SCS – Aug 2022 – L3 – Bazar Stores’ Strategic Expansion and Challenges
- Level: Level 3
- Series: AUG 2022
- Case Study Tags: Acquisition, Change Management, Corporate Governance, Employee Turnover, Financial Performance, Organizational Structure, Supply Chain Management, Value Chain, Whistleblowing
Summarized Case Study
Bazar Stores Company Ltd, a major player in the Ghanaian retail market, operates across 75 locations and employs over 2,500 staff. The company has been successful but faces significant challenges. Its organizational structure is highly centralized and family-driven, with management resistant to change. The company is experiencing high labor turnover, particularly among part-time staff, contributing to operational inefficiencies.
Corporate governance is weak, with an authoritarian leadership style, resulting in tension between management and employees. The Chairman is heavily involved in daily operations, showing little regard for modern governance practices. There are also issues with the company’s fragmented supply chain, as smaller suppliers feel discriminated against compared to larger manufacturers. Despite efforts to improve relationships with suppliers, trust remains low.
Bazar is planning to acquire 20 stores from Little Bee, a regional supermarket, as part of its growth strategy. However, this acquisition is risky due to Little Bee’s weak financial performance and the complex integration process. The financial health of Bazar, while strong in terms of turnover, shows only marginal growth and increased operating expenses, raising concerns about its capacity to manage the acquisition.
The case study also touches on whistleblowing concerns within the company, following a secretly recorded conversation that could expose unethical practices. The company’s handling of employee relations, including its weak communication systems and lack of collective bargaining, poses additional risks.
Strategic questions focus on Mintzberg’s organizational structure, acquisition and mergers, corporate governance, employee turnover, change management, and financial performance. Solutions must address Bazar’s governance structure, improve its supply chain management, and effectively handle the acquisition while navigating internal culture and employee management issues.