Succeed By Embracing Reality
June 19, 2005 by JS
Competitor or partner?…it’s all in the Point of View
In my last article, I told of meeting an extraordinary gentleman by the name of Albert Koopman
The story is set in South Africa and the opening of two McDonald’s restaurants in that country. Both of the new franchises where immediately facing the same problem: as soon as they opened their doors there was a virtual barricade of street vendors in front of their doors, selling hamburgers!
The owner of the first McDonald’s was incensed; he stormed to the local government and petitioned to have the undesirable competition cleared out from in front of his store. He was, after all, supplying quite a few jobs and paying hefty taxes. Clearly, he had the right to actually have a chance to sell his burgers.
The owner of the second McDonald’s gathered up all the street vendors and offered them a partnership deal. He sold them the burgers at a discount and sent them out into the street to resell them. His profits quadrupled overnight.
This is a great story about how to “think outside the box” and turning, as Martha would say, lemons into lemonade. Most interesting was the fact that Albert presented the story as a solution to the current world problem of how to compete with China. Joint venture was his clear message [e.g. WalMart]. The first owner saw enemies and competition the second saw opportunity and partners.
Partnerships and joint ventures are excellent ideas initially. Its a good way to get into markets like China which have barriers to entry. The problem comes later on (don’t know how much later) when a Chinese version of Wal-mart emerges. Actually, a friend of mine told me something similar is happening in India, where an Indian version of Wal-mart has started. I think the one thing that is forgotten in the China argument is the loyalty the Chinese have to their own country’s brands and businesses. There are similar feelings of nationalism now in India as well with many Indians believing they can do everything better than anyone else in the world. Now that capital is flowing to both of these countries, it will be interesting to see what transpires.