Competitive strategies for small businesses survival: A Gauteng township retail industry study

Abstract

The township retail market in Gauteng contributes 10% to the GDP of the province, generated by informal small retail businesses. While their success is considered key for economic growth in South Africa, they are faced with challenges that impact their ability to compete and survive. In addition, more challenges include the influx of large retailers entering the township market thus increasing competitiveness to the detriment of the small businesses. The method of research followed to explore this phenomenon was qualitative inductive research, leveraging 12 semi-structured interviews to collect data. The participants included owners and managers of food and grocery businesses operating in the Atteridgeville retail market. Leveraging thematic analysis, key insights were drawn from the data to derive the research focus themes. The key findings determined that despite the homogenous offerings and limited access to resources, to compete. The small businesses adopted a focused differentiation strategy serving customers in close proximity to the business establishment, and differentiated through product quality, variety and availability. In addition, they mainly leveraged resources that they had access to, which included the business location, customer relationships, and the reputation of the business and the owner to gain an advantage that would aid in remaining competitive in the market.