CROSS FIRE
CROSS FIRE
LEADERSHIP , FOLLOWERSHIP , COPYING , AND THE GAMES PEOPLE PLAY .
By Herman Githinji
Friday 10th 2012 , Ole Sankan , a wheat farmer in Narok looks up into the skies . Clouds heavily gather like they would fall as rain any time . Farmers in the area heavily depend on rain fed wheat farming . The rains have delayed and farmers are hesitant to put their seeds into the ground . They have lost severally before .
Ole Sankan ’ s next door neighbor is McGrath , a large scale wheat farmer . He also depends on rain , but he has always predicted the rains more precisely .
While one of Ole Sankan ’ s eye is into the skies , the other is onto McGrath ’ s land and his activities . If McGrath has not planted ,
Sankan won ’ t plant either . The locals around have learnt that McGrath has an exceptional way of knowing when to plant and when not to .
Severally , the locals have gone ahead to plant when McGrath hadn ’ t , and lost immensely . McGrath knows something they don ’ t know . He is the unsolicited leader . If he moves , they move . If he stays put , they stay put .
That type of leadership is also common in other industries as well . There are companies that lead in pricing and price adjustments . In milling industry , no one adjusted prices until Unga Limited did . If Unga stayed put , all others stayed
‘‘ Following or copying has its good and bad sides . Some people just copy exams and they never get caught , and they even pass with flying colors . China has copied and succeeded , Ole Sankan copies , and he often succeeds . I nevertheless copied and failed .’’ put . If Unga moved , all others moved . That is for sure common in many industries that have market price leaders .
I have seen companies do tremendously well , by skillfully using this price ‘ tail gating ’ strategy . Firstly , you determine what price position your products will take based on desired market share , quality , and value proposition .
You may strategically choose to be , say , number 2 in order to grow market share , or serve a market a price leader does not . Secondly , you determine how much cheaper you want your products to be . Thirdly , you consistently keep that position and price difference .
Now you see why it makes sense to let the market leader move first ; because you can always adjust your prices later to consistently keep that price gap and price position . There are consequences of moving first . The leader may not follow . That means your products may suddenly be more expensive than those of the leader and customers won ’ t buy , can ’ t buy .
04 MAL 18 / 17 ISSUE