A Strategic Analysis of the South African Soft Floor Industry Supply Chain

Abstract

The current business environment, globally and locally, has added pressure for soft floor manufacturers to re-imagine the value they create in the market place. Market trends and consumer buying behaviour have shifted to alternative types of flooring, which are perceived by the consumer to be more maintenance and durability friendly. This has contributed to a decline in soft floor volume sales. The objective of this study was to establish the context of the South African soft flooring environment, and to do a strategic analysis of the industry supply chain. The focus was on gaining industry insight, in order to inform a possible strategic direction for the future, with regard to how a leading soft floor manufacturer could protect its soft flooring market share. The study aimed to provide a good understanding of where the soft flooring market division fits into the entirety of the flooring industry, as well as to suggest changes that could be made to the current strategy – If one does not know the context, one cannot strategise. The soft flooring industry has experienced a decline in sales in recent years, and the importance of a new growth strategy is crucial. Market leaders cannot afford to be complacent, and the importance of reviewing the current business strategy and plan for the future must take priority. The study investigated a forward integrated supply chain strategy, in order for a manufacturer to grow, by also being involved in the downstream stages of the value chain. This strategy could have an impact on sales and specifications of branded soft floor products directly to the consumer. The study provided a view on three possible downstream strategies that could be considered, and the likelihood of the best possibility, were further discussed against the backdrop of current industry challenges. The risks of the elimination of a channel intermediary, as well as the possibility of the formation of partnerships with key stakeholders within the soft flooring ecosystem, were investigated. This resulted in the proposal of a strategy development process framework, as a guide that could lead the manufacturer through the process of finding the right strategy and key partners, in order to address the current industry challenge, as well as to protect their soft floor manufacturing interests. The findings of the literature review, as well as the findings from the empirical research were summarised, followed by conclusions and recommendations that were presented. A collaborative supplier-retailer-consumer strategy (re-intermediation strategy) was proposed. Recommendations of a soft flooring governing body, similar to the wood and laminate association, as well as the prospects of private branded soft flooring products were made. Limitations and implications for further research were also explained. This study mainly provided a platform for deeper future research. The risks and challenges the fourth industrial revolution will hold for the soft floor industry were also suggested as a topic for future investigations and research into this under-studies context.