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  • Ethiopia - Case Week 3 GSM

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    Loan Nguyễn Lê Mỹ
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    Ethiopia presents both opportunities and challenges for foreign businesses. While the government has pursued market liberalization and fostered economic growth, significant state involvement in the economy remains. As a result, foreign investors face caution in dealing with the government and competition from state-owned enterprises. However, Ethiopia's large population and infrastructure development create potential for market expansion, while low wages provide a cost advantage. Foreign businesses must navigate cultural and infrastructure barriers as well as protection of intellectual property.

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    Ethiopia - case week 3 GSM

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    Ethiopia presents both opportunities and challenges for foreign businesses. While the government has pursued market liberalization and fostered economic growth, significant state involvement in the economy remains. As a result, foreign investors face caution in dealing with the government and competition from state-owned enterprises. However, Ethiopia's large population and infrastructure development create potential for market expansion, while low wages provide a cost advantage. Foreign businesses must navigate cultural and infrastructure barriers as well as protection of intellectual property.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    16 views2 pages

    Ethiopia - Case Week 3 GSM

    Uploaded by

    Loan Nguyễn Lê Mỹ
    Ethiopia presents both opportunities and challenges for foreign businesses. While the government has pursued market liberalization and fostered economic growth, significant state involvement in the economy remains. As a result, foreign investors face caution in dealing with the government and competition from state-owned enterprises. However, Ethiopia's large population and infrastructure development create potential for market expansion, while low wages provide a cost advantage. Foreign businesses must navigate cultural and infrastructure barriers as well as protection of intellectual property.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    of 2

    (+) (-)

    Political environment + industrial Political stability since early 1990s Single-state party and limited
    policy under rule of EPRDF, with political freedom requires caution
    relatively low country risk for companies doing business with
    government and/or accustomed to
    Efforts at market liberalization by more open environments
    the government of Ethiopia,
    including openness to foreign State control of economy remains
    investment and privatization of significant, with key sectors off
    state-owned businesses limits to foreign investors

    Significant investment in public Stated-owned or partly own =>


    infrastructure to build foundation unfair competition
    for long-term growth
    OVERALL: ROLE OF GOV -
    Favorable tax and customs regime significant
    for businesses that match criteria for
    government growth priorities (e.g.,
    local manufacturing)

    OVERALL: Market
    attractiveness degree has been
    increased

    Ease of doing business Ease of doing business relatively Ease of doing business remains poor
    developed by global standards

    Construction and property Investor protection, cross-border


    registration relatively easier than it trade among areas where
    is in other SSA cosuntries performance is relatively poor

     Face challenges when


    invest in this market
    => affect the way to
    entry
    Market opportunity Population: more than 90m When compared to global standard:

    Ranked 6th For Market OPP GDP per capita remains low, below
    most comparison countries
    Fast- growing economy; GDP
    Possible limits to addressable
     PURCHASING market due to income inequality
    and low urbanization rate
    POWER
     Bottom of the
    pyramid segment need

    Market access Supplier opportunity through lower Fragmented distribution limits


    costs and access to potential addressable market and drives up
    growing market costs

    Wholesale and retail business


    reserved for Ethiopian businesses
    only

    Local knowledge, relationships,


    and customs are paramount and
    may require reliance on local
    partners

     Affect to entry mode

    Competitive Position Limited competition due to legacy Global brand strength may be
    of state-controlled economy, mitigated in environment where
    creating opportunities for new foreign influence has been limited
    entrants and small upstarts are on level
    playing field
     Market gap
    Protection of intellectual property
    may be costly and/or difficult

     Difficult to compete
    by differentiation

    Human resources Low wages can create significant Cross-cultural management may be
    cost advantage for labor-intensive difficult for foreign firms, leading to
    businesses preference for hiring costly
    Ethiopian diaspora
     Cut cost. Improve VC
     Management
    Other Infrastructure challenges for
    transport, power,
    telecommunications can drive costs

    High imported duties: make


    offshore products less competitive
    on local market

     Barriers to WOS or
    export (International
    business perspective)

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