MATTERA MOTORS: SUCCESSION PLANNING IN SOUTH AFRICA
CASE STUDY SOLUTION
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SYNOPSIS
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This case focuses on a small family business, Mattera Motors, an auto-repair shop operating in the
challenging operating environment of a South African township. The founder, Marcello Mattera, started
the business as a “necessity entrepreneur” (i.e., an individual pushed into launching their own business due
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to no other employment options). The business has nonetheless reached a level of stability over the past
two decades and is successful by the standards of a township enterprise. However, the company faces
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dilemmas in the coming years relating to succession and growth. Specifically, should Marcello’s children
inherit the business from him? Could the business survive if Marcello shared it between his two children?
Or should they expand the business to seize new opportunities?
lu
So
OBJECTIVES
• Understand the external environment, specifically as it pertains to the unique risks and challenges
entrepreneurs face when operating as necessity entrepreneurs.
• Identify the resources (especially intangible resources) an entrepreneur can use to overcome the
obstacles in highly uncertain operating environments.
The Case Solution Starts From page 5
,• Identify to what extent those resources allow for firm stability, and whether they may be compromised
by strategies such as growth or diversification.
• Evaluate which resources are specific to the entrepreneur and which are related to the firm, and hence
can be passed down.
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ASSIGNMENT QUESTIONS
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1. How does the current operating environment in Delft and beyond impact Marcello’s business, and how
might it influence the readiness of his children to take over?
2. Identify and analyze the key resources that have contributed to Marcello’s business success over the
past two decades.
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3. Explore and outline the various alternatives available to Marcello, specifically focusing on whether
sharing the business between his two sons, expanding to new opportunities, or other strategic options
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would best serve the legacy he has built and his children’s involvement.
4. Evaluate each alternative from the perspective of both decision-makers—Marcello and his two sons
once they inherit the business.
lu
So
The Case Solution Starts From page 5
,ANALYSIS
1. How does the current operating environment in Delft and beyond impact Marcello’s business,
and how might it influence the readiness of his children to take over?
Environment analysis: The first component of the external analysis focuses on the operating environment
and is meant to provide students with a better grasp of the challenges facing entrepreneurs in the township.
emphasize how different this context is from more stable, Western settings. Based on the
details from the case, Exhibit -1 provides an overview of the environment using the PESTEL analysis,
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revealing that many of the risks and challenges come from the environment’s socioeconomic dimensions.
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Industry analysis:
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The Case Solution Starts From page 5
, EXHIBIT -1: PESTEL ANALYSIS
Political • Apartheid legacy, where non-whites were relocated into townships
• The ANC government policies are primarily meant to support black Africans
• The Democratic Alliance primarily supports the coloured population
Economic •
•
•
•
Social • Significant population growth (50% in Delft over one decade)
•
•
•
•
•
•
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Technological • Low availability (material is mainly salvaged)
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Environmental •
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Legal • Businesses in Delft are mainly informal (illegal/unregistered) and subject to raids by police
•
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n
tio
lu
So
The Case Solution Starts From page 5
CASE STUDY SOLUTION
e
pl
SYNOPSIS
m
Sa
This case focuses on a small family business, Mattera Motors, an auto-repair shop operating in the
challenging operating environment of a South African township. The founder, Marcello Mattera, started
the business as a “necessity entrepreneur” (i.e., an individual pushed into launching their own business due
n
to no other employment options). The business has nonetheless reached a level of stability over the past
two decades and is successful by the standards of a township enterprise. However, the company faces
tio
dilemmas in the coming years relating to succession and growth. Specifically, should Marcello’s children
inherit the business from him? Could the business survive if Marcello shared it between his two children?
Or should they expand the business to seize new opportunities?
lu
So
OBJECTIVES
• Understand the external environment, specifically as it pertains to the unique risks and challenges
entrepreneurs face when operating as necessity entrepreneurs.
• Identify the resources (especially intangible resources) an entrepreneur can use to overcome the
obstacles in highly uncertain operating environments.
The Case Solution Starts From page 5
,• Identify to what extent those resources allow for firm stability, and whether they may be compromised
by strategies such as growth or diversification.
• Evaluate which resources are specific to the entrepreneur and which are related to the firm, and hence
can be passed down.
e
pl
ASSIGNMENT QUESTIONS
m
Sa
1. How does the current operating environment in Delft and beyond impact Marcello’s business, and how
might it influence the readiness of his children to take over?
2. Identify and analyze the key resources that have contributed to Marcello’s business success over the
past two decades.
n
3. Explore and outline the various alternatives available to Marcello, specifically focusing on whether
sharing the business between his two sons, expanding to new opportunities, or other strategic options
tio
would best serve the legacy he has built and his children’s involvement.
4. Evaluate each alternative from the perspective of both decision-makers—Marcello and his two sons
once they inherit the business.
lu
So
The Case Solution Starts From page 5
,ANALYSIS
1. How does the current operating environment in Delft and beyond impact Marcello’s business,
and how might it influence the readiness of his children to take over?
Environment analysis: The first component of the external analysis focuses on the operating environment
and is meant to provide students with a better grasp of the challenges facing entrepreneurs in the township.
emphasize how different this context is from more stable, Western settings. Based on the
details from the case, Exhibit -1 provides an overview of the environment using the PESTEL analysis,
e
revealing that many of the risks and challenges come from the environment’s socioeconomic dimensions.
pl
Industry analysis:
m
Sa
n
tio
lu
So
The Case Solution Starts From page 5
, EXHIBIT -1: PESTEL ANALYSIS
Political • Apartheid legacy, where non-whites were relocated into townships
• The ANC government policies are primarily meant to support black Africans
• The Democratic Alliance primarily supports the coloured population
Economic •
•
•
•
Social • Significant population growth (50% in Delft over one decade)
•
•
•
•
•
•
e
Technological • Low availability (material is mainly salvaged)
pl
Environmental •
m
Legal • Businesses in Delft are mainly informal (illegal/unregistered) and subject to raids by police
•
Sa
n
tio
lu
So
The Case Solution Starts From page 5
