Hi Guys,
There was a nice little pamphlet
in today’s newspaper that was an advertisement for a new intra-city logistics
service started in Chennai. I was wondering how many similar services have been
launched in the past one year. I can remember seeing advertisements of at least
two similar players.
Almost all the new start-ups in
India have been facing the same issue – Imitations. During my MBA, 0ne of my professors
concluded his Strategy course saying,
‘Strategy is something that will differentiate your business from competitors providing superior Value Proposition to Customers over a sustainable period of time’
In short, if a Competitor can imitate your strategy, then it is not a strategy
in itself.
For starting a business, Ideation
is important. You have a good idea which can get customers and make money –
Investors will pump in money. But today, I guess it is enough if you can take
someone’s existing idea and pitch in quoting less competition in the field and
enter into a direct cost war with your competitor.
Eternally, the companies says
that acquiring a customer is important. It is all about deals, cashbacks, acquisitions
and sales at any cost. But, I am not finding any of the companies providing
superior service to the customer, creating relationship and making efforts to
retain the customer.
If you look at any of the newer
business areas that has emerged, you can find a minimum of at least two players
or sometimes as big as ten players trying to catch the pie. You have Ola-Uber
fiercely competing and providing deep discounts to customers and big incentives
to drivers. If you consider any of the aggregator services – let it be Food
Aggregators (FoodPanda, Zomato, Swiggy, etc), Grocery Aggregators (Big Basket,
Grofers, PepperTap, etc), Hotel Aggregators (Oyo, Zo, GoIbibo, etc), the
strategies have been more or less similar. One players enters the business. A
few imitations are born. The discount war begins. Cash burns and you end up in
a Catch-22 situation.
One of the key lessons taught in
Strategy is that reducing your price is that last thing you need to do and that
too when all other cards are exhausted. Most of these players seem to have only
one card with them and that is the Pricing. Sometimes, I do wonder if these players
are too myopic and are not thinking out of the box to attract and retain
customers.
It remains pretty much the same
with the big Daddys out there – Flipkart, Amazon and Snapdeal. But, one
significant thing I find in ecommerce business is that these players are trying
something to retain the customers. From my personal experience, Amazon has been
trying to provide a great customer service and by treating customer as the
king, they are making significant improvement in the market share.
Ultimately, I do wonder if many
of the founders really have the passion to become the next big thing. Most of
the Investor’s money goes into filling the pockets of founders (as
remuneration) and to Customers as cashbacks and discounts (You know, it has
been ages since I paid my Phone bill fully – Thanks to PayTm and Freecharge).
Happy Reading!
