Page 1 of 3 123 LastLast
Results 1 to 10 of 28

Thread: When will this Bottom Feeder be eyed by the Competition Commission?

  1. #1
    Email problem
    Join Date
    May 2011
    Location
    Pretoria
    Posts
    45
    Thanks
    0
    Thanked 5 Times in 3 Posts

    When will this Bottom Feeder be eyed by the Competition Commission?

    Appliance Repair businesses are the bottom feeders of our society. I have had an Appliance Repair business in Pretoria for 10 years. Initially, I made a lot of money, but like in any free market environment, when that happens new entrants eat away at your market share and profits. Now the business is barely surviving. I planned to close it, because of my dealings with the Russian Federation.

    But I thought, I now have enough money available to kick some butt in the Appliance Repair game. So it is time for a shake up. The structure of the market is as follows:

    2 suppliers of spare parts
    2 or 3 big repair businesses
    100's of small repair businesses

    All the repair businesses buy their spares from one of the 2 suppliers.

    Now my planned strategy is as follows:

    Buy out the spares parts suppliers even if I have to pay a premium. If they do not want to sell, headhunt their personnel and open a spare part supply business next door to them and close them down by selling at cost less 10% for 3 months or however long it takes to kill them.

    Buy the 2 big repair shops. Now that I control the spares supply in Pretoria, I can drive the smaller repair shops out of business by either discontinuing their discount or refusing to sell to them.

    Many customers are a bunch of arseholes and once they know what the problem with the machine is, they do not accept the quote, but want the machine back to do the repairs themselves. This is easy to manage when the spares supply and the repairs are integrated. You can flag that customer on the system and when someone comes in to buy that spare, you ask for his details. If he is the one who did not accept the quote, you sell the spare at double the normal retail price or he can buzz off and go buy it in Johannesburg, because he will not be able to buy it in Pretoria.

    This will be how you gain control of the market in Pretoria. Then on to Johannesburg where you do the same. Now I wonder, will the Competition Commission waste their time with a business like this which is clearly behaving monopolistic, but not deemed as strategic like bread?

  2. #2
    Diamond Member adrianh's Avatar
    Join Date
    Mar 2010
    Location
    Cape Town
    Posts
    5,089
    Thanks
    336
    Thanked 808 Times in 642 Posts
    I just read your post talking about how
    Many customers are a bunch of arseholes
    and other comments like
    you sell the spare at double the normal retail price or he can buzz off and go buy it in Johannesburg, because he will not be able to buy it in Pretoria.
    And then you point the following out
    Appliance Repair businesses are the bottom feeders of our society.
    I think that the post answers itself
    How easily someone is offended is directly proportional to how stupid they are.
    ~GS Elevator

  3. #3
    Email problem
    Join Date
    May 2011
    Location
    Pretoria
    Posts
    45
    Thanks
    0
    Thanked 5 Times in 3 Posts
    What is wrong with what I wrote? Please explain it in a bit more detail. You have not answered the question that was asked either, so what is your point, exactly?

  4. #4
    Full Member
    Join Date
    May 2011
    Location
    JHB
    Posts
    31
    Thanks
    1
    Thanked 2 Times in 2 Posts
    Not sure if the lack of 'strategic behaviour' would make any difference, what you're suggesting so far sounds like a case the commission would definitely be interested in.

  5. #5
    Site Caretaker Dave A's Avatar
    Join Date
    May 2006
    Location
    Durban, South Africa
    Posts
    20,979
    Thanks
    3,055
    Thanked 2,462 Times in 2,067 Posts
    Blog Entries
    12
    I've been to big IT repair operations that already behave like this - I thought apprepcen was taking the mickey...
    The trouble with opportunity is it normally comes dressed up as work.

  6. #6
    Gold Member
    Join Date
    Jun 2010
    Location
    Johannesburg
    Posts
    832
    Thanks
    180
    Thanked 176 Times in 145 Posts
    Quote Originally Posted by apprepcen View Post
    This will be how you gain control of the market in Pretoria. Then on to Johannesburg where you do the same.
    And if you make any decent money doing this .....

    Quote Originally Posted by apprepcen View Post
    ... but like in any free market environment, when that happens new entrants eat away at your market share and profits.
    Back to square one, after spending a lot of money buying dealers at a premium and selling at below cost. Surely there is a better more sustainable business model out there? That money you have could be spent far more wisely and profitably IMO.

  7. #7
    Email problem
    Join Date
    May 2011
    Location
    Pretoria
    Posts
    45
    Thanks
    0
    Thanked 5 Times in 3 Posts
    Quote Originally Posted by BusFact View Post
    And if you make any decent money doing this .....



    Back to square one, after spending a lot of money buying dealers at a premium and selling at below cost. Surely there is a better more sustainable business model out there? That money you have could be spent far more wisely and profitably IMO.
    Then I take them out of the market again, either by buying them out and signing restraint of trade agreements or I close them down by offering our services for free for a month or 2. Business is war. I was almost a victim, but now I am on the attack. There is a better way still. Refuse to sell them spares. What I want to do is raise the barriers of entry.
    Last edited by apprepcen; 08-Jul-11 at 03:24 PM.

  8. #8
    Diamond Member AndyD's Avatar
    Join Date
    Jan 2010
    Location
    Cape Town
    Posts
    4,403
    Thanks
    513
    Thanked 854 Times in 687 Posts
    Quote Originally Posted by Dave A View Post
    I thought apprepcen was taking the mickey...
    I didn't reply before now because I wasn't sure if this was some kind of wind-up.

    I just want to check if I'm straight so far.

    • You opened and ran an appliance repair shop which was very profitable in the early years but as competition grew they ate away at your market and now you're left with a business that's no longer profitable. (I didn't understand where the Russian Federation fits in though)
    • You're now considering either buying out the two main spares suppliers or putting them out of business by head-hunting their key personnel and selling appliance spares at cost or under market value.
    • Once you control the supply of appliance spares you will either buy out the two biggest repair centres or you'll put them out of business by undercutting them or artificially inflating the price you'll sell spares to them.
    • If this fails you'll refuse to sell them spares at all.
    • Any ....and I quote....arsehole customers who decline your quotation to repair their appliances will be blacklisted and not allowed to purchase spares.
    • Once you've conquered Pretoria then onto Joburg..... and beyond!!


    I can see a couple of flaws in your 'business' plan immediately but I'm all ears to hear about the 'Russian Federation' story first.
    _______________________________________________
    I am special and so is Vanash.
    _______________________________________________

  9. #9
    Gold Member Sparks's Avatar
    Join Date
    Dec 2009
    Location
    Port Elizabeth
    Posts
    826
    Thanks
    15
    Thanked 112 Times in 90 Posts
    If you can afford to buy out all the local suppliers and force the competition (?) out, what the hell are you complaining about? Go retire somewhere and let the people who need to work do it.

  10. #10
    Email problem mother's Avatar
    Join Date
    Jul 2011
    Location
    Northwest Province
    Posts
    333
    Thanks
    31
    Thanked 45 Times in 35 Posts
    Blog Entries
    2
    Quote Originally Posted by apprepcen View Post
    Now the business is barely surviving....I now have enough money available to kick some butt in the Appliance Repair game.
    So obviously the money you have available is from a different source, not the barely surviving business?

    Quote Originally Posted by apprepcen View Post
    Buy out the spares parts suppliers... pay a premium ... headhunt their personnel ... selling at cost less 10% for 3 months or however long it takes... Buy the 2 big repair shops... refusing to sell to them... he can buzz off and go buy it in Johannesburg
    Is it just me, or is this an extremely expensive strategy?
    Not trying to funny apprepcen, but is this a strategy aimed at yielding a financial return on investment, or is this simply a revenge fantasy?

Page 1 of 3 123 LastLast

Similar Threads

  1. Competition Commission refers abuse of dominance findings against Telkom
    By BBBEE_CompSpec in forum General Business Forum
    Replies: 3
    Last Post: 30-Oct-09, 07:13 PM
  2. [Article] Bargaining council is competition killer
    By BBBEE_CompSpec in forum Labour Relations and Legislation Forum
    Replies: 0
    Last Post: 30-Oct-09, 06:56 PM
  3. [Article] Animated headline feeder for my blog.
    By IanF in forum Marketing Forum
    Replies: 2
    Last Post: 25-Jan-09, 09:28 PM
  4. Competition commission's banking inquiry public hearings.
    By Dave A in forum Business Finance Forum
    Replies: 6
    Last Post: 14-Nov-06, 12:43 PM

Did you like this article? Share it with your favourite social network.

Did you like this article? Share it with your favourite social network.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •