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FEATURE  
Who should be losing sleep over the rise of Safaricom?

“Who sells the largest number of cameras in India?
Your guess is likely to be Sony, Canon or Nikon. The answer is: None of the above. The winner is Nokia, whose main line of business in India is not cameras but cellphones.
Try this. Who runs the biggest music business in India? The answer is Airtel. By selling caller tunes (that play for 30 seconds) Airtel earns more than music companies do by selling albums.”

Y.L.R. Moorthi, Wall Street Journal India (8 February 2010)

Dr Moorthi of India’s renowned Indian Institute of Management, Bangalore, had some interesting questions to ask recently in WSJ India, as shown in the excerpt.

In a world where mobile phone makers lead the market in cameras, and mobile network providers sell the most music, we have to all stop and pay attention. The rules of competition are being rewritten every day. If you aren’t on top of this, you will soon be somebody’s breakfast. And you won’t even see it coming.

Do you think the likes of Canon and Nikon foresaw, a few years ago, their coming evisceration by the makers of mobile phones? Or those who sold albums in the form of CDs and cassettes foresaw the coming of the iPod and iTunes? No they didn’t. In fact, as Nokia was gloating over becoming a huge camera maker, did it see Apple and Google on the horizon, ready to whack it where it hurts by taking over the profitable smartphone market? Apple, the computer maker, and Google, the search-engine king?

It’s all different now, people. A few years ago you knew your product and knew your competitors. You had simple sources of competitive advantage, and you nurtured them. Life was good. Now, you have no idea where your next competitor is coming from.

This is not true just in America and India – it’s happening here all the time. Who will Kenya Airways’ biggest competitor be in years to come – Virgin? Air Uganda? Or could it be the company that successfully installs affordable videoconferencing technology in the most companies across the region?

Airtel and Nokia and Apple and Google all have one thing in common: a captive customer base. To this base, which trusts their brand and service, they can sell a plethora of things. Apple moved from computer hardware and software to music, telephony, television and media. It is now bigger than Microsoft in market capitalisation. Google is an internet overlord, a software prince, a mapmaker, a book provider.

Look at Kenya’s Safaricom, which announced record revenues and profits recently. So what is its business? Mobile phone calls, right? The people worried by Safaricom are Zain and Orange, right? Wrong. The people losing most sleep are internet service providers, banks, music companies, advertising agencies, media companies and computer sellers. At least I hope they are.

That is why the recent joint venture by Safaricom and Equity Bank to create the first mobile banking product in Kenya was so interesting. The two giants hold in their hands millions of subscribers and clients. Now they have got together and created another revolution in the making. I imagine a lot of CEOs are finding it’s “squeaky bum time” (as Manchester United’s Sir Alex Ferguson puts it), as they fidget in their leather executive seats. What else are these people going to try and sell to their captive markets in the months and years to come? What will stop them? Is it already too late? Was the game already lost when the two behemoths were building their respective customer bases?

Interesting times indeed. As you sit down to plan your competitive strategy, I urge you to throw your preset thoughts and assumptions out of the window. The person and company most likely to take your lunch tomorrow is probably not even visible in your industry today.

- Courtesy of Sunny Bindra
http://www.sunwords.com

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The companies that will survive will be led by someone who innovates,solves problems,adds value and is free from fear. If a leader resists the above qualities he can kiss his or her company goodbye.

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