Entrepreneurial Case Studies: South African Success Stories and Strategic Business Insights
Read the following articles and answer the questions that follow:
Article 1
Hunadi pursues her passion owning her own jewellery and manufacturing company
Having a deep interest in jewellery design was what anchored Hunadi Baloyi to strongly pursue a career in the industry and led to her business, Caliente Designs.
Baloyi told Business Report that while she has many other interests, jewellery was the one thing that was always the anchor of her pursuits.
Baloyi studied jewellery design and manufacturing at the Tshwane University of Technology. “Jewellery design has been my passion since I left high school. While I have various other interests, this craft has always been the anchor of my pursuits. I am a visionary and a lover of nature. Design encapsulates everything beautiful that I love. It allows me to imagine, create, and share. It’s not just about jewellery but the design,” she said.
Her company, Caliente Designs began seven years ago where Baloyi designs and manufactures jewellery.
“At Caliente Designs, I serve as the designer and concept creator bringing unique and bespoke jewellery designs to life. This is in addition to owning and managing the business,” she said. “My life fuels my creativity. As an introvert, I am always in touch with my feelings. If I’m creating
something, you can trust that I’m experiencing or have experienced it – love, hurt, loss, joy, all of
it. I’ve come to understand that my work isn’t just about me, but it can resonate with others.
“We go through many things we can’t express in words, and design has become my source of expression. However, my passion is also my business, so sometimes I have to immerse myself in someone else’s vision to create their bespoke pieces purely for business,” Baloyi said.
The young designer told Business Report she enjoys creating high-value, designer, custom, studio, and commercial jewellery in the form of necklaces, engagement and wedding rings, bands, general rings, earrings, bracelets, signet rings, lapel pins, and brooches.
“This is jewellery that is sophisticated, contemporary, and elegant. I love it when our pieces embody a fusion of timeless tradition and modern innovation. We are all about exceptional jewellery that reflects discerning individuals’ unique style and celebrates life’s special moments,” she added.
Baloyi said she sources her materials from metal concentrates (CPM, Metcon), the gemstones from local suppliers, and diamonds from local diamond dealers.
“Caliente Designs emphasises sustainability and ethical sourcing practices, preserving the environment for future generations,” she said.
“We deal with high-valued goods that require large amounts of money. It’s not always easy to gain a client’s trust. Like any other business, we have also faced numerous challenges with access to funding and expensive equipment being major hurdles. However, we have found ways to work around these obstacles, which has allowed us to turn a new leaf and start breaking new ground.
“I believe I have grown more as a person while building Caliente. It is not easy trying to establish a luxury brand – it’s hard! This journey has taught me to be more patient, resilient, and hard working,” she said.
In coming up in the industry and building her business, she said, “I spent a lot of my teenage and young adult years doubting myself. Looking back, I can see that every challenge was a building block. Today, I am confident in my decisions and content with who I am.”
Baloyi advised other young designers to believe in themselves and what they are doing.
Born in the small town of Mokopane in Limpopo, the designer said she was raised by her strict parents.
“Although I didn’t appreciate their strictness growing up, the more I realise the positive impact their teachings have had on my life. The woman I am today is the result of how they raised me. Their influence shaped my work ethic, commitment, and the type of mother and wife I am.
“My foundation was not perfect, but it was rock solid. I get to do what I love, and it doesn’t feel like work 90% of the time. It often comes effortlessly to me, and that’s what I love most about it – it’s a part of me,” she said.
https://iol.co.za/business-report/economy/2024-08-22-hunadi-pursues-her-passion-owning-her-own-jewellery- and-manufacturing-company/
Article 2:
Meet Valentia Chokoe — An entrepreneur taking Pretoria on a culinary journey
As we close out the year, IOL News has been looking at a few entrepreneurs who have inspired us and have made us want to showcase their business and who they are as people.
One such entrepreneur is Valentia Chokoe. The 34-year-old businesswoman is the founder and owner of Hunadi Malope Catering Services. Chokoe is also a beneficiary of Momentum Metropolitan and MyDough’s incubator programme.
Originally from Polokwane, Chokoe said she was surrounded by entrepreneurs growing up. She was raised by a family that owned a small spaza shop.
Chokoe said that she has entrepreneurship in her blood, and cites her family’s shop as where her love for business first developed.
PASSION FOR COOKING
She said that her journey to entrepreneurship began when the company she worked for relocated.
“Unfortunately I couldn’t go with them as I had just given birth, so I decided to take my passion for cooking and turn it into something profitable, “ she said.
“That’s when I started to advertise my catering business. I started following prominent people who are within the same industry to gain insight and direction on what to improve and also how to unlock more opportunities. I attended short courses to equip me in managing my business.”
It should be noted that Chokoe obtained a baking qualification from The Knead Baking School and has also completed a food safety management training course from the Small Enterprise Development Agency (SEDA).
Chokoe said that the spark to start her home-based catering services began when she saw the delight her meals brought to those who tasted it.
“It gives me great pleasure to see people enjoy the food I make.”
She said that the next step for her business was to have a restaurant where people could go and enjoy delicious meals.
“I’m also looking into collaborating with different organisations as their primary supplier,”
Chokoe said.
“I’m a businesswoman prepared for any hiccup in business. From having gas ovens in case of load shedding to strategies preventing client poaching. I have a plan for problem- solving that involves research and experiments.”
Chokoe emphasised the importance of customer service and knowledge of the catering industry such as organisational and time management skills.
She prides herself on spending time on focusing on recipe development to compliment her diverse menu that caters to different cultures, allergies, vegetarians, vegans, and religious dietary needs.
Questions:
- Compare and contrast: the entrepreneurial characteristics demonstrated by Valentia Chokoe and Hunadi Baloyi and identify the key traits that contributed to the success of
their ventures. (15)
- Explain how these two entrepreneurs can determine the capital requirements of their businesses and discuss the common financing challenges faced by early-stage entrepreneursusing examples from the two rticles. (15)
QUESTION TWO [30]
Read the following article and answer the questions that follow: The Man Behind Chicken Licken.
George Sombonos founded Chicken Licken in the 1980s, and today, it is South Africa’s most successful local fried chicken brand.
The journey behind the brand was not as straightforward, though. It involved Sombonos travelling the world, fighting lawsuits, and undermining apartheid rules.
George Sombonos, the son of Greek immigrants who came to South Africa during World War II, was born in 1949.
He learned about the industry from a young age. At only seven, he was already serving customers in
his father’s café on Saturdays.
When he was 11, he knew the difference between a close corporation and a private limited company, and he was savvy enough to avoid answering the phone when the bank manager called.
After graduating from Potchefstroom Boys High in 1966, he started working full-time at his father’s roadhouse, the Dairy Den, in Ridgeway. By the age of 23, he was running it on his own after his father suffered a heart attack.
In 1972, his father sent him to the US to conduct research, which involved tasting 12 hamburgers and 20 chicken pieces daily. In Waco, Texas, Sombonos tasted the best chicken he had ever had.
He invited the owner of the chicken outlet to dinner, who finally agreed to sell the recipe for $5 000 after Sombonos pestered him enough. However, he only had $1 000 in traveller’s cheques, so he had to settle for a different, untested recipe.
When he got home, he secretly mixed up a batch of the coating and hid it under his bed before
swapping it with the one used at his father’s roadhouse.
It was such a hit with customers that he replaced the recipe used at the roadhouse, and over the next four years, turnover grew from R25 000 a month to R200 000.
In the ‘70s, with apartheid still in full swing, he decided to serve black customers in their cars. From this time, black people became his most loyal customer base and the backbone of his business.
Some of his earliest customers were notable public figures, such as Winnie Mandela, Tokyo Sexwale, and Kaizer Chiefs’ Kaizer Motaung.
His innovation didn’t stop there. In 1976, he introduced the drive-through restaurant concept to the Dairy Den after seeing it at Wendy’s restaurants in America.
In 1980, tensions rose between him and his father when Sombonos renegotiated the roadhouse lease and signed it in his own name. His father was in Greece at the time, and refused to speak to him for three months afterwards.
Fortunately, they were able to reconcile their relationship shortly before his father’s death later that year.
In 1981, Sombonos was ready to launch a company called Golden Fried Chicken when one of his waiters suggested that he name it Chicken Licken. He set up the first location on the site of the Dairy Den. It did so well that in 1982, after he had opened franchises in Soweto and Alexandra, KFC sued him for trademark infringement.
KFC argued that Chicken Licken sounded too much like its slogan, “It’s finger-lickin’ good.” The judge disagreed.
The transition from shopkeeper to company executive wasn’t easy for him. He had to learn about phones, hire a receptionist, and operate the switchboard, all without an accountant. Chicken Licken was little more than a one-man operation, a fact that he hid with different ruses. Callers who were put through to Mike in marketing or Peter, the accountant, spoke to Sombonos without knowing it.
In 1986, Sombonos hired an ad agency, which suggested using Joe Mafela, an actor in the popular TV Zulu comedy series Sgudi ‘Snaysi. After a few drinks, Mafela started tinkling on a piano and came up with what became the popular jingle for over a decade: “S’good, good, good, S’good, it’s nice.”
Chicken Licken, initially seen as a township brand and beloved by millions, faced declining sales after many customers moved to the suburbs post-1994. Despite landlords’ fears that a large black customer base would devalue properties, Sombonos expanded into these areas, eventually attracting white customers.
In 1994, Chicken Licken also listed the word “soul” as a trademark, which was enforceable against other restaurants and food vendors in South Africa.
Over the years, Chicken Licken has engaged in a hostile campaign against businesses that use the word in their name or product, notably losing a lawsuit against Oh My Soul Cafe, a vegan restaurant, in 2019.
His daughter, Chantal Sombonos-Van Tonder, started working at Chicken Licken in 2001, where he groomed her to take over the business. In 2007, the business was ranked second after KFC in the Fast Food and Restaurant Chains category of the Sunday Times Markinor 2007 Top Brands Survey.
By 2013, Chicken Licken, with 259 outlets, sold more than 400 000 chickens and five million hot wings a month.
Sombonos continued to visit the United States every few years to keep up with changing tastes. He never let go of his roots.
Sombonos passed away at 67 in Johannesburg, but his business continues to thrive under the management of his daughter, who has carried on the family tradition as CEO.
Since taking over, she has earned numerous accolades, including 49 Loeries, a Grand Prix, eleven Gold awards, and both the ‘Brand of the Year’ and ‘Brand Representative of the Year’ awards for 2019.
“Chicken Licken is my life, and I am as passionate about it as my father. He once told me that if you believe in something, you should be willing to die for it,” she said.
As of last year, Chicken Licken had 286 outlets across South Africa, making it one of the biggest fast-food retailers and the largest non-American fried chicken brand in the country.
Questions:
- Assess the growth strategies employed by George Sombonos in building Chicken Licken into South Africa’s leading local fried chicken brand. Include in your answer reference to both organic and strategic growth decisions, and compare the growth of Chicken Licken with the characteristics of growing companies. (15)
- Analyse the role of franchising in Chicken Licken’s expansion across South Africa. Include in your answer the advantages and challenges of franchising as a growth strategy with reference to how it was implemented by Sombonos. (15)
QUESTION THREE [20]
Entrepreneurs can pursue various paths to venture creation, including starting a new business or acquiring an existing one.
Assess these two entrepreneurial pathways by comparing their advantages, risks, and strategic implications.
QUESTION FOUR [20]
- Every business must have some location or establishment to operate from. The choice of where to locate the premises is not an easy one and neither should it be taken lightly. With reference to the above statements discuss the factors that impact on location decisions including in your answer the importance of the location of an entrepreneurial venture. (10)
- Chicken Licken is considering expanding into international markets to grow its brand beyond South Africa. As a consultant, identify and explain two appropriate global market entry strategies the company could adopt, and discuss the risks and operational challenges associated with global expansion.
Expert Answer on Above Questions on Entrepreneurship
Answer 1: A comparative analysis of the entrepreneurial characteristics as shown by Valentia Chokoe and Hunadi Baloyi is performed as follows considering the key traits that contributed to the success of their ventures.
Passion Driven: In the case of Hunadi Baloyi, the focus is on providing jewellery designs that meet the expectations of its customers. It is highly passion oriented towards making the design that meets our customers’ needs. In the case of Valentia Chokoe, her passion for cooking was significantly higher which led her to entrepreneurship after her job loss.
Creativity and innovation: The creativity and innovation were clearly reflected in the jewellery design of Hunadi Baloyi, whereas it is also evident in the case of Valentia Chokoe in terms of inclusive menus for a variety of dietary needs of its customers.
Visionary thinking: The focus of Hunadi Baloyi is on creating a sustainable luxury brand whereas Valentia Chokoe aims to open a restaurant that becomes a primary food supplier.
The analysis therefore indicates that the key traits that contribute to the success of both are their patience for their business, their willingness to innovate and provide unique offerings, and also their strong personal vision.
Determining the capital requirements for the businesses
There are many factors that directly affect the requirement for capital in a business, and they are unique to their own. Some of the factors to consider include the cost of ingredients required to start up the business, cash flow requirements, working capital needs, and future growth plans. The challenges that can be faced in this respect includes access to sufficient funding, lack of collateral security etc. The financing sources that can be utilised include personal savings, loans from friends and relatives etc, as it is not possible to source from bank loan because of early stage entrepreneurs.
| Disclaimer: This answer is a model for study and reference purposes only. Please do not submit it as your own work. |
