How do you overtake Toyota company in car production? Well, I’ll tell you a secret. Go to the moon or some planet, make some dollars of dollars and buy it off. Good idea right?
Let me tell you another big secret: You might not be able to overtake Toyota company if you start your own car company in the world.
- Register here for Tekedia Mini-MBA (Jun 6 – Sep 3, 2022)
- Pay N60,000 ($140) by May 18 early bird deadline.
So this post isn’t about how you want to overtake Toyota company. It is about how you can start a car company today and still make your profits, and who knows you could still overtake Toyota in sales.
Maybe not a car company, maybe just a company! However, I will use this Toyota company and starting a car company as an example throughout. You are free to add: How do you build Bigi Cola to overtake Coca Cola?
So, here I am, I have some billions of dollars and I have investors (in summary some money) and I want to start a car company (any business).
The first thing to look out for is a place where there are no cars, they need cars and they can afford cars. That’s my target market. Funny enough, no such place exists.
What does this mean? It means it’s almost impossible to start a business without having a competitor already in position or already thinking about the same thing. For every idea that pops us in your head, other people have it or have done it or doing it.
So, let’s agree you have competitors and you are quite aware of them. Chances are you will have issues scaling in that business and when I mean business, I’m not talking about all these un-scalable businesses.
I mean real businesses which are very few in Africa though. So how do you enter into the heart of your target audience who already belong to someone else?
It’s either you build your own audience and focus on a small niche, or compete with the existing audience just like Bigi Cola is doing to Coca Cola. Can Bigi Cola get its own niche? Tough; they need to compete with the likes of Coke and Pepsi which is like going to the lion’s den with a broom.
Do they have a chance? Yes! They need to apply what I call Design Thinking.
Now, let’s go back to the car company and assume it’s the same scenario. Hey! Young billionaire, that you have billions doesn’t mean you do as you like, in such a fixed situation as this is; you need to consult someone like me, make someone like me the CEO, and let me handle the rest.
So how do I apply Design Thinking to manufacture our own cars? At least the company needs to succeed so I’d keep being paid one million dollars salary monthly.
I need to consider some very important factors before even employing workers:
- I need to know everything about the customers of Toyota: Why do they buy Toyota? Is it for speed or for comfort? Is it for its affordability or its portability? I will draw a long list of reasons why they buy. Mind you, I’m the CEO; someone will be employed to do such. I’m just speaking generally.
- I need to know everything about Toyota cars. Like I have noted, a lot of our businesses are not scalable. They can only bring enough money to feed the family and after a few years buy a small car, and send the kids to private schools. Largely, we do not plan to build industrial empires here in Africa. The Igbos do though! I really need to know what Toyota stand for, what philosophy they have been selling and how they have been selling it.
- Lastly, I really need to pay all attention to design, distribution, cost etc. This is the most crucial part. What’s the distance covered per hour at top speed? What’s the fuel consumption at that same speed?
Mind you, I have already begun designing the model of the car for my billionaire boss based on all these.
The CEO Desk – Design Thinking
As the CEO of this new company, I will not want to ruin the company; I mean who wants to go home broke and suffering? My wife and kids will complain.
I need to do everything possible to make sure we succeed in the market place despite the fact that Toyota has been in market for a long time and it seems like everyone is using it. So back to the application of Design Thinking!
I earlier talked about studying Toyota brand and knowing their philosophy, selling point, and brand style. Now pay attention: If everyone in the country bought cars for convenience sake and not because of ostentation, I need to know as the CEO. You will see me yelling at Peter for not yet sending the research details about Toyota to my drop box.
Me: Peter, what the hell is wrong with you, are you crazy, it’s been three months and you haven’t sent the research document to me. Do you want to lose your job?
Well, I wouldn’t say this out loudly, I will treat my employees right but common, we are talking about selling good cars and not releasing an irrelevant product in the market. We just need to succeed.
Now here’s the point, as the CEO, I must be very vast, I must know trends, I must know the past, present and the future of the automobile world. I must know the past, present and the future of the road networks, I must know about the economy.
I must be damn vast in knowledge and insights. Personally, I am; I spend hours daily learning. If there’s any 23-year old going Nigerian who spends hours learning most, it’s me. I spend hours on LinkedIn reading papers on the African economists, I watch videos on the future of Africa, future of tech, read publications, journals, read books (read about 30 already this year), discuss with entrepreneurs across Africa.
Now back to my role as the CEO. Remember, there are other car brands like Mercedes, Ford, BMW, and a host of others. I will study them but in order to make things easier for you to read, I need to just consider Toyota.
First thing first, if I really pay attention to trends as a smart thinker, I will be able to play some safe risks. Actually in business there are no safe moves. The only safe moves are for those who want to remain at the bottom, and make some few pennies.
However, if you want to dominate, then you need to take different types of risks. There are calculated risks, safe risks and stupid risks. This post isn’t about defining risks!
I actually gave the attributes of a CEO so as to understand why it’s important to not just be a rash thinker as a CEO or even an entrepreneur. You cannot afford to think irrationally.
Let’s take a look at the Tesla car by Elon Musk. Elon is a great guy, and I think he’s my most respected tech guy, and if you understand tech well, you’d know that he is a god of tech. He is super-intelligent.
Tesla people wanted to start their market and they were starting in the U.S. where other great car companies were and making crazy sales. Why not travel to another country with lesser brands and see if you will dominate? Elon took what I call a safe risk and here it is.
If I want to sell cars, I definitely needed a better selling point. And if there’s any place to win, it should be in all areas. I will talk better on that later but let’s see how Elon got a market for himself.
Prior to Tesla cars, all other cars used fuel and emitted carbon monoxide. Why don’t we build electric cars instead that will not emit green house gases. I mean let’s help save the world from green house effect. The world will soon end, let’s not end it now.
That’s the selling point!! Clean energy product!!!
Firstly, that’s very ridiculous. How do you plan to figure this out? I believe this must have been the internal argument. However, externally, it was a good selling point.
Nobody has used that selling point before! Finally, a loop hole in the automobile industry!
Does this automatically guarantee the success of Tesla cars? No! There are still so many things to consider: Cost, Distribution, Layout, Price, and Strength.
Let’s take it one at a time. Let’s talk about distribution.
Toyota has already a strong distribution system which means Tesla cars cannot combat head on with them. They needed to start with a small niche and the sport-racing industry was one. Why not make clean energy cars for the sport industry?
They still have a chance there than for the normal road transport. The biggest mistake you will ever make is to combat head on in distribution with a bigger competitor. How much do you have?
Except if you have a lot of money. Look at Bigi Cola making huge sales in Nigeria. They cannot win Coca Cola in distribution, they will fail. But they can win in other things. Bigi Cola cannot be a beverage sector player since Coca Cola owns that’s space. Bigi Cola has to invent something new.
Lacasera keeps selling because they have found a niche (fast drink for traveling). If they want to combat Coca Cola drink as best beverage brand, then, they need more power, strength, money, etc.
There are many things that go into building companies. Most of those elements do not change whether you want to build a new Toyota or Bigi Cola. The key is understanding the mission and purpose, and then executing them. I want to wish you good luck if you want to begin that journey. Simply, spend time to master the mechanics of business. And you can start your own Bigi Cola to take up Coca Cola in Nigeria. Begin with a clear differentiation and niche – and thrive.