Determinants of Success
Reasons behind Sodigaz’s success: Sodigaz is enjoying a 20% growth in sales per year. One reason for this growth is increased storage space, which was purchased with the help of an AREED loan. Without sufficient stock, they would not be able to expand their client base. Clients choose their LPG brand based on the convenience of the purchase location and the availability of the product. Without a large supply, Sodigaz would not be able to cover as wide of a geographic area or provide consistent service.
Another reason for Sodigaz’s success is that they transport their own goods. Sodigaz owns the trucks that pick up the gas at the ports and deliver to the distributors, which means that they do not have to rely on the availability of an outside transportation company. It also allows them to make decisions on which to port to buy gas from and which distributors to supply bottles. This results in a more consistent supply for end-users, which, in turn, makes them more likely to buy Sodigaz.
Sodigaz has a very large network of distributors throughout the country. Most of these 600 independent distributors stock about 35 bottles, although some of the distributors located farthest from Bamako have a stock of about 1,000 bottles. This network allows Sodigaz to expand its reach and break into new geographic markets. At the same time, it is difficult to manage 600 distributors. There have been some customer service complaints and money issues related to the distributor.
Government support has also been crucial. Government subsidies on small bottles makes them more affordable and thus expands the possible client base. The government also conducts public awareness campaigns on the impact of deforestation and the importance of LPG, directly promoting Sodigaz’s products. This government support, however, also limits Sodigaz’s profits, as it controls the price of LPG. In addition, the subsidy is paid to Sodigaz, not the end-user, and there are sometimes payment delays, which tie up Sodigaz’s working capital.
The staff’s team spirit is one the company’s major strengths. The staff is motivated, which makes the business run more smoothly. Good communication and enthusiasm among staff has allowed Sodigaz to grow and address business needs in a quick and professional manner.
Overall, client satisfaction is high. The cylinders are readily available, thanks to Sodigaz’s personal transportation fleet and large network of distributors. The range of product sizes allows the customer to pick what best fits his or her needs.