How to PIVOT

My younger brother, Mugulusi Eddie Fab, came to me with a crazy idea to start a manufacturing business. At first I willfully ignored him. But being persistent I began to pick some interest. He has come to me with crazy ideas before and I ended up losing money on some of them. So I was naturally cautious.

So eagerly we formed a partnership and started the project. He had already assembled a team and they had tested the concept in the market. The first product prototype was a sachet of ketchup which was sold for 500 shillings a piece. The first products were made in his kitchen in Kisaasi. Naturally we desired to expand and we began packaging the product in bottles and sold these in supermarkets. However our products were retailing for a higher price than the local tomato sauce. So they didn’t move much off the shelf.

Realizing that this strategy was not working we decided to make the products more affordable and go after another market segment. In other words we decided to PIVOT. This was preceded by a detailed market reconnaissance which he did with the sales team. We decided to make sachets which we could sell for 100 to 200 shillings. We abandoned the supermarkets and decided to go after other markets. So we imported a machine from India. We also relocated the factory to Gayaza. Eventually we began retailing our ketchup for 100 to 200 shillings and it started to move in specific retail outlets.

Knowing that we can’t compete with one product the team developed three other products under the “SHAKE” brand to complement the original ketchup. The strategy was to drive volumes as the unit selling price is only 100 to 200 shillings per pouch. Also if we attack a retailer with many products we can negotiate a good deal and are able to provide a reasonable discount.

Of course this called for the deployment of a dedicated sales force and transportation. It also called for an increase in working capital to fund the growth process. We are also developing an app to automate the sales process. We are also finalizing the UNBS certification process to ensure that we conform to quality requirements.

While maintaining our eyes on the prize we have had to PIVOT several times. Changing course and direction is part of the game of business or money engineering. We make plans but we should be willing to change them or to PIVOT depending on the prevailing circumstances.

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