Lessons learnt from a private sector business pilot targeting the primary healthcare needs of poor South Africans : the case of RTT Unjani Clinics
Thesis (MBA)--Stellenbosch University, 2012.
Railit Total Transportation (RTT) is a multinational corporation whose core business is to be a logistics and distribution partner to other multinational corporations. Many of RTT’s key clientele are in the healthcare and pharmaceutical industry, with various key relationships and networks being developed over many years of operation. RTT set the trend by becoming one of the first large South African companies to participate in and profit from the rest of the African continent at a time when it was not popular to do so. On a similar motivation, the current CEO of the RTT Group, Dr Iain Barton, believes that it is a strategic imperative to participate in the Base of the economic Pyramid (BoP), both for economic and developmental reasons. The BoP is not a new market, but recent interest in its potential profitability has being sparked in the business community by the works of management gurus such as the late C.K. Prahalad and the current sustainability champion Stuart Hart. This dissertation presents a case study that will analyse the phenomenon of developing a business model that targets the primary healthcare (PHC) needs of poor South Africans. This study will also extract lessons learnt from the case study in the context of existing BoP theory, primary healthcare in South Africa, and a similar initiative implemented in Kenya in the form of the Child and Family Wellness Clinics (CFW). The case study presents the reader with the pilot phase of RTT’s Unjani Clinic project, and contrasts the findings and lessons learnt from the two main pilot sites in Johannesburg’s Etwatwa and Wattville peri-urban BoP communities. This study also explores a smaller business model concept among Cape Town’s informal traders, also known as spaza shops. The data collection for the case study was undertaken in the qualitative research methodological format with a comprehensive set of interviews that aimed to triangulate the views of management, operational staff, community participants and patient participants. The strength of the case study findings is enhanced by the inclusion of comprehensive case study data, which includes verbatim transcripts of all interview participants and focus group participants. The database can be found at the end of this research report. Many lessons emerged that were both expected and unexpected, with three major themes coming to the fore: • The strategic funding of Unjani, within the dichotomy of profit and non-profit hybrid models • Challenges in achieving operational scale and efficiencies within the BoP • Marketing the value proposition to the BoP. RTT’s management has already begun to implement many of the lessons that have emerged. This includes the marketing mix that requires greater appreciation at a detailed ethnographic level of the dynamics of non-traditional BoP markets. The research report also provides other recommendations to stimulate demand in BoP markets as well as suggestions for the ideal funding and business partners to move this project forward. This research is unique in exploring the challenges of business model development specifically to service the healthcare needs of poor South Africans, and to contribute a small but significant part in the broader understanding of doing business in the South African BoP.