In sport, the term Home Ground Advantage is often heard. The term implies that the team playing at “home” has an advantage over the other team. On a superficial level this makes sense as they should have more fans and these fans should rally against the opposing team to create a hostile environment for the opposing team. What we can learn from the 2015 Rugby World Cup is that home ground advantage cannot guarantee success.
Lesson 5 – Don’t rely on Home Ground Advantage
In lesson 5, we look at how home ground advantage does not guarantee success. In the 2015 Rugby World Cup, the hosts England, were drawn in the “Pool of Death” with Wales and Australia. Since the World Cup was hosted by England, many observers expected England to make it our of the pool of death and probably at the expense of injury ravaged Wales. The way things turned out is that it England who will be watching the World Cup from the stands and Wales and Australia who progress to the knock out stages.
Additional irony to this situation is that England does not select players who do not play in England, where Australia had a similar policy they recently overturned this policy to add overseas based players to their squad. It was of course Australia who beat England to send them out of the World Cup. If there was ever an opportunity to use the phrase adding insult to injury, this is the time.
So what can business learn from this?
1.) Homegrown customer loyalty is fickle.
Much has been said of the new SAB brewery in Okahandja. Fantastic for job creation and adding value locally to products, however the warning bells are ringing for Namibia Breweries, the producers of Windhoek and Tafel Lager. The scene for customer loyalty has been set and there have been reports in the media about Beer Wars. In the hyperlinked article, NBL Manager for Corporate Affairs, Gideon Shilongo, says: “Our Namibian consumers have proven over time that they do not compromise on top quality beer and this is what NBL believes in, in regard to our Reinheitsgebot brewing philosophy.” Based on the advantage of the home ground companies such as NBL have to be prepared to compete with the world’s best. In the two points listed below, NBL and similar companies would be wise to not count too much on local support.
2.) Customer scrutiny of local products is more intense.
Recently the Namibian government overturned a decision to import restrictions on dairy products. Prior to this decision being overturned customers were incensed at the drastic increase in locally produced milk and dairy products. In addition to prices skyrocketing, there were supply shortfalls. All of this resulted in a backlash from consumers and general bad publicity for the dairy producers. Even a press release from local dairy producers on the state if the international dairy market did little to appease the public. On the above evidence the lesson is that, if you produce locally, businesses need to be prepared for intense public scrutiny of their products and services.
3.) Customers expect local prices to be cheaper.
The view point of customers, particularly in Namibia, is that if products are produced locally it should be cheaper. This is because of a general perception that most of the food in Namibia is imported and therefore more expensive. Thus if something is produced here, it should be cheaper. This is seen in the ongoing complaints against the pricing of chicken in Namibia. While chicken producers fail to meet demand, this price of chicken is more expensive after being produced locally. This is while the chicken industry claims they are also fighting for survival. The point of this is that local suppliers and producers need to also consider the underlying biases and perception of local consumers.
In summary, like the English Rugby team found out, while you can count on near fanatic local support. Business also need to be prepared for local backlash and increased scrutiny if underlying perceptions and expectations are not managed.