Central Bank of Nigeria to restrict forex on importation of milk: A Brand Strategy Perspective.
A Brand Strategy Perspective.
One of the raging topics (In Nigeria, drama never ceases) in the past week, has been about the CBN restricting forex for the importation of milk ostensibly to conserve forex and defend the Naira as well as ‘boost local production of milk’. The emerging policy, like all policies, has proponents and opponents.
One proponent is the richest man in Africa according to Forbes who is positioning to take advantage, some argue, unfairly and monopolistically.
One opponent, here: Dangote Wants You To Be Poor
has written about the potential negative impact of the policy, such as increased cost, ready availability, and anti-trust concerns.
Regardless of how the pendulum of the policy swings, manufacturers and brands need to prepare for impact from a competitive corporate and brand strategy perspective.
Michael Porter’s framework of competitive strategies would be useful: brands can choose to play either by differentiation, cost leadership and/or focus.
If costs go up, prices of dairy brands would generally rise. For a brand to win with higher prices, it would need to differentiate itself by offering added value such as fortification with relevant micro-nutrients and drive strategic brand building. A redefinition of target market might be required. Packaging innovation to lower costs should also be in view.
On the other hand, a manufacturer and brand with financial capacity may choose to play with cost leadership and drive down operational costs to enable consumer price to be as low as budgeted margins would allow.
Choosing the focus competitive strategy could entail new product development such as specialty dairy products and premium pricing.
In all options, packaging would play a key role.
A big question would be how to ensure accessibility of milk to those who most need it: children, regardless of socio-economic class. I hope those who are driving the policy have this firmly in view. And also that brands are ‘woke’ to play competitively.
Author —-Lampe Omoyele
Its only in Nigeria you put the cart before the horse!