Wednesday, March 29, 2006

In Business, to be fore informed is to be fore warned

In Business, to be fore informed is to be fore warned

By Joseph K. Kanyua

Competition is something you cannot get rid off if you are in business. Entrepreneurs need to realize this and hence strategize to remain competitive in a market flooded with duplications. It is for this reason that the serious Entrepreneur needs to identify the weak points of the competitors so as to build sustainable competitive advantage. It is a fact that most people in business are plagued by multiple blind spots. This erodes their potential to improve their market niche and build customer loyalty.

I will examine some of the known weaknesses that can have massive impacts to an entrepreneurial venture. It is said that it is better to risk than coast along with the status quo. Is it also not true that if we risk not, we risk more?

The first group of entrepreneurs suffers from the ‘Not Invented Here Syndrome’. Simply because the current trend in the market was not hatched in the firm’s premises, they decide to shield it. These entrepreneurs will cling hard to their modus operandi like a courting couple. Other risk takers go ahead and embrace the new techniques, gain market share and reap much from this. Consider a local example. Post Bank Kenya has been reluctant to install Automated Teller machines for their customers. On the other hand, other commercial Banks have cashed in on these machines. This blind spot can spell devastating effects to a firm. Internationally, we know how IBM adopted the GUI technology from Apple and went ahead to make a kill out of it. If you suffer from this syndrome, it is a high time you sought a cure before the syndrome becomes chronic. Furthermore, the cure rests in your decisions!

Then there are those entrepreneurs with the ‘Skim the market blind spot’. To them, selling their products/services at exorbitant, inflated prices is the only way to maximize profits. They target the wealthy people with high purchasing powers leaving the middle class and low class cadres unattended. Skillful entrepreneurs realize the magnificent market left unattended and capitalize on it. An example is Tusker Mattresses which has risen from a very humble background to challenge the big guns. They have a passion for the back streets yet they are raking in huge profits. The Nakumatt chain of supermarkets actually suffers from this blind spot.

The third category suffers from the ‘Technological Tunnel Vision’. These are the diehard adherents to archaic means of conducting business. When other companies are busy making acquisitions for Computer Network equipment, they are busy hiring messengers; and purchasing files. With advancements in technology, those keen to change their modes of operation gain sustainable competitive advantage since they are able to meet the customer needs better. If integrated properly, technology can really alter the way a firm conducts its business which in effect means more profit. Technology can create a compression of the sales cycle, better customer relations as well as cut down on personnel requirements. Which modern, pragmatic manager would not like to hear such?

And lastly, there are those worst hit by the ‘Maximizer complex’. To them, singularity of products/services or rather specialization is alien. They will try their hands on virtually any product yet succeed not in none. A serious entrepreneur should always make a decision to deal in a particular product or service and aim at making it better. Consider BAT Kenya, It deals only with cigars yet it is one of the most profitable firm in the country.

Conclusively, your future performance in business rests squarely in your hands. You can do something about it and change your fortunes.

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