a. What is the value proposition of the business?
The value proposition of the business is embodied in their company slogan of “Quality has no substitute”. Quality products and service at competitive prices are supported by a drive to please people, enjoyment and satisfaction derived from work, and cherishing, valuing and protecting the family name and brand. Personalised attention to clients and their needs was observed during the research process.
b. Please describe the ownership structure of the business.
The meat wholesale, processing and retail ownership structure in terms of percentage ownership is John 52 percent and James and Jack controlling 24 percent each. The abattoir is owned by John, James and Jack in an equal three way split. The family’s property business is also owned in an equal three way split between father and the two siblings.
c. Please describe the company staff structure (organogram).
Quali-cuts Family Butchers is divided into to main divisions, the retail division (managed
by Jack) and the wholesale and processing division (managed by James). The abattoir is managed by John.
In George, the business has approximately 90 staff, five of whom are top management in charge of sales, marketing, bookkeeping, strategy and operations. There are nine floor managers that supervise operational tasks performed by the rest of the staff. Figure 5.3 depicts the family and non-family member involvement in the family businesses.
Figure 5.3 – Quali-cuts Family Butchers’ family and non-family involvement
d. Are there any specialist skills required in running the operation and performing the required tasks? If there are, what are they?
Specialist skills are required in running the operation and performing the required tasks. All owner-managers and operational managers have had to work their way up from the bottom of the business to the top or their current position by going through the whole process; learning all the required specialist skills necessary in running the business – processing, production, sourcing, sales, and cost and quality control. Roles are described as evolving with business growth and as a result, managers become specialist generalists; being able to perform any task demanded of others. A hands-on approach is adopted by owner-managers. This approach saves time in decision making and solution implementation, as well as keeps owner-managers in touch with their market’s needs and preferences.
e. Is the business suffering from a lack of available skills? If so, are there measures in place to address the issue? If there are measures, what are they?
A lack of skills is a problem noted. Staff receive training, however, cost and time constraints, as well as a lack of motivation to improve skills and accept roles of greater responsibility by floor staff, and labour union influence, make the lack of available skills a persistent problem for the business.
f. What are the goals and objectives of the business?
Quali-cuts Family Butchers aim to be a one-stop shop for meats, meat products and
other related products. The business goals cited are to continue business growth, to satisfy clients, to build the brand name and to help make life better for all staff and their families.
g. Please describe the growth of the business in terms of: structure, employees, market share, product range, fixed assets, new markets, existing markets, other businesses and financial.
The current business venture was formally incorporated in 1989 with a small retail outlet with five staff. A second retail outlet was launched to offer a more affordable range of products and meat cuts. Quali-cuts Family Butchers Wholesale was launched in 1996, specialising in supplying the hospitality industry with high quality products. In 2003
Quali-cuts Family Butchers launched their own abattoir in Lainsburg. This location was
chosen for the world class quality lamb produced in the region. In 2006 a new processing facility was acquired to produce high quality cured and smoked products. In 2010 financial year, an additional 1200m2 is planned to be added to the wholesale section of the business.
Business growth is evident in the expansion of facilities, backward integration in the supply chain and the increased number of employees. Retail growth is described as being strong in the Southern Cape and with the addition of an outlet in Franshoek in the Western Cape.
The growth in turnover for the business mirrors macro-economic fluctuations with the 2009/2010 financial year recording the only single digit growth figures of 8.61 percent (reflecting recessionary conditions) since the 2003/2004 financial year. In 2003/2004 the company’s turnover grew by 22.5 percent, in 2004/2005 by 10.59 percent, in 2005/2006 by 36.56 percent, in 2006/2007 by 41.41 percent, in 2007/2008 by 19.14 percent, and in 2008/2009 by 24.24 percent and 8.61 percent in 2009/2010. The adjusted growth forecast for 2010/2011 is 15.65 percent.
Products are produced in-house. Approximately 1000 product lines are produced. Traditional recipes have been maintained whilst new and improved products have been introduced over the years. Cutting, packaging and delivery services are provided. Beef, pork, lamb, chicken, fish, ostrich and turkey cuts and products are supplied. Other
products include spices, marinades, biltong, droëwors, seasonal venison and processed products such as hams, gammons, sausages and bacons.
Quali-cuts Family Butchers target low, middle and upper income groups. Middle and
upper income group retail outlets are located near the residential areas of their target group as well as being in the vicinity of other convenience stores. The low income outlet in George is situated at the central mini-bus taxi rank that serves the same market.
The market is described as being quality competitive; price is important but not the most important factor. An increase in the level of quality and service reduces the importance of price in purchase decisions (primarily amongst middle and upper income groups); hence the focus on quality products and services, reducing the risks associated with market fluctuations, low margins and large volume processing capacity capital investments.
New markets under development are the retail and wholesale markets in the greater Western Cape region with retail outlet additions in Stilbay and Franshoek. Existing markets are closely monitored and serviced to ensure long-term positive relationships with customers. The sales and marketing managers maintain weekly market monitoring and servicing checks; monitoring sales mix and volume changes. James notes that “charity begins at home – don’t neglect your markets”, emphasising the importance of monitoring markets and ensuring customer satisfaction to support and reinforce a positive brand image and resulting in referral marketing.
In terms of other businesses, the family has integrated backwards in the supply chain. The abattoir is a separate legal entity, as is the property company owned and managed by the same three family members. The property company owns some of the premises used by Quali-cuts Family Butchers. The additional business ventures embarked upon by the family serve to help secure the base of the meat wholesale, processing and retail business.
h. To what extent is innovation embraced in the business?
Regarding innovation in the business, each owner manager knows their roles and responsibility and is responsible for continual innovation in their area of expertise and control. Innovations and changes are discussed by all shareholders to ensure consensus, applicability and practicality prior to implementation.
i. What is the extent of resource investment by family members in the business operations?
The extent of resource investment was described as blood, sweat, tears, belief in the business and each other, and many long hard hours of work; indicating that the transfers from family to business transcend tangible measures and that a great deal of commitment is required to establish and grow a business.
j. Describe the extent and nature of stakeholder management (employees and external community).
Regarding stakeholder management (employees and external communities), daily contact is made with clients to solicit feedback on product and service quality. Weekly meetings are held to discuss and address problems, and find solutions. The inclusion of customer input is cited as leading to improved products and services, resulting in increased customer satisfaction and consequently, continued business growth.
k. Describe the life-cycle of the business.
The businesses life-cycle is described as being in the maturing stage. Product development and innovation serve to continually add an element of ongoing rejuvenation in the business and helps to maintain continuous growth. Economic constraints experienced due to repressed macro-economic conditions are cited as factors contributing to increased risk levels, and as a result, a long-term strategic view of
achieving stable moderate growth levels is employed to reduce risks and maintain financial control by not over-extending resources disproportionately to demand levels.
l. How would you describe the cultural environment within the business?
The focus of management is to create an environment where individuals can be and are encouraged to be all that they can be. Employee input is encouraged. Working relations are focussed on achieving the required business performance results, are informal but professional, mutually accepting and mutually respectful. Employee cultural differences influence the degree to which employees accept and pursue self- development opportunities.
The cultural environment within the business is supportive of the business’s goals despite collective action by unionised employees in participation of nation-wide collective action. Non-striking employees assist each other in carrying the extra workload to ensure deadlines and orders are met.
5.3.2 Questionnaire section B – Macro-economic environment
1. Describe the influences of the political economy in terms of regulations,