Abstract:
This research compares partners required to be competitive in the low income market to the partner network of the more traditional upper income market in South Africa. The research examines the non-traditional partnerships engaged by firms which include local communities, government and NGO’s. It further looks at the broader alliances formed by firms competing in the low income market compared to the traditional market and lastly investigates institutional voids and their effect in the respective markets.
The research is exploratory in nature and considers the perceptions of managers in eight companies through the use of semi-structured interviews. 14 managers were interviewed across the 6 industries selected. Insights were gained through the use of a semi structured interview guide.
The research indicates that non-traditional partnerships do take place in both the low income and traditional markets but for different reasons, with the low income market focusing on these partnerships to access the consumer. It was further apparent from the interviews that those competing in the low income market tend to partner more with other firms operating in the market but in different industries, whilst the traditional market managers tend to partner more with smaller business set up to fulfil the needs of the larger firm. The research further indicates that institutional voids may present an area to develop first mover advantage by locking down successful partnerships before competitors do.
