Survival Strategies in a Turbulent Business Environment

Survival Strategies in a Turbulent Business Environment: The Case of Sole Proprietorship Company (SPC) in the Northwest and Southwest (NWSW) regions of Cameroon

By Merlin Mfondo, Ph.D. (Download Pdf)

INTRODUCTION

Each changing decade in the business world brings with it a changing paradigm and a new way of acting to adapt to this changing paradigm. As such, businesses face downturns and upturns in respective phases of their life cycle. Root (2017) explains that getting a business to survive a downturn requires planning and rigorous execution of the plan when gloomy days show up. According to Suikki et al., (2006), new competencies are required to cope in any business characterized by uncertainty and inability to predict the future. For Calantone et al., (2003) managers need guidance on how to cope with turbulent environments to improve corporate performance.

In fact, the entrepreneurs in the two Anglophone regions of Cameroon have been operating within a turbulent business environment brought about by what is today known as the Anglophone Crises since late 2016. Their business environment is hitherto characterized by uncertainty and inability to predict the future, thus requiring the development of survival strategies.

According to the ministry of small and medium-size enterprises, sole proprietorship businesses are defined as those with a capital of less than 2 million FCFA and with less than 10 (ten) employees. These economic actors whose activities are menaced of shutting down on daily basis are a call for concern. That’s why; this research aims to find out the strategies applied by those sole proprietorship companies to survive in a turbulent business environment like the one of the NWSW regions in Cameroon nowadays. This is done by first examining the characteristics of Sole Proprietorship Companies in the NWSW regions in Cameroon. Then, by identifying the survival strategies adopted by those sole proprietorship companies to resist in that turbulent business environment they operate in, before investigating the challenges hindering the effective implementation of the survival strategies adopted by sole proprietorship companies in that their turbulent business environment.Then propose policy recommendations.

Methodology of the Study

The study made use of qualitative data through interviews with key informants’ persons and groups’ discussions. A sample of 510 Sole Proprietorship Companies’ Managers were selected proportionately from seven commercial strata identified, in Buea; (ie Clarks quarter, Molyko, Buea town, Mile seventeen, Bolifamba, Great Soppo and Muea) and ten commercial strata in Bamenda (Mobile Nkwen, Commercial Avenue, Hospital Rounabout, Ntarikon Park, Foncha Street Junction, Mile Four Nkwen, Azirie Junction, Ancien Combattant, Sonac Street and Finance Junction). 25 discussions took place with groups of 20 participants each and interviews were conducted with 10 key informant persons. The data was analyzed using content analysis, both for interviews and groups discussions.

Characteristics of Sole Proprietorship Companies in the NWSW regions in Cameroon

Sole Proprietorship Companies in the NWSW in Cameroon are characterized by low income, lower capital, and fewer employees. Furthermore, SPC in the NWSW regions of Cameroon are business with small sizes, few numbers of employees, and a very few numbers of branches established (Eho and Mfondo, 2018).

It has been reported that, there is more than 3000 Sole Proprietorship Companies operating in the NWSW regions of Cameroon, which comprises of both the formal and informal businesses. SPC are usually small individually owned or family managed businesses offering basic goods and services. Those SPC in the NWSW regions of Cameroon intervene in sectors like agriculture, services, information communication and technology (ICT) and trading including goods, shopping, restaurant, call box, hair salon, snack-bars, etc.

Survival Strategies adopted by Sole Proprietorship Companies in the NWSW regions in Cameroon

The death rate of sole proprietorship business in Cameroon before their first 5 (five) years of existence is a call for concern, and it is very high compared to other States of the ECCAS zone (Mfondo, Eho & Tabeko, 2022). The situation is worst in the NWSW regions, where the rate of start up’s collapse has escalated since 2016 when the conflict started, because they operate in an unsecured environment with killings, threats, trauma, harassment and other abuses perpetrated both by State armed forces and the so called Ambazonian armed groups. Strategies that are used by those small businesses to survive in this turbulent environment include Sales Revenue Strategy (SRS), Structural Adjustment Strategies (SAS), Market-Oriented Strategies (MOS), and Cost Minimization Strategies (CMS) (Mfondo, Eho and Tabeko, 2022).

In the NWSW regions of Cameroon, Sole Proprietorship Companies as sale revenue strategy do set specific goals to their business. For instance, some businesses in Bamenda have changed their goal by adopting a proximity approach, minding first the interest of customers by bringing first necessity goods closer to them in their different locations. In Buea, some shops have turned to mobile shops, whereby goods are transported from the back of cars to easily reach the consumers at their different locations. Still under the sales revenue strategy, some small businesses have decided just to target small markets and others have decided to negotiate with both parties in the conflict, for them and their business not to be attacked. Nevertheless, SPC from the two Anglophone regions of Cameroon under crises have resolved to stay afloat the conflict by meeting regularly, to share ideas and solutions on running a business in a turbulent environment.

Also, the Structural Adjustment Strategies (SAS) are used by most of the SPC in the NWSW regions in Cameroon. These are a set of economic reforms that those SPC must adhere to secure a loan from Microfinance Institutions (MFI) and commercial Banks. For instance, collateral security is being used by SPC in the NWSW as one of these reforms; an act of solidarity which needs to be lightened. In addition to these, the SPC believes that working together as a business community would help them better shoulder their individual challenges. Most of them drafted a crises strategy plan for their business.

When it comes to Market-Oriented Strategies (MOS), the SPC in the NWSW has adopted an approach that prioritizes identifying the needs and desires of consumers and creating products and services that satisfy them. The focus is now on the products in most demand from the clients. To minimize marketing costs, most of the SPC have chosen to apply Cost Minimization Strategies (CMS), by which they have transferred into online trading. The social media platforms are now a vital means used by those SPC to easily reach their clients and sell their products in safety.

Challenges hindering the effective Implementation of the Survival Strategies adopted by those Sole Proprietorship Companies

Despite the efforts of the different SPC to implement the strategies they have put in place for their business to survive, some challenges hinder them from successfully doing it. Those challenges include the multiplication of police and gendarmes’ controls point with its implications, the pressure of council agents on the SPC, the menace and attacks of the SPC by the so called Ambazonians, the kidnapping of SPC owners, their family members and employees, and the request for ransoms, the burning of some sole proprietors’ business, the loss of lives and property. Also, business people have incurred huge financial losses in the face of “ghost towns” that take place each Mondays and have been put in place by the so called Ambazonian forces.

Conclusion and Recommendations

In summary, SPC in the NWSW regions of Cameroon are very small businesses that despite the violent effect of the Anglophone crises have decided to put in place some strategies in the view to survive. After revisiting those survival strategies, the study recommends that:

The government should support the SPC in the NWSW regions of Cameroon in their initiative of coming together to conjointly address the issues they are facing through regular meetings.

The SPC in the NWSW regions of Cameroon should seriously engage in online trading, as some of SPC have started using it. It could be another avenue to reach more clients.

The SPC shouldn’t rely on their efforts and keep looking at participative and adaptative solutions to keep their businesses afloat.

The SPC facing shortage or reduction of their capital should join with others in the same sector and product/service line to be stronger.

Incubators should accompany young startup in the NWSW regions of Cameroon, using a particularly tailored program adapted to their specification.