Teamwork Assignment

Case study

Group 1

Student No.

207064

208560

209885

Global Business Environment

Prof. Vikrant Shirodkar

University of Sussex

July 25, 2019

 1. M-PESA Power

A) Access to financial and banking services through reputable financial institutions is an

attribute of developed societies, an essential factor of social inclusion and its economic

development.

Kenya, a country with limited banking services and a high need for growth, can be considered

the principal attributes of success for M-PESA. Taking into account that Kenya is an

undeveloped country, it seemed like a daunting task to offer financial services, especially to

those with considerable levels of poverty.

Kenya needed to grow; consequently, M-PESA found the perfect recipe for success. Cell phone

usage is high in the country regardless of social class, and M-PESA used this to its advantage

and developed an app that can even work in basic mobile phones to reach all levels of society,

but mainly they included those people that would never use mobile financial services. M-PESA

offered a solution to Kenyans through the usage of a tool that they already had, which is mobile

phones.

M-PENSA took advantage of what already existed in the country and offered an e-wallet that

is within everyone’s reach along with low-prices. The need for growth, high usage of mobile

phones, and the development of the right software are what led M-PENSA to succeed in Kenya.

B) Vodafone is the pioneer of the M-PESA project in Kenya. Vodafone was granted financial

resources by the UK Government to develop financial services in East Africa for this the

company acted as coordinator and partnered with is affiliate in Kenya, Safaricom.

Safaricom, an associate of Vodafone, served as a pillar of trust, and customer service provider

for Kenyans and local financial institutions. Also, Safaricom led the pilot programs in

cooperation with local firms for the launching of what is M-PESA today.

Sagentia, had the responsibility of developing the right software in order to meet the needs of

Kenyans, these included an easy to use app, that could work in the most basic mobile phones,

especially that smartphones were practically non-existent when M-PESA was developed, and

deliver technical and operational support.

Agents, they had a crucial role in the success of M-PESA, besides serving as cashing out points,

they provided a physical space to service Kenyans and allow more people to access the service.

C) An obvious way for expansion would be identifying new market opportunities, currently

there are many countries where mobile financial services are needed, such as Latin America,

but it would be a wiser approach for M-PESA to identify those countries that are in financial

crisis, where there is an urgent need to improve the social and economic aspects of the country.

M-PESA could offer the following additional services to continue expanding in current markets

and potential ones:

 A virtual assistant to provide clients with advice on savings and investment.

 Market segmentation: Personalization of customer experience through the usage of AI.

 Faster transactions, lower prices, and a higher level of confidentiality in the operations

carried out by the customers.

 2. GMR in the Maldives

A) GMR could have better anticipated the likelihood of expropriation in the Maldives with

better preparation to reduce the risk of their investment. A key management priority is to fully

assess the risks alongside the potential rewards before and after investing in these kinds of

higher risk markets (Collinson, Narula & Rugman, 2017). Performing a country risk analysis

would have helped GMR examine the chances of non-market events (political, social, and

economic) causing financial, strategic, or personnel losses, following their FDI in the Maldives.

This would have helped them to predict the macroeconomic and political sources of change

that proceeded to undermine their agreement (Collinson, Narula & Rugman, 2017).

Additonally, GMR could have enlisted the help of country risk rating services such as The

FORCE Country Reports from BERI who provide a qualitative analysis of socio-

political, economic, and financial forecasts. The BERI risk measurement components include

several categories of information, such as political factionalization, linguistic/ethnic/religious

tension, coercive measures to maintain the regime, prevalence of corruption, radical left

strength, dependence on major external power (Collinson, Narula & Rugman, 2017). A better

insight of this information would have better prepared GMR for the issues to come. Using the

weighted country risk assessment model would have helped GMR to identify the risks they

faced, and they may have been able to reduce, adapt and prepare for them (Collinson, Narula

& Rugman, 2017).

Moreover, using integrative techniques would have helped them to assimilate themselves into

the government’s plans as they would have been seen less as outsiders. Using protective and

defensive techniques would have better safeguarded them from being casted out so efficiently

once the government changed. A more strategic plan of how GMR operated as a whole in the
Maldives would have provided them with a contingency plan once operations became

problematic.

B) Even with a great amount of intensive planning, the risk of international trade in emerging

markets always contains an amount of risk. I would argue that although the outcome was

negative for GMR, initially the Singapore Arbitration Court was the best option for GMR in

this dispute. Furthermore, I believe GMR’s attempt in settling the dispute at the Singapore

Arbitration Court was the most ethical approach as “international arbitration is regarded by the

international business community as the normal means of settling disputes arising from

international transactions (Casella, 1996, p. 157)”. Arbitration is seen by businesses as a way

of avoiding the uncertainty around unknown foreign laws. Arbitrators are seen as more

competent and more reliable than the courts, and these feelings are reinforced with respect to

foreign courts (Casella, 1996).

Additionally, arbitration affords the possibility of highly specialised judgments. Via arbitration,

business have access to judges who are acquainted with the usages of the trade and with the

technicalities of the specific transaction being examined. Opposingly, national laws must

respond to different needs of all citizens of a country, arbitration is tailored to the particular

type of economic activity (Casella, 1996). In essence, it is the most ideal way to settle a dispute

of this nature. Due to the complexity of the dispute, the likelihood of success for GMR was

increased via the Singapore Arbitration Court. As Casella (1996, p. 183) notes, “international

traders recur to arbitration not only because the rules of arbitration can be more closely tailored

to their transactions, but also because the enforcement of courts judgments is uncertain”.

Evidently, although the they did not reach a desired outcome, GMR’s strategy was the most

practical for the nature of their dispute.

 Bibliography

Casella, A., 1996. On market integration and the development of institutions: The case of

international commercial arbitration. European Economic Review, 40(1), pp.155-186.

Collinson, S., Narula, R., & Rugman, A. (2017). International Business.