Ensuring BKB’s future: achieving sustainability amidst market uncertainty

Learning outcomes Following a discussion of the case study, students should be able to: Case overview/synopsis BKB was a leading South African wool brokerage and agricultural service provider situated in Gqeberha (formerly Port Elizabeth) in the Eastern Cape, South Africa. Isak Staats, the Executive Manager of BKB’s Fibre Division, was facing a critical challenge: the profitability of the numerous sheep farmers/wool producers who supplied wool fibre to BKB for subsequent sale to buyers on auction had declined in the face of the rising costs of farming, combined with lacklustre wool prices. The financial constraints that BKB’s suppliers were facing were threatening their ongoing viability and sustainability, putting BKB in an increasingly precarious position in a highly competitive market where buyers were insisting on sustainably produced products and synthetic alternatives to wool were in strong demand. Isak was faced with a serious dilemma: how could he enhance the profitability and ongoing sustainability of BKB’s farmers/wool producers so that they once again became a reliable source of supply, while also satisfying the needs of its buyers who were demanding high-quality, competitively priced wool? How can Isak find ways to balance the interests of two different client sets with inherently opposing objectives? Complexity academic level This case can be used in postgraduate courses in microeconomics and strategy. Subject code CSS 11: Strategy.