Pan-Pacific Conference XXXIV. Designing New Business Models in Developing Economies

A total number of 83 respondents may also seem
too small for a study such as this one.
However, it is also important to recognize that the
percentage of successful co-operatives is also very
small due to the harsh conditions of the business
environment. This research study was conducted in
the four districts of the Gauteng Province, in South
Africa as elaborated further on this section. The
study uses data collected from funded sewing cooperatives
in Ekurhuleni, City of Johannesburg,
Westrand and Sedibeng Districts as shown on the
map below (municipalities.co.za).
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70
60
50
40
30
20
10
0
LOCATION: SUPPLY CHAIN OF CO-OPERATIVES
The physical location of the co-operative is influence by ...
b1_2 the size of the
business in terms of
space required for
storing materials
b1_3 the nature of
the business
operations
b1_7 customer
accessibility
Graph 1: Location - Supply Chain Consideration
b1_8 government
regulations
Strongly Disagree Disagree Do not know/Neutral Agree Strongly Agree
Out of the 83 cooperatives, 51 did not consider
government regulations entirely when choosing a
geographical site. A large majority of the
cooperatives agree that they considered the
proximity to suppliers, availability of buildings [21]
and 65 out of 83 cooperatives agreed that the nature
of their operations played a key role in the selection
of their geographical site.
Rental rates & electricity
Some of the production facilities of the funded
sewing cooperatives were sponsored by government
and as a result, they did not incur the costs renting
their manufacturing or production facilities [23].
Electricity Tariffs:
Increase production costs.
Figure: 2 Gauteng Provincial Map of Districts
These sewing cooperatives have a direct economic
impact in the province of Gauteng in South Africa
given the employment created through them and
they also have a potential to revitalize the textile
sector of the Gauteng City Region and that of South
Africa.
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40
30
20
10
0
b3_3 The business has special
arrangements with Eskom regarding tariff
increases
b3_4 Tariff hikes will significantly
increase operating costs
III. RESULTS
A larger sample would have enabled us to derive a
factor analysis. However, the frequencies of the data
generated enable us to provide answers to the
research question raised in this study. The high
involvement of women in the funded sewing
cooperatives serves one of the primary objectives of
the South African government, in 66 of the 83
cooperatives, 4-6 of their members are women. Out
of the 83 sewing cooperatives, 37 have leased their
facilities and 34 working from home based facilities
[11].
Strongly Disagree Disagree Do not know/Neutral Agree Strongly Agree
Graph 2: Location – Electricity Tariffs
Most cooperatives did not study their competitors’
location, but 57 considered greatly the lease
agreement. Estate agents were seen to be less
important in assisting in the location decisions by
over 50% of the cooperatives and they did not
understand the services of estate agents in relation
to production facility decisions. The hikes in
electricity costs had a negative impact on the output
of the cooperatives and due the nature of their
operations, the hike in tariffs increased their
operating costs significantly.
Location
The location factor had ten constructs, which
referred to all the areas that a business would
consider when deciding on a particular geographical
site of their production facilities.
Employment & Green buildings
Cooperatives aim to ensure an inclusive
involvement of their members, as a result, creating
accessible and decent employment for the members
and other professional employees is not a choice but
is an obligation.
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