Share, , Google Plus, Pinterest,

Posted in:

Keys to business success in Africa

Most progressive South African businesses appear to have an African strategy, even if it is only mentioned in an annual report or inferred to in a press release. Global markets are attractive and are proving viable for various brands that have penetrated markets in other African nations. However, expansion is never easy and has to be well researched and executed. This article offers three keys to achieving business success in Africa and looks at the success and failures of some of SA’s leading brands.

Study the environment

It is often said that the best way to learn about people and their culture is to immerse yourself in their setting. The same is true in the business context, as truly understanding a country’s local business culture and its general environment calls for in-depth research and understanding. Even some of the most reputable brands have learned the hard way that you simply cannot replicate operations northward.

Tiger Brands is one example which fell into this strategic pitfall. They found that you cannot adapt the existing, entrenched environment and culture to suite your successful enterprise in another country. It is the brand and business model that must appropriately adapt to the environment – without forsaking its strengths of course. This can include aligning everything from product line, to pricing, logistics, and even governance among other factors, in order to effectively penetrate the local market.

Build political capital

This isn’t what it may sound like. We aren’t referring to bribery or ‘facilitation fees’ (although common practice in many places) as no successful business can be sustained on the foundation of unethical business practice. There are always ethical ways of achieving the same if not better results (and peace of mind), albeit with a bit of determination and endurance. Here we are talking about understanding the history and aspects such as a country’s colonial past. This sincere interest is underpinned by the principle of ‘seeking first to understand, then being understood’. With a clear picture and political capital, enterprises can synchronise business ventures, CSR and related PR in tandem with government agendas and core local objectives.

By touching the heart strings of a nation in this way, a stranger can develop legitimate allies and integral networks. Take MTN for example. While the company has hit the news recently for breaching laws of the land in Nigeria, the brand is considered first or second in its industry in most, if not all, countries it penetrates. They understand this concept and even have local shareholders on their boards. Adjunct to this is the enlisting of local skills as well.

Recognise and exploit uniqueness

Shoprite spent time identifying their ‘difference’, or their core strength. They realised simply replicating operations is a no-go, and that in reality their biggest strength wasn’t their brand. They found that their core success was founded on their ability to bring the right brands to the right markets, based on their superior logistics and distribution capabilities in Africa. Shoprite has a presence in well over 10 markets beyond SA’s borders (within the African continent), with a growing footprint.

These three keys are fundamental to African expansion, but also leave lessons that apply across the board for growing businesses: know your environment, align with government and local agendas where possible, and identify one’s ‘difference’.

Proudly brought to you by the National Small Business Chamber (NSBC).

Views All Time
Views All Time
1528
Views Today
Views Today
3