international business assignment 7

BOP OPPORTUNITY

SUDAN

KELLY POPPE-GALE

SEPTEMBER, 2012

Presentation Overview• BoP opportunities differ from other new market entry• Sudan – Demographics• Cultural differences• Nokia and Obopay• Modes of entry• Safaricom and M-pesa• Internal control design • Critical Factors• Recommendations

Base of Pyramid Opportunities

• Low income

• High population

• Must meet a need

• Increase Standard of living

• Provide access to markets

• Provide business opportunities

SudanDemographics• Population of 32.4 million• 70% are Sudanese Arab• Official Languages are Arabic and English• Primarily Muslim religion with a small

Christian Population• 61% literacy rate• Federal Republic with a mixed legal system

(Islamic and English common law)• 18.7% unemployment (2010)

Nokia and Obopay• Largest manufacturer of cell phones

– 1.2 million per day

• $70 million Investment in Obopay

• 1.3 billion active Nokia phones

• No production facility in Africa

• Is not an MNO

THE OPPORTUNITY

Potential Entry Modes• Joint Venture• Foreign Direct Investment

– Greenfield– Acquisition

• Export Services–Sub-Contract Sales Force

Safaricom• Over 17 million current subscribers• M-Pesa or mobile money transfer

service• All models of cellular phones are

available

Global Organizational DesignOptions• Global Product• Global Area• Global Functional• Global Customer• Global Matrix

Best Fit• Mixed including both of the following

– Area– Customer

Subsidiary Structure• Agent Networks

– Use of sub-agent network of airtime resellers where needed

– Ability to offer service quality

• Decentralize authority to react to market conditions

• Customizable plan for region, not per customer• Financial reporting kept to US standards

East African Cultural Considerations• Hofstede’s Classifications

– High Power distance– Collectivist– Feminine– Low Uncertainty Avoidance– Short Term Oriented

• Hall’s Cultural Parameters– Low Context

Arab Cultural Classifications• Hofstede’s Classifications

– Higher Power distance– Lower in Collectivism, more individualistic– Feminine– Higher Uncertainty Avoidance– Time Orientation not measured

• Hall’s Cultural Parameters– Higher Context

Examples from other Countries

Mexico

• Fee avoidance behaviors common among consumers

• Government restrictions limited the ability to charge for roaming

• IFT transactions preferred

Bangladesh

• Cell phones evolved into primary educational platform

• Cell phones provided opportunities for new business ventures

Critical Factors• Strategic partner identified• Cultural regions segmented• Target Market strategies developed

– Business/Corporate– Individual Consumer

• Perceived service quality and employee training plan established

Recommendations• Enter the market through a joint venture with an

established provider• Modify pricing and offerings to fit local needs• Aim advertising at enhancing quality of life• Use social media for promotion• Form strategic alliances with educational institutions• Fit products (phones models/service plans) to actual

consumer needs• Design a complete employee training manual• Find local champions

First Steps• Review Ghana experience for learning opportunities• Begin partnership negotiations• Conduct cultural mapping and market segmentation• Determine if multiple brands are needed

– Business/corporate accounts– Individual consumers/subcultures

• Design advertising campaigns• Identify Influencers among target markets• Obtain key accounts• Full services launch

THANK YOU

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