In the summer of 2013, the CEO of Tata Chemicals Magadi, Africa’s largest soft drink producer and one of Kenya’s oldest and largest exporters, wondered how to respond to a growing number of challenges. As a manufacturer of a raw material product, the company was vulnerable to rising energy costs, oversupply, and economic cycles. Global growth has been slow since the economic recession of 2008 and competition has been intense, especially since the emergence of Chinese producers. The Magadi community, where the company’s manufacturing plant was located, was one of the poorest in the country, suffered from drought and lacked many basic public services normally provided by the government, such as roads, health care, electricity, water and education. To meet these needs, the company shifted from a top-down, parenting, ad-hoc, and resource-intensive approach to a bottom-up, collaborative, holistic, and resource-sharing style that focused on developing community capacities and self-government. . Now, however, the question arises as to how best to balance the strong need to cut costs while maintaining the commitment to the sustainability of the surrounding community.
Ivey Publishing (W15033-PDF-ENG)
February 20, 2015
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