Like many others in this country, I have had a long Association with CNA. In fact my first job was doing paper rounds for CNA in Fish Hoek, Cape Town, when I was 13 years old.
Over the years, I have bought stationery such as notebooks, examination pads, pencils and sharpeners from CNA. The stores use to be a go-to place for magazines and newspapers.
CNA has been in difficulties for a number of years and has had change of ownerships to try to turn the company around. This year has seen the closure of several of their branches and it’s getting harder to find a store near me.
A company is said to be stuck in the middle if it does not offer features that are unique enough to convince customers to buy its offerings, and its prices are too high to compete effectively based on price. Michael Porter argues that a firm which is stuck in the middle is likely to fail because it will not be able to sustain a competitive advantage for a longer period of time, and its consequence might be a poor financial performance.
However, being stuck in the middle doesn’t necessarily mean terminal decline. A company can still apply Porter’s three basic generic strategies for gaining competitive advantage: Cost Leadership, Differentiation and Focus. For example, IKEA, one of the most successful and largest furniture retailers in the world, applies all three strategies.
CNA division is targeted at middle to upper income consumers and its product offering includes stationery, books, magazines, greeting cards, mobile phones, toys and digital equipment.
Competition in the stationery, books and gifts market has increased with new stationery franchised stores in shopping centres, online stores and specialised stores for digital technology items such as cell phone and laptops. Supermarkets carry essential stationery items for homes and offices. With more people working from home, stationery supplies can be found at many other outlets including the plastic packaging stores.
It’ll be interesting to see how CNA emerges from its difficulties. It is in a tight spot but there are strategies available to make it more competitive. However, if it stays in its present form it will continue to decline.
It will be sad to see CNA go if that is the final outcome. It’s been such a familiar and long-standing brand in the country.
Sources
https://www.inceconnect.co.za/article/astoria-offloads-cna-stake
https://www.rns-pdf.londonstockexchange.com/rns/6049S_-2016-12-22.pdf
https://www.iol.co.za/business-report/opinion/absa-made-the-cna-liquidation-inevitable-780537
https://www.engineeringnews.co.za/article/125-year-old-cna-placed-in-business-rescue-2021-06-09
https://www.cbn.co.za/news/cna-appears-to-be-in-terminal-decline/
https://opentextbc.ca/strategicmanagement/chapter/stuck-in-the-middle/
