Factors affecting corporate South's Africa strategies to support SMMEs

Abstract

Based on previous research, the SMME sector growth in South Africa is growing too slowly to have a real effect on reducing unemployment and alleviating poverty (Goldstuck, 2014; Lehohla, 2014 & DTI, 2005). This research explored three factors influencing the strategies of primarily consumer based corporate companies in South Africa in support of SMMEs. These factors are the BBBEE Act, particularly enterprise and supplier development; the Consumer Protection Act, particularly consumer education and access and the application of a Bottom Of the Pyramid (BOP) concept when businesses engages with the BOP market. The research adopted a phenomenological design using semi-structured interviews to collect data, of which were recorded and transcribed. The results were analysed according to the three factor influences on business in support of SMMEs. The first two factors relate to how adherence to the BEE legislations mentioned above materialised into inclusion of SMMEs in business s supply chains. The last factor relates to the approaches business follows when deploying their products and services into the BOP consumer market. Findings of this research support adherence to the BEE legislations, but said adherence did not result in SMMEs being included in business supply chains. There was support of application of a BOP concept. New finding was business application in support of procurement from BOP SMMEs, due to the SMMEs being part of businesses enterprise development programs. Due to the new DTI codes, under the BBBEE Act, and fairly new Access legislations, there was also an indication that business was gearing up to engage the BOP consumer market even further, through the inclusion of SMMEs in their supply chains as prescribed by the new DTI codes. However, this research did not establish the outcome application of these new laws and thus the subject requires further study.