FMCG STRATEGY FOR NIGERIA: When Focus is the Enemy

Focus is the way.

At least so goes the popular business philosophy.

It stresses that businesses that fail to focus would struggle to achieve their strategic objectives.

Well, this is not always the case.

You see, in the rough FMCG streets of Nigeria, you’ve got to be looking forwards, backwards and sideways.

What would be celebrated as laser-guided focus in other industries would be derided as tunnel vision in ours. For good reason.

Below are 4 ways FMCG business can be jeopardized by focusing:

1.      Focusing only on what your company is doing

This works if you are running a monopoly. Like a utility or something.

In our cutthroat Nigerian FMCG market, not tracking the moves of your competition is a great way to be run out of business fast.

You need to be all up in your competitors’ business (pun intended). Their product offerings, pricing, strategic alliances, sales and marketing activities, name it. All is fair game.

Hell, you even need to track indirect competitors from other industries.

This is one situation where what you don’t know can kill you because by the time your competitors’ moves become entrenched, it might be too late for your company to react (or survive).

Ignorance of the competition is never bliss. It only portends extinction. Your company’s extinction.

2.      Focusing on one product line for too long

Many FMCG companies start as mono-product enterprises.

This is for good reason.

Building one successful product line is a lot of hard work. There’s no need complicating things by having too many irons in the fire from the start.

For those FMCGs that record reasonable success with their first product line, there is a general wariness towards diversifying to new “unknown” product lines.

“Why not focus on one sure thing that is making us sure money?”, they might ask.

“Wrong!”, I say.

You see, regardless of a business’s success in a specific product market, there is an ever present threat of exogenous factors depressing that market.

These could range from the manifestation of stiffer competition to changes in consumer tastes to tougher government regulations to scarcity of inputs to rising costs amongst others.

Having a spread of products serving unconnected markets hedges the business against threats endemic to one product line.

Diversifying is not an FMCG luxury. It is the only way to survive long term.

3.      Focusing on one customer, channel or territory

FMCGs like to keep things simple.

They like to focus on “what they know”.

Selling to the one customer they know, through the one channel they know, in the one territory they know.

If it aint broken, why fix it?

Well, your one customer can play you against your competitors and squeeze all the juice out of your margins.

Your one channel can demand unlimited discounts, rebates and incentives erasing any hope of your company booking profit.

Your one territory can get saturated with competition putting to bed any prospects of sales growth.

What if you had many customers across multiple channels in several local and international territories?

You guessed right, no one customer, channel or territory can then hold you to ransom.

Growth in sales volumes and profitability can be better guaranteed. The future of your business would be assured.

4.      Focusing on one intelligence source

Some FMCGs get intelligence from their sales teams; others from their customers; others from commissioning primary research; others from the published literature.

Nothing wrong with either approach per se.

But what about gathering intelligence from all the sources above and more, at the same time?

The FMCG space is notorious for having more misinformation than your neighbourhood snitch.

Managers can only get ahead by cross-referencing intelligence gathered from many sources and extrapolating what is true and what is dross.

“Why is intelligence, so important?”, one might be tempted to ask.

The short answer is that the prudence or folly of strategic business decisions are only as good as the intelligence underpinning them.

Crappy intelligence only results in crappy business decisions.

Enough said.