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Q&A with Samir Youssef, author of case study: Kheir Zaman in Egypt

Samir Youssef is currently Professor of International Business and Organization at the American University in Cairo. He teaches in the fields of international business, organization, and business ethics. His publications cover the areas of IT outsourcing, cross-cultural relationships, business strategies, business-government relationships, and business social responsibility. His preferred research approach is using cases from the Egyptian environment.

Kheir Zaman is supermarket chain of the Mansour Group.

To download the Kheir Zaman case study from the GIM database, pleaseclick here.

What is Kheir Zaman’s basic value proposition and what makes its financial model sustainable?

The company sells at a lower price through using unbranded items, efficient supply chain method and mass volume. In addition, the company capitalizes on common resources for its high-end and low-end products. Sustainability is achieved through maintaining a decent profit margin, searching for more suppliers and spreading its stores to other locations in the country where population is dense and real estate is relatively cheap. In upper Egypt, due to high poverty, the company is considering using mobile sales vehicles owned and operated by independent vendors in order to reach remote aeas.

How does Kheir Zaman’s retail trade impact lower income communities in Egypt?

Lower income people used to rely on cooperatives, informal open markets and street venders to get their needs. With the creation of this lower-income retail chain these people can buy their needs from modern hygienic facilities, enjoy different choices and reduce their buying trips, an important element as many women have entered the labor market and they need to use their time more efficiently.

What have been the biggest challenges hindering Kheir Zaman’s growth?

Rising cost of food items, logistical problems due to crowded streets which slow down delivery of items and spread of informal production methods which could be once regulated be a good source of low cost products. The company handled these problems by having its own vehicle fleet which is shared by its high-end supermarkets, the Metro Chain. In addition, the company through requiring suppliers to abide by its standards has encouraged many of them to enter the formal economy. Rising prices could keep out some of the low income people but as the economy is becoming more competitive in the field of internal trade and new informal suppliers enter the formal market Kheir Zaman, with its hygienic standards, economies of scale and modern supply chain management can keep its prices at a reasonable level.