The most important part of strategy will always be to know what not to do, yet it is the part most entrepreneurs forget or choose not to understand.
In the quest to become profitable, most companies let go of what makes them competitively strategic in the bid to get a piece of the pie that everyone else is supposedly enjoying. They try to become everything to everyone. Profitability will always come at a cost, a trade-off if you may. The trade-off may mean holding on to your strategic fit and losing out on the big pie, or losing your strategic fit in a bit to compete to get a slice of the big pie. Losing this fit will however limit your clout to meet demands and command pricing.
This is a fatal mistake that leads to less and less differentiation which hands the power back to the customers. Choice becomes easy for them and companies have to work harder to maintain that emotional connection that ensures lifelong customer/consumer patronage.
When an industry is nascent, it may be advisable to gobble up as much piece of the pie as possible and consolidate on that standing, but being competitively strategic means being unique, it means choosing a different set off activities to deliver a unique mix of value.
The delivery industry in Nigeria, particularly in Lagos and for SMEs is a highly volatile, yet potentially rewarding one. More Nigerians are tapping into the Entrepreneur boom which means goods and services need to be delivered faster. This has opened up business opportunities to just about anybody with a fleet of motorcycles which dramatically reduces the time of moving from Point A to B. As the demand for same day delivery increases, more and more delivery companies are springing up. One of which is Gokada.
Gokada recently announced its intention to move from just a motorbike hailing service to one that intends to add delivery and logistics to its list of services. This is very laudable because Gokada is efficient for now because it is innovative and solves a problem of traffic gridlock that cars cannot overcome. Its visibility, track record, and supply power is also in the mix.
However, this move will make it similar to its main competitor a la Max.ng which will consequently reduce its market share in its initial venture. A way to look at it is when the services are divided, it will increase the downtime customers would have to endure because some of the bikes would have been allocated meet up with the demands of logistics and delivery.
All in all, Gokada is a product of data and I believe Deji Odutan has mined enough data to be certain of the impending success of this venture.
Strategy embodies uniqueness, which may mean being different from your competitors or doing the same thing differently from your competitors and one of Gokada’s innovations is placing a chunk of their drivers at key strategic locations in Lagos which makes it easier for riders to place their orders.
If the same would feature in the plans, then it just may have same-day delivery to all locations in Lagos as their USP and this will be increasingly profitable and scalable and may be reminiscent of FEDEX’s rise to the top which used faster delivery as its USP.
And if the traffic situation of Lagos improves considerably overtime, would Gokada’s influence wane or increase?