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REACH: Supporting Community

Growth and Development


Creative Shock’18 Preliminary Case Study

Provided by:

Note: Data provided in the case study is fictional and is presented for
illustrative purposes only.
Creative Shock Preliminary Case Study ‘18

Overview of REACH
• REACH is a ‘Not For Profit’ (NFP) organisation that uses an ecological model to empower women and
combat domestic violence in the community. In South Africa, the NFP market is shifting towards increased
community focus, providing further opportunities for REACH to focus on community development and
engagement.
• REACH provides a unique distribution network, employing unprivileged women in Soweto, a township in the
capital of South Africa, as its main product development team. The organisation gives the means to earn a
higher income and improve the living conditions of these women.
• REACH currently operates in the South Region of Soweto which is characterised by high rates of crime, low
income rates and a large disconnect between the youth and community leaders. It has historically
developed as a township for black people under the apartheid system. Today individuals living in these areas
have limited access to specific products or information which could improve their living conditions.
• REACH’s cash flows are historically unstable, with expenses often higher than revenue, while falling receipts
in 2017 have meant that cash on hand has dwindled. REACH currently operates three community services:
1) Embroidery Project
2) After School Care Programs
3) Clinical and Social Work Services
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Creative Shock Preliminary Case Study ‘18

REACH seeks to address key social problems in Soweto


REACH Social Goals
• Soweto is home to 40% of Johannesburg’s residents of which 68% are women. Of these
68% women, 71% are considered to live below the poverty line. Many women with Community Empowerment
young children have been socially excluded after losing their husbands. The high REACH seeks to empower local community
unemployment rate among women makes it difficult for them to sustain themselves and through trainings to improve work skills &
their families. Consequently, this leaves them at the bottom of the social and economic counselling of abuse victims
pyramid.
• High unemployment rates in Soweto lead to slow development of these communities
Employment Creation
and low quality of life.
REACH is creating opportunities and
• Soweto is known for its ‘culture of violence’. One in five (19.8%) women have
provides a platform for entrepreneurs and
experienced some form of sexual abuse in their lifetimes. More than a third (34.4%) of
job seekers in Soweto with high
respondents reported having ever been hit, beaten, kicked or physically hurt by an adult
unemployment rates
who was supposed to be taking care of them. One in five (23.1%) young people had ever
witnessed violence perpetrated by an adult caregiver against a sibling or another adult
Increase access to health & security
in their homes.
REACH aims to build safe play parks and
• Traditional NFPs rarely operate in these areas, therefore REACH is the monopolist within
house a number of services to improve
the market tackling these issues. REACH’s distribution network is reliant on local
health of community members
community members who have none or limited access to basic resources and services.

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Creative Shock Preliminary Case Study ‘18

Overview of REACH operations

REACH Embroidery Project Clinical and Social Work Services After School Care Programmes

Manufacturing and sale of high-quality, Free counselling and medical assessment of Build safe play parks and house a number of
Description ethically produced bags with authentic Zulu child abuse victims services (e.g. library, tutoring, etc.)
patterns

Bag production p.a. : R$400,000 + Variable


Cost of Service Costs R$559,000 p.a. R$73,000 p.a.
Trainings: R$20,000 per class (~20 people)

Visitors p.a. - 740 8,000

Sustained by profits coming from bag sales


& donations (currently operations in South
Source of income region are unprofitable, but loss is fully Fully government funded Fully government funded
covered by donations from companies in
Soweto)
4
R$ - South African rand
p.a. – per annum
Creative Shock Preliminary Case Study ‘18

REACH Embroidery Project


• REACH Embroidery Project is one of the most successful community Number of Women associated with manufacturing
initiatives operating in South Soweto, which employs 39 women who
manufacture high-quality, ethically produced bags with authentic Zulu
patterns. Each bag is priced at R$160 and has not changed in the last five +32%
years. It takes 2 days for 1 employee to produce 3 bags. REACH currently 39
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does not produce any other products.
• The number of women participating in the project has been growing every 17
year, providing an increasing number of socially vulnerable women in South
Soweto to have a sustainable source of additional income. This not only
ensures better living standards for these women and their families, but also 2015 2016 2017 2018
allows them to gain a better understanding of the support networks within
the community. Women are trained in developing the skills to manufacture Sample REACH bags
the bag and also gain basic money management knowledge. Each woman can
determine their own work schedule.
• The introduction of a REACH Sales Representative who is located in each of
the different communities in South Soweto has contributed to an
improvement in sales. Each Sales Representative is trained in communication
and product negotiation skills.
• All profits from the project are invested back to provide work skill
improvement trainings to the community members.

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Creative Shock Preliminary Case Study ‘18

Implementation of Organisational Strategy

REACH has gained heavy media attention over the past several months which has lead to
increased community support and guaranteed donations in 2019. Consequently, Dr. Leela has
come out of the board meeting with high spirits regarding the future of REACH.
Situation Many new ideas were raised during the meeting. In particular, the board has had a desire to
increase the social impact of REACH for a very long time. Additionally, as REACH has been
looking strong the past years, the board is considering 3 Soweto regions for expansion in 2019
and has not yet decided which region would yield the best result. Dr. Leela has decided to
consult a local consulting team to assist in the decision making process.

1. Provide your recommendation and arguments to which region should REACH expand in
order to remain sustainable and maximize their income (from both product sales &
donations), while at the same time reaching their Social Goals they had set up for the next
Your Task years.
2. Provide ideas/strategies on how REACH could increase their social impact in Soweto. Use
strategic tree template provided to map your ideas.

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BACK UP

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Creative Shock Preliminary Case Study ‘18

REACH’s Social Goals targets


Tactics KPIs Target for 2019
• Opportunity:
REACH has had specific interest from
organisations who are willing to • Free counselling & medical • Number of Clinical and • 800
guarantee donations to REACH if they assessment for abuse victims Social Work Services
Community Empowerment
expand the embroidery project to their visitors
specific region.

• Improve REACH’s women • Number of training • 10


skills classes
• Employ unprivileged • Number of women • 45
Employment Creation women employed full time

• Increase REACH’s women • Income from bags • Not less than R$32,000
income above the baseline manufacturing per per year
women employed

• Increase access of health, • Number of After Care • 8,000


Increase access of health & security and social program visitors
security empowerment to the
community

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Creative Shock Preliminary Case Study ‘18

REACH distribution network value chain

Regional REACH sales


Suppliers REACH HUB Service Delivery Customers
Distributors reps

Sales commissions*, %
5-9% 7% 18%

Description REACH is currently Women are manufacturing Small distribution A REACH service person A REACH Sales Main customers
working with 1 bags in REACH HUB, which centers set up in manages orders and Representative sells are upper working
supplier. The cost of functions as the different regions. delivers products to the goods on behalf of the class citizens.
the materials per bag is distribution centre of the Goods from REACH REACH Sales Rep. women and manages Additionally,
R$4. Southern Region as well**. HUB are delivered sales orders. Because recently small
Women are paid R$80 per directly to these of effective sales force businesses have
bag produced. In Soweto, a centers. all of the bags currently started to use the
traditional week is 5 produced are fully sold bags for store
working days. Each woman in few weeks period in decorations
has an average of 3 sick the South Region of
days per year and typically Soweto.
takes 3 weeks of holidays
per year

*Calculated from Retail price


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**No additional commissions apply as service delivery person collects goods directly from distribution centre
Creative Shock Preliminary Case Study ‘18

Potential Opportunity for REACH Embroidery Project

Embroidery Project – Potential Expansion Locations


When evaluating options
assume that:
North Region West Region East Region
• Bags in other regions will
be sold at the same retail
price Total Population
70,000 95,000 120,000
• All bags will be fully sold if Size
produced (no storage costs)
• Demand in South region Estimated
will remain same next year demand of bags 3.5% 2.5% 2.0%
• No additional cost will sold*, %
occur in order to hire sales Sales commissions
representative in the new of Regional
region (only standard sales +5% +9% +7%
Distributors
commissions)

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*Assume that 1 person will purchase 1 bag
Creative Shock Preliminary Case Study ‘18

Overview of Companies who have donated previously

• Console Pty Ltd: Located in West Soweto, the organisation sells high technology devices and provides
customer support.
• Arms Length: Located in North Soweto, the organisation supports disadvantaged children.
• Faith: Located in South Soweto, the organisation focuses on sustainable production of goods and services.
• Investor Private: Located in East Soweto, the organisation manages investments in high risk companies.
The company is looking to expand their corporate social responsibility
• Forever New: Located in South Soweto, the organisation has been a consistent supporter and buyer of
REACH’s products.
• Township Realtors: Located in North Soweto, the organisation manages multiple properties in North
Soweto.
• Wits Training: Located in East Soweto, the organisation develops professional training courses to improve
the labour force.
• LifeLine: Located in South Soweto, the organisation is a mental health charity working with the youth.
• SupportCom: Located in South Soweto, the organisation assists the elderly in daily care needs.

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Creative Shock Preliminary Case Study ‘18

Overview of Companies who have donated previously

• Infant Trust: Located in North Soweto, the organisation is a community business dealing with legal and financial assistance.
• Parity Software: Located in West Soweto, the organisation is the developer of cyber security software and infrastructure.
• Liberty: Located in South Soweto, the organisation is a legal firm dealing with civil cases.
• Rand Water: Located in West Soweto, the organisation is responsible for the water management system across West
Soweto.
• Vodacom: Located in East Soweto, the organisation is a provider of telecommunication services across East Soweto.
• Change.Org: Located in South Soweto, the organisation is a multinational corporation developing sustainable products.
• CC Pty Ltd: Located in East Soweto, the organisation is a leading cleaning and maintenance provider.
• Owner: Located in South Soweto, the organisation is a local developer in the South Soweto region.
• Aspen Pharmacare: Located in West Soweto, the organisation is a wholesaler of pharmaceutical products.
• EOH: Located in East Soweto, the organisation is a local construction company.
• IDC: Located in North Soweto, the organisation is a construction company who is looking to expand their corporate social
responsibility.
• Challenger: Located in South Soweto, the organisation is large wholesale store.
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Creative Shock Preliminary Case Study ‘18

Potential Donations for Embroidery Project


North Region East Region

Opportunity:
9.10 % 7.22 %
8.10 % 6.23 %
5.50 % 4.02 % 4.20 %
4.27 %
2.03 %

Arms Length Township IDC Infant Trust EOH Investor Wits Training Vodacom CC Pty Ltd
Realtors Private
West Region South Region

12.00 % 6.30 %
9.50 % 5.10 %

3.10 %
4.31 % 4.20 %
1.30 % 1.11 % 1.30 % 1.01 %
0.10 %
Console Pty Ltd Parity Software Aspen Rand Water Faith Forever LifeLine Support Change. Owner Liberty Challenger
Pharmacare New Com Org

Note: In 2017 Wits Training donated R$4,812. Same amount of donations is expected to be received next year as well
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