GROUP 1

Group members:
Jenifer Frenita
Naila N. S. Komara
Ng Kara Sevania
Daniel Kenneth Cruz
Gian Levin S. Batac

Klopper’s Case Study Analysis

Kloppers - Family business with over 40 years of existence. A discount retail family
business in Bloemfontein. Focusing on the sales of electrical appliances, but also
include sports apparel, clothing, and hardware in their product ranges.

Unique in the development of the Family business?

“The transition from a pure family business to a family-owned business, to the selling of
the business and ultimately the re-invention of the original family business.”

What happened to the family?

● Studied different areas but chose to work in the business (two accountants,
lawyer, social worker, agriculture and a medical doctor)
● Six brothers working together toward a common goal
 ● Children will start in junior positions, learning the business before they will be
allowed into managerial positions.

After the sale of the family business to the Pepcor group, some of the Kloppers sons
who had at that stage been involved in the business reverted back to their professions,
while others continued to operate the small unrelated motorcycle store that they started
a few years earlier. – However, after a year the sons decided to start a new discount
retail store, which they called “Juniors”.
- Reverted back to their professions
- Start a new discount retail store–Juniors

What happened to the business?

“From start-up to being sold to a corporate group, and then was revived again by the
second generation of children”

1st phase (Initial Stage)

- Young family business, the owner is the only member (Controlling owner) - 1967
- New Concept of discount retailing, but initially purchased in wholesale
- Suppliers were skeptical about their business (discount retailing) and thus
refused to supply their products to them
- Managed by the owner and wife
- Core focus: To establish effective trade and distribution channels

2nd phase (Expansion)

- Three Sons joined the business
- Decision-making criteria revolve around balancing between business and family
development
- Family development is about how to involve the sons and their wives in the
business
- None will enter the business at a senior level, Entry will be based on age and
seniority (considerations in the specific cultural domain as sons grew)
- The wives of the sons were not allowed to be involved in the business because
only the sons grew up with their father and thus have the cultural domain instilled
in them (essentially, no “outsiders”)
- Experienced fraudulent behaviour from its non-family member managers
- Increasing Competition, Geographical Diversification
- Problems of Control due to Non-Family Employees
- Reintegration into a bigger store
- Bought a Department Store (Single Site for all types of products)
 - Change from a “pure family business” to a “family-owned” business where
managerial decisions are made by both family members and non-family
members

3rd phase (Maturity)

- Founder Started another unrelated motorcycle business
- The motorcycle business is instrumental in the exit strategy later on.
- the business experienced problems with control as well as fraudulent behaviour
by some non-family members of their management team.
- PepCor group purchased the Kloppers store. The business was now a privately-
owned company with no involvement in the business by any of the Kloppers
family members.

4th phase (Restarting Cycle)

- Sons reverted back to their professions and some stayed in the motorcycle
business
- Founder retired from business
- Eventually, the sons decided to start another retail business “Juniors”

- Key Success Factors

Second wave:
- The loyalty of customers that was built over time, therefore, resulted in a
substantial erosion of business away from the Pepcor group store towards
the Juniors store
- Resulting in the Pepcor group offering the original Kloppers store
for sale back to the Klopper brothers at a negligible price
- The Klopper brothers purchased the original family business back from the
Pepcor group
- Subsequently closed all the branches of Juniors and started to do
business under the original trade name of Kloppers again.
- Back to the pure family business again which is owned and managed by
the six Klopper brothers.
- The Juniors could win the lawsuit, because the agreement at point 5, only
restricts the founder (not the juniors).

Takeaways

1. Unified Leadership and Commitment of family members toward one goal

2. Stability and Trust within the family
3. Assured transfer of Passion, Knowledge, and Skills from the founding fathers
4. Family businesses have Long-term vision and Mission for the enterprise
5. Customer Loyalty is a key factor to success
6. Be flexible in managing the family business, it’s okay to pivot.