2003 Winner
Winners:
State of Rio Grande do Sul, Brazil
2003
Publication:
Management and Citizenship Programme in Brazil
Sponsored By:
The Public Management and Citizenship Programme in Brazil
Jurisdiction:
Brazil

More information in Portuguese about this award-winning program.

After buying a butcher store in Porto Alegre, a local businessman, Mauro de Camargo, realized the sector was having difficulties. Sales and profit were dwindling, many establishments were facing closure, employees were often drunk and the lack of hygiene was widespread. With help from a government consultant, Mauro and a number of other establishment owners joined forces to create the ChefCarnes brand. The network of butcher shops became clean environments, to the point of becoming a reference for the office of sanitation. Promotional campaigns attract customers with gifts, prize draws, wine tasting events and barbecues. Profits have increased as the store owners now negotiate collectively with suppliers, obtaining better prices.

Many small businesses all over the country face the same sort of problems. Bakeries, grocery stores, auto repair shops, drug stores and a myriad of other businesses common to the urban landscape find it hard to break even and many close shortly after opening. A 12-state survey carried out between 1998 and 1999 showed that 55% to 73% of businesses closed after operating less than 3 years.

Implemented in 2000 by the government of Rio Grande do Sul, the Cooperation Networks Program has been helping small businesses keep their doors open and expand, facing competition by large economic groups. The Program encourages small business owners to set up cooperation networks and work together to negotiate with suppliers, develop marketing strategies and reach out to new markets. Groups of at least 10 small business owners in the same line of business set up associations, exchange experiences and contribute monthly towards network expenses, such as the hiring of ad agencies and investment in information technology for the stores. The commercial establishments who set up a network create a brand and use the same visual identity, as if part of the same company. Each group counts on support from a consultant who is a student or former student from one of the regional Universities working in partnership with the Program. The consultant helps the business owners evaluate the sector's strong and weak points and elaborate a strategic plan. The Universities also offer managerial training for the small business owners.

By August 2002, the Program had set up close to 50 networks, involving some 1,500 small businesses with monthly profits between R$20 thousand and R$120 thousand. All together, these businesses were responsible for 10 thousand jobs.

As well as commerce, activities include small industries, service providers and rural producers. To give an idea of the variety of sectors involved, networks include bakeries, drug stores, dry cleaners, clinical analysis labs, stationers, gyms, dairy product industries, auto parts and repair shops, florists, fruit producers and honey producers, among many others.

Some of the associated grocery store owners, for instance, have seen a 40% profit rise, helping them compete even with large chain supermarkets. Redefort is a network with over 100 participating stores in several municipalities. They managed to gain direct access to some industries, allowing them to cut out the distributors. Networking has opened up possibilities such as the implementation of a computerized system for the stores, with a customer credit card.