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Where to Launch in Africa?

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Submitted By minhaljamil
Words 391
Pages 2
Minhal Jamil
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Retail Management Assignment

Should Benard begin his new packaging business in Nigeria or Malawi?

According to me, I suggest that Benard should establish his business in Nigeria.
Nigeria is the perfect place to launch a new business. It’s large, increasing population will demand more and more products as the economy expand. As the retail industry grows, so will the packaging industry. But it’s not just that Nigeria is attractive. The other approach that Benard is considering—start in a small market and quickly expand into others—has several drawbacks. First, operating, and even winning, in Malawi most likely won’t provide him with enough capital to move into other countries. Capital is very important for African entrepreneurs. It’s very expensive to set up a business in an African country that you’re not from, and not just because of the bureaucracy. Look at Nigeria: It has some of the highest hotel rates in the world. And flying between countries in Africa can be costly as well. Businesses will encounter visa restrictions, cross-border taxes, and corruption, and each country has its own currency. The other issue Benard will face is managerial skills. When you are working across the border, you need skilled manager to help you. And to my thinking Benard can’t find such skilled manager in Malawi as compared to Nigeria.
Many entrepreneurs fear that if they don’t expand fast enough or don’t get into a country first, they’ll miss a huge opportunity. But often the opposite is true. When you move into a market later, after others have already attempted to establish businesses there, you have the advantage of learning from their mistakes.
I can see why Benard wants to go toward what he knows—his home country, a known business partner, and a familiar industry. And he’s right to consider the risks in Nigeria about political environment. But there are risks everywhere. Business goes on despite the political turmoil, no matter how extreme it seems to those outside the country.
If Benard can set up his business in Nigeria, he sure can do in Malawi. But if he set up his business in Malawi, he will waste his time to expand the business due to drawbacks. To realize his ambitious vision, he should go to Nigeria, accept his uncle’s help, and prove himself there before expanding.

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