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Competing like a Champion

Competing like a Champion
Image courtesy of Times Live an Avusa Inc. website

Image courtesy of Times Live an Avusa Inc. website

There was an inspiring story in the “It’s My Business” entrepreneurial supplement to the Sunday Times of 2nd May 2010. It described the business journey of Michael Rademeyer an entrepreneur in the clothing industry. The full article can be viewed online at the Times Live website. I have quoted from the article and acknowledge the fine work of It’s My Business and journalist Hendri Pelser on bring this incredible story to the public.
Back in 2006 the company he worked for closed down, as have hundreds in this troubled industry in the last decade. He joined another company who ‘had an unorthodox view on salaries – he didn’t get paid’. So, in an industry which has been battered by imports coming in at prices that local manufacturers can’t match, he did the intelligent thing and opened a clothing manufacturing company making jackets. He was faced with two major competitive threats. Chinese manufacturers could make quickly and because of economies of scale and low cost labour they could make jackets at prices he could never match. What the Chinese had not gobbled up was controlled by long established large local manufacturers. How could he compete? He worked on three issues:

    • Local manufacturers took four to six weeks to produce an order. Michael’s company, Michael Luke Clothing delivered in two weeks.
    • The Chinese suppliers need to ship to South Africa but were even more at risk when something went wrong – they had to ship back to China to remedy the problem and then return the merchandise. Michael Luke could respond in days or even hours.
    • He could make higher quality jackets than his competitors by being a stickler for getting things right, and placing his factory in the depressed Hammanskraal area where there were many highly skilled clothing workers who had been retrenched, so he had the best workers.

The outcome was a company that grew from 8 staff to 100 between 2006 and 2010. Just think of that miracle – massive growth in a severely depressed area, in an industry considered to be a bloodbath and covering the time of a massive worldwide recession.
There are three other lessons to be learnt for this wonderful story. The first is that he was faced with some downsizing when the recession bit, and he vowed then to manage his order books so that he kept his labour force intact. He limits growth to sustainable volumes even in bad times and so keeps a skilled and fanatically loyal work force busy.
Secondly he is faster on his feet than his competitors in keeping his products innovative and fresh. He reacts faster to changes in fashion than others and so is less at risk from copycat manufacturers.
And lastly he puts an enormous emphasis on service and especially keeping promises. In his company keeping to a promised delivery date is not negotiable, and he keeps supplier relations at the same high standards as his customer relations.
Last word to him, as quoted in the article “To me, success is not having R1- million in the bank. Success is measured on how long you stay in business. I would rather trade immediate profit to be in business in ten years time”.

About Ed Hatton
Ed Hatton had a successful career in sales and marketing management in the IT industry before launching consulting company The Marketing Director almost 20 years ago. Ed is passionate about entrepreneurs and the need to develop the SME sector. He co-authored a textbook on Entrepreneurship and writes the advice column “Start Up Coach” for Entrepreneur Magazine.
More information is available here or send Ed an e-mail.

About The Marketing Director
This consulting company advises and mentors small and medium enterprises with a particular focus on strategy, marketing and sales, and the inter-relationship between these disciplines. The company has been operational for almost 20 years and has consulted to a wide range of IT, manufacturing, services based, and distribution SMEs. The success ratio of client companies is far ahead of industry norms, meaning that clients of The Marketing Director are generally high flyers in their sectors, and survivors when other fail.
More information is available here, or by e-mail.

©copyright  Ed Hatton. All rights reserved. You may republish this article or extracts from it provided you acknowledge me as the author and acknowledge my copyright.

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