Scenario Planning – A township economy case study

In 1999, Gogo Khumalo had an idea of selling fresh vetkoek (amagwinya) in the taxi rank. Gogo Khumalo would be on the street cooking her vetkoek with a little paraffin stove from 4:00 a.m. until 9:00 am and then again from 16:00 pm until 19:00 pm, taking advantage of the commuters rushing to and from the taxi rank. The delicious smell of her vetkoek would attract plenty of passing trade. Her vetkoek became so popular and was so affordable that she began to be called “Mama Gwinya”

When Gogo was getting old, her daughter Mbali saw great opportunities, and in 2014 combining her savings with those of Gogo they took a lease on a shop just behind where Gogo used to trade. Mbali was a very smart and hardworking lady and the shop which was now called Mama Gwinya’s and it started to stock groceries, sweets, baked goods, and pies. Mbali decided to innovate and invented the Makhulu and the Kota Gwinya which were a lot bigger than an ordinary vetkoek and had all kinds of tasty things including chips, viennas, masala steak, and other fillings. 

After only four years, Mama Gwinyas was doing a roaring trade and the family was able to buy the shop and even a bakkie which they used for buying stock and occasionally doing deliveries to the schools in the area.

Two years ago, things began to take a turn for the worse. The number of people using the taxi rank started to drop because a bigger taxi rank was built next to the new mall which had a variety of fast-food franchises.

Youngsters in the area all wanted to enjoy the famous brands of food. As sales started to drop, it became harder to compete and the Makhulus and Kotas became quite expensive compared to the fast foods that people were buying at the mall.  

The shop had eight mainly unqualified but loyal workers and a driver, their fixed salaries added to the costs. It was getting harder to maintain the cash flow and salaries were paid late each month. Everybody became afraid of losing their jobs.  

Things were also starting to change in their neighborhood. The old government houses were being upgraded and people generally had more money, many were owning cars. In some of the established parts of the town people from other countries were moving in and fixing up homes. At first, this caused some tension in the community but when people say that the new residents were hard-working, middle-class people investing in the area and attending church, they became part of the community.

Very few local shops catered for their special tastes and often the new residents would travel long distances to shops in Joburg to buy the sorts of food that they appreciated. This did not make things any better for Mama Gwinya. 

This was when Mbali’s daughter Lerato started running the shop. She brought in a smart young team of family members, cousins, and friends who all agreed there were great opportunities to take the shop to the next level. 

After selling the old bakkie they decided to spend some money on the NTTJ & RareRabbit consultants to take Mama Gwinya to the next level.  

They worked with the Mama Gwinya team to design a transition path whereby Mama Gwinya would not just compete with the fast-food outlets in the mall but develop a comparative advantage and begin to see positive growth in their bottom line. 

After the 2-day workshop, the Mama Gwinya team realized that there were aspects in their daily operations that were a hindrance to being competitive. They realized that it had been a while since they analyzed the macro environment to see what trends are present and what those trends mean for their business.

A key realization was that the world had changed significantly since the business was established and this was both a pain point and an opportunity. The pains were that the business offering was largely based on a traditional food that people who shared their culture easily understood and didn’t need much convincing to purchase. However, with the gentrification of the neighborhood and new families with different cultures moving in, this posed a challenge as a new subculture was being created.

The opportunity was that new foods could be introduced to the menu that took into account the new cultures. The modernization of consumer preferences also presented an opportunity for the Mama Gwinya team to update its menu.

They further realized that if they were to be deliberate with their marketing, more people would take note of their business and also that they need to consider equipping the business better so it can handle the potential influx of customers who would see their adverts and marketing materials.

For a more in-depth look at how we can help your business ,the way we helped Mama Gwinya, send us an enquiry for a short consultation.

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