Case Study
The Consolidation Mindset
Your Business Will Always Give You the Highest rate of Return
Overview
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This case study shows how business owners can increase long-term returns by consolidating capital into an existing value chain, rather than diversifying into unrelated investments.
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The Challenge
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Many business owners have:​
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A profitable operating core business
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Excess capital available for investment
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A desire to “diversify” to reduce perceived risk​​
As a result, many business owners start thinking of where they can find the highest rate of return, and start considering alternate investments such as:​
Property
Cons: Transfer duty, Conveyancing cost, Maintenance, Rates & Levies, Tenant Problems, etc.
Commodities
E.g. Gold, Diamonds
Cons: Storage, Insurance (cost doesn’t make sense)
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Stocks
E.g. Woolworths Shares
Cons: Only receives a % of earnings, no control of the company
Bonds
E.g. African Bank
Cons: If African Bank defaults, your investment is lost
Stop wasting money on the above. Diversification ensures you don’t lose money, Consolidation ensures you make money.
The DR Group Strategy
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We advise consolidation, not diversification, with a strategy focused on:​
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Identifying upstream and downstream opportunities within the client’s existing value chain
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Investing capital into manufacturing, importing, distribution, or supply — directly linked to the core business
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Leveraging existing infrastructure, customers, and industry knowledge​
Rather than creating a new business, the focus should be on expanded control within the same ecosystem, turning one profitable operation into a vertically integrated model.
The Result - Own Your Supply Chain
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By consolidating into the value chain, you can achieve:​
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Higher effective returns than traditional investments
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Greater margin control and pricing power
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Reduced reliance on external suppliers
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Stronger scalability using existing systems and channels​
Capital is no longer diluted across unrelated assets, and can be deployed where you already have a competitive advantage.