Africa’s Business lessons for MBA students
“…the first principle of business success is identifying the needs of the society and then directly or indirectly filling those needs. “, Dr John Demartini, The Basic Principals of Business
Africa is an emergent economy. It has proven a continent of great opportunities, with growth and potential for business. But Africa also has its own challenges – a complex economy with risk factors (of course like any other). It is a continent of great inequality and of high needs for socio-economical solutions. Therefore looking at what can be learnt from Africa, there are four major Business lessons:
Opportunities fill needs
In Africa, business opportunities often fill socio-economic needs, lack of medical access may lead to mobile health clinics; technological products that do not match the needs of the African market, creates the opportunity to develop technology that supports local businesses. This technology needs to take account the local circumstances of its market – access to electricity or lack thereof, as one example. Social Entrepreneurship often solves a social development need and in the process creates a new business that creates much needed employment. Lastly, businesses sometimes form due circumstances – A group of woman who need to find ways to support themselves and their family, for instance.
Relationships are key
African business culture, much Asia, is more about relationships than transactions. A good example of this would be the amount of business done in Africa by the Chinese. There is the perception that Chinese treat Africans like peers, and not individuals who need incentives to motivate a certain type of behaviour. Also, business is done face-to-face rather than via emails or phone. Building relationships also helps you understand the potential clients better, establish a local network and ultimately understand the ‘locals’ where the business will operate.
Regional business is good business
Africa is a big continent. And even though its countries are often grouped together as if one, each country is actually quite remote – both economically and geographically. When doing business in Africa, one has to focus on the needs and strengths of a region before one considers expanding. From a practical point of view, this also means regulations within a region would be similar, as well as access to resources and of course markets would have similarities.
Quality not quantity
Business in Africa has also shown that focusing on cities with high growth potential has better results, or focusing on a region where the product/service meets the local market’s needs. To ensure a business’ success in Africa, experience teaches to make sure the product/service is adjusted well enough to the locals’ context. In other words, it is not a one fits all scenario. Do research and make sure that the product is suitable within the focus area’s context. A good example is the detergent Ariel in Nigeria. The product was actually reformulated to lather faster with less water, as the Nigerian market saw lather as an indicator of the detergent’s effectiveness. The quality of sales will therefore depend on whether a product has been given a local identity or not.
These are a few of the lessons learnt on doing business in Africa. They could in fact be useful to anyone planning on starting a business – even if not in Africa.
Students that participate in our business programs will see and experience Business in Africa first–hand and find your own lessons to learn.