Great companies build and accumulate capabilities, and then find ways to compound their impacts. Indomie Noodles which we have used as a case study in Tekedia Mini-MBA has a lesson for us. Has your startup passed the Indomie Noodles Test? Has your insurance company passed the Indomie Noodles Test? Has your business passed the Indomie Noodles Test? Watch this video. Accumulate capabilities. Go upstream. And Protect your castle via leverageable moats.
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 them. Dangote Group later sold its noodle business to Dufil Prima Foods. This shows a practical model anyone that wants to compete against Dangote Group can deploy. Beware: you need to be very solid!