How do companies compete?

by Victor Muchemwa on March 5, 2017

Imagine yourself helping a friend who has found commercial space at Makoni Shopping Centre. This friend would like to open a new pub at this popular business centre in Chitungwiza.

There are more than 30 bottle stores and pubs at this busy centre. So the question to ask is how are you going to compete with 30 or more competitors selling the same product? Is he going to reduce the price of beer? This is not feasible as the price of beer from the major beer price, Delta is the same. Selling at a lower price in order to attract customers is not feasible at all. So what are the options available to him? In the past a few club owners had DSTV sports that helped them to attract revellers interested in watching their favourite soccer teams in action. This competitive advantage over rivals did not last long as everyone soon followed. So given the few options available to gain a competitive advantage over competitors, what can this friend do to compete against others?

He can spruce up the place so that it looks fresh-one strategy to compete against others maybe service-the quality of service that he gives to clients.

He may consider hosting sporting tournaments such as Pool at his bar, this may help attract

Introduce Mbira Concerts, few pubs host Mbira Music and yet it is popular and does not require a lot of capital to attract bands. A case in mind is that of the hugely Mbira dze Dzimbahwe in Budiriro or the former Beer Engineer Mbira group-Samaita who used to fill the venue before relocation to USA.

If you ask me to go and open a pub at Makoni Shopping Centre, I would think again because there are just too many pubs/bottlestores at the place making profitability a challenge. This has led business people to look elsewhere for entertainment business and one such place is Tanza Centre.

The example above was just giving you an example of the decision making that an Entrepreneur goes through when deciding to set up a business-competition analysis! How you are going to compete will either break or make your business.

In 1985, Harvard Business School professor Michael Porter wrote Competitive Advantage. He outlined the three primary ways companies achieve a sustainable advantage. They are cost leadership, differentiation, and focus.

Cost leadership means you provide reasonable value at a lower price. Companies do this by continuously improving operational efficiency. That means usually pay their workers less. Some compensate by offering intangible benefits such as stock options, benefits, or promotional opportunities. Others take advantage of unskilled labour surpluses.

Differentiation means you deliver benefits better than anyone else. A company can achieve differentiation by providing a unique or high-quality product. Another method is to deliver it faster. A third is to market in a way that reaches customers better. A company with a differentiation strategy can charge a premium price. That means it usually has a higher profit margin.

Focus means you understand and service your target market better than anyone else. You can use either a cost leadership or differentiation strategy. The key is to focus it on one specific target market. Often it’s a tiny niche that larger companies don’t serve. For example, community banks use a focus strategy to gain sustainable competitive advantage. They target local small or high net worth individuals. Their target audience enjoys the personal touch that big banks may not be able to give. They are willing to pay a little more in fees for this service. These banks are using a differentiation form of the focus strategy.

So we have given you 3 strategies for competing, going back to my friend at Makoni Centre, he cannot use the cost strategy because of the reasons I explained before. This leaves him with differentiation or focus. Focus remains a viable option if he focuses on Mbira Music Lovers.

We can also analyse how ZBIN was formed. We realised there was no platform for business discussions on Social Media especially Facebook. All Zimbabwean business pages were formed for adverts. A total of 10 groups existed at the time when we formed ZBIN. We decided to focus on business discussions and business exchange of ideas. This became our focus and identity. We do host a couple of limited adverts but this area is not our key strength, we have concentrated on what we do best-business discussions!

So you too can analyse your current business set up. Remember that you cannot do everything-rather concentrate on what you are good at, what provides you with a competitive advantage sustainably.

Diaspora Matters

Funds Available to SMEs in South Africa

by Victor Muchemwa on March 5, 2017

One of our key objectives as ZBIN is the provision of information related to Access to Capital. This morning we do share with our members in South Africa, important information on accessing funding.

The information was previously compiled by GAA Accounting.

By Afzal Khan

Afzal Khan attempts to address the lack of awareness of some governmental sources of soft capital.

Small medium entities (SMEs) are the building blocks of an economy. According to research performed in 2010,1 91% of the entities in South Africa are SMEs, of which 61% contribute to the country’s employment statistics. Of the 91%, 52–57% contributes to the country’s GDP. This study emphasises the importance of SMEs to any country’s growth. The economic boom in many countries has been due to their SME market.

Mind-set

Entrepreneurship in South Africa is sometimes defined as unique ideas, inventions and technologies. This definition is terrifying to the average entrepreneur. Consider China where entrepreneurship is simple … make anything as long as you are cheaper than the next guy.

The South African government has benchmarked against the global economy and understands the importance of providing fertile ground for all types of SMEs to spawn and grow. Many government initiatives are under way but perhaps we are not aware of them.

Our government has attempted to provide such support via a few mechanisms, namely:

Preferential procurement and BEE codes
Tax incentives for entrepreneurs and big business who work with entrepreneurs
Provision of grant funding and soft loans

In this article I will deal with the last of the three and highlight some of the sources of capital so that you may further investigate them. However, be aware of the tax benefits for small business and those that partner with small business.

Also note that an offshoot funding structure has emerged due to the Enterprise Development requirement in the BEE codes. Private organisations provide soft funding for BEE companies in order to obtain their Enterprise Development points.

Cash flow

One of the four main ingredients required for an SME to spawn is cash flow. In our country as with other countries there exist entrepreneurs in our wider population. Unfortunately most tend to lack capital or the awareness of the sources of soft capital. Our history has exacerbated the lack of capital within a community. Hence the private sector invisible hand of Adam Smith cannot work to support entrepreneurs as there is no soft capital in the community.

However, there is a lack of awareness of some governmental sources of soft capital. These are discussed below.

Department of Trade and Industry (DTI)

Various grants are available to SMEs in various different sectors. The DTI has various programmes and grants in place to encourage new SMEs and to create employment in our country. These are summarised below.

The Black Business Supplier Development Programme (BBSDP)

This is a grant that encourages black businesses to grow by acquiring assets and operational capacity. The BBSDP allows for a maximum of R1 million investment to a 51% black-owned entity of which 50% of management must be black, as defined. Of the R1 million:

R800 000, of which R400 000 is contributed by the DTI and the remaining amount is to be contributed by the entity, is to be used for machinery and equipment
The remaining R200 000 is to be used to develop the business contributed in the ratio 80:20 between DTI and the recipient.

Co-operative Incentive Scheme (CIS)

This scheme is for co-operatives formed with five or more black members. A co-operative is a body of people who come together for mutual benefit either in a social, economic or cultural way. This scheme aims to promote co-operatives on a 90:10 cash basis grant by assisting co-operatives to meet their start-up requirements. The maximum amount that this scheme offers is R350 000.

This scheme is offered to co-operatives incorporated and registered in the Republic of South Africa (RSA) that are operating in emerging sectors within rural and semi-urban areas whilst abiding by the principles of co-operatives. This scheme is biased towards woman, youth and disabled individuals. Significant emphasis has been placed on this area by DTI.

Technology and Human Resources for Industry Programme (THRIP)

THRIP is a project between DTI and the NRF (National Research Foundation).This scheme was implemented to increase the high level technical skills for the industry and improve South Africa’s competitive edge through the development of technology. This grant is primarily aimed at engineering graduates. The THRIP fund capacity is R150 million. THRIP aims to develop these SMEs into large companies, expanding the networks and allowing these SMEs access to scientific expertise, equipment and facilities at partner research entities.

Incubation Support Programme (ISP)

This grant is aimed at initiating entities to allow them to develop incubator programmes and thereby create employment within the communities and in turn strengthen the economy. The programme is aimed at encouraging partnerships between the private sector, SMEs and Government in order to create sustainable growth within the economy by creating these incubator programmes. The ISP is available on a 50:50 cost-sharing basis between the government and the private sector. The ISP must offer the SME a cost-sharing ratio of 60:40. This is capped at R10 million a year for three years. The ISP also provides mentorship to develop the necessary services and grow the entity. The ISP lasts for two to three years in which time the incubator should become self-sustainable.

The costs that the ISP will cover include the business development services, market access, machinery, equipment as well as tools, the infrastructure of the entity that has to do with the creation of the incubators, feasibility studies, product or service development, as well as operational costs.

Capital Projects Feasibility Programme (CPFP)

This project is aimed at RSA enterprises in the capital goods sector that have the potential to boost expansion and employment within the country by attracting foreign investment. Feasibility studies in the capital goods sector play an important role in opening contract and project opportunities. This project is a cost-sharing (55:45) programme and includes the costs of the feasibility (50:50) that will increase local exports and stimulate the market for RSA goods and services. The grant is capped at R8 million.

The objectives of the CPFP are to:

Increase domestic and foreign investment
Create employment
Create demand for RSA goods and services
Create upstream and downstream links between SMEs and BEE firms

The criteria for the projects are:

New projects, expansion of existing projects and stimulating existing projects
Feasibility study fulfils the objectives of the CPFP
Minimum local content (50% for goods and 70% for services)
Project must have a chance of success

The scheme pays the full cost of the feasibility study and the rest will be paid as per milestone achieved.

Clothing and Textile Competitiveness Improvement Programme (CTCIP)

This is a grant designed for the clothing and textile manufacturing industry. It is directed at the international market for quality and affordable clothing. This grant is aimed at individual companies or clusters (a group of manufacturing companies).

The programme cost-sharing grant ratio entails that investment is given to RSA ordinary clusters in the ratio of incentives given of 75:25. The grant cannot be used for machinery, equipment, commercial vehicles, land or buildings. The grant is capped at R25 million over the period of the programme implementation.
The cost sharing ratio for national clusters is:
Year 1: 100% Investment grant
Year 2: 95% Investment grant
Year 3: 90% Investment grant
Year 4: 80% Investment grant
Year 5: 70% Investment grant

Manufacturing Competitiveness Enhancement Programme (MCEP)

The purpose of this grant is to improve manufacturing competitiveness in the South African manufacturing and services support market. The feasibility study is done on a cost-sharing ratio of 50% for applicants with total assets with a historical cost of at least R30 million and for applicants with less than R30 million in historical cost of total assets is 70%. To get this grant applicants need to submit a pre-feasibility study that shows projections of a minimum of R30 million. The feasibility cost is capped at R7,5 million.

The tax benefit of this grant is as follows:

7% of manufacturing value added (MVA) (enterprises + R200 million in assets)
10% of MVA for enterprises with an asset value of R30 million to R200 million
12% of MVA for enterprises with an asset value of R5 million to R30 million
15% of MVA for enterprises 100% BEE with an asset value of below R5 million

MVA is calculated as follows: sales/turnover – sales value of imported goods – sales value of other bought-in finished goods – material input costs used in the manufacturing process.

Enterprise Investment Programme (EIP)

This programme is for the manufacturing sector. This investment grant is between 15% and 30% towards machinery, equipment, plant, and customised vehicles. The incentive is capped at R200 million per application. For less than R5 million of investment, the benefit is up to 30% payable over three years. If the investment is between R5 million to R200 million, the benefit will be 15% over two years. Foreign investment projects include the cost of transporting the qualifying machinery and equipment to RSA as part of the grant.

Qualifying expenditure includes machinery and equipment, land and buildings acquired as part of the investment projects and commercial vehicles.
This programme has two parts to it:

Manufacturing investment programme (MIP): This grant is for the promotion of manufacturing in metal fabrication, chemicals, plastic fabrication, pharmaceuticals, furniture, automotive and components.
Tourism support programme (TSP): This is for the creation of jobs outside the main tourism destinations (Cape Town, Durban and Johannesburg). The government understands the importance of this sector in its economy. The TSP offers grants of +30% of qualifying capital investment by enterprises investing less than R200 million.

Foreign Investment Grant (FIG)

The objective of this grant is to provide support for the actual cost of transport of qualifying new machinery and equipment. This is to attract foreign direct investors to set up operations in RSA. The grant covers 15% of the value of the imported machinery and equipment to a maximum of R10 million.

Product Incentive (PI)

This grant is also for the clothing, footwear, textiles and leather goods industries. The benefits are limited to a maximum of 10% of MVA (sales-materials input costs). The grant is payable on proof of qualifying expenditure.

Sector Specific Assistance Scheme (SASS)

This grant is a re-imbursable grant and is re-imbursed in the ratio of 80:20. The grant comprises two parts:

SSAS generic funding: Funding of a non-profit organisation that grants R50,000 for establishment of an export council. There is a matching grant of up to R1 million based on membership income of 2:1 for operational costs.
SSAS project funding: This is a re-imbursable grant that is given in an 80:20 cost sharing to export councils, joint action groups (JAGS). It is for SMEs, woman, youth and disabled persons.
SSAS: Project funding for emerging exporters: This project compensates an entity in respect of activities aimed at the development of South African exporters. This fund benefits a person by paying for a return fare economy class as well as accommodation and transport as well as exhibition costs and marketing materials. The amount per project is capped at R1,5 million.

Seda Technology Programme (STP)

This programme provides for a maximum grant of R1 million. Of this R1 million, R800 000 is to be used for tools, machinery and equipment of which 35% is contributed by the DTI. The remaining R200 000 is to be used in the business development programme on a 50:50 basis.

Bavumile

The object of this grant is to empower South African women in the arts and crafts sector. This fund is to ensure the quality production of commercially viable products by women with the relevant skills.

Isivande Women’s Fund

This fund is managed by the DTI. Its purpose is to promote the economic empowerment of women. The grant is allocated to a company owned and managed by women (60%) which has existed for two years. The loan is from R30 000 up to R2 million.

Critical Infrastructure Programme (CIP)

The grant covers the development costs from 10% to a maximum of 30% towards the improvement of the critical infrastructure. This amount is capped at R30 million.

Export Marketing and Investment Assistance (EMIA)

The DTI assists South African exporters by organising events in which local products can be showcased to international traders. The DTI bears all costs of these exhibitions.

Group outward-selling missions: This is aimed at foreign buyers wanting to conclude orders with South African exporters.
Group outward-investment missions: This is aimed at foreign investors wanting to invest in the South Africa.

Both of these grants assist with investment/export seminars and conferences, market research missions and lobbying missions. Exporters are compensated for the following: return economy airfare, subsistence allowance per day, transport of samples, and marketing materials to a maximum of R100 000 a year. Under this grant, 50% of patent registration costs in a foreign jurisdiction are covered.

Film and television incentives

The South African government offers incentives to promote this industry.

Foreign film and television production and post-production incentive:

-Foreign films and television productions shot in South Africa on location has an incentive of 20% of the qualifying South African production expenditure (QSAPE).
-Shooting in South Africa on location and conducting post-production with a qualifying South African post-production expenditure (QSAPPE) of R1,5 million attracts an incentive of 22,5% of QSAPE and a cumulative 2,5% is added on for the QSAPPE.
-Shooting in the RSA and conducting post-production of R3 million will result in an incentive of 25% of QSAPE and 30% of QSAPPE (a cumulative 25% added to the additional 5%).
-Foreign post-production with QSAPPE of R1,5 million will attract an incentive of 22,5% of QSAPPE.
-Foreign post-production of QSAPPE of R3 million will attract an incentive of 25% of QSAPPE.

SA film and TV production and co-production:

The incentive is available to qualifying South African productions with a total budget of R2,5 million.
The rebate is calculated at 35% of the first R6 million of QSAPE and 25% of the QSAPE on amounts above R6 million.

SIZWE/FABCOS

This loan funding is provided to BEE SMEs that are incorporated and working within South Africa. The funding offered can be from R10 000 to R3 million. SIZWE/FABCOS will contribute 90% and the remaining 10% is the entity’s contribution. This is repayable over a period of five years at a rate of prime +3%. This fund is operated in conjunction with SIFA/Khula.

Business Partners

Loans and equity investments are available to the public on researched and tested products.

Business Partners offer two options:

• They obtain a shareholding and retain it for five years whilst participating in shareholder and director meetings. They also offer guidance in management matters. During these five years if surplus cash is available they advise to pay the other shareholders loans. After five years they either sell to a third party or to the existing shareholder.
• This option is a normal loan in which they provide a term loan, usually five years. Depending on the risk and business model it will be prime +?. Loans can be from R500 000 up to R10 million.

Red Door Funds

Nedbank/Khula

Nedbank in conjunction with Khula offer SMEs loans.

Khula-Akwandze Fund

This is an agricultural loan for the crop establishment and re-plantation of crops. For this loan, a cane delivery agreement needs to be in place. The entity needs authority to occupy the land. The loan starts from R1 300 and goes as high as R15 500 per hectare.

Anglo Khula Mining Fund

The equity stake taken cannot exceed 49% of the issued share capital. The amount offered is between R1 million and R20 million.

Small Business Development Fund

Godisa Supplier Development Fund

The focus of this fund is the development of BEE-owned companies (SMEs) in Transnet’s procurement chain with focus on rail and port business. The fund amounts to approximately R165 million of which an average of R5 million will be granted per project.

SEFA

The funding amount starts at R500 000 and is capped at R5 million. The fund will contribute 90% and the remaining 10% must be contributed by the entity. The entity must be owner-managed. The loan must repaid within five years.

Umsobomvu Youth Fund

Franchise Fund

This fund is managed by Business Partners. The SME would require an amount of R150 000 to R3 million to purchase a new or existing franchise which is viable or has the potential to be viable. A 30% shareholding needs to be held by a black South African youth who must be operationally involved.

Micro Finance

This fund is managed by the Nations Trust and Micro Enterprises.

Micro Enterprises:

− This loan is available to a South African black youth aged between 18 and 35 years requiring a loan capped at R20 000.
− The business must operate in the Eastern Cape, Free State, Limpopo or Mpumalanga.
− The South African black youth must be operationally involved in the entity.

Nations Trust Youth Enterprise Finance:

− Applicant needs to be an 18–35-year-old black South African youth requiring a loan of not more than R50 000 to operate an existing business in affixed place or expand an existing business.

Youth co-operative finance

The registered co-operative must have a shareholding of at least 50% black youth with a stable and credible management team requiring a loan of not more than R500 000. All members of the co-operative need to be operationally involved. The funds must be used to start up a business or expand an existing one.

Diaspora Matters

Opportunities at Business Centres in Rural Areas

by Victor Muchemwa on March 5, 2017

Here is an interesting observation from the 2012 Zimbabwe Census- ‘In 2002, 65 percent of people lived in rural areas whilst 35 percent lived in urban areas. However, the 2012 Census shows that 67 percent now live in the rural areas whilst 33 percent live in the urban areas’

The trend in urban to rural migration should have continued from the 2012 and am sure when another census is done, results should confirm this. So today we cover Rural Area Business Centre Opportunities because this is an area overlooked by many. Most people view rural areas as places that offer little or no opportunities at all. Its even worse for the Diaspora when you are so far away and you are not aware of recent changes that have happened in terms of urban to rural migration. Let me start by telling you a short story of my journey to a rural area called Musana Bindura.

In 2006 I visited relatives in this rural area which is located 60km to the North East of Harare. My car had mechanical problems which were being attended to by a mechanic and this prompted me use public transport. I boarded a kombi from the Fourth Street Bus Terminus and within an hour I had reached my destination. I expected my return journey to be smooth sailing. After finishing my business, I decided to come back and at 2:00pm I was at the bus stop waiting for a kombi going to the city. I waited for close to 30 minutes without seeing any kombi going to the city and decided to inquire from locals when I could expect to board the next kombi. Imagine my shock when I was told that the last kombi had left at 1:30pm and I had to wait for private cars or possibly walk a 15 kilometre journey to Shamva Road!

I decided to wait for private cars but none came. I eventually phoned my mechanic to check whether he had finished fixing my car, luckily he had done so and my wife had to drive and pick me up at 6:00pm-what a relief! Now imagine 2:00pm and you are already late for transport back to the city on a Saturday afternoon?

Anyway this was in 2006 and is the situation still the same in 2017? Dear reader, the situation has improved drastically as more than 30 kombis go to this area on a daily basis. The last kombi leaves around 8:00pm. There is so much traffic such that iam tempted to say this rural area is a new suburb for Harare. Locals in the area can be forgiven for calling the area ‘Glen Lorne Extension’ because every 30-45 minutes there is public transport going to the city or to Nyava Business Centre.

I do not really know what happened in the past 11 years but from general observations, it seems that the population size has increased tremendously. More people have relocated to rural areas especially areas that are near Harare-the peri urban areas. One can include Domboshava,Seke,Goromonzi,Chihota and Zvimba.

A look at Domboshava Showgrounds Business Centre shows an increase in shops at the business centre- they now have a Service Station and Pharmacy-business ventures previously unheard of in rural centres. Business is not bad for those who have set up business ventures at rural business centres although almost everyone is doing the same business with hardly any new and innovative business ideas being introduced. Munhu wese general shop,bottlestore,chigayo or butchery.

Some retailers in rural areas should be competing pound for pound with their counterparts in Harare when it comes to daily sales. We are therefore urging ZBIN members to relook at the opportunities that exist in rural areas because apart from the Rural Urban Centres, some are making a living through various farming projects such as raising Poultry, Piggery Projects and various other Agro-Processing projects.

We will carry out detailed studies on opportunities in the peri-urban and share with you. For now we urge you to look to look at these areas as new new surbubs for all cities. If you are in Harare then you should consider Domboshava, Zvimba, Seke, Goromonzi, Musana and Chihota as ‘new surbubs’ with opportunities that need to be tapped into.

Diaspora Matters

Why you should join ZBIN

by Victor Muchemwa on March 4, 2017

We only have 3 forum objectives and they are (1) Access to investment and business information (2) Access to Markets and (3) Access to Capital for our members. Three simple objectives for all of our members who are mostly based in Southern Africa and beyond.

We have done well in Objective 1 –Access to investment and business information. We have been giving you information on business trends, new investment ideas and general business information for the past 2 years. Our Facebook page has a lot of useful business discussions, our Whatsapp groups have active business discussions from our members. In terms of information provision, we believe that we have done fairly well. There is room for improvement in terms of quality and we hope to recruit interns who will assist with market researches so that our members can make informed investment decisions using information that is evidence based. We also hope to improve in terms of coverage because we have concentrated on Harare only and not covered the rest of Zimbabwe and the region.

Objective 2–Access to Markets. This is an area of weakness because we have not done enough to enable our members to sell their goods and services. The good thing is that we are aware of this area of weakness and are taking corrective measures with a number of initiatives lined up for the rest of the year.

I did spend the greater part of Saturday last week talking to some of our members during a meeting that we held in Harare. We brainstormed on the Poultry Market Challenges, as you may be aware-access to markets for our poultry members is a big challenge which is hampering the growth of the sector by our members. We came up with various business models that should help solve the challenge. One of the model is the formation of a company that buys poultry from members and sell in bulk to retailers. So one company that specialises in market identification and selling chickens. Farmers would concentrate on what they do best and that is producing chickens and not have to worry about the marketing side.

We also have an Online Car Boot Sale which is looking at the creation of one regional market for goods and services in Southern Africa. This should help members in selling goods and services beyond the borders. We are initially targetting Malawi, Zambia, Namibia, Botswana and Zambia because these are the countries that follow ZBIN closely. We are going to invest a lot of resources inorder to tap into the opportunities that abound in the region.

Objective No 3: Access to Capital: Perhaps the bigggest hurdle in the ZBIN community-Money an other resources inorder to start businesses. Where is the Money ZBIN? We have not done much in terms of enabling our members to access capital. On objective 1-Access to Information, we have covered business plans, crowdfunding and listed ZBIN members looking for investment partners. This is not enough because we have few success stories of members who managed to access funding through the forum.

We are aware of this greatest weakness to date and the good thing is that we have a number of initiatives and innovations that are coming up. The first one is the development of an investors database where our members will list their business plans. A typical business plan should contain the name of the organisation, history,capital structure,detail of goods and services,name of industry and level of competition, competitive edge, current and proposed financial information and the proposed investment that require funding. You can refer to our post on business plans for reference. So we hope to ensure that all members requiring capital have this information in our database. This should help potential investors to invest if they are interested. Last week, we did share a list of members looking for investors-this is not enough as it barely covered the basics described above.

So we will prepare our members for investment with ready business plans to submit to banks or any other lenders. We are also going to carry out some test cases where we will choose the best business plans for partnerships with Diasporans. Your company will have to under go some tests such as verification of your company existence, verification whether you are registered and comply with all local laws and regulations. We will also check whether you have a clean Police Record because we would not like to put our reputation at risk by asking investors to partner with someone who has high risk of default. You should provide evidence of handling funds from others such as banks before we shortlist you. We should be done by June 2017 so that we can publish the database for the benefit of our members.

We will be sharing more information on funds availability and this includes researches on loans that are available to the Small to Medium Scale (SME) sector. We will advise you on which funders to approach and why. We will do advocacy in this area so as to help push for favourable terms for our members. We will explore innovative solutions in the area of funding such Crowdfunding.

More work

As you can see, there is more work to be done by your favourite forum.We are going to require more people to achieve the 3 objectives listed above. We will invite volunteers from across the region and the Diaspora community. Volunteers to compile lists, volunteers to write business articles and contribute to objective 1. We are going to require volunteers to come forward and share their success stories so that they can inspire others. The objective being to see the success of our members because a ZBIN member should be well informed in terms of business. A ZBIN member should have access to Markets and Capital. Together lets work together to make it a success!

ZBIN Board composition

We have set up a team of board members to drive forward our 3 objectives. We happy with the impressive skills they possess. These are people who are already successful in their respective fields and simply volunteered because they believe in the vision of the organisation. A gender balanced organisation, ZBIN is chaired by Sis Martha, a leading NGO field personality who has won several international awards in the field of HIV and Aids. She also holds various board membership in Zimbabwe and the region. She will be leading a team composed of the following board members.

2.Farai, MBA, CPA,CGMA- a qualified Accountant who is based in USA. Currently working as a Finance Manager, He will bring in business leadership and management skills to the board. Farai will be the Deputy Chairperson of the ZBIN board.

3.Laureen– Based in USA, Laureen has a strong background in the medical field and brings a lot of networking expertise to the board.

4.Tavaziva, CA- a qualified Accountant (Chartered Accountants South Africa) Tavaziva brings to the board leadership,financial and risk management expertise to the group. He is based in the United Kingdom where he works as an Internal Audit Manager. He is currently pursuing Chartered Financial Analysts (CFA) studies.

5.Rudo-Rudo is based in the United Kingdom, a former teacher in Zimbabwe and a medical field professional, she brings a lot of networking and capacity building skills to the group.

6.Farai– Farai based in South Africa is from the Engineering field and holds a Bachelor of Engineering (B.Eng.), Civil and Water Engineering (Hons) a Master’s degree, Water Resources Management and a Masters in Business Administration. She brings to the board a lot of engineering,innovation and business management skills.

7.Polite– MBA-Polite brings in a lot of capacity building, enterpreneurship and consulting skills to the board. He is currently based in Plumtree.

8.Victor– ACMA,CGMA, Based in Harare, He brings a lot of experience and skills in Entreprenership, Innovation, Capacity Building, Risk and Financial Management.

9.Rutendo-Rutendo is a lawyer by profession and is currently based in Harare. She brings in entrepreneurship and legal skills.

10.Maggie-Maggie comes from the Marketing and Human Resources Management field, a holder of a Marketing Degree, she is finalising MBA studies with the National University of Science and Technology. Currently employed as a civil servant, Maggie is the secretary of the board.

Board Statistics

Total members:10	Maximum term limits:2 terms
Gender Analysis: (60% women-40% men)	Location : 60% Diaspora-40 % local
Location : 2 USA, 2 UK, 1 SA, 4 Zimbabwe	Professional background: 3 Qualified Accounts, 1 Lawyer, 2 Medical Field, 1 Engineering, 1 Business Consulting, 1 Marketing and 1 NGO Management.
Zimbabwe location: Harare 3, Plumtree 1	Members all Zimbabwean

Term Limits and Handover

The team has been in existence from the start of the forum in February 2015. Our official term begins in March 2017 and ends in March 2027. Serving a maximum term limit of 2 terms, we have to develop one of the best regional business forum that helps in business and investment in Southern Africa. Starting with a capital of less than $1,000-we hope to leave a balancesheet with 7 digit figures in value when we leave. Hope to have assisted hundreds of thousands of Southern Africa citizens with information, access to markets and capital. We will handover a thriving business forum to the next generation of business leaders who will carry on with founding vision.

We will distribute the constitution of the forum to our members in future. Please note that a bigger council is going to be in place that has a total of 30 members. This will ensure that we cover some of the regions that have not been covered on the board such as Australia, Namibia, Mozambique, Malawi and Cape Town.

Formal membership Registration

The board is not going to be responsible for member registration, we will recruit a secretariat in the next 3 months. The secretariat will be responsible for formal registration and we are looking at recruiting an initial 5,000 members and most members to come from those already on our Facebook and Whatsapp forums.

So in summary, your forum is here for Business and Investment Information, Access to Markets and Capital. Your forum as already demonstrated during the past 2 years, will be anchored on transparency, innovation and intergrity.

Please note that we are not an investment authority, so do not approach us with money for investment.

Wishing you a Blessed Weekend

Diaspora Matters

Greetings from Beatrice Repost

by Victor Muchemwa on March 2, 2017

The prices of eggs have shot up from $3.3 per crate in March 2016 to almost $5 in March 2017. Guess who is smiling all the way to the bank? So we reproduce the article that we first posted in March 2016 and lets see whether it makes any sense at all.

Enjoy your day

So yesterday I found myself 70 kilos from Harare…Munemo was in Beatrice!

Purpose of my journey was simple–wanted to tour a Poultry project being carried out by one of my friends. Aaaaah fabulous stuff…My friend started the project in March 2014. He borrowed $20k as initial capital to fund the project.

He used the capital to buy 1000 layers at $12 each. (Pretty expensive, $12,000 on birds alone?)The remainder of the capital was used to construct a Poultry Run that accommodates 1000 layers, also sunk a borehole n purchased poultry feed n vaccines.

Payback Period
In 2014 eggs were being sold at $4.5 per crate & my friend managed to sell all eggs resulting in him raising and returning back the capital of $19,000 in 7 months!!!

Fast forward to 2016
At first he bought point of lay chickens @ $12 per bird..very expensive arrangement. Not a sustainable arrangement. This sort of capital is definitely not easy to access…he decided to raise own chicks to cut on costs. The experiment worked, only 7 chicks died from a batch of 2040 ( 40 ma extras given by the seller)

So what did I witness yesterday? Dear forumites, I witnessed a successful project where my friend has 2000 birds producing 60 crates per day. The selling price is not good at all…now pegged @ $3,3.(Profit per bird?Eeeh did not carry out a detailed cost analysis…promise to do next time). However its important for you to know tht a layer that has reached a point of lay stage is expected to continue laying for a period of 18 months. An egg per day…

He is currently phasing out the first batch of 1000 layers.

Management
He does not need to actively manage the project…he rarely goes to the project. Infact he only goes when there is a red flag…the red flag of chickens producing eggs less than 60 crates per day. If its consistent for a number of days then he has to investigate 3 issues namely:
1.Are eggs being stolen?
2.Disease outbreak?
3.Faulty feed?

The few times he has had to investigate were prompted by faulty feed.

So once set up the project does not require a lot of management time. He visits the project once every 2 months. He however ensures that he gets daily updates of production matters such as how many crates produced-feed used etc

Labour costs
He has 3 full time employees, 2 part time guards.

Water
For this type of project one needs plenty of water. My friend did sunk a borehole(kwete tsime lol)…from the photos you can see the water tanks and pipés.

Market
Initially he used to sell his eggs to schools-churches-tuckshops and neighbours. He realised that this was not an efficient way of selling eggs with chasing up debtors going to be costly.

Mbare the Egg Market Hub
He started selling his eggs at Mbare and has never looked back!!! He delivers his eggs at Mbare on a weekly basis getting paid for his sales the following day after delivery. Current egg prices range from $3-$3,3. Mbare is now the marketing hub of eggs even the big 3 Poultry Companies now offload thousands of crates on a weekly basis at Mbare. Mbare is now the nerve centre of Eggs in Zim…eggs are transported from Mbare to areas as far as Victoria falls or Nyanga!!

His current plans
Phase out the initial offlayers(1000 birds) n replace them with road runners. Also continue with the new batch of 2000 birds.

Diaspora Matters

Business and Innovation

by Victor Muchemwa on March 1, 2017

So where does our nation stand in terms of innovation? How many innovations have been made by Zimbabweans in the last 10 years? Its difficult to answer this question because there is little coverage on innovation. I believe there is a lot happening, I do sometimes watch our local television station especially on the Sunday Edition-they do try their best to showcase innovations from across the country but they are mostly small scale innovations which are hardly commercialised. The story usually ends with a television interview and we never hear about it again.

Innovation and Researches go hand in hand, countries that invest heavily on Research and Development are on top of the pole when it comes to innovation. So how do we fare in terms of R&D? Perhaps we can look at our supreme research institution in Zimbabwe-The Scientific and Industrial Research and Development Centre (SIRDC). One can visit their site to learn more about their work. They are doing a fabulous job although there is need for more funding and exports of products produced.

So in the business sector who is doing researches? We have a number of researches by ZIMTRADE www.zimtrade.co.zw. They recently released a market survey of opportunities in the Democratic Republic of Congo-excellent stuff from ZIMTRADE. ZEPARU (Zimbabwe Economic Policy Analysis and Research Unit) www.zeparu.co.zw. The organisation produces a lot of useful reports that are useful for business and Policy Makers.

How about SME Sector Researches? We seem to have a gap in terms of researches that specifically target the SME sector, researches that seek to transform Magaba-Siyaso. Yes researches are coming here and there but they are not enough-there is room for more. ZBIN will therefore be filling the gap in the coming months-we hope to cover detailed researches targeting the needs of small to medium scale business owners, Diaspora Community needs and innovation as a key driver of business success.

ZBIN is driven by innovation and thefore hope to provide a lot of resources for the benefit of our members. We will complement the work that is already being done by a host of other research institutes.

One question that is worrisome about researches in Zimbabwe is where are the universities and colleges? A lot of research is going on, ever student who graduates at under graduate or post graduate level has to produce a research. So where are these researches? How about uploading some of the top projects on the website of universities so that the nation can benefit? Take for example the Graduate School of Management at the University of Zimbabwe-a lot of graduates produce a lot of research projects which are important in business, a lot of industry leaders would benefit from these projects. Why not agree with students with winning projects and upload them centrally so that the nation can benefit?

Food for thought for all key stakeholders. For today, i give you the post below on China and Innovation.

Why China now leads the way in innovation

By Daniel Allen

China is set to become the globe’s biggest innovator by the end of this decade, as its government pushes the need for bright ideas and China’s huge domestic market demands something new.

China has long celebrated its Four Great Inventions – gunpowder, the compass, papermaking and printing. All four were developed many hundreds of years ago. But as the nation’s economic resurgence continues, both the Chinese Government and Chinese corporations are working to make China a world-leading innovator again.

In recent years, innovation and technology have become the loudest buzzwords of Chinese industry. According to 2014’s China Innovation Survey by global management consulting firm Strategy&, innovation is now the top priority for 42 per cent of Chinese companies, compared to just 21 per cent of multinational corporations.

A raft of innovation-focused government policies is encouraging change. For instance, although innovation is not a new theme, in China’s current Five Year Plan (2016-2020) it has taken on even greater significance. In this one, “innovation-driven development” is repeatedly referred to as a new driver for China’s economic growth.

The government has certainly recognised the importance of China developing new industries based on the internet and e-commerce, encouraging the integration of the internet with traditional sectors of the economy and promoting internet-based innovations.

On the back of these policies, Chinese patent applications are booming, rising from 40,000 in 2003 to more than 800,000 in 2013.

While much of the increase could be attributed to the government’s prodding, China’s patent progress cannot simply be ignored.

“Investment in the patent system has taught Chinese entrepreneurs and scientists the value of filing for patents,” says Tom Saunders, a senior researcher with innovation-focused charity Nesta.

“Now the Chinese Government is shifting incentives from quantity to quality.”

The innovation focus is having other effects, too. A report by the US National Science Board shows China’s share of global high-technology manufacturing leapt from 8 per cent in 2003 to 24 per cent in 2012. University of Sydney innovation expert Dr Thomas Barlow notes that in three Chinese provinces (Jiangsu, Shanghai and Tianjin) business research and development (R&D) spending per person exceeds that of Italy and Spain.

Based on current trends, the OECD estimates that by the end of the decade China will supplant the US as the world’s top investor in R&D. Such an economic shift in the world’s second-largest economy holds the potential to change not just China, but the rest of the world as well.

An economic imperative

For years now, Beijing has focused on the importance of innovation to China’s economic health. The country’s growth model of the last three decades – based on cheap, abundant labour, low rents and the mass production of low-value products – is well on its way to redundancy. Eastern China is headed for middle-income status, and parts of it are already there.

If China is to avoid getting stuck in this middle-income rut – like, say, Brazil – and follow Japan and South Korea into high-income status, then the government believes China needs to start designing its own products, rather than making someone else’s.

For years, too, sceptics found it easy to dismiss Beijing’s aspirations. Critics noted that both governments and large companies have tried and failed to produce innovation by edict.

And they argued that the economy’s central control, and in particular its grip on the education system, would strangle Chinese business creativity. As recently as 2014 these arguments appeared in a Harvard Business Review article titled “Why China Can’t Innovate”.

But other analysts point to Beijing’s repeated success at marshaling government resources to achieve economic change, and also emphasise the strength of its commitment to innovation.

“The Chinese have seen the way the Apple business model works,” says Francis Gurry, director general of the World Intellectual Property Organization.

“Very little of the value goes to the assemblage and all the value goes to California.” Gurry is one of many who believe that China’s push towards a knowledge economy will succeed.

China innovation expert Professor Bruce McKern set out China’s path to innovation in a 2012 paper Can China Innovate? His answer to that question is a firm “yes”.

“Many firms will fail,” he writes, “but in the Darwinian fight for success in their home and international markets, some will emerge as radical innovators.”

From cost innovation to unique products

McKern points out that smaller Chinese firms in fields from laptop production to nanotechnology have already begun to find radical new ways to cut costs while meeting their customers’ needs. This process is called “incremental innovation” or “cost innovation”.

When Shanghai-based WuXi AppTec, a drug research company, wanted to develop a new hepatitis treatment, it separated an existing production process into multiple steps, with teams of technicians assigned to work on each one. The firm adapted German software designed for managing assembly lines to streamline the multi-stage innovation process.

“It’s a commonsense approach,” says Saunders.

“For Chinese companies to reinvent things that they could already buy from overseas would be a total waste of resources.” Incremental innovation, he says, “plays to China’s strengths”.

Meanwhile, another force is pushing Chinese firms forward: Chinese consumers. Shaun Rein, managing director of the China Market Research Group (CRM), points out in his recent book The End of Copycat China that Chinese consumers no longer slavishly copy trends from the West, or even their own Chinese peers. In high-tech sectors such as mobile communications and e-commerce, they increasingly want products that are not just cheaper, but offer something new.

Tech leads the way

Prodded by the new generation of Chinese consumers, privately owned high-tech Chinese companies keen to succeed on their home turf are leading the way. The China Innovation Survey by Strategy& asked 368 China-based Chinese and non-Chinese businesspeople to name the most innovative Chinese enterprises of the moment. Of the top 10 companies, eight came from the high-tech sector, including Huawei, Alibaba, Tencent, Baidu and Xiaomi.

Each of these companies is ambitious, has demonstrated its capacity for innovation, and is selling to Chinese consumers. Each has the support of both Beijing and the Chinese banking sector. Each wants to create its own high-profile, fully international brand.

Today half of Huawei’s 170,000 employees work in R&D. The company is starting to conceive and manufacture breakthrough products and is one of the world’s top five patent filers. According to Interbrand, it has even broken into ranks of the top 100 best global brands, a first for a Chinese company.

“Accompanied by a rise in patent and scientific paper numbers, Chinese companies are increasingly focusing on genuine creativity,” says Qing Wang, professor of marketing and innovation at the University of Warwick’s Business School.

“Pioneers such as Huawei are showing that novel innovation pays.”

State-owned stimulation

International, innovation-based success stories such as Huawei and Alibaba may grab the headlines but they are still few and far between. Despite achievements in areas such as solar energy, supercomputing and space exploration, the Chinese Government is concerned that its efforts to boost creativity are not bearing enough fruit. Two-thirds of the Chinese economy still comprises state-invested and state-owned enterprises (SOEs), and few of them are hotbeds of innovation.

“The Chinese market is hyper-competitive and this has created a spirit of fearless experimentalism among private entrepreneurs,” says Saunders.

“The trick for Beijing now is how to embed this culture into China’s SOEs.”

Beijing’s latest Five Year Plan has a heavy emphasis on investment in science and technology, combination with a market-led focus on efficiency, quality, coordination and evaluation. As a result many hope that SOE employees will be given more leeway to work on riskier and initially less profitable projects.

International implications

China’s innovation model is already impacting on multinationals across the globe. In a 2014 paper – Innovation in Emerging Markets – The case of China – Bruce McKern and colleague George Yip (co-director of the Centre on China Innovation) noted that multinationals have poured extra funds into R&D centres in China over recent years. Pfizer, Microsoft and General Motors all now have R&D centres in the country.

McKern and Yip list the attractions of doing R&D in China: plenty of low-cost engineers and scientists; government innovation support; a huge and fast-growing market; and a new entrepreneurial spirit in the younger generation. And because Chinese consumers have not had years to develop buying habits, some firms could seize the opportunity to leapfrog competitors who are not operating in China.

Meanwhile, Chinese companies that are already achieving success through incremental innovation are using part of their profits to buy up cutting-edge multinationals. Rather than paying licensing fees and royalties, these firms are simply purchasing breakthrough innovation capability by acquiring overseas technology and talent.

The China Innovation Survey found that many business executives outside of China still expect Chinese companies to target developing countries with cheap, low-quality, derivative products. But in reality, more and more Chinese executives are using innovation to drive globalisation.

Future focus

Today, China’s capacity for innovation remains a work in progress. The country’s transition from an incremental to a breakthrough innovator will take time. But China’s private companies have already proven their ability to adapt to a fast-changing environment. Yeman shengzhan, or “brutal growth”, is the unspoken philosophy of the modern-day Chinese entrepreneur. Copying, tweaking, acquiring, inventing – whichever tool for profit and growth best fits the market will be used.

One thing is for certain. It would be foolish to bet that Chinese companies cannot follow the path already taken by South Korea and Japan, harnessing different forms of innovation to move further and further up the value chain.

In the China Innovation Survey, two-thirds of China-based respondents of multinational corporations said their companies face Chinese competitors that are at least as innovative as they are. As an ultra-competitive domestic market continues to hone Chinese innovation, this number is only likely to increase.

Diaspora Matters

List of ZBIN Members looking for Investors

by Victor Muchemwa on February 28, 2017

One of the greatest benefits of being a member of ZBIN is free business promotion. We like to see the success of member projects and one way we do this is through investors linkages. We showcase businesses from our members and invite potential investors to get in touch with them.

We hope to improve investor linkages by having businesses that would have been audited and certified by ZBIN to be fit for investment. Through this initiative, we are hoping to link up local businesses with the Diaspora community. Stringent measures will be in place to ensure that only bonafide companies participate. The programme will be coming in the next few months and our advice to enterpreneurs interested in participating is that you should be a registered company, be tax compliant and owners of the business should have a clean Police Record. Our team will verify before certifying you fit to participate in the programme.

In the meantime we contacted our members inorder to gauge the interest in the programme, the result is awesome as we managed to obtain information from our members which is listed below

Kadoma Mine owned by a group of disabled persons looking for partnership-Contact Number is +263 713 840078

Victor Marochi Mining,,Victor,, Filabusi,,0712304437 app 0774576074

Roscoe Errol Ermas Farming,Errol,Bulawayo,0779610679

Michael Chikohomero Farming in Beatrice name Mike 0775 358 156..

Musenzi BM Manufacturing Bruce in Harare 0771 927 974

Ishmael Sithole Beekeeping, MacJohnson Apiaries, Manicaland, +263773619799.

James Munowenyu James Chiororo Munowenyu Business Consultancy(bias to Construction planning) in Harare email jimi.chiororo@gmail.com cell + 263 772 374 557

Kudas Mpini Kudakwashe, lp gas retailing, +263 773 956 082

Unganai Muzondo retailing;muzondo u; chatswoth;0777196515

Patrack Muyambo IT, Tawanda Patrack Muyambo, Bindura, +263735264703

Farirai Zengeni Farming, Farirai, Mutare, 0773972527

Ishmael Sithole Are you into crop farming? I do offer pollination services and feral swarm removal and relocation services as well. My whatsapp num is +263773619799

Mandishona Achihoro Memzy Memory Mandishona, Events catering, Harare ,WhatsApp Call +263 77 592 7479

Seth Kunaka Seth Kunaka Interest in Mining:+263775213369 Shamva

Nico Minister Mahati solar products ,Nicolae Mahati ,Harare, +263773988353

Beaullah Chirunga Farming Beaulla 0772809558

Tawanda Makwarimba Manufacturing, Tawanda, Bulawayo, +263773478332

Florah Maruve catering and baking. Theresa Maruve. 0772974535

Misheck Mutanda farming misheck bulawayo 0734444573

Archie Kupeta Health and Fitness, Archie, Harare, 0772480803

Job Muhwati Network Marketing, Job Muhwati, Harare, +263777926109

Charles Mudzamba hunting and safari 263772277778

Takunda Lee Kafesu Network Marketing ,Wilson Kafesu Harare
0777945740

Sengisazi Chihaba Mining. Sengisazi Chihaba. Kadoma. 0773640056. 0772562254. 0715605208.See Translation

Elina Shumba Baking, Elina, Harare, 0772332737

Pardon Gambiza Transport Pardon Gambiza +27769944389

Akiyana Musimbo Farming musimbo +263777397394

Brian Kuveya Personal development , Brian kuveya, + 263 775706104

Edmore Kavele Edmore Chemical Manufacturing, South Africa +27739145536

Sharon Gwizo Mining,Sharon,Masvingo,0716145856

Micheal Tafadzwa Mapfumo Mining,TAFADZWA M MAPFUMO KWEKWE 0772502106

Micheal Tafadzwa Mapfumo Manufacturing, TAFADZWA M MAPFUMO KWEKWE +263772502106

Farai Chiboora Panel beating and spraypainring, Albert ,Harare, 0772729921

Chester Makunde Retail chester Makunde 0734223877

Taurai Chalmer Samhere Ict..retailing ..chalmer ..chitungwiza 0772810359

Tapfuma Hebert Education (E.C.D, Primary & Secondary schools), Harare, +263776375799

Tapfuma Hebert We are looking for a very serious investor into our Group of Schools operating Pre School, Junior & Senior Schools in Zimbabwe. Our College is already operating & properly registered with reasonable enrolment increasing every day. Please call/app The Admin +263776375799 for more details.

Tichaona Pfukwa Phil Farming Tichaona Harare 0773498991

Archie B Mangwende Motor Industry,Turbo Charger Sales and Repairs.Archibald Mangwende,0714887968

Rueben Moyo Mining ,Kwekwe 0772265714

Rueben Moyo Am based in Harare but have interests in Midlands my home area..

Mukomondera Tawanda catering, Fiona, Harare 0783806446

Tracie Mukasa Tracy. Road construction. Harare 0718586506

Jonathan Nago Jonathan Nago Retail outlets Fmcg 0779727012 looking for serious partners investors,

Ruddgunnsound Station Farming,Shadreck, kwekwe,0027784830274

Florah Maruve Cateering. Theresa. Harare. 0772974535

Stanarr WaMeki ICT, Stany, Chinhoyi,0772358397

Carol Joy Dube ICT 0779 888 000

Rege Mataruse cosmetics, , masvingo, 0773753348

Patrack Muyambo ICT, Bindura, Tawanda Patrack Muyambo 0735264703

Sengisazi Chihaba Mining. S. Sengisazi Chihaba. Kwekwe. 0773640056

Mildred Mdlongwa Mildred Mdlongwa , farming Bulawayo ,0715403259

Thoko Nyandoro Retail- roofing timber and pine boards, Thoko , Harare , 0772423383

The list above is just a general guide of members from the forum. We are going to refine the list and ensure we have different clusters. Each member will be asked to develop a detailed business plan which shows potential investors why they should partner with them.

Diaspora Matters

New Suburb=New Opportunities

by Victor Muchemwa on February 27, 2017

One of our objectives is to equip our members with opportunity identification skills. A ZBIN member should have a competitive advantage over others when it comes to spotting investment opportunities. Before others realise what is happening, a ZBIN member should have taken up all opportunities!

Let me tell you of this interesting story that happened a few years back. Legend has it that a Nigerian brother visited Harare for the first time. When he was being driven from Harare International Airport, she shocked the cab driver when he started shouting ‘I can see money, I can see money-money, money money’. Our brother from West Africa kept on repeating the money, money much to the bewilderment of the cab driver. The local cab driver initially thought he had collected a mad person because it did not make sense- How does one see invisible money?

So when they reached the Coke Corner, the cab driver who had kept quiet all long driving from the airport, decided to inquire about this ‘money’ that our brother kept referring to?

Do you want to know his answer? His answer was that the many cars that he saw on the road represented nothing but Money! To him cars meant more business in terms of car parts or service kits! So it is very easy to overlook investment opportunities when you are a resident of a particular area. So we would like our members to think like our brother from West Africa who was seeing ‘money’ which was invisible to the cab driver.

I have already provided you with a post where I talked about having an investment mind-set. You can search the post on our website-brilliant article about having a positive mind-set that helps in identifying opportunities.

New Suburb –New Opportunities

So what do I have to share with you this evening? Well I would like to notify you of a simple way of identifying opportunities in your area-opportunities that are mostly noticed by visitors to an area. The opportunity lies in identifying new residential areas, new developments.

Many people ignore new areas especially when you are not interested in buying residential stands or homes. There is a breed of entrepreneurs who follow new suburbs with the intention of setting up businesses. They will not be interested in buying residential stands nor building homes-their interest is simply in providing business services such as real estate construction, provision of building materials, setting up of tuckshops to sell food and groceries. Some will rush with a view to build creches, setting up car washes or any commercial business.

In 2 week’s time, I hope to cover new suburbs in Harare as a lot is happening in terms of new developments. So take an interest in all new developments in your local area and think about how you can benefit in a commercial sense.

Diaspora Matters

Case Study Of The Week: Kodak

by Victor Muchemwa on February 26, 2017

We have a good case study this week from Kodak, a famous American Company that is well known for its photographic films. Kodak was founded by George Eastman and Henry A. Strong on September 4, 1888. During most of the 20th century, Kodak held a dominant position in photographic film. The company’s ubiquity was such that its “Kodak moment” tagline entered the common lexicon to describe a personal event that was demanded to be recorded for posterity. Kodak began to struggle financially in the late 1990s, as a result of the decline in sales of photographic film and its slowness in transitioning to digital technology.

So why have we chosen Kodak? We have chosen it because it provides a classic case of a company that failed to adjust to the fast changing world of digital technology. They had the some of best engineers and other professionals at the time but still failed! Kodak got caught looking backward when it should have been looking forward and taking risks to reinvent the company.

The company had very talented executives along with the best engineers and chemists. But all its smart people focused on Walmart gaining market share with its single-use film camera when wireless operators were enabling consumers to send digital photos over mobile devices, which reinvented what consumers could do and wanted to do with photography. As a result, while Apple was reinventing the mobile phone with multimedia capabilities that matched what was going on in the big picture, the world’s best brand in photography spent billions expanding its investment in an old technology.

We thought that you could also benefit by studying the analysis below. Try and apply this to your company or business, are you in the same boat? Are you adjusting quickly to the changes in the external environment?

By Nitin Pangarkar

“You press the button, we do the rest.”

So went the advertising slogan coined by Kodak in the late 19th century.

It was a motto that opened the door to mass-market consumer photography – a popular culture pioneered by Kodak, but which its recent sorry decline has shown it failed to keep pace with.

The habit of button-pressing is of course more popular then ever – see Facebook, Tumblr, Flickr et al. But for Kodak, recently forced to file for bankruptcy protection, the company’s failure to reinvent itself to the instant gratification realities of the digital era meant there was increasingly little of “the rest” for it to do.

Founded by inventor and philanthropist George Eastman, Kodak’s little yellow film packages became one of the world’s most recognised brands. Indeed for much of the twentieth century Kodak was an American industrial icon – at one point enjoying a similar status as tech giant Apple does today.

Since the turn of the century however, the fortunes of the once mighty photographic firm have plummeted. By early 2012 Kodak’s shares were trading at around 40 cents, down from $40-45 just seven years earlier. The NYSE even went as far as to warn the company that it risked being delisted.

So where did it go wrong?

One common explanation about Kodak’s demise is that it missed the digital revolution – or simply that the ubiquity of digital cameras made photographic film redundant while Kodak bosses buried their heads in the sand. While that explanation has some merits, it is far from the full picture. In fact Kodak was a pioneer in the development of digital cameras, producing the first prototype megapixel digital camera in 1975.

Presented to sceptical Kodak executives, the bulky device was powered by no less than 16 batteries and took a full 23 seconds to record a single image, using a cassette tape as the equivalent of today’s memory card. (You can see a picture of the camera on this Kodak blog, the title of which is a story in itself: “We had no idea”)

Even when digital cameras reached the consumer market in the mid- to late-1990s, some of Kodak’s early models vied with models from Olympus and Sony for top-selling spots. In fact, the early cameras made by Canon, the current global leader in digital cameras, lagged well behind those of Kodak in terms of consumer acceptance as well as critical reviews.

Kodak didn’t lack technical expertise either and, even today, has considerable intellectual property in the digital imaging space with its thousands of patents worth several billion dollars. Why then is Kodak struggling to survive despite a strong start in the promising – and still rapidly growing – arena of digital imaging?

Bridging the gap

In my recent book High Performance Companies: Successful Strategies from the World’s Top Achievers I suggest that successful innovators must be able to integrate (as in combine) external and internal knowledge. An excellent example of this is the case of Fanuc, the Japanese maker of machine tool controls.

Based near the foot of Japan’s iconic Mount Fuji, Fanuc used to make mechanical and hydraulic controls in the 1970s. But after the first oil shock in 1973, operating costs of those controls became prohibitive because they consumed a lot of oil.

In response, Fanuc began a huge effort to shift to computer controls. It overcame gaps in its own knowledge by partnering with diverse sources including the University of Tokyo, its customers, end-users and sometimes even existing as well as potential competitors, such as GE and Siemens which had their own aspirations in this industry.

The external knowledge from these partnerships was combined with a number of other elements including its own internal knowledge, some bold strategic bets (being the first to use an Intel microprocessor in a dusty, dirty and hot factory environment) and a far-sighted leadership which had the vision of global leadership.

Not only did Fanuc manage to successfully adopt new electronic technology, it also became a dominant leader. Indeed a recent Bloomberg article recently called it “The Microsoft of machine tools” – a company whose products effectively run the world’s factories.

Kodak’s failure to adapt to the new technology stands in stark contrast to Fanuc’s case because Kodak had greater resources in terms of its brand reputation, its finances and its technological prowess in digital imaging. Kodak’s failure lay in its strongly inward focus.

Although it was a pioneer in the technical aspects of digital imaging, it lacked skills in areas such as lens making and manufacturing (making efficient and reliable electronic devices) to successfully commercialise products based on its innovations in digital imaging.

Critical integration

While Kodak did make efforts to outsource its camera manufacturing (and thus fill some gaps in expertise), the outsourcing arrangement did not achieve the integration of external knowledge with Kodak’s own internal knowledge that was so critical to continued innovation. As a result, Kodak remained stuck in the lower end of the digital camera spectrum and could never compete in the high end of the spectrum, which is where the bulk of the profits are.

That all begs the question: Why did Kodak fail to achieve the integration of external and internal knowledge? After all, Kodak was for decades a greatly admired company which owned an iconic brand. It had mastered all aspects of the film business including R&D, manufacturing, marketing and worldwide distribution.

The answer lies in the quality of management. Unlike Fanuc which had the towering figure of Dr Inaba, a key scientist in his field of robotics and numerical controls; in its effort to provide the visions needed to adapt to the new technologies and then lead the world market, Kodak went through a number of CEOs – it is on its fourth CEO since 1990.

The short tenure of each CEO made working towards a distant goal of industry leadership in the fast evolving technology of digital imaging rather difficult.

Very often, when CEOs change, they bring new priorities and the pursuit of a distant goal can be easily ‘misplaced’ in these reshuffles, or, worse yet, the goals themselves may be changed. Kodak also went through numerous restructurings which were traumatic for the employees and sometimes also taking it into unfamiliar and hypercompetitive markets such as printers, again diluting its focus.

The key stumbling block was its inability to convert its technical expertise into tangible products that could be sold profitably

Complacency also played its part. Kodak is based in Rochester, New York, where it was the largest employer and has a towering influence. It has helped many local causes – in fact of one of the premier music schools in the world (the Eastman School of Music at the University of Rochester) bears the name of Kodak’s founder.

Possibly, in its efforts to continue to be good to the local community, Kodak let its costs get out of control. Like many corporate peers such as GM, legacy costs (funding generous retirement packages) became a huge burden, especially when revenues started to decline.

So what lessons do Kodak’s problems hold for others?

From my perspective, the key stumbling block was its inability to convert its technical expertise into tangible products that could be sold profitably (in other words a sustainable business model). Kodak had several gaps in its expertise to design a complete business model but lacked the clarity of vision or the continuity of leadership to acquire the resources in a systematic fashion, let alone integrate them with its considerable internal knowledge of digital imaging.

Other companies facing similar technological discontinuities would do well to remember the critical role of integration of internal and external knowledge to achieve innovation, which would, in turn, improve their chances of successful adaptation.

Diaspora Matters

Developing Your Website Marketing Plan

by Victor Muchemwa on February 26, 2017

Strive Masiyiwa calls internet the ‘most valuable real estate in the world’. He says the internet is more valuable than land. He goes on to say ‘Every entrepreneur needs to “see” the Internet as “valuable real estate,” in much the same way you would see a piece of land for building something like a hotel’

So this afternoon we continue with websites reviews and do tackle the marketing and promotion side of websites. Our first question is ‘Have you seen our new improved ZBIN website? It looks much better doesn’t it? I give credit to SKT Website Design, a Harare based Web Design Company operated by a small team of brilliant youngsters with offices in Southerton.

My background is Finance and Risk Management and had never designed a website before. So when i developed our initial ZBIN website, I turned to Youtube for assistance and took several hours studying how to develop a website. After 6 hours of studying, trial and error, I did it…I produced the fastest growing business website in Zimbabwe and the region!

The quality was not the best but I had used my innovation to create a site that attracted 20,000 hits in the first month of operation. I had made history, a finance person with little website development experience ndini uyo zvatoita! Website yombobuda yakapidiguka, kana kuti mamwe maposts ombotiza lol

There is something special though that happened during the development of the website, I developed an attachment to it. The stress, the curiosity, the pain, the headaches and finally the joy of having the site up and running is indescribable. This is the greatest advantage of developing your own site versus having one developed for you.

My own researches of why most websites fail is due to the fact that there is no attachment during production and also the fact that website development is being done by IT Professionals only. They are very good at what they do but in developing most exclude the key users of the website-Finance, Marketing and Management- as a result a website produced is owned by IT and yet most forget that these guys are strictly technical in the field of Information Technology. This is why you often find websites with no new updates-in most cases users would have forgotten the website passwords or run out of ideas on what to put on the site.

So after developing a standard website I approached SKT for support. I knew the site was not the best ( it is still work in progress). I did spend half a day to talking to these brilliant youngsters. They showed me a couple of websites that they did, files of work that they have in progress. We discussed about my vision for the group, what I had done to date and what is missing. A great partnership was born on the day because we would like to develop a formidable team that works on website development and maintenance. They bring strong technical IT knowledge and skills and I bring the business side of website including E-commerce. During our partnership, we will try and fill the void that exist in the field-the absence of the business side to website issues.

Website Marketing Plan

One of the most important factor in a website is traffic! Getting traffic to your site is the difficult part especially when you are new. Getting 5 views on your site is not an easy process –the site owner has to work hard in marketing the site and also ensuring that visitors do come back again.

Google provides free analytics which show the number of people visiting your site. The analytics also come in graph form and a number of extra features. Apart from number of site visitors there is also data on how much time are they spending on the site, what are they doing? Are they returning? Are you turning them into business?

So anyone can get a site and prices range from $150 to $600 for small businesses and this depends on the number of features you would like your site to have-some may want to have an online store or databases of customers, this may need extra costs. Its therefore important to discuss what you need when you need a website. ZBIN will provide you with an important checklist for new business people interested in setting a site for the first time…a checklist will be important so that you do not end up getting a website that does not provide you with enough value or return on investment.

Marketing Plan for your website

A website without a marketing plan is as useful as a free phone number that no one knows about.

It is important to consider the following factors when developing your website:

Websites without traffic offer no business or organisational purpose: Sad but true, the myth is just pure myth. If you build a beautiful website and nobody comes, no matter how useful or artistic the website, it is useless. Think of a website as a new version of the freephone telephone number; just like a freephone number is useless if nobody dials it, so too a website is useless if nobody visits it.
Websites don’t get traffic by themselves: If you build it, and do nothing else, they will come. That’s also a myth. Websites don’t generate traffic anymore just because they are good, or useful.
Traffic takes marketing: It takes marketing to generate traffic on a website. Successful websites generate traffic by new applications of old-fashioned marketing, including advertising, public relations, and word of mouth. They also generate traffic through new Internet marketing, highlighted by careful management of searcher strategies such as search engine optimisation and CPC (cost per click) advertising on the likes of Google, Espotting and Overture.

Your competitive edge

What is your website’s competitive edge? How are you different from all others? In what way does it stand out? Is there sustainable value that you can maintain and develop over time?

The most classic of the competitive edges are those based on proprietary technology and protected by patents. A patent, an algorithm, even deeply entrenched know-how, can be a solid competitive edge.

Sometimes market share and brand acceptance are just as important. Know-how does not have to be protected by patent to offer a competitive edge. For example, some of these values might lead to competitive edge:

Quick loading pages–2 seconds vs. 12 seconds, 8 seconds being the average. For example, Buy.com’s average load time is 2-4 seconds. This has certainly been the case with Yahoo!, it consistently loads in a very quick amount of time.
Fresh content. e.g., major news sites. This is less of a concern to readers of bbc.com where the expectation is that content will be updated on a daily basis.
Trust. A community where people feel free to post their thoughts and concerns will have a competitive advantage based on trust. New posts and new ideas bring them back to your site. Fool.co.uk, for example, has mastered the art of building a network of users. They have dozens of custom email newsletters, some of which feature the most popular message board posts for that day.

The competitive edge might be different for any given company, even between one company and another in the same industry. You don’t have to have a competitive edge to run a successful business–hard work, integrity, and customer satisfaction can substitute for it–but any edge will certainly give you a head start if you need to bring in new investment. Maybe it’s your customer base, as in the case with Hewlett-Packard’s traditional relationship with engineers and technicians, or maybe it’s image and awareness, such as with Compaq. Maybe your competitive edge is quality control and consistency, like that of IBM.

Features and benefits statements

A good website strategy first identifies a market need, which indicates a target market, and then fills that need. Your strategy usually has to add an element of basic business revenue, considering who will pay how much to have that need filled.

Features and benefits statements are classics of standard marketing. For every product and every service you sell, develop your features and benefits statements.

Conclusion

Most people relax after setting up a site, they get training from website developers and initially run the site but lose interest in the long run. Some lose passwords or simply run out of what to update. This is the reason why most websites are not updated. Our advice is that enterprenuers should view websites as a precious investment that can drive business growth, you should look at your website as a source of competitive advantage over your competitors. We will cover online stores in the next article and how small businesses can take advantage of online stores.

Are you interested in setting up a website? Do you want your existing site to be reviewed or upgraded? If your answer is yes then contact SKT Website Design on +263 772 922 265