NIGERIAN COMPANIES AND THE HERD MENTALITY

Philip Kotler, in his book, Marketing Management, posited that “all companies must look beyond their present situation and develop a long-term strategy to meet changing conditions in their industry. They must develop a game plan for achieving their long-run objectives.” He further opined that there is no one strategy that is optimal for all companies. Each company must determine what makes the most sense in the light of its position in the industry and its objectives, opportunities, and resources”.

This principle was applied by some notable companies in the United States and Japan in varying degrees to strengthen their operations as well as markets and hence improved revenue base. Companies like Goodyear Tire and Rubber Co., Uniroyal and Armstrong Rubber Co. in the US and Toyota in Japan applied this strategy to perfect their operations and products.

In the tire industry where all the major players adopted it, it was so used efficiently that each of the company got something and was, in a way, content retaining its distinct character and having to run to the other for assistance at any given time.

Here in our dear country, Nigeria, any thing and every thing runs on the herd mentality, This is why any strategy employed by company A to shore up its operations is automatically copied by company B irrespective of the differences in objective, resources and opportunities available to the two companies and to some extent, experience in their respective fields?

It is for the same reason that our telecom providers are all in the race to promote one event or the other usually in the entertainment sector that in a way alter and pollute our culture. No thought is given to the education sector by way of empowering the youths through scholarships as the oil companies do nor assisting with social projects that benefit the majority across economic strata.

During the re-capitalization efforts by banks, the stock market became the centre of attraction to all the banks. And they are yet to leave that market till date, not even the crisis in that pot of confusion is discouraging them, no. When it was the turn of the insurance sector to shore up their capital base; they too turned to the capital market for succor. The irony in this as it concerns the insurance companies is that the sector that is supposed to invest more in the capital market and in such other critical areas of our economy because of its potential to raise more money than other financial institutions, is the one begging for money. A direct opposite of what obtains in other climes is what our insurance sector represents here in Nigeria. Too bad.

By some slips arising from misconceptions or miss-application of strategy, our banks are increasingly finding it difficult to match reality with expectations. Rather than attempt a review of business plans and carry out some radical changes, marketing plans are being updated and probably are now made to replace business plans the result of which are the various panic measures being put in place to hunt for deposits even from school children as if that is what will give value and stability to their business.

While all these comedies are playing out, some of the banks are declaring mind boggling figures and mouth watering figures as profits, some as high as 98% over the previous year. And if we are to believe these fantastic performances it then becomes very difficult to reconcile the crazy hunt for deposits that now bothers on desperation. Worst still is the fact that daily, our highly performing banks are being accused of cheating their customers maybe to make up for the big profits declared.

Understandably, and in line with the bandwagon behavior, the new craze has shifted to the micro finance sector with virtually all the major banks falling over themselves to take vantage (?) position in that area. The obvious fact that that sector is also banking at the low level makes no meaning to the extent ‘deposit money’ will be sourced there.

While commending our banks for their innovation and ingenuity in what is gradually becoming a phenomenon in the way we do business in this country, it is better some good thought is given to carry out a review of operations based on reality. It will be a better strategy for each bank to look inward and turn its distinctive competence into its competitive advantage as IBTC used to be. Cutting an edge for your business will be a better strategy to this uniformity approach. Harassing people on the streets for deposits sends a signal that all is not well with our banks.

Can we be more creative in doing these things? Enough of these pretensions.