Are Oligopolies the Answer to Zambian Companies Being Innovative?

Competition in any economy is the driving force for innovation. Much has been written about its importance however, competition in Zambia has not been fully been embraced by those that chose to play the competitive game. Much of what lacks in Zambian competition is knowledge of what type of players are in a game.

What is interesting is when you drive around the city of Lusaka which has been a bustling with an increase in the number of motor vehicles making it a prime location for setting up car washes at each and every available piece of side road that the council can allocate a prospective local investor. Note that the barriers for entering the car wash game are very minimal. What this implies is that anyone with a bucket and hoover can enter this game, making it prime for competitive forces. However, many investors believe or would like to believe that it is a game of scale. For revenue generation it is.

Although this may be true to a certain extent, this is a business that can easily have its value preposition destroyed by the stroke of a pen. Council and city planning regulation is inconsistent. Environmental aspects of this business are also murky. The moment these forces are in alignment that is the moment value evaporates.

What does this all have to do with competition you must be thinking? Well, the moment you have more than 5 players in a game, value becomes threatened through player saturation in the market. Furthermore, an increase in competition in the market as a game of car wash becomes an area of interest from numerous macro environment stakeholders. By their mere presence in numbers signals to the environment that if there is a source of value in this game, it must be ripe for tithing.

Innovation therefore, demands that the safety net that is provided by copying other businesses without considering how your company will compete in the market as a game becomes your only recourse for survival in the game.  What will make survival possible when the eminent macro headwinds hit will be whether your company joined the game based on competing on price or product differentiation.