What is the accumulation of capabilities Construct? Case Study of Dangote Group

Question: “What is the accumulation of capacities according to Ndubuisi Ekekwe in Tekedia?”

Answer: According to Ndubuisi Ekekwe, as frequently discussed on Tekedia, capacity accumulation is a fundamental principle for companies to succeed and approach market friction. He stresses that companies are created to solve problems or “friction” on the market, and to do this, they must acquire and accumulate specific capacities.

These capacities are built on three key pillars:

Tools: these are technologies, software, machines and other physical or digital resources that a company uses to operate and produce.

Process: These are the established methods, procedures and flow flows that a company implements to organize its operations, ensure efficiency and provide coherent results.

People: this encompasses human talent, skills, knowledge and expertise within the organization. Qualified and competent people are crucial to effectively use the tools and run the processes.

Ekekwe postulates that these three pillars – Tools, Process and Persons – are then used to organize and reorganize production factors. This organization allows companies to create products and services that are ultimately deployed on the market to resolve customer friction and generate value.

In essence, for Ekekwe, the accumulation of capacities is to create a robust and adaptable internal engine (including the right tools, effective processes and qualified people) which allows a company to innovate, produce and respond effectively to the evolution needs of its target market.

In this video, I used the Dangote group as a case study. Next week, while I start podcasting daily on business revelations, deeper information would be shared.

https://www.youtube.com/watch?v=PFQMZLSUBXO

According to Ndubuisi Ekekwe in Tekedia, the construction of “accumulation of capacities” refers to a strategic process where companies systematically develop and bring together the capacities, resources and expertise necessary to obtain a competitive advantage and ultimately dominate their market.

Here is a ventilation of what it involves:

• Fixing market friction: Companies are created to meet specific challenges or “friction” on a market. To resolve them effectively, they must acquire and accumulate capacities.
• Capacity pillars: These capacities are built on three main pillars:
  • Tools: Technologies, machines and systems used.
  • Process: Effective and optimized working flows and operational methods.
  • People: Qualified talent, expertise and human capital.
• Organization and reorganization: These three pillars (tools, processes and people) are then organized and reorganized to effectively manage production factors.
• Creation of products and services: The culmination of these organized capacities leads to the creation of higher products and services which effectively approach customer friction on the market.
• Strategic result (higher value segments): When companies successfully accumulate capacity, they are able to operate in greater value market segments compared to their competitors.
• Example (Dangote group): Ekekwe often uses the Dangote group as an excellent example. Dangote takes advantage of its accumulated assets and its technical expertise (for example, in the production of cement) to establish important obstacles at the entrance of new competitors. By continuously perfecting its system, Dangote reaches higher productivity, economies of scale and savings, which in turn leads to margins and industry leadership.

In essence, it is a dynamic process of continuous learning, investment and strategic integration which allows a company not only to compete, but also to direct and extract a maximum value of a sector.

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