international business assignment 7
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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
ReferencesAgyapong, G. Q. (2011). The effect of service quality on customer satisfaction in the utility industry -- A case of Vodafone (Ghana). International Journal Of Business & Management, 6(5), 203-210. doi:10.5539/ijbm.v6n5p203
Griffin, R. W., & Pustay, M. W. (2010). International Business. 6th Ed. Upper Saddle River, NJ: Prentice Hall. Hall, E.T. (1976). Beyond Culture. Garden City, NY. Anchor Press.
Hofstede, G. & Hofstede, G. J. (2005). Cultures and Organizations: Software of the Mind. McGraw Hill.
Merritt, C. (2011). Mobile money transfer services: The next phase in the evolution of person-to-person payments. Journal of Payments Strategy & Systems, 5(2), 143-160.
Prahalad, C. K.(n.d.). The last market. Retrieved June 20, 2012, from: http://www.youtube.com/watch?v=ew2zQnUh_uw
Stacey, O. (2011). Network sharing business models and the structuring issues and choices facing operators. Journal
of Telecommunications Management, 3(4), 306-312.
Talbot, D. (2009, April). Nokia bets on mobile payment. Technology Review. MIT. Retrieved from: http://www.technologyreview.com/communications/22379/?nlid=1917&a=f
The World Fact Book (n.d.). Retrieved September 15, 2012 from https://www.cia.gov/library/publications/the-world-
factbook/geos/su.html
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