Massbuild: Culture “Gets it Done”

Abstract

In February 2015, Llewellyn Walters, CEO of Massbuild, the building products division of Massmart, a warehouse retail organisation, was perplexed by the results of the 2014 employee engagement survey. The survey showed that employee engagement had continued to decline for a third year. Walters reflected on his decision in 2009 to work on the adage “culture will eat strategy for breakfast” and initiate a culture change process as a means of ensuring that Massbuild achieved its strategic objectives. The decision to go the culture route had not only led to better results, but also facilitated decisions regarding the division’s brands and resulted in renewed customer focus. He wondered what more the organisation could do to reinforce its culture.

This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

2024 Sage Publications, Inc. All Rights Reserved

Resources

Exhibit 1: Background to Massbuild

Massmart

In 2014, Massmart Holdings, based in South Africa, comprised four operating divisions – Massdiscounters, Masswarehouse, Massbuild and Masscash – housing a portfolio of retail and wholesale chains.

Figure
Massbuild

Massbuild was unique in that it housed the only home improvement warehouse chains in South Africa. Three chains became the initial brands under the Massbuild banner, when it was formed by Massmart in July 2005:

  • Builders Warehouse: In 2003, Massmart acquired five independent Builders Warehouse stores operating in Johannesburg and Pretoria and, in 2005, bought and rebranded three independent De La Rey stores in the Western Cape. These formed the first of the 34 Builders Warehouse stores that were in operation in 2014.
  • Builders Express: Builders Express began in 2005 with the acquisition and rebranding of 14 independent Servistar stores operating in the Eastern Cape and KwaZulu-Natal. In 2014, there were 36 Builders Express stores in operation.
  • Builders Trade Depot: In 2005, Massmart bought 34 Federated Timbers stores around the country from NABCAT Empowerment Holdings and the Federated Timbers Employee Incentive Share Trust, and rebranded them Builders Trade Depot. After a number of smaller store closures and store conversions, there were 20 outlets in operation in 2014.

In 2013, Massbuild opened two Builders Superstores, which were positioned in townships and towns servicing surrounding rural areas, close to transport nodes and major food retailers for convenience. Thus, in 2014, Massbuild, headquartered in Johannesburg, operated four retail brands in South Africa: Builders Warehouse, Builders Express, Builders Trade Depot and Builders Superstores. Builders Warehouse also had branches in Botswana and Mozambique. Each brand focused on delivering a range of supplies for all phases and types of building projects.

Sources: Massmart (n.d.), “Business Model”, available at: www.massmart.co.za/about-massmart/business-model/ (accessed 11 May 2015); and Massmart (n.d.), “Massbuild”, available at: www.massmart.co.za/our-business/massbuild/ (accessed 21 May 2015).

Exhibit 2: Massbuild’s Sales and Sales Growth 2007–2014

Year

Sales (Rm)

Sales growth* (%)

2007

4 948

21.3

2008

5 553

11.0

2009

5 604

0.8

2010

6 367

12.0

2011

7 271

12.0

2012

8 138

12.5

2013

9 583

10.6

2014

10 823

15.0

Source: Massmart annual reports 2007–2014, Massmart website, “Investor Centre”, available at: www.massmart.co.za/investor-center/overview/ (accessed 17 July 2015).

Exhibit 3: Livingfacts Results Showing Customer Satisfaction

Figure Figure Figure Figure Figure Figure

Source: Livingfacts (2015), “Performance Trends, 2009–2014”, internal company PowerPoint presentation, Livingfacts, Johannesburg.

Exhibit 4: The Icons from the Dictionary

Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure Figure

Source: Builders (n.d.), “Formula for Success Dictionary”, internal company information booklet, Builders, Johannesburg.

Exhibit 5: Flowchart and Timeline of the Bluprints Process for Creating the Formula at Massbuild

Figure

Source: Martin, G. (2015), E-mail correspondence with Angela Urban, 20 July.

Exhibit 6: Bluprints Results

Participation: Number of staff members scoring

Figure
Indices: Overall scoring

Figure

Source: Govender, D. (2015), E-mail correspondence with Angela Urban, 18 May.

Exhibit 7: Points for Top-line Principles

Figure

Source: Massbuild (2015), “Store Communication – Building Success”, internal company PowerPoint presentation, Massbuild, Johannesburg.

Exhibit 8: 2015 Prizes

Figure Figure

Source: Massbuild (2015), “Store Communication – Building Success”, internal company PowerPoint presentation, Massbuild, Johannesburg.

Exhibit 9: Walmart’s Philosophy Linked to Massbuild’s Formula

Figure

Source: Tomaz Weeden, C. (2015), E-mail correspondence with Angela Urban, 20 May.

Exhibit 10: Bua Scores (Walmart Employee Engagement Survey)

Responses (FY15)

FY13 (%)

FY14 (%)

FY15 (%)

Walmart Massmart overall

26 070

59

57

48

Cambridge Food

1 010

54

52

50

Head offices (including regional offices)

154

65

56

68

Cambridge food stores

856

50

52

47

Masscash Wholesale

3 583

55

54

47

Head offices (including regional offices)

321

70

73

73

Masscash wholesale stores

3 262

49

52

44

Massdiscounts

10 836

54

51

41

Head offices (including regional offices)

602

68

68

63

Massdiscounts stores

10 234

50

50

40

MASSMART SERVICES

280

82

86

84

Head offices (including regional offices)

280

82

86

84

Masswarehouse

3 497

58

61

56

Head offices (including regional offices)

274

67

78

80

Masswarehouse stores

3 223

56

60

54

Massbuild

6 864

66

64

55

Head offices (including regional offices)

412

76

80

81

Massbuild stores

6 452

64

63

53

Source: Massbuild (2015), “Bua Results – Group Summary Report”, internal company PowerPoint presentation, Massbuild, Johannesburg.

Exhibit 11: Images of Rebranded Stores

Figure Figure Figure Figure

Source: Livesey, J. (2015) E-mail correspondence (photos) with Angela Urban, 21 July.

This case was prepared for inclusion in Sage Business Cases primarily as a basis for classroom discussion or self-study, and is not meant to illustrate either effective or ineffective management styles. Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educational, or personal use only within your university, and cannot be forwarded outside the university or used for other commercial purposes.

2024 Sage Publications, Inc. All Rights Reserved

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