SA Taxi was a vertically integrated business that operated in South Africa’s distinctive taxi industry. Despite being plagued by violence, informal structures, unsafe road practices and lack of government support, the taxi industry had grown to become South Africa’s most common mode of public transport. SA Taxi was one of the largest companies entirely focused on serving the taxi industry. In addition to vehicle financing services, it offered insurance products, refurbishment services, and retail capabilities. SA Taxi served a mainly black-owned industry whose main participants—taxi owners, drivers, and commuters—had been historically disadvantaged. SA Taxi CEO Terry Kier understood that his company was already creating substantial impact for these constituents through financial inclusion, job creation and skills development but he knew that SA Taxi needed to do more to enhance its sustainability as well as that of the industry. By 2018, following multiple engagements with industry representatives, Kier saw an ownership deal that benefited the industry as SA Taxi’s next strategic move. Although there was an alignment among the company’s leadership on the need for and purpose of the deal, the transaction itself was far from clear. After consulting with internal and external stakeholders, Kier landed on three deal options. Kier and the company’s founders needed to agree on the best path forward.
The case opens in February 2021 as Mohamad Ballout, co-founder and CEO of Kitopi, a Dubai-based managed cloud kitchen platform, is looking over the company’s 2020 results. Propelled by the COVID-19 pandemic, delivery orders had been on the rise globally and dine-in restaurants were more than ever focused on profitability. Against this backdrop, Kitopi had seen high traction in its business and the management needed to decide on which growth opportunities to focus. The case provides an overview of the pain points of the various players in the on-demand food ecosystem —the aggregators, the restaurants and the customers— and lays the ground for the nascent cloud kitchen business worldwide complete with the competitive outlook. The case also provides a detailed overview of how Kitopi structured its kitchens, how the company developed proprietary software to track space utilization and efficiency across its operations, and how it built it supply chain capabilities. While the B2B positioning of the company enables Kitopi to help restaurants expand much faster and in a less costly way, the company is mainly invisible to customers who don’t know that their food order is coming from a central kitchen. Also, the company has been witnessing the consolidation of aggregators across its markets. The case puts the reader in Ballout’s shoes, who wondered if the company could feasibly continue to own the supply side of the business and retain its position as a primarily B2B company without risking being squeezed out by the aggregators, who owned the customer relationship and data. Should the company focus on building on its currently small B2C arms, consider licensing it tech stack, or be squarely focused on its core business?
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Pippa Tubman Armerding joined Harvard Business School in 2017 as Executive Director for the HBS Africa Research Center, opened this year in Johannesburg, South Africa. Pippa’s work spans sub-Saharan Africa, with a particular focus on the development of cases and support for faculty research in the region. She also plays an important role in establishing and fostering relationships with companies and alumni in Africa on behalf of HBS.
A lawyer and strategist with 20 years of experience as an attorney and business professional operating across Africa, Europe and North America, Pippa has held a number of leadership roles with large multinationals working across the continent. Prior positions includes serving as Director of Legal and Corporate Affairs for Microsoft South Africa, and Director of Pan-African Strategic Initiatives for Coca-Cola South Africa.
As a graduate of Harvard College, Pippa has been an active alumnus, serving in a number of volunteer roles for the alumni community in South Africa. In addition, Pippa holds a JD from New York University, specializing in international law, and is fluent in French. Raised in Liberia, Pippa returned to Africa 13 years ago and has since lived in South Africa and Kenya.