Jaggers: The Fall Of An Illustrious Zimbabwean Titan

Jaggers Wholesalers Zimbabwe was founded in 1910 by an Englishman named Messr. John W. Jagger. It opened its first branch in Bulawayo, and its sales team traveled around the country by ox-drawn carriage, peddling goods imported from South Africa.

By 1998, the entity’s branch network had exploded to fifty-two branches that were scattered across Zimbabwe. And thanks to a substantial equity injection from, and the technical expertise of, Metcash - a company domiciled in South Africa, the company had access to a global procurement network and a state-of-the-art computerized inventory management system that bolstered its efficiency.

Just before the beginning of the new millennium, Jaggers expanded its operational focus and built a mini-hypermarket; a one-stop superstore that sold high quality goods from every corner of the globe. The new facility offered end-consumers a wide assortment of goods that were sold ‘in bulk’ and regular quantities; a concept that was relatively new in Zimbabwe at the time.

The target-customers of the store were affluent, discerning customers, who couldn’t be satisfied with the ‘regular’ products: people who only desired the best quality products. Jaggers, the hyper-market, exponentially expanded its range of high quality offerings to attract its target customers. In short, it is safe to say that Jaggers configured its systems, processes and operations to increase the quality of its product offerings in a never-ending self-reinforcing cycle.

Because of this, the organization became unassailably successful; it became an industry leader in the high-end retail sector, and as far as hypermarkets in Zimbabwe were concerned, Jaggers, the hypermarket, was the industry. The adaptation of Porter’s 5-forces model below, illustrates the firm’s dominance of the high-end hypermarket industry:

At that time, it seemed that the only way for Jaggers to go was up, it had a solid and profitable business model, and it continually optimized it, to supercharge its engine of growth; the high-end superstore.

…Then the Zimbabwean economy began to wither at an exponential pace.

The declining economic fortunes of Zimbabwe spawned a phenomenon known as ‘brain-drain’. Simply stated, the poor economic prospects of the country were a push-factor that drove away its best and brightest minds; the socio-economic strata that Jaggers, the hypermarket, catered to. Incomes in Zimbabwe also plummeted to pre-1960 levels, and the ranks of the affluent were shrinking at an increasing pace.

Surprisingly, Jaggers’ / the hypermarket’s business model did not adapt to this changing reality. The entity kept on multiplying its ranges of high quality offerings, and operating with the outmoded mindset that was responsible for its past success.

Zimbabwe had shortages of basic foodstuffs (like bread, rice and maize meal), and Jaggers was incongruously expanding its offerings of tinned salmon (from increasingly exotic geographies). In fact, you could say that the product offerings of Jaggers had shot beyond the prevalent needs of its target-customers.

While Jaggers was busy importing high quality goods, other players saw an opportunity in trading exclusively in basic goods, and there sprawled-up a diverse range of small stores that sold low quality basic commodities (bread, sugar, milk, soap, toilet paper, and cooking oil). These ‘stores’ had unimpressive instore layouts, poor merchandising and unskilled workers, but their business models allowed them to make profits at very low prices; largely owing to their low fixed costs.

The events that followed are best explained through the use of the adaptation of Dr. Clayton Christensen’s model of disruption below:

In the model of disruption above, the vertical axis represents improvements of stock quality, which is largely calibrated by a qualitative assessment of consumer perception of stock quality. The horizontal axis represents time. Points that lie to the right represent a ‘higher level of stock quality’, while those that lie to the left represent a lower one. The blue trajectory, labeled sustaining business models, represents the business model that Jaggers, the hypermarket, applied. On this trajectory, very few new entrants could compete with, or challenge the superiority of Jaggers’ business model; that chiefly focused on high-end retail. The brown trajectory that is lower than the blue one represents disruptive business models that cater for the very basic needs of customers who are being ‘over-served’ by incumbents.

Hence, when the economy of Zimbabwe went into a moribund state, Jaggers, a company that had a sustaining business model, represented by the blue trajectory, had a rate of improvement of stock quality that was increasingly outpacing the needs of its customers. The point labeled (a) represents new players entering the markets; selling very low quality products that are relevant to consumers’ dominant needs. Jaggers’ new competitors had business models with low fixed costs and product offerings that were in alignment with the new reality of Zimbabwe. Because of this, the new entrants ‘outcompeted’ Jaggers (and increasingly displaced it from its ‘leadership position’ with every incremental improvement they made in the quality of their offerings).

Will Jaggers survive into the future?

It’s hard to tell, but my bet is they won’t. Although the company is now under new ownership, it is still trying to re-establish a business model that was discounted by the ebb and flow of Zimbabwe’s economy.

Maybe business sense won’t save them; maybe dame fortune will intervene in the firm’s affairs and alter its destiny!