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Unseating a dominant rival
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muganda
#1 Posted : Thursday, December 03, 2009 11:51:07 AM
Rank: Elder

Joined: 9/15/2006
Posts: 3,907
Kenya is replete with examples from Safaricom, EABL, KDN, Access, Scangroup, Kenol, Bamburi, Nation Media, Serena etc etc.

I've come to believe it's very difficult to unseat a dominant rival. I think it may be fruitful to realign portfolio to one of these guys. It cuts down the hustle to just checking the state of the country / economy....then

Come to think of it, you always make money at the end with a dominant rival. Appreciate thoughts...
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muganda
#2 Posted : Sunday, December 06, 2009 6:25:08 PM
Rank: Elder

Joined: 9/15/2006
Posts: 3,907
Allow me to further advance my case. Looking at some monopolies in US from around 1997 [when I first looked at shares] and approximate rates of return:
Microsoft x10
Monsanto x7
WallMart x10

And now looking at local examples of monopolies from around 2001 and estimated rates of return:
EABL x4
Bamburi X3
Nation x7
Serena x4
KPLC x15
KQ x9

Heey, it's not perfect and maybe there are 1/2 exceptions. So, does it make a compelling argument?
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anasazi
#3 Posted : Monday, December 07, 2009 6:03:56 AM
Rank: Veteran

Joined: 6/8/2007
Posts: 675
I think dominant players also have the cash and muscle to buy off or scare off upcoming rivals. Look at what microsoft did, with all the antitrust stuff. Look at EABL and Castle.

Well,Nation tried to shake off Nairobi Star with the Daily Metro, but failed.

However as an upcoming guys you need shock absorbers (or deep pockets) to survive the onslaught once they start getting @ you. As an invetsor, though, you just put your money on the dominant player!
Form is temporary, class is permanent
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muganda
#4 Posted : Monday, December 07, 2009 6:35:27 AM
Rank: Elder

Joined: 9/15/2006
Posts: 3,907
Hmmn interesting. In my opinion a dominant player will often try [perhaps urged on by hubris] to conquer all near spaces, often with unforseen results:
-Safaricom goes into data
-Nation goes into radio, daily metro
-Microsoft goes into search

Nevertheless, despite the outcome in these new spaces, they remain secure in their dominant space, and this is where the money comes from anyway. So making the case for return in longer term and hence a buy proposition
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Njung'e
#5 Posted : Monday, December 07, 2009 7:33:16 AM
Rank: Elder

Joined: 2/7/2007
Posts: 11,935
Location: Nairobi
@Muganda,
Kenol...??....Total maybe....CMC (Mukiha must be smiling)..and BAT too.
Nothing great was ever achieved without enthusiasm.
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muganda
#6 Posted : Monday, December 07, 2009 9:06:42 AM
Rank: Elder

Joined: 9/15/2006
Posts: 3,907
@Njung'e agreed; infact CMC x4 and BAT x6 since 2001
Kenol maybe one of those exceptions that go againt any supposition. However, a quick check shows that considering there was the 10:1 split in 2004, investment in 2001 would still x6 return - or perhaps I'm mistaken.

I tell you these dominant guys may be a gold mine.
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mukiha
#7 Posted : Monday, December 07, 2009 10:21:10 AM
Rank: Elder

Joined: 6/27/2008
Posts: 4,114
@Njung'e...now who dropped your apostrophe? Have you ever read "I Know It When I See It" by John Guaspari? Look for it, you will see what I mean....recommended reading for Wazua....

Back to CMC...I am quite pleased...I sold off half my holding in Mar 2008 at between 14.20 and 14.25. Put some of the cash in CFC (ouch!! that has been painful)...

However, my CMC paid back a looooooong time ago....my average purchase price is below 5cents!!!!

May be I should get some more at the current level of 11....
Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
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mukiha
#8 Posted : Monday, December 07, 2009 10:27:24 AM
Rank: Elder

Joined: 6/27/2008
Posts: 4,114
From a marketing point of view; if you want to unseat a dominant rival, you have to do it quietly and attack from the most unlikely side...."Guerrilla Marketing" as described by Al Ries and Jack Trout...
Nothing is real unless it can be named; nothing has value unless it can be sold; money is worthless unless you spend it.
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muganda
#9 Posted : Monday, December 07, 2009 11:21:09 AM
Rank: Elder

Joined: 9/15/2006
Posts: 3,907
@mukiha, well read. Hmmn must pick up at least 1 of the 2 tomes then share notes. So I take it you ascribe to my preposition - a dominant buy is almost a sure buy!

As regards guerilla marketing, any successful examples you would like to share...
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Njung'e
#10 Posted : Monday, December 07, 2009 11:42:43 AM
Rank: Elder

Joined: 2/7/2007
Posts: 11,935
Location: Nairobi
@Muganda,
They are....but patience here is very important.This is not stuff for speculators.Maybe we should ask Mukiha when he bought his first lot of CMC and you surely will get the picture.....and you sound like someone i know.One of your name starts with a T?Sorry if i have made a silly guess...smile

@Mukiha,
I'll try and get those books.....Hope Al and Jack do not teach how to bomb your competitors....lol.
Nothing great was ever achieved without enthusiasm.
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  | | Edit by user: Monday, December 07, 2009 11:43 AM | Reason: Not specified
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