A company that operates only domestically is limited to its border. An international organization takes advantages of the global arena to maximize its revenues. When an organization has made a decision to enter a foreign market, there are a variety of options open to it. These options vary with cost, risk, and the degree of control, which can be exercised over them. The simplest form of entry strategy is exporting. The more complex forms include the truly global operations, which may involve joint ventures or a new subsidiary. .
The purpose of this case analysis is to examine the risks and benefits of entering the African market. What are the key drivers and challenges to enter the African marketplace? Following, this paper will list the issues for a company to enter the African marketplace.
Key Drivers.
When a company decided to enter a foreign market, the most significant key driver should be the political climate of the region. To increase foreign investments, political reform programs continued to be implemented in such countries as Benin, Senegal, Mali, Uganda, Mozambique, and Tanzania. On the other hand, efforts at political reform were slowed, interrupted, or halted completely by political crises in Cote d"Ivoire, Zimbabwe, and Central African Republic, and by lingering civil war in the eastern Democratic Republic of the Congo, Burundi, Liberia, and Sudan (AGOA, 2003).
Another key driver that a company should consider when entering a foreign market is the infrastructure of transportation and communication. Inadequate physical and regulatory infrastructure of transportation and communications has been a major impediment to sustainable economic growth and development in sub-Sahara Africa and has hindered the region's international competitiveness. A number of United States government agencies have been working to assist African countries in their efforts to improve infrastructure in the transportation and communication sectors (AGOA, 2003).