EXAMINATION CASE STUDY: WeBuyCars: Driven to succeed Founded by Faan and Dirk van der Walt in...

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EXAMINATION CASE STUDY: WeBuyCars: "Driven to succeed" Founded by Faan and Dirk van der Walt in 2001, WeBuyCars is an entrepreneurial founder-led business that has developed over the last 20 years into a uniquely positioned, highly experienced buyer and seller of used vehicles (Transactional Capital, 2020). WeBuysCars has become a well- known and reputable brand known for providing a reliable, affordable, and a convenient alternative to selling or buying a vehicle (Transactional Capital, 2020). The company started off as a hobby for the brothers which included buying, fixing and selling cars (PWC, 2021). Their love for cars began when their father taught them how to fix family cars while growing up (Shevel, 2021). Since 2001, the business has grown rapidly, because the brothers were able to successfully adapt the business to various challenges along the way including various economic crises (PWC, 2021). The fast-paced growth seen in the WeBuysCars success story has not changed the culture of the business nor the level of involvement of the founders in the day-to-day activities of the business. Both Faan and Dirk are personally involved in all processes of the business and this involvement and passion helps to retain a family-like organisational culture within the company (Cisco, 2022). The brothers' focus is on developing and maintaining a unique business culture and philosophy where the needs of their customers and staff are priorities (Business Tech, 2021). WeBuyCars is now South Africa's largest second-hand car retailer (PWC, 2021), with an impressive national footprint of seven vehicle supermarkets and 10 buying pods (Transactional Capital, 2020). They currently employ more than 2000 staff, and the company trades over 6000 cars, with eight offices and eight warehouses located across Gauteng, the Western Cape, the Eastern Cape and Kwazulu- Natal (Transactional Capital 2020: PWC 2021) WeBuyCars has clearly transformed the way South Natal (Transactional Capital, 2020; PWC, 2021). WeBuyCars has clearly transformed the way South Africans privately sell and buy cars in the motor trade industry (Business Tech, 2021). When commenting about their success over the last 20 years, and ensuring that cars are of a good quality, Faan van der Walt says "It's been a nice journey, but it's not the end, we still have lots of plans for the future (BusinessTech, 2021). "I think the industry has a bad reputation and we - and many other players in this space - are trying to change the perception the public have about the used car dealership" (Biznews, 2021). Growth through digitalization Similar to companies such as Netflix, WeBuyCars has achieved something rare - the ability to transition the company and reinvent itself through the aid of technology and ensuring that they keep growing and shaping the industry in which they operate (Lightbody, 2019). Dirk and Faan have created a symbiosis between the old practice of buying and selling cars in person, with a very modern technology platform to facilitate this old practice, and at the same time consistently achieving scale (Lightbody, 2019). While WeBuyCars could have successfully remained a 100-200 vehicle lot, the WeBuyCars team were ambitious and wanted to do more than that. This required them to use the right technology enablers to scale up their model of buying cars. Dirk acknowledges that they were fortunate to be around at the boom of the internet and e-commerce era and they took advantage of this at the time. Other large dealerships could have scaled to WeBuyCars's level during this period; however, it was Dirk and Faan who saw the opportunity that technology would bring and that ultimately proved the difference (Lightbody, 2019). The implementation of the technology platform allowed them to keep growing, from a lot of 80, to selling more than 6000 vehicles a month, and from 10 employees in 2010 to almost 900 by 2019 (Lightbody, 2019). Trading is done through a vertically integrated, data and technology-led e-commerce and physical infrastructure (Transactional Capital, 2020). This was not always the case, as up until November 2018, most of the business, including its inventory management process was kept on Excel spreadsheets and only the buying process was automated (PWC, 2021). However, as the number of transactions grew, it was becoming a huge burden for staff to handle the additional workload. The founders realized that they had to digitally transform and expand their market share which included the need to hire more staff including a chief digital officer, developers and a data scientist (PWC, 2021). WeBuyCars also began recruiting more technically skilled workers, and those from diverse backgrounds and with a "problem-solving" mind-set. The founders felt that these attributes would help to create a workforce that took a more proactive and innovative approach to challenges PIC 20211 In February 2018, Wynand Beukes took on the job of chief digital officer and he saw the opportunity to turn WeBuyCars into a completely digital business (Tarrant, 2020). WeBuyCars was in a very fortunate position in that it didn't have any legacy systems inhibiting digital transformation and before the end of 2018, the business went live with an electronic inventory management and invoicing system which comprised the core of the business (Tarrant, 2020). The business now has a fully cloud-based business and Beukes comments that "these days, we see ourselves as a technology company that happens to buy and sell cars" (Tarrant, 2020). The deployment of Cisco Meraki cloud-managed technology is helping the company to drive efficiencies and improve overall operations (Banda, 2020). Since the business is so heavily reliant on technology, aspects such as system updates and bug fixes could potentially turn into an IT nightmare. The General Manager of Cisco in Sub-Saharan Africa, Clayton Naidoo, says that having a robust network is key to a business' success, no matter the size of the business. At WeBuyCars's the core philosophy is 7 not to change processes but instead to get the software to work for WeBuyCars (Tarrant, 2020). For a business that could sound simple from the outside in that you have a website, and you buy and sell cars, there are many nuances that make the business work. The implementation of the WeBuyCars digital transformation strategy began as a "bit of a hybrid", as the business did not have the luxury of either a large in-house IT team or time, and the Chief digital officer, Beukes said "We couldn't wait. We didn't have time to build an in-house inventory management system" (Tarrant, 2020). Instead, the company implemented a standard, but very customizable, finance system from a local software house as well as a dealer management system that was well known in the market at the time (Tarrant, 2020). "Aside from the two core systems, all integrations as well as all other software, including that related to logistics, selling, the buying process, and online auctions is done in-house by its core development team, which scales up by using contractors for larger projects." This approach has given the company its agility to adapt, and the sheer amount of data collected at every point of interaction with every client, buying or selling is a valuable source of competitive intelligence offering WeBuyCars a competitive advantage, especially when they are buying an average of 300 vehicles a day (Tarrant, 2020). Future plans In 2021, Transaction Capital concluded agreements with WeBuyCars to increase its shareholding in WeBuyCars to 74.9%. Transaction Capital had already owned 49.9% of WeBuyCars, which it bought for 1.8 billion in September 2020. When commenting about the deal, Faan commented that he believes this is a 'win-win' for both parties and further mentioned "we've got great plans, we are going to do great things together' (Business Tech, 2021). Transaction Capital has a call option to buy around 15% of the shares by 2024 and the remaining amount by 2026 (The Capital Quest, 2021). WeBuyCars have also extended beyond just buying and selling second-hand vehicles, and provide a range of services including financing, insurance, and tracking. The business has also recently launched a first for the South African motor market in the form of an online car auction, which they are excited about (Business Tech, 2021). Their strategy is to continue to grow the e-commerce offering and drive higher penetration of finance, insurance, and allied products as they continue to yield results (Mungadze, 2021). When asked on whether WeBuyCars keeps its eyes on the competitors (many of whom have copied the WeBuyCars model), Beukes comments "Of course, we look left and right, but we really focus on fine-tuning what we have" and describes their philosophy as ingrained in continuous improvement. The dream is "to sell a car in 30 minutes from start, including test-drive, to finish" (Tarrant, 2020). EXAMINATION CASE STUDY: WeBuyCars: "Driven to succeed" Founded by Faan and Dirk van der Walt in 2001, WeBuyCars is an entrepreneurial founder-led business that has developed over the last 20 years into a uniquely positioned, highly experienced buyer and seller of used vehicles (Transactional Capital, 2020). WeBuysCars has become a well- known and reputable brand known for providing a reliable, affordable, and a convenient alternative to selling or buying a vehicle (Transactional Capital, 2020). The company started off as a hobby for the brothers which included buying, fixing and selling cars (PWC, 2021). Their love for cars began when their father taught them how to fix family cars while growing up (Shevel, 2021). Since 2001, the business has grown rapidly, because the brothers were able to successfully adapt the business to various challenges along the way including various economic crises (PWC, 2021). The fast-paced growth seen in the WeBuysCars success story has not changed the culture of the business nor the level of involvement of the founders in the day-to-day activities of the business. Both Faan and Dirk are personally involved in all processes of the business and this involvement and passion helps to retain a family-like organisational culture within the company (Cisco, 2022). The brothers' focus is on developing and maintaining a unique business culture and philosophy where the needs of their customers and staff are priorities (Business Tech, 2021). WeBuyCars is now South Africa's largest second-hand car retailer (PWC, 2021), with an impressive national footprint of seven vehicle supermarkets and 10 buying pods (Transactional Capital, 2020). They currently employ more than 2000 staff, and the company trades over 6000 cars, with eight offices and eight warehouses located across Gauteng, the Western Cape, the Eastern Cape and Kwazulu- Natal (Transactional Capital 2020: PWC 2021) WeBuyCars has clearly transformed the way South Natal (Transactional Capital, 2020; PWC, 2021). WeBuyCars has clearly transformed the way South Africans privately sell and buy cars in the motor trade industry (Business Tech, 2021). When commenting about their success over the last 20 years, and ensuring that cars are of a good quality, Faan van der Walt says "It's been a nice journey, but it's not the end, we still have lots of plans for the future (BusinessTech, 2021). "I think the industry has a bad reputation and we - and many other players in this space - are trying to change the perception the public have about the used car dealership" (Biznews, 2021). Growth through digitalization Similar to companies such as Netflix, WeBuyCars has achieved something rare - the ability to transition the company and reinvent itself through the aid of technology and ensuring that they keep growing and shaping the industry in which they operate (Lightbody, 2019). Dirk and Faan have created a symbiosis between the old practice of buying and selling cars in person, with a very modern technology platform to facilitate this old practice, and at the same time consistently achieving scale (Lightbody, 2019). While WeBuyCars could have successfully remained a 100-200 vehicle lot, the WeBuyCars team were ambitious and wanted to do more than that. This required them to use the right technology enablers to scale up their model of buying cars. Dirk acknowledges that they were fortunate to be around at the boom of the internet and e-commerce era and they took advantage of this at the time. Other large dealerships could have scaled to WeBuyCars's level during this period; however, it was Dirk and Faan who saw the opportunity that technology would bring and that ultimately proved the difference (Lightbody, 2019). The implementation of the technology platform allowed them to keep growing, from a lot of 80, to selling more than 6000 vehicles a month, and from 10 employees in 2010 to almost 900 by 2019 (Lightbody, 2019). Trading is done through a vertically integrated, data and technology-led e-commerce and physical infrastructure (Transactional Capital, 2020). This was not always the case, as up until November 2018, most of the business, including its inventory management process was kept on Excel spreadsheets and only the buying process was automated (PWC, 2021). However, as the number of transactions grew, it was becoming a huge burden for staff to handle the additional workload. The founders realized that they had to digitally transform and expand their market share which included the need to hire more staff including a chief digital officer, developers and a data scientist (PWC, 2021). WeBuyCars also began recruiting more technically skilled workers, and those from diverse backgrounds and with a "problem-solving" mind-set. The founders felt that these attributes would help to create a workforce that took a more proactive and innovative approach to challenges PIC 20211 In February 2018, Wynand Beukes took on the job of chief digital officer and he saw the opportunity to turn WeBuyCars into a completely digital business (Tarrant, 2020). WeBuyCars was in a very fortunate position in that it didn't have any legacy systems inhibiting digital transformation and before the end of 2018, the business went live with an electronic inventory management and invoicing system which comprised the core of the business (Tarrant, 2020). The business now has a fully cloud-based business and Beukes comments that "these days, we see ourselves as a technology company that happens to buy and sell cars" (Tarrant, 2020). The deployment of Cisco Meraki cloud-managed technology is helping the company to drive efficiencies and improve overall operations (Banda, 2020). Since the business is so heavily reliant on technology, aspects such as system updates and bug fixes could potentially turn into an IT nightmare. The General Manager of Cisco in Sub-Saharan Africa, Clayton Naidoo, says that having a robust network is key to a business' success, no matter the size of the business. At WeBuyCars's the core philosophy is 7 not to change processes but instead to get the software to work for WeBuyCars (Tarrant, 2020). For a business that could sound simple from the outside in that you have a website, and you buy and sell cars, there are many nuances that make the business work. The implementation of the WeBuyCars digital transformation strategy began as a "bit of a hybrid", as the business did not have the luxury of either a large in-house IT team or time, and the Chief digital officer, Beukes said "We couldn't wait. We didn't have time to build an in-house inventory management system" (Tarrant, 2020). Instead, the company implemented a standard, but very customizable, finance system from a local software house as well as a dealer management system that was well known in the market at the time (Tarrant, 2020). "Aside from the two core systems, all integrations as well as all other software, including that related to logistics, selling, the buying process, and online auctions is done in-house by its core development team, which scales up by using contractors for larger projects." This approach has given the company its agility to adapt, and the sheer amount of data collected at every point of interaction with every client, buying or selling is a valuable source of competitive intelligence offering WeBuyCars a competitive advantage, especially when they are buying an average of 300 vehicles a day (Tarrant, 2020). Future plans In 2021, Transaction Capital concluded agreements with WeBuyCars to increase its shareholding in WeBuyCars to 74.9%. Transaction Capital had already owned 49.9% of WeBuyCars, which it bought for 1.8 billion in September 2020. When commenting about the deal, Faan commented that he believes this is a 'win-win' for both parties and further mentioned "we've got great plans, we are going to do great things together' (Business Tech, 2021). Transaction Capital has a call option to buy around 15% of the shares by 2024 and the remaining amount by 2026 (The Capital Quest, 2021). WeBuyCars have also extended beyond just buying and selling second-hand vehicles, and provide a range of services including financing, insurance, and tracking. The business has also recently launched a first for the South African motor market in the form of an online car auction, which they are excited about (Business Tech, 2021). Their strategy is to continue to grow the e-commerce offering and drive higher penetration of finance, insurance, and allied products as they continue to yield results (Mungadze, 2021). When asked on whether WeBuyCars keeps its eyes on the competitors (many of whom have copied the WeBuyCars model), Beukes comments "Of course, we look left and right, but we really focus on fine-tuning what we have" and describes their philosophy as ingrained in continuous improvement. The dream is "to sell a car in 30 minutes from start, including test-drive, to finish" (Tarrant, 2020).