I received some Thank You notes today from some MBA students somewhere in Africa. They informed me that they enjoyed the Indomie Strategy and how to defend competitive flanks. From The Art of War by Sun Tzu, we learn of the importance of protecting flanks, and by building moats through accumulated capabilities, we rule our markets and become category-kings.
No other company has demonstrated how to defeat Dangote Group in a direct business combat than Indomie maker. The competitive war, on noodles, was not evidently asymmetric, as Dangote Group usually wishes, nevertheless, the moats built by Indomie were enough to win Dangote Noodles, and then bought out the brand!
In this videocast, I explain how the makers of Indomie noodles used the same strategy Dangote Group had deployed across industrial sectors to defeat Dangote Noodles. The accumulation of capability which Dangote Group uses to crush competitors did not work because Dufil Prima Foods (makers of Indomie) did the same thing from electricity generation to production, for its noodles business. With their vertically integrated business, there was no left efficiency which Dangote could exploit to improve quality and reduce price. At the end, an established brand won and Dangote Noodles could not dislodge the firm.
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Something Gokada could have deployed against Oride, and subsequently take over the latter. Unfortunately, you cannot build a sustainable enterprise just on Apps, with no differentiation, so it was easy for Oride to show up and take down Gokada.
It is one thing to know your turf, and it is another thing to know how to defend your turf.
As always, hope is not a business strategy; you must have today – answers to tomorrow’s attacks and threats. Those coming to take your place are very mean.
Absolute – differentiation is critical all around in markets