Case
Supplementary Resources
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.
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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.
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
Source: Livingfacts (2015), “Performance Trends, 2009–2014”, internal company PowerPoint presentation, Livingfacts, Johannesburg.
Exhibit 4: The Icons from the Dictionary
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
Source: Martin, G. (2015), E-mail correspondence with Angela Urban, 20 July.
Exhibit 6: Bluprints Results
Participation: Number of staff members scoring
Indices: Overall scoring
Source: Govender, D. (2015), E-mail correspondence with Angela Urban, 18 May.
Exhibit 7: Points for Top-line Principles
Source: Massbuild (2015), “Store Communication – Building Success”, internal company PowerPoint presentation, Massbuild, Johannesburg.
Exhibit 8: 2015 Prizes
Source: Massbuild (2015), “Store Communication – Building Success”, internal company PowerPoint presentation, Massbuild, Johannesburg.
Exhibit 9: Walmart’s Philosophy Linked to Massbuild’s Formula
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
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