Clients in UK. Representative office in Dubai or an agent in South Africa. What if your Zimbabwean small business was serving clients all over the world. What if you did not have to rely on cash-strapped Zimbabweans to support your business but had access to markets in other countries? This purpose of this article is to help you dream big!
Internationalisation has been typically associated with big businesses but even smallest companies can internationalize successfully if they play their cards right. Taking a proactive approach to internationalization will make your company more robust and potentially more successful, with a far greater client base and more scope to expand.
Econet Wireless Zimbabwe has about 8 million subscribers from a country population of 13 million. Netone and Telecel are also in the scramble for subscribers from that same 13 million. That pie is not growing #zvekumhanya and there is thus little room for further growth of the EWZ mobile business in Zimbabwe. Fortunately for Strive Masiwa, he does not have to rely on the Zimbabwean market alone. Econet Wireless Global has MNO presence in Botswana (Mascom), Nigeria (Bharti Airtel), Burundi (U-com), Central African Republic (Telecel), Newzealand (2Degrees Mobile), Lesotho (Telecom Lesotho), …My point is that, by internationalising a Zimbabwean founded business, #Strive has opened up the growth capacity of the business beyond the limited potential offered by our 13 million population.
Case Study (Small Business)
We are privileged to be assisting a client who is into horticulture production on a 40Ha piece of land. In 2013, her operation was failing to break even due to the low prices on the local market. She then decided to explore the export markets. She went on a scouting trip around UK and established contacts with wholesalers interested in Zimbabwean peas, beans and chillis. She only needed to attain a GlobalG.A.P. Certification for her product, which assured her access to the entire EU market. She can now choose between supplying peas to local buyers at US$2/kg, or wholesalers in Scotland at the equivalent of US$5/kg.
Zimbabwe has a population of just 13 million with a relatively low average disposable income. The good lady has expanded her market to include the EU which has a population of 508 million and higher disposable incomes.
Internationalisation is a possibility for both big and small businesses. There are several stages to internationalise as outlined below.
Stages of internationalisation
Domestic – These companies work within a single nation, sourcing their supplies from within it and selling to customers only within that country. This is what we want to run away from…
International – An international company is headquartered in a single nation, but has import or export operations that give it a presence in other nations. This category also includes companies that sell their products online and ship internationally. We can also show finer classification within the stage:
- International 1—Passive exporting: the company fills international orders but does not seek export business. At this stage, many small business owners do not realize the extent of the international market that they have.
- International 2—Export management: the owner specifically seeks export sales. Because of resource limitations, most small businesses at this stage rely on the indirect channel of exporting. However, this stage is often a major change in orientation for the small business owner who views exporting as an opportunity for new business. Our client referenced earlier is at this stage. She is following an aggressive but structured approach towards transforming her business into a full fledged exporter.
- International 3—Sales branches/agents: when demand for the company’s product is high in a country or region, it justifies setting up local sales offices or some form of representation. Small businesses must have the resources to transfer home managers to expatriate assignments or to hire and train local managers and workers to run or set up these operations.
Multinational – A multinational corporation is one that has a physical presence in multiple nations. The firm may actually own a foreign branch, might have a foreign partnership, may have foreign investments, or could have any number of other forms of arrangements in place that give it full or partial ownership over international functions.
Global/Transnational – Global companies are those that “lack” a home nation. They keep multiple points of control at different locations on the planet in order to stay responsive to the local markets. They often offer stock in several different nations, have geographically diverse management, and sometimes even lack a single formal headquarters. This is done so that each market receives specialized attention and the units of the company that are concerned with a regional market can give that market their full attention. Econet Wireless Global is at this stage.
These traditional stages and forms of internationalisation are being modified, in part, by the Internet. Whilst some firms are totally dependant on the Internet for growth, the best strategy is to use multiple paths for achieving international market growth. One should utilize the Internet as an efficient complement for the traditional network because personal relationships are still vital in the path towards internationalisation. A powerful online presence can have your business enjoying the benefits traditionally reserved for mature Transnationals. #DareToDream.
Nonetheless, a small business which decides to engage in international operations must follow a structured approach involving a series of activities. This set of actions will form the internationalisation strategy of the firm and it should be based on its available resources, due to the fact that a lack of resources can seriously affect the feasibility of the international operations that the business wishes to undertake.
The good lady will make a tour of UAE, early next year to expand her market options. Unlike, the EU, which has a thriving domestic horticulture production, arid conditions in UEA rule out meaningful domestic production. Prices in UAE are thus higher. She is also establishing an interactive and informative website, complete with testimonies and e-commerce capabilities. The site will also help prove her legitimacy to prospective clients. She is also presently working towards further certifications to enable her to supply the Middle East.
The idea has been to introduce Internationalisation as a possible growth avenue for your business. I now leave you with homework… Analyse your business to determine if it has export potential. While traditionally the preserve of big business, the present technology has made it easier for smaller players to internationalise.
Want to explore this avenue? talk to someone who can help. It can be done. Just take it one step at a time…
Remember, we can do BIG things…