Diversification: surviving Covid and beyond

Diversification: surviving Covid and beyond

Last year was tough on South African companies, with Covid-19 exacerbating a troublesome pre-pandemic situation characterised by a recession and a credit-rating downgrade. Businesses that survived 2020 have some things in common, such as having diversified operations. Sweet-Orr and Lybro, South Africa’s oldest protective workwear manufacturer, is a case in point.

“We have always treated diversification and versatility as a strategic business priority, focusing on our product range, the types of clients we serve, the sectors we cater for, our sales channels and our geographical footprint,” says Sweet-Orr executive director Denver Berman-Jacob.

“To safeguard your present and future, a business must have its eggs in multiple baskets and increase that number of baskets strategically. Just because you are on top of your game today doesn’t mean you will do well tomorrow,” he says, using the Kodak and Thomas Cook case study examples to reinforce this point. “These well-established companies were household names that everyone thought would be around forever. What failed them, unfortunately, was an inability to diversify and move along with the fast-moving market.”

Despite the challenges over the past year, Sweet-Orr has managed to achieve growth: it has diversified its product range, now offering an apparel range and a head-to-toe service.

“We have managed to do this thanks to strategic partnerships with leading manufacturers of workwear. Customers these days prefer to deal with fewer suppliers, and we are tapping into that mindset,” Berman-Jacob says, adding that the company has also expanded the list of sectors it serves.

“Traditionally we focused predominantly on the mining sector, but we have expanded into the petrochemical, engineering, automotive and hospitality industries as well as the medical field and the military.”

The company’s sales ecosystem has also evolved, most recently by harnessing the power of e-commerce and by opening larger and better showrooms. “Moving from a traditional and single-sales platform business towards a multi-channel sales company makes it easier for existing and potential clients to access our products,” he says. “This is good for our performance.”

By adapting, adopting and diversifying, Sweet-Orr has been able to expand over the past year – both in and outside of South Africa. “We have started to distribute into Namibia and the United Arab Emirates, and there are plans to venture into Botswana and other sub-Saharan African countries. We also intend to return to our roots in the United States, where the firm opened its doors 150 years ago,” Berman-Jacob says. “The ability to expand in challenging times like these hasn’t been a result of a series of coincidental flukes, but a well-thought-out and ongoing diversification strategy.”

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