Nakumatt: The elephant on its knees!

What next for the big elephant Nakumatt?

A few years ago, shopping at Nakumatt was a delight. Today it feels like you are walking into a funeral parlour.

The once pride of retail shoppers is currently struggling to pay employees, suppliers and generally meet their financial obligation pointing to a cashflow challenge which is a symptom of deeper problems in their capitalization and operations.

Manufacturers have been complaining of facing a serious cash flow challenge following delays by the retail chain-store with the outstanding debt estimated at Sh40 billion. So what next for the big elephant?

Today empty shelves and shorn of many brands and products, Nakumatt is beleaguered by mounting crisis. Can it be because the founders decided to step back and allowed someone else to take over the company? 

A relative who pumped in money and then took on the mantles of the company? Was it because of some top level management individuals who unscrupulously scalped the company and watched while it sailed into more turbulent waters and then fled to greener pastures?

Nakumatt is crumbling like the stale cookies on its shelves.

Nakumatt had everything going for it but now is in shambles. There is a possibility that it can make a comeback with some judicious decisions and actions. For one the brand and the goodwill was immense but today it is turning into a joke. But it can still be revived. If swift action is taken in winning back customers: Suppliers.

Nakumatt just like any other business is at a cross roads of some sort in its growth trajectory. Nakumatt needs to solve several issues to untangle itself from the current dilemma; Fresh capital injection, Management and motivation of staff, supplier engagement and brand erosion management.

At the heart of any strategy is ability to diagnose a bottleneck or challenge, development of a guiding policy for dealing with the challenge and development of coherent actions designed to carry out the guiding policy.

Nakumatt management team is faced with strategic choices that are highly correlated and chain linked. This means that implementing a single strategy on its own would not produce real value. Say for example negotiating with employees and other suppliers on payment plan without significant capital injection would only aggravate the situation further. 

Similarly negotiating for capital injection from strategic investors would take time hence the need to ensure suppliers are patient.

This chain link logic is in framed in a way that the overall strategy performance will only be limited by its weakest link.

Some proposed solutions to deal with the challenges faced may include review of business model to e-commerce to reduce stock holding and other fixed overheads, establishment of employee share ownership plan, debt-equity conversion option for strategic suppliers and finally identification of key investor to inject capital to finance some of the proposed programs.

In conclusion a good strategy doesn’t just draw on existing strengths; it creates strength through the coherence of its design.  Most organizations of any size don’t do this. Rather they pursue multiple objectives that are unconnected with one another or worse that are in conflict with one another; Nakuamtt must ensure it’s not a victim of the same.

x