Analysis: Hardball Strategy – DSTV goes after Star Times

by Boardroom Nigeria

This looks like many things. Looks like HP, Dell and the other American PC businesses going after Lenovo’s Chinese market immediately after China joined the World Trade Organisation in 2001 and Lenovo bought over IBM’s PC business. It looks like the leading Japanese automakers – Toyota, Nissan and Honda – seizing the US light truck market from GM, Ford and Chrysler in the early 2000s. This is hardball strategy in its finest form and DSTV is out to take Star Times’ most prized asset; mass-market customers and profit sanctuary.

A few months ago, DSTV announced the introduction of a low cost version of its premium service offering, through GOTV, its subsidiary. Let’s put this in context. DSTV’s is the market leader. For so long, it has had monopoly of the satellite TV market. For a while, it looked like this monopoly was under threat though HITV’s football broadcast-license coup. However, circumstances played-out against HITV. DSTV got back the broadcast rights for the major football leagues. HITV in Nigeria went bust and it was back to the status quo.

Then came a little problem for DSTV. The Chinese were in town and they came with a very cheap version of DSTV’s offering, Star Times. Certainly not as premium, but decent enough for the mass-market. The Chinese did their homework right and in a few short months, built traction that sent shivers down the spines of the DSTV honchos. Nevertheless, like every business with a healthy level of organisational agility, DSTV responded. It launched a service for the mass-market, through GOTV and from what we gather, the Chinese might be facing a bigger battle than they imagined.

George Stalk and Rob Lachenauer in their book, Hardball: Are You Playing to Play or Playing to Win, assert that one of the best ways for companies to maintain their market share is to constantly take the war to their competitors. Put it in another way, the best way to defend is to attack, a la Barcelona FC. In playing hardball, DSTV has drawn a line in the sand for actual and potential competitors; come anywhere near our market and we will go after yours. DSTV’s intention may not be to win the battle against Star Times and it doesn’t have to. However, it needs to make it as difficult as possible for Star Times to have an overwhelming victory, by reducing the volume of its business. If Star Times is too comfortable in the mass-market, it could become the proverbial 800-pound Gorilla that sleeps anywhere it decides, including potentially, DSTV’s premium market. How will the Chinese react? Would the fact that the market is large enough to accommodate two big players reduce competitive aggression? Time will tell.

This is one of the most exciting competitive battles the Nigerian business landscape has seen in recent years. What a match-up!

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-Boardroom Nigeria is a management and business training platform. They share their insights and analysis on www.boardroomng.com

Op-ed pieces and contributions are the opinions of the writers only and do not represent the opinions of Y!/YNaija.

 

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