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Three strategic decisions to rescue a failing business

The most successful people are the ones who learn from their mistakes and turn their failures into opportunities



The most successful people are the ones who learn from their mistakes and turn their failures into opportunities

Business captains across the world are operating in lean economic times characterized by ever shrinking consumer markets, high rates of inflation and reduced productivity, thanks to the dwindling global economic fortunes. As a result, majority entrepreneurs are mulling over the idea of downsizing of operational units and eventual close down of their businesses.

What most entrepreneurs fail to remember though is that, downsizing or closing down a new or existing business has a more severe impact on individuals and institutions that rely on the business unit than the actual business owner.

As much as business may be operating in tough economic times, it is wise to listen to a renowned marketing guru Zig Ziglar and his famous quote on turning setbacks into a success story. He points out that, “The most successful people are the ones who learn from their mistakes and turn their failures into opportunities.”

The world of free enterprise has a positive impact to the society and to our local Kenyan economy as well. It is, therefore, unwise to let go of a business enterprise just because of intermittent economic aftershocks that can be surmounted with a clear plan and strategy.

Established business owners recognize the fact that entrepreneurship is a vital cog in the wheel of economic development and is actually not meant for the faint-hearted. When faced by a business crisis, as Leonard Saffir says, be quick with the facts and slow with the blame. If your business is struggling, you need to do something to turn it around instead of folding your arms and whining. Before closing down your business, try out these turnaround strategies that could help you salvage your failing business.

  1. Trim the Fat

The first thing you ought to do is to have a screenshot of your business income and expenditure in form of a spreadsheet. The aim of this exercise is to cut out the flack and do away with whatever expenses on things your business does not urgently need.

Fore example, Catherine who runs a leading travel advisory agency in town realized that she was spending Kshs500,000 annually in magazine subscriptions for her 30 support staff. When sales began going south due to travel advisory policies by foreign governments, Catherine reduced that to Ksh25000, freeing up Ksh,475,000 annually for more productive activities in the company.

Business-strategy-150x150 Three strategic decisions to rescue a failing businessAnother bright move you could exploit is closing down unprofitable business units/ branches in order to preserve your bottom line. Barclays the other day decided to sell off its 33.7 per cent stake in their South African unit raising a total of Ksh299.8 billion that will definitely be channeled to more profit making ventures. The bank decided to stick to it’s core USA and Britain market.

Another example is that of the ailing national carrier Kenya Airways. As per their 2016 report, Kenya Airways made hard choices of subleasing three Boeing 777’s and two Boeing 787’s and selling two Boeing 777’s bringing their fleet costs down by Ksh14 billion to Ksh15.5 billion, significantly reducing their loss making levels. Tough choices indeed but quite necessary for business survival.

  1. Have the right business model

Most entrepreneurs fail not because they have entered the wrong market but because they have the wrong business model. Management operatives at the giant e-commerce platform Amazon realized that consumers were seeking low prices, convenience and faster delivery of products and services and quickly structured their business model around that reality. Had they not realized that fact fast and early enough, they would not be enjoying the current status they are in in the world of e-commerce and delivery business.

Delivery and price are just as important as the quality of the products and services your are offering in the market. Customers are fluid and are not bound to one organization thanks to the many vendors selling just the same products/services in the market. Faced by low visitor turnouts in low seasons, the Tourism Ministry in Kenya is now toying around with the idea of reducing visa and park entry fees during the low tourist season of April and June. The move will definitely cushion the the industry against low sales during lean times when the industry registers low visitor numbers.

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Right pricing and the ever fluid consumer needs can only be accurately captured by a prior market research in the industry you are operating in. Such a blueprint is vital and will arm you with prior knowledge of your customer buying patterns, what products/services they need most, how they want to be served, and how much they are willing to pay in exchange for your products/services.

The market research document will set your business up for success in the industry. In case you did not do a research during the business set up stage, do not worry yourself much. The research could still be conducted on a daily basis as you run your business entity. Constant restructuring of your business model is key. Though it takes lots time, it will help you keep up with the ever changing consumer needs and wants.

  1. Differentiate yourself in an overly saturated market

As the ability of consumers to choose from a wide array of product and service providers continues to increase, every thoughtful entrepreneur must be intentional in standing out in the market as well as creating and delivering value to her consumers. This is if your are serious with your business and don’t intend to see it close down.

Business-strategy-150x150 Three strategic decisions to rescue a failing businessA number of scheming entrepreneurs actually believe that a crowded marketplace is a critical indicator of high demand. They do not hesitate to put their heads into the crowded market and the trick they mostly use is differentiation and exemplary customer service.

A couple of years ago, Purity set out to launch a high end spa meant to cater for middle class women in Nairobi. Armed with her cheque book and property agent, she set out to locate a premise with a high number of high end spas in the vicinity. After weeks of careful searching, she found one in the one of the leafy suburbs of Nairobi town and aid for it immediately.

After contracting her interior designer, neighbours started whispering doubts about Purity’s move of jumping into an overly saturated high end spa market. She blocked her ears and went on to put final touches on her dream spa.

The inaugural day came and Purity opened her doors to clients and went ahead to offer a 50 per cent slash on prices of services offered by other high end spas in the neighborhood. She made an effort to collect names and contact details of all clients who set foot in her dream spa on that material day. Confident in her highly trained team, Purity was assured of repeat business at normal rates the next time the same clients stepped into her business doors.

Unique approach

Word actually spread around the vicinity and Purity was blessed with a double increase in clientele the following weekend. As we speak, her dream spa is among the leading high end spas in the leafy suburb.Whether your business has a distinct philosophy or a unique approach, or transforms some aspect of the traditional offers of your competitors into something bigger, better or more useful, you can easily excel in an overly crowded market through differentiation. Am sure most of you shy away from crowded markets in fear of competition and business failure but you now know what to do if faced by such an opportunity.

These strategies and more should help you gain confidence and turn around your struggling business. Remember, most of the worlds successful business owners started and closed numerous business ventures before making it big in the corporate world.

So, who are you to chicken out of small economic tremors? Experiences of failure ought to strengthen you and offer you a map of what has and hasn’t worked before and not an excuse to close down your brilliant business entity. Come up with your own business turnaround campaign today and stop living in fear of the unknown. Businesses are built to last and not to fail.

Maina Gachanjah is a Marketing Consultant at Juhudi Investments Consultancy. He  runs training programmes on marketing management and entrepreneurship. call +254 716 951 031 and book an appointment. <>


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Bt Intelligence

Researchers find first-ever Android ransomware

DoubleLocker is distributed mostly as a fake Adobe Flash Player through compromised websites. Once launched, the app requests activation of the malware’s accessibility service, named ‘Google Play Service’.



ESET researchers have discovered DoubleLocker, an innovative Android malware that combines a cunning infection mechanism with two powerful tools for extorting money from its victims.

Detected by ESET products as Android/DoubleLocker, it is based on the foundations of the banking Trojan Android.BankBot.211.origin, renowned for misusing accessibility services of the Android operating system, which is a popular trick among cybercriminals.

“DoubleLocker’s payload can change the device’s PIN, preventing the victim from accessing their device and encrypts the victim’s data. Such a combination hasn’t been seen yet in the Android ecosystem,” comments Lukáš Štefanko, ESET Malware Researcher who discovered DoubleLocker.

DoubleLocker spreads in the very same way as its banking parent does. It is distributed mostly as a fake Adobe Flash Player through compromised websites. Once launched, the app requests activation of the malware’s accessibility service, named ‘Google Play Service’.

After the malware obtains the accessibility permissions, it uses them to activate device administrator rights and set itself as the default Home application, in both cases without the user’s consent.

“Setting itself as a default home app – a launcher – is a trick that improves the malware’s persistence. Whenever the user clicks on the Home button, the ransomware gets activated and the device gets locked again. Thanks to using the accessibility service, the user doesn’t know that they launched malware by hitting Home,” explains Stefanko.

Related: Govt puts banks on high alert over cyber attacks

DoubleLocker however lacks the functions related to harvesting users’ banking credentials and wiping out their accounts, but which can be added easily.

“Given its banking malware roots, DoubleLocker may well be turned into what can be called ransom-bankers. Two-stage malware that first tries to wipe your bank or PayPal account and subsequently locks your device and data to request a ransom”, says Stefanko who adds that a test version of such a ransom-banker was spotted in the wild as long ago as May, 2017.

ALSO SEE: Firms can use the cloud to block cyber criminals

 DoubleLocker, once executed on the device, creates two reasons for the victims to pay.

First, it changes the device’s PIN, effectively blocking the victim from using it.  The new PIN is set to a random value which is neither stored on the device nor sent anywhere, so it’s impossible for the user or a security expert to recover it. After the ransom is paid, the attacker can remotely reset the PIN and unlock the device.

Second, DoubleLocker encrypts all files from the device’s primary storage directory. It utilizes the AES encryption algorithm, appending the filename extension “.cryeye”.  The ransom has been set to 0.0130 BTC (approximately USD 54 at time of writing) and the message highlights that it must be paid within 24 hours. However, if the ransom is not paid, the data will remain encrypted and will not be deleted.

Encrypted-files-169x300 Researchers find first-ever Android ransomware

Figure 1: Encrypted files on a device infected with DoubleLocker


Encrypted-files-169x300 Researchers find first-ever Android ransomware

Figure 2: DoubleLocker ransom messages


In the ransom note, the user is warned against removing or otherwise blocking DoubleLocker: To prevent unwanted removal of the “software”, the crooks even recommend disabling the user’s antivirus software.

“Such advice is irrelevant: all those with a quality security solution installed on their devices are safe from DoubleLocker,” comments Štefanko.

SEE: Ransomware: Should you pay cyber criminals?

To clean your device of the DoubleLocker for devices that are not rooted and which don’t have a mobile device management solution installed capable of resetting the PIN, the only way to remove the PIN lock screen is via a factory reset.

If the device is rooted, then the user can connect to the device by ADB and remove the file where the PIN is stored. For this to work, the device needs to have debugging enabled (Settings -> Developer options -> USB Debugging).

The PIN or password lock screen will be removed and the user can access the device. Then, working in safe mode, the user can deactivate device administrator rights for the malware and uninstall it. In some cases, a device reboot is needed.

“DoubleLocker serves as just another reason for mobile users to have a quality security solution installed, and to back up their data on a regular basis,” concludes Štefanko.

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Bt Intelligence

Former Nation CEO owed Sh56m by struggling retailer

Mr Gitahi says numerous boardroom talks with Nakumatt management have yielded little, forcing the company to move to court



Mr Linus Gitahi is the owner and chairman of Tropikal Brands, which has been supplying Nakumatt with various products.

Former Nation Media Group CEO Linus Gitahi is among creditors and suppliers owed hundreds of billions of shillings by Nakumatt. Mr Gitahi, the owner and chairman of Tropikal Brands, is owed Ksh56.3 million by the struggling retail chain, which has lately been facing cashflow difficulties.

Mr Gitahi says numerous boardroom talks with Nakumatt management have yielded little, forcing the company to move to court.

“We have watched the company deteriorate for about a year now,” Mr Gitahi is quoted as saying by Business Daily. “Following negotiations, they started issuing us postdated cheques which at some point started bouncing.”

Even with these credible signs of financial weakness, Tropikal Brands continued supplying its products to Nakumatt, which include air fresheners and pesticides among, “because they were a major retailer.”

READ: Linus Gitahi returns to Aga Khan empire as director

Gitahi is among a number of wealthy industrialists who are trawling the retailer seeking settlement of debts worth billions of shillings. Most of them have moved to court to secure their dues.

The list of Nakumatt’s prominent creditors also includes the Kenyatta family (Brookside Dairies), Chris Kirubi (Haco Industries), Kimani Rugendo (Kevian Kenya).

Brookside, whose executive chairman is Muhoho Kenyatta, is owed Sh457 million. Mr Kirubi is claiming Sh71.8 million, Mr Rugendo (of the Pick ‘N’ Peel brand) Sh90.2 million while Mr Gitahi is seeking to recover Sh56.3 million from the retail chain.

The row between the Ndegwa family and Nakumatt over the occupancy of Nairobi’s Junction Mall exposed the intensity of bad debts wars the supermarket is fighting against wealthy industrialists.

The Ndegwas, who are successors of former Central Bank of Kenya governor Philip Ndegwa, on Saturday night ejected Nakumatt from the Junction Mall where it holds a majority stake, citing failure by the retailer to pay the tens of millions shillings it owes in rent arrears.

The contractual disputes, which have been boiling under for a year, finally burst to the surface, dragging the reclusive Ndegwa family into the limelight they have avoided for years despite having their footprints all over the national economy.

Nakumatt’s problems were complicated this week by the resignation of the chief marketing officer, Mr Andrew Dixon, barely 10 months after he was appointed.

ALSO SEE: Nakumatt exposes family-owned chains’ struggle to adapt 

Mr Dixon is the former executive of UK-based retailer Tesco. He had been appointed to be Nakukatt’s chief marketing officer help boost Nakumatt’s strategic outlook and consumer engagement. Mr Dixon confirmed his departure via his official twitter page and a text message he directed to Citizen Digital.

This is the second high profile management exit from Nakumatt following regional and strategy director Thiagarajan Ramamurthy who left in April to become the chief executive officer of Bidco Africa.

Nakumatt is involved in takeover talks with Tuskys Supermarkets for a merge as well debt restructuring negotiations with lenders.

Nakumatt has been plagued by acute stock shortage as suppliers severed ties over unpaid deliveries forcing the retailer to close as many as four of its stores in Kenya.

READ: How Kenya has turned into a beggar’s paradise

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Bt Intelligence

Tuskys and Nakumatt reach management deal



The two families have engaged transaction advisers who are working on the deal before it is presented to the Competition Authority.

Nakumatt and Tuskys shares will be owned by a holding company to be formed as part of the merger deal between the two retailers.

The two, which control the retail business in the country, are currently reviewing the structure of the two businesses to facilitate the merger process, The Standard reported today, quoting an inside source. “The new company will own all the shares of the two entities. It is still too early to know who will own what stake in the new entity, whose name has also not yet been agreed on,” the source told Standard.

Though details of the deal remain scanty given the secrecy that has characterised the family businesses, it is also understood that the two firms will leave a number of shares to be sold to a private investor at a later date.

Why Tuskys and Nakumatt are perfect mates
The real trouble with Nakumatt

“In the end, there will be a company whose shares will be owned by the two entities after it is determined what share each would own. This will allow the two firms to continue operating as separate entities,” said the source who is not authorised to comment on the negotiations.

He said the two families have engaged transaction advisers who are working on the deal before it is presented to the Competition Authority. Negotiations are also ongoing about the fate of the two retailers’ staff after the merger.

The retail chains issued the first joint statement last week confirming the merger talks but pointed out that the process was complex and would require some time to complete.

Cash flow crisis The merger is expected to offer Nakumatt Supermarkets a lifeline in dealing with a painful cash flow crisis and bringing back stock to its empty shelves. The deal is being described as a ‘homegrown solution’ to the retail chain’s troubles.

The entities last week formed a caretaker management team that comprises executives drawn from the two firms. Audit firm KPMG is providing transaction advisory services for the merger. In exchange, Tuskys, which still enjoys some supplier goodwill, will offer Nakumatt access to stock from its retail value chain.

READ: Business started with hotel tip grows to Sh3.5 million

The retailer’s current position is a far cry from its former stature when its ‘You Need It, We’ve Got It’ tagline promised shoppers a vast variety of goods. It had 66 branches in the region before it began closing them, weighed down by piling supplier debt and unpaid rent. According to a recent report released by the Ministry of Industry and Trade, Nakumatt led in debts to suppliers, owing Sh278.9 million by December last year.

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Bt Intelligence

GDC CEO gets mixed up in hiring of senior manager

Johnson Ole Nchoe is embroiled in an internal cold-war with a section of management who see him favouring one candidate for communications manager position



Johnson Ole Nchoe, CEO, Geothermal Development Corporation: Said to have contracted the communications manager after she resigned.

Tension is brewing within the Geothermal Development Corporation (GDC) boardroom as the company scouts for an in-house communications and marketing manager.

The company’s CEO, Mr Johnson Ole Nchoe, is embroiled in an internal cold-war with a section of the board and management who see him favouring a former GDC communications manager, Ruth Musembi, who left two years ago.

The post of corporate communications and marketing manager fell vacant in March 2015 after Ms Musembi resigned under unclear circumstances, claiming to have done so under duress. She even requested the human resource office to release part of her pension.

Her resignation letter dated March 16th 2015 indicated she would cease being a GDC employee on 30th April, 2015.

“I have tendered my resignation effective today,” she wrote in her resignation letter seen by Business Today, which was sent to human resources general manager Irene Onyambu and copied to the managing director and the general manager for corporate affairs.

“I will serve one and a half month notice and utilize my outstanding 30-day for the rest of the notice. Please, organize my final dues. I would like to access the portion that is permitted under the law.”

Ruth-Musembi-GDC GDC CEO gets mixed up in hiring of senior manager

Ruth Musembi: Resigned from GDC in 2005 and set to make a comeback.

SEE: CNN reports on geothermal energy in Kenya

Four months later, in August 2015, she was back at GDC after being rehired under a one-year contract without competitive interviews being conducted.

The contract was silently renewed in 2016, according to insiders at GDC, in breach of the company’s hiring policy.

Meanwhile, after returning on board on contract, Ms Musembi, who worked earlier for NEMA as communications manager, is said to have immediately hired a PR agency linked to her to manage the company’s communication needs, at a time the communications department was seen to be overstaffed yet underworked. This elicited protests from the staff who collected signatures in a petition to denounce the act.

These so-called whistle-blowers were reportedly punished by being transferred to different departments. “The then general manager Christopher Leparan and the CEO Johnson Ole Nchoe desperately invoked the transfers as a mechanism to punish the staff,” said the source. “The transfer allowances paid to the staff ran into millions of shillings.”

SEE ALSO: Disabled man losses his Sh3 million bus to auctioneers

Two and a half years after resigning, Ruth Musembi is set to make a comeback as to GDC’s payroll, if the CEO has his way.  Her contract ended on 31st August 2017, in a move that is likely to cause uneasiness in the board as well.

In June 2017, GDC advertised the post internally. The advert, which read as if crafted to suit Ms Musembi, a former teacher, required a minimum of 12 years of experience as a manager among others, in what was seen as a ploy to lock out younger managers in the department who would be interested in the job.

Ironically, when GDC advertised for the post of General Managers, a more senior position, it asked for only five years’ experience. The staff union protested against the internal advert, and it was silently pulled down.  The company then advertised externally in the newspapers but reduced the number of years of experience from 12 to 10, with 5 as a manager.

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