Ethiopia PRESENTATION

Ethiopia

Ethiopia: An Emerging Market Opportunity?

Margot LECOMTE, Maeva GABINA, Valentin LUCAS, Alizée BARDONNET MSC2

INDEX

Does Ethiopia représent an attractive investment opportunity ?

Case by case CareCO, ShoeCo, Medco

Make a team decison for each firm related to :

How to go : export / Own production facility / Joint-venture

What would you suggest as complementary investigations before going

Go / Not to go

Does Ethiopia représent an attractive investment opportunity ?

Does Ethiopia représent an attractive investment opportunity ?

Advantages

Inexpensive infrastructureInexpensive landGood location.Not in a war situationGood rail network

Disadvantages

Insecurity and instability of the countryEmployees with few qualificationsCountry surrounded by other countriesNo direct access to the seaCorruption and leakage of industrial patents

Localisation

Addis AbabaE OR Diré Dawa

Case by case

shoego

medco

Careco

What is currently the firm’s competitive advantage based on ?

CareCo

Historical AdvantageCareCo's historical advantage lies in its strategic market entry through local distributors. The advantages: local knowledge, existing relationships, low-cost, low-risk approach.

Implicit Competitive Advantage The evolving strategy indicates a pursuit of greater control over operations, brand image, and market presence.

Current Competitive Advantage CareCo's present competitive advantage lies in the shift from historical reliance on local distributors to a strategy emphasizing internal control.

Shoeco

ShoeCo exports its products (shoes) through a local third-party distributor. It also manufactures its products locally, which means it bids aggressively. Its import strategy is its biggest strength.

Medco

the firm’s competitive advantage

• Operational Efficiency

• Lean, Agile Production

• Specialization in Generic Pharmaceuticals

• Small Batch Advantage

• Cost and Speed Advantage

• Operational Know-How

Is this transferable to Ethiopia ? Is Ethiopia revelant as a Choice ?

Careco

Competitive Urgency

Motivation for Ethiopia Entry

Concerns about the arrival of competitors on the market and local manufacturing explain CareCo's sense of urgency.

Challenges in key markets (Brazil, India, China) that prompted exploration of Ethiopia.

Growth Opportunities

Market Potential in Ethiopia

Expected 15% growth in the Ethiopian market and the opportunity to capitalise on its early stage of development.

Strong consumer awareness, a market size of $125 million and the potential for expansion through increased revenues.

Challenges and Benefits

Contrasting advantages, customs duties, potential reduction in market share, control, pricing and brand image.

Shoeco

Ethiopia is a good location for ShoeCo. The company wants to build a factory in view of the growth opportunities in the country. By setting up there, the company will gain an economic advantage that will enable it to stand out from its competitors, particularly its Chinese competitors.Furthermore, when setting up in Ethiopia, it is important to be familiar with the local context. The company therefore wants to send an employee who is familiar with this context and who will be able to instill the company's values in local employees. ShoeCo sees this as another advantage, as the workforce is highly skilled and inexpensive.

MedCo

MedCo's competitive advantage could thrive in Ethiopia's expanding healthcare market if it can adapt its operational model to local conditions. Despite alignment with Ethiopia's growing healthcare spending and demand, challenges in regulatory frameworks and supply chain dynamics must be navigated. Success will depend on MedCo's adept replication of operational effectiveness in this new environment.

Make a team decision for each firm related to :

Go / Not to go

Careco

Not to go

Go

Concerns and Challenges Customs Duties Impact Competitive Landscape

Market Potential Strategic ApproachEarly Entry Advantage Customs Duties

Shoeco

GO ShoeCo has a huge opportunity to set up and grow in Ethiopia thanks to its business model.

the high quality of the employees' work

the country's (strategic) location

the protection of intellectual property

the reduced presence of competition

MedCo

GO/not go

Not go

GO

MedCo faces hurdles in navigating regulatory challenges and obtaining approvals while adapting to local regulations. Additionally, understanding and maneuvering through fragmented distribution channels and competition present initial challenges in the market dynamics.

MedCo stands to benefit from significant market potential, driven by annual growth, and government support in the health sector. Its operational efficiency becomes a key advantage in navigating fragmented distribution channels.

How to go :

Export / own production facility / joint-venture

Careco

Strategic Consideration Risk Sharing Local Expertise Challenges

Historical Approach Export Consideration Pros Quick Market Entry

Advantages Challenges

Export

Joint-venture

own production facility

Shoeco

Joint venture

“In a joint venture, multinational corporations could maintain greater control while benefiting from the advantages offered by a local partner. The local partner could be a private entity or the government, which might keep an equity stake.” ShoeCo would like someone to work with in Ethiopia who can adapt to the local context and train the people who work in the factory, while respecting the company's DNA. Furthermore, if the company wants to establish itself, it must be able to adapt to the local culture and customer relations.

MedCo

• Operational Control: A wholly owned subsidiary allows MedCo to maintain full control over operations, ensuring operational efficiency is enforced.

• Government Incentives: Available incentives, such as tax exemptions and duty-free imports, make a wholly owned subsidiary an attractive option.

The way to do it

what we suggest as complementary investigations before going

Careco

Suggestion

CareCo's Ethiopia entry success :

Infrastructure Analysis Cultural Sensitivity Joint Venture Considerations

Comprehensive Market Research Competition Analysis Regulatory Environment

Shoeco

“In a joint venture, multinational corporations could maintain greater control while benefiting from the advantages offered by a local partner. The local partner could be a private entity or the government, which might keep an equity stake.” ShoeCo would like someone to work with in Ethiopia who can adapt to the local context and train the people who work in the factory, while respecting the company's DNA. Furthermore, if the company wants to establish itself, it must be able to adapt to the local culture and customer relations.

medco

Regulatory Landscape

Supply Chain Dynamics

Risk Mitigation Strategies

Workforce Skills

THANK YOU !

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Got an idea?

Let the communication flow!

With Genially templates, you can include visual resources to wow your audience. You can also highlight a particular sentence or piece of information so that it sticks in your audience’s minds, or even embed external content to surprise them: Whatever you like! Do you need more reasons to create dynamic content? No problem! 90% of the information we assimilate is received through sight and, what’s more, we retain 42% more information when the content moves.

• Generate experiences with your content.
• It’s got the Wow effect. Very Wow.
• Make sure your audience remembers the message.