ensor; 2005: 33). The externalenvironment for analysis was broken down into three key steps, each becoming more specific tothe organization. The first step was an analysis of the macro- environmental influences that the organization faces. This was followed by an examination of the competitive environment theorganization operates within and for this Porter' five forces model was chosen. Finally theintegration of such inputs which emerged out of the social environment, business understandingand empirical data was done to come up with a comprehensive strategy. The departure pointwas the analysis of the characteristics of the environment prevailing in the township. Theseincluded study of crime, inputs from police and community policing forum, needs of informalbusinesses, role of locals to the trade, their possible impact on thefts and hijackings and changesif any envisaged in the near future.The outcome of the study addresses the penetration of the retail segment despite the crimeenvironment. It had to take risk to vehicles, staff and cash while planning distribution whileensuring that the company maintains a hold on the retail market to a reasonable degree.Company' future growth plans which included new product introductions also had to be takeninto account.Out of the possible alternatives, the outsourcing of distribution to local vendor drivers wasrecommended. Practical guidelines regarding the implementation of such a system keeping inview the unique environment, in which business is conducted, were discussed.Recommendations were made keeping such challenges in view while also supporting thecompany' current and future plans.

[发布机构] Stellenbosch University