In International
marketing, firms are faced with critical decisions on their market entry strategy,
whether to license locals as franchisees, set up fully as an expatriate brand
or adopt a blended model of both entry strategies. Many brands after careful
study chose to remain in their home countries and appoint foreign distributors
and agents.
Choosing to go abroad
in the first place is because either the home market is saturated, competition
has become tougher or as a result of the desire to increase revenues which only
foreign virgin markets can provide.
An international brand
wishing to locate in a foreign market brings along its brand’s strengths,
weaknesses and associated country of origin effects (negative and positive).
The current volatile
social and economic protests, and xenophobic attacks by South Africans against
foreigners which has led to the killing of foreigners in that country including
Nigerians, and the looting of their shops has kickstarted copy - cat protests
across some African nations.
In Nigeria for
example, there have been reported reprisal looting and destruction of offices
and assets of perceived South African owned businesses. Some Shoprite locations
have been looted and vandalised including MTN offices and masts.
While the Nigerian and
South African authorities grapple to contain the escalating situation, one
can’t help but ponder on the dangers of international market entry strategy
using home country brand names.
Whereas MTN and
Shoprite are South African brands, however their footprints and imprints in
Nigeria have since been coloured by varying degrees of indigenous shareholding
and ownership. Nigerians are now working and managing these enterprises and
they also patronise indigenous suppliers. This means that any material damages
and financial loses from the vandalisation of their shops and assets will also
directly impact on the Nigerian co-owners and employees.
Unfortunately, those
who are perpetrating these vandalism acts have no way of discerning the
ownership structure.
In hindsight, as a way
of forestalling such occurrences and resultant loses in the future, could there
be a counter strategy of shedding the toga of foreign brand, and adorning the
cloak of an indigenous brand for some of these South African brands and others
operating in Nigeria? This is for the brands to decide. Though such a strategy
surely will have its disadvantages too.
Could these attacks
have been avoided if some of the South African brands operating in Nigeria have
done more to ‘indigenise’ and deepen their operations and footprints? We will
never know but clearly, it appears that a lot has to be done still.
Perhaps, the present
occurrences in South Africa and Nigeria are good case studies for business
schools as they discuss market entry strategies and inherent challenges
especially in developing economies.
uchenworah@yahoo.com
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