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Want to expand your business in Africa? Toss the 'cut and paste' strategy

Mar 07 2019 06:30
Njeri Mwagiru

African economies are described as emerging and frontier markets, and typically viewed as raw landscapes of unbridled opportunity.

However, doing business in Africa requires more than the stereotypical "venturing into the wilderness" approach in a business suit and safari hat, or pith helmet. The popular rejection of Melania Trump’s fashion faux pas during her official visit to the continent in 2018 underscores this sentiment.

Doing business in Africa compels an adjustment of cursory perceptions of Africa. It requires organisational introspection of a business, and of the risks pertaining to the business.

A "cut and paste" approach imitating models applied elsewhere will not suffice, as doing business in African countries requires tailored approaches to fit each context.

Organisations may have to initiate change processes, adjust styles of communication, and realign leadership, management and human resource functions. There are also issues of sustainability and profitability, and the tension to balance short-term gains with long-term goals.

Advancing business prospects in Africa

Companies should be aware that their view of Africa influences their approach towards developing a footprint.

Companies must explore their perception and understanding of Africa, and whether this is in support of developing their particular footprint in the region.

It will be helpful for companies to ask: What do we think the realities of Africa are? How should we adjust and align our business to such realities?

Interested companies should strive to have an informed view of the continent. Although there are significant constrains in obtaining reliable data, companies should nevertheless endeavour to get the best data available, allowing them to base decision-making on verified information.

This goes hand-in-hand with building networks in African countries, and growing relationships with stakeholders. There may already be competitors, other interests, and well-established networks.

A few tips to consider: Take note of case studies and information from other companies in similar sectors in the country or sub-region of interest.

Explore what is considered as best practice and learn from the lessons and experience of other companies. It is essential to do the groundwork in terms of risk assessment. Strategy implementation is not simple, and initial approaches may need to be adapted to unforeseen eventualities.

Ethics and respect

Ethics and values count. Illicit outflows of resources and capital, and professional and human rights violations are serious infringements with ruinous consequences.

If a company is looking at a future-oriented impact strategy with sustainability in mind, ethics and sound values are crucial for long-term collective good, including the company’s reputation.

Companies also need to be aware and respectful of the varied contexts within the continent, as there are many stories within.

It would be unwise to blankly apply a "cut and paste" approach of business models from other parts of the world. The continent consists of diverse countries, cities, habitats and cultures. Consequently, companies need to understand and appreciate diversity, including sensitivity to the different norms of societies.

Hence, keep an open mind, think creatively, and act innovatively.

Prospects for Africa

Recent research at the University of Stellenbosch Business School indicates that alongside growing international interest in the prospects for business in Africa, there is a stronger link between futures thinking and the development of a fitting organisational strategy to assist businesses to establish and grow footprints on the continent.

The Institute for Futures Research (IFR) at Stellenbosch University recognises that a spectrum of prospects exist, from optimistic to pessimistic, for the future of business in Africa. Hard data and facts demonstrate that, in general, there has been vast improvement in the social and economic realities of African countries.

However, multiple issues and challenges still persist, and destabilise states and economies.

There is the likelihood that different business futures may be simultaneously realised across the continent. Patterns of globalisation clearly indicate this possibility, with prosperous futures unfolding for some and worst-case scenarios actualising for others.

Ultimately, strategic long-term thinking and targeted collaboration within Africa and internationally, will remain key, in order for the scale of opportunities promised by the continent’s current growth path to have collective benefits and to leave none behind.

Dr Njeri Mwagiru is Senior Futurist for Africa at the Institute for Futures Research (IFR), a strategic foresight and advisory institute of Stellenbosch University. The IFR is the first and only institute for futures research on the African continent. For more information on the IFR please visit www.ifr.sun.ac.za

stellenbosch university  |  africa  |  investment
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