How You Can Build Your Business To Become a Mini-Dangote Group [Video]

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April 27, 2018

I began the day with a client in Rwanda. He asked a question: how can I be as successful as mini-Aliko Dangote? My answer to the Board was simple […], and using Indomie Noodle as a case study, I explained how Dufil Prima Foods (owner of Indomie Noodle) knocked out Dangote Noodle out of competition and finally acquired the vanquished DG subsidiary for nothing. We have developed a framework on that in my practice [from the way we see it].

Business is a living system. Just like you feed babies for them to grow, based on frameworks mothers, nurses etc have mastered over generations, companies have attributes. You can see patterns in markets and build on the consistencies and similarities.

Now, feel great, you can take up Dangote Group or you can defend your territory by doing what Dangote Group does. Read it here.

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!

And Dangote confirmed my point here.

Amazon.com’s One Oasis Continues to Nurture the Inhabitants

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Ndubuisi Ekekwe

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April 27, 2018

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Amazon is mesmerizing markets showing that it can keep growing. It is a solid contender in the race to the first $1 trillion company in the world. Alphabet, Microsoft, and Apple are other companies in that club. The online retail giant crushed analysts’ expectations, generating over $51 billion in revenue, compared with the $49.8 billion they had expected, according to CNBC and Reuters.

Amazon.com Inc more than doubled its profit on Thursday and predicted strong spring results as the world’s biggest online retailer raised the price for U.S. Prime subscribers, added U.S. football games and touted its cloud services for business.

[…]

Despite the surge in shopping, Olsavsky gave credit for Amazon’s $1.6 billion profit last quarter to two younger businesses: advertising and Amazon Web Services.

Revenue from third-party sellers paying to promote their products on Amazon.com was an unusually large bright spot during the quarter, with sales in the category, which includes some other items, growing 139 percent to $2.03 billion. This included $560 million from an accounting change.

“Advertising is an important and very profitable bucket of revenue for Amazon and is also growing at a fast rate,” said D.A. Davidson analyst Tom Forte. “They are just getting started here.”

Amazon said it expects operating profit this quarter between $1.1 billion and $1.9 billion, up from $628 million a year earlier. Analysts were expecting $1.01 billion, according to analytics firm FactSet.

And the number of Prime subscribers soared along with its sales from its cloud-computing services (Amazon Web Services). Also, the e-commerce giant also announced it would hike the price of Prime in the US by 20% to $119 per year, reflecting the service’s new features and growing popularity since it first launched.

Amazon Web Services remains the most profitable part of Amazon. It is the oasis in the One Oasis Strategy as I have explained. As it soars, the ecommerce advances and just like that, Amazon deploys multiple-threats to the market: Prime club membership free cash (about $10 billion annually), best ecommerce ecosystem, leading cloud offering and pioneering voice AI [Alexa]. Amazon now has more than 563,000 in its payroll .

Source : Quartz

Advertising Business

Amazon is becoming an advertising company purely for companies that pay to promote their products within Amazon ecosystem. It made $2 billion in that unit and that is significant for a quarter.

Revenue from third-party sellers paying to promote their products on Amazon.com was an unusually large bright spot during the quarter, with sales in the category, which includes some other items, growing 139 percent to $2.03 billion.

This has a major implication to Google. If advertisers know that all they need to do is to promote their products on Amazon, most would not bother to promote their websites on Google Search. The same can be said of Facebook. In other words, if promoting the product where people come to buy and spend delivers better results, there is no need to spend money on Google and Facebook. If you sell things on Amazon, it is a better strategy to position yourself before people who are actively buying over web surfers (Google) or those watching crying cats (Facebook). I expect Amazon advertising business to grow and practically challenge the duopoly of Facebook and Google on advertisement. I wrote about this Amazon advertising business few weeks ago.

I was on Amazon today working on gifting items when I noticed something: Amazon now runs a serious advertising business. And there are many companies putting money in that ecosystem. If companies think that advertising on Amazon is a better deal than promoting their websites on Google, it simply means that Google has a major problem in its hands.

Facebook has walled off the partying and events communities, and if Amazon takes care of the merchandise, I do not know what will remain for Google. Yes, we put adverts for two major things: events and products. If Google becomes a second-platform for both, there is a problem for Larry Page and his lieutenants in Alphabet, the parent to Google.

This may explain why Google is not showing friendly handshake to Amazon these days. Amazon is not just attacking Google, it is going to the heart of its business which is advertisement. As Sun Tzu put it in The Art of War: you must defend your flanks to win. Indeed, Google has a war to fight.

All Together

Amazon is a peerless brand which developed a solid strategy which I have called the One Oasis Strategy. That one oasis has helped it to build a pace-setting digital conglomerate. The oasis makes big money today even as it continues to nurture the well-being of its inhabitants.

Business Idea #6 – Car Repair, Home Improvement Lending via Artisan Contractors

By

Ndubuisi Ekekwe

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April 27, 2018

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This daily series focuses on business ideas for those looking to launch new ventures in Nigeria (and Africa in general). The short ideas are archived here.

The Problem

Cars break. Homes need improvement. Finding funding to do some of these things is hard in Africa. Largely, you either have the cash or you will be forced to abandon the project. It does not have to be that way.

The Opportunity

There is a clear need to provide lending in some of these areas. The plan will be to make it possible for a fintech to provide on-the-spot financing for repairing cars, home improvements, etc by using a network of the contractors that do the job for end-borrowers. By using these contractors to lend to borrowers, the fintech can reduce default rate since the contractors know the customers better. There is a possibility to deliver great service to customers, and yet profiting at two levels (i.e. both sides) of the deal with no risk of default.

Action Roadmap

A bank will be the lender while the fintech will be the underwriter. If fintech has funding, it can handle the lending itself. It will work with contractors like mechanics and home renovators to deliver services to customers who need loans to fix their cars and homes.

There is aggregation construct here: the fintech is the aggregator with the contractors working for it. For the fintech, the business delivers double-side profits at near-zero default rates. The fintech has to focus on recruiting the contractors while the contractors look for the borrowers. Typically, these are customers that call these contractors for services. The contractors will present the financing options to help the borrowers finance their needs. The contractor will be the executor of the service. I present the full process flow here.

PRESIDENT MUHAMMADU BUHARI APPROVES NEW APPOINTMENTS

By

Ndubuisi Ekekwe

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April 26, 2018

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PRESIDENT MUHAMMADU BUHARI APPROVES NEW APPOINTMENTS

Following their confirmation by the Senate of the Federal Republic of Nigeria, Muhammadu Buhari, President, Federal Republic of Nigeria has approved the following appointments:

(i) Mr. Anthony Okechukwu Ojukwu – Imo State (S/E)

Executive Secretary,

National Human Rights Commission.

Initial term of five years.

(ii) Mr. Lucky Orimisan Aiyedatiwa – Ondo State (S/W).

Non-Executive Director,

Niger Delta Development Commission.

Initial term of four years.

(iii) Hon. Chika Ama, Nwauwa – Imo State (S/E)

Non-Executive Director,

Niger Delta Development Commission.

Initial term of four years.

(iv) Mr. Nwogu N. Nwogu – Abia State (S/E)

Non-Executive Director,

Niger Delta Development Commission.

Initial term of four years.

(v) Professor James Momoh – Edo State (S/S)

Chairman,

Nigerian Electricity Regulatory Commission.

Initial term of five years.

2. The appointments take immediate effect.

(Signed)

Olusegun A. Adekunle, Esq.

Permanent Secretary,

for: Secretary to the Government of the Federation.

[Apply] Vice President’s Office Offers Equity Free Capital to Startups in Southeast and Northcentral

By

Ndubuisi Ekekwe

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April 26, 2018

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This is a good opportunity to get support for your startup and business if you operate in South East and North Central. The deadline is May 5 2018. It is the Office of the Vice President that is coordinating this.

Startup Nigeria is an intervention of the National Social Investment Program (NSIP) under the Office of the Vice President of the Federal Republic of Nigeria as part of the program to support private sector innovation hubs for the strategic increase of entrepreneurial and technological capacity across Nigeria.

It is a 3 month incubation program designed to help Nigerians with great innovative ideas – create viable products, go to market and gain traction.

The program will provide training, mentorship and equity free funding to selected startups, with a specially curated curriculum designed specifically to help idea and early stage entrepreneurs find their footing and grow in Nigeria’s socio-economic terrain. Startup Nigeria gives founders the needed leverage to excel.

Other startups that don’t get accepted into the incubation program will also be able to access support in business model generation, customer acquisition and other business engineering skills – from Startup Nigeria representatives located in every state in the North Central and South Eastern zones of the country.

North Central

Any Individual or start up who has an idea or a solution in Agriculture and Governance as it affects the North-Central Region or the nation as a whole. Your state of residence or startup must be located in any one of these states; FCT, Benue, Plateau, Kwara, Kogi, Nasarawa or Niger.

South East

Any Individual or start up who has an idea or a solution in Commerce or Fintech as it affects the South-Eastern Region or the nation as a whole.Your state of residence or startup must be located in any one of these states;Enugu, Imo, Anambra, Abia or Ebonyi

IDEA STAGE APPLICATION

If you are still at the idea stage of your product, you can apply to participate in the Startup Nigeria Hackathon from which you get a chance to qualify for incubation

Apply Here

EARLY STAGE APPLICATION

If you have a startup with an MVP that falls into the listed sectors you can apply directly for incubation

Apply Here

How You Can Build Your Business To Become a Mini-Dangote Group [Video]

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