Browsing by Author "Van der Merwe, Michael David"
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- ItemThe base of the pyramid: a growth framework for SMME action(Stellenbosch : Stellenbosch University, 2017-12) Van der Merwe, Michael David; Grobbelaar, Sara; Schutte, Cornelius S. L.; Von Leipzig, Konrad; Stellenbosch University. Faculty of Engineering. Dept. of Industrial Engineering.ENGLISH ABSTRACT: A key challenge faced by South African enterprises operating in the market made up of the poorest socio-economic segment, namely the Base of the Pyramid (BOP), pertains to the difficulty of achieving sustained profitable growth whilst simultaneously promoting sustainable poverty alleviation. This study focuses on how growth promoting factors might be incorporated into a cohesive framework to provide consultants, enterprise owners, and academics alike with a means by which to guide Small, Medium and Micro-sized Enterprises (SMMEs) operating in the BOP towards attaining higher, lasting growth and socio-economic development. Existing enterprise growth models and frameworks have been found wanting in terms of their ability to cater for the unique approach necessary for navigating through the adverse and atypical conditions prevalent at the BOP. Grounded on an empirically backed literature base arrived at via a systematic literature review, an expansive list of antecedents to enterprise growth, i.e. growth factors, was developed. These factors, when addressed appropriately, have previously been shown to improve enterprise growth. This study therefore addressed the development of a framework to aid enterprises in simultaneously promoting for-profit growth and maximising sustainable impact in the BOP. The systematic literature review revealed 25 growth factors, of which five were within this study’s scope in that they are business strategy related and within direct control of the enterprise. The five growth factors are: business modelling for detailed planning; following a suitable and detailed business strategy for long-term growth; utilising innovation to consistently create value and respond rapidly to market changes; implementing good marketing practices to ensure maximum value delivery to customers, and; forming strategic alliances to bolster core competencies, leverage resources, and scale operations. Furthermore, pursuing sustainable development was determined as crucial to ensuring both lasting profitability and social impact is realised. Guided by the tenets of Soft Systems Methodology (SSM), the framework was iteratively developed by synthesising the BOP requirements with conventional growth factor processes, verifying the preliminary framework, and incorporating validation findings in its final design. Framework validation entailed four mechanisms, namely conducting: a retrospective case study to determine credibility and confirmability; expert screening interviews to ensure it is efficable, efficient, effective, and ethical; a survey of 57 for-profit South African enterprises to empirically establish need, reliability, relevance, and usefulness, and; expert focus interviews to maximise usability by identifying key stakeholder requirements within the framework. All routes validated the framework for use as a consultative tool in guiding SMME owners towards improved growth at the BOP. The unique contribution is embodied in: the framework’s novelty, combining multiple fields of knowledge pertaining to success at the BOP and in traditional markets into a cohesive whole for the first time; the confirmed practical significance of the framework requirements in that it provides users with an empirically vetted procedure for increasing growth potential as evidenced by the survey data, and; the optimised usability due to the visually clear framework, the easy to use evaluation scorecard, and incorporation of key focus areas for dealing with key stakeholders.