Edgars is a Johannesburg-based chain of stores present all over Southern Africa.
The department store was previously selling clothing, shoes, homeware & beauty and under new leadership has recently shifted its focus to mass-market fashion and beauty products.
The chain had just around 200 stores, with multiple locations in South Africa, Namibia, Zambia and Botswana as well as in the capital cities
of eSwatini (Swaziland), Lesotho, and Ghana when it was sold to Durban based, private fashion company Retailability in 2020
Edgars was founded in Johannesburg, South Africa in 1929.

As part of Edcon, Edgars was included in an ill-fated buyout by U.S. private equity firm Bain Capital Private Equity LP in 2007, which burdened the parent company with debt just as the economy hit a downturn following the global financial crisis.
In 2014 Edgars opened at a new 50,000 square meter shopping centre in Nairobi, Kenya. In 2018 Edgars introduced a new, larger 8,000 square meter store in Fourways Mall in Johannesburg, featuring trees, play areas, a coffee shop, “beauty rooms” where customers can get makeovers, and a section that allows customers to print their own text or images on clothing. Edgars promoted the new prototype store design as “a bit like a town square, a multi-sensory, tree-lined central social space”.
In January 2020 it announced it would close its 6,000 square meter store in the upscale Rosebank Mall in Johannesburg suburb Rosebank.
In June 2020 Edcon put the chain up for sale due to economic difficulties stemming from the COVID-19 pandemic. 7 July 2020 it was announced that Edcon has signed an agreement to sell the chain to Durban-based Retailability, which operates 460 stores across Southern Africa and is the owner of brands Legit, which Edcon had sold to Retailability four years prior, Beaver Canoe, and Style. Retailability acquired 130 of 194 Edgars stores.
In September of the same year, the company under the new leadership announced to be repositioning Edgars as a mass market brand focused on fashion and beauty products, shifting from its previous homeware portfolio.

QUESTION ONE [25]

With reference to the above article, provide a detailed analysis according to Porter’s Five Factor Forces. Use examples to support your analysis.

QUESTION TWO [25]

“.the company under the new leadership announced to be repositioning Edgars as a mass market brand focused on fashion and beauty products, shifting from its previous homeware portfolio”
2.1. Discuss the role of top management in making the above decision. (10)

2.2. Critically evaluate the four main areas that would have influenced the decision making referred to in the above excerpt. (15)

QUESTION THREE [20]

3.1. Explore the impact of the changes referred to in the article on organisational behaviour.
(10)

3.2. Provide an explanation of high and low KPIs. Provide an example of each KPI within the context of Edgars. (10)

Answers to Above Questions on Business Administration

Expert Answer 1: Porter 5 forces analysis is an important way of doing strategic analysis of a company. The application of Porter 5 forces in the given case scenario of Edgars is performed as follows:
Threat of New Entrants: The threat of new entrants is considered as moderate to high in the case of the South African fashion retail sector. As a result it becomes difficult for the new entrants to enter into the industry. In the case of Edgars, the company has restructured its business and now it is competing with online retailers that target the same mass market segment.
Bargaining power of suppliers: The bargaining power of supplier is considered as low to moderate because companies like Edgards purchases its requirement for fashion products from multiple suppliers and international market also provides a good source of procurement to the company which reduces its dependency on any single source and their by reduces its dependence on any single supplier in the industry.
To know the detailed analysis of Porter five forces as applicable to the case of Edgars, connect with our strategic management expert in South Africa.

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