Price is not a strategy: Alan Knott-Craig

Alan Knott-Craig will take the reins at Cell C on 1 April, after a three year hiatus since stepping down as Vodacom‘s CEO.

There is pressure on Knott-Craig to reproduce the excellent results which he achieved while at the helm of Vodacom, but he is confident he can boost Cell C’s fortunes.

In an interview with Business Times, Knott-Craig said he plans to grow Cell C’s market share to 25% – and will achieve this by “changing the old rules” of the South African cellular environment.

“If you’re not sitting at 25%-plus it’s very difficult to compete,” Knott-Craig said. “You’re always sucking the hind tit. In this game, numbers do matter, size does count.”

However, according to Knott-Craig, winning market share is not as simple as a price war. “A price war is brute force. It has its place. It is a tactical thing rather than a strategic weapon,” said Knott-Craig.

“It is much more important to have a good strategy going forward, of which price may be a tactic. Price as a strategy is a killer for everybody,” said Knott-Craig.

Touching again on market share, Knott-Craig was asked about 8ta’s chances of being a viable competitor in the market. Knott-Craig jokingly said that Telkom has “no chance” against Cell C in the South African mobile market. This, despite the fact that it has lots of cash to invest in 8ta.

Changing the rules

The former Vodacom CEO added that the industry has not changed much over the last few years. Knott-Craig said that, while technology has moved on a bit, the industry is pretty much where it was when he left Vodacom three years ago – when looking at business models and the way the cellphone industry works.

Speaking to journalist Bruce Whitfield, he said that Cell C needs fixing, but Knott-Craig is confident that it can be done. He gave himself one year to get the “basics” right at Cell C, and another two years to “change the industry”.

The incoming Cell C CEO said that he has some interesting ideas – interesting enough to change the industry bit.

“To try and compete with the current rules in place will be tough. The only alternative is to change the rules and get ahead before the others can catch up,” Knott-Craig concluded.

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Price is not a strategy: Alan Knott-Craig