Exploring an alternative competitive strategy for the Namibian small stock industry
Abstract
The Namibian small stock industry has been in decline since the implementation of the Small Stock Marketing Scheme (SSMS) 15 years ago. In a country where 70% of the population's livelihoods depend on the agricultural sector, the impact has been dramatic. These policy interventions had the objective of value addition creation and establishing a secondary industry. Abattoirs were built in Namibia, quantitative restrictions were enforced on the export of live sheep to South Africa, and it was expected that value would be added through the processing of sheep carcasses locally, rather than having these processes taking place in a neighbouring country. Noble in thought but lacking in execution, the SSMS, together with drought and a difficult economic situation, had the opposite effect, driving the industry downwards to a point where it has halved in size. Namibia is one of the scarcest populated countries in the world, leaving the population very dependent on the area in which they live. Sheep farming mainly takes place in the dryer and harsher southern parts of the country. Sheep farming has helped these towns to exist, creating employment and contributing to the value chain by means of expenditure for farming activities. The implementation of the SSMS therefore had far more reaching effects than just the small stock industry itself, but on many of the towns which are highly dependent on the success of this industry. The jobs created by the secondary industry were heavily outweighed by the jobs lost on a primary level. The objectives of value addition turned into a reality of value erosion. The Namibian small stock industry is at a stage where alternative plans and strategies needs to be evaluated and successfully implemented to make a successful recovery. This study aims to help this industry with that goal. Multiple strategic tools could assist in the analysis and assessment of the Namibian small stock industry. This study uses the SWOT analysis to understand the industry, its strengths and weaknesses as well as its opportunities and threats. The study further applies the PEST analysis to identify the opportunities and threats which each of these environments provides and pose to this industry. Using the principles of the stakeholder theory, it is suggested that the industry should be governed in a manner that would contribute positively to all its members (stakeholders). The identification, evaluation and implementation of a competitive strategy could assist the industry in its recovery. Semi-structured interviews were performed with eight members of the Namibian small stock industry. The research participants represented the industry fairly as four sections of the industry, namely farmers, abattoirs, businesses and meat board representatives were represented by two participants each. This study recommends that the Namibian small stock industry applies a differentiation strategy as Namibian sheep is of high quality and adheres to the requirements of free-range animals. This sets Namibian sheep apart from the global sheep industry and provides an opportunity to establish itself again.