Monday, October 27, 2003

(Untitled and unpublished article on business competition)

By Moje Ramos-Aquino

Remember when a Coca Cola changed its formulation approximating Pepsi’s sweetish taste? It was a big flop. Immediately, Coca Cola switched back to its old and trusted formula and put back Classic Coke into the market. This illustrates the danger of playing by the rules of a competitor and abandoning your own competitive drive.

Splash Holdings, Inc., did not attempt to come up with a Dove-like or Palmolive-like soap. They came out with their own papaya-based soap. It rode on the aspiration of many Filipinas to have smooth white skin. Splash came out a winner with its Hiyas soap. Hiyas was sold at reasonable price unlike earlier papaya soaps that were sold with high price tags.

It is the same with their other products. They stick to their strategic heartbeat—The Filipina’s quest for beauty at affordable price. From a company that started modestly with a capital of Php12,000, Splash is now a billion-peso organization.

We’re back to our continuing Journey on Entrepreneurship. Just to refresh your mind, we were discussing about your company’s strategic driving force. It is that single strategic force that propels or drives your company to success.

From the book of Michel Robert, Strategy Pure & Simple (McGraw Hills), we learned about ten important areas a company might adapt to give it its strategic edge.

Product / service concept
User / customer class
Market type / category
Production capacity / capability
Technology / know-how
Sales / marketing method
Distribution method
Natural resources
Size / growth
Return / profit

We have so far discussed the first six. We shall now focus on distribution method and natural resources.

Bayantel, Globe, Smart and PLDT have one thing in common. They have one unique way of delivering their products to their customer. They use their network of wires, switches, cell sites to reach your telephone set at home or your handheld phone. Meralco has a massive distribution system to sell electricity in their franchise area. Rustan’s, Shopwise, SM, Pricemart, Sta. Lucia, Makro, Robinson’s will sell any product that they could push through their stores.

These companies will only sell products that will optimize the use of their distribution system. Globe sells Nokia phones at discounted price only to lure users and make it easier for them to use their distribution system. They are not in the business of selling telephone sets.

On the other hand, oil and mining companies are classic example of natural-resources driven company. They derive business from their access to and pursuit of natural resources. The big mining companies in Jose Panganiban, Camarines Norte, all folded up when the earth beneath them failed to yield profitable quantities of gold and other minerals.

What is the key to your company’s survival, competitive advantage and success?

(Moje Ramos-Aquino is president of Paradigms & Paradoxes Corp. and helps companies in their strategic thinking and planning initiatives. She receives feedback at

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