The paper "Incentives to Enter Rwandan Special Economic Zone' is an outstanding example of a marketing case study. Personal computer industry in Rwanda has experienced rapid growth in recent years and has played an important role in the national economy. As a result of a good business environment, an Alpha Response Technology solution (ARTS) is planning to enter the Rwanda computer industry (Mwanza, 2016). The aim of this report is to analyze the strategic situation and business environment of the computer industry in Rwanda (Asaba, 2015). The motivation of an in-depth analysis of personal computer industry in Rwanda stems from the fact that personal computer industry has played an important role in the national economy of Rwanda, and has an important role on the educational sector (Beaumont, 2010).
The report will carry PEST Analysis to analyze the business environment of the personal computer industry, and 5 Forces Analysis will be used to analyses the competitive nature of the Personal computer industry in Rwanda. Background PESTEL Analysis PESTEL Analysis Political Factors Stable country regardless of the 1994 genocide. The legal system supports participative governance whereby citizens contribute to the government decision. The tax regulations are favorable for foreign direct investment. Economic Factors Inflation rate. Import laws Exchange rates, and Interest rates. The economy is based on farming. Social Factors Minimize the environmental impact Educated populace. Technological Factors Trying to find new technologies to better serve the people. Use of Biodegradable material for recycling. Environmental Factors Fuel-efficient equipment. Use of biodegradable material that can be easily be recycled.
Legal Factors Health and safety consideration Importance of consumer law Fluctuation in trade laws A great requirement of the firms for the recycling Licensing permission permits. Five Force Analyses Five Force Analysis Competitive rivalry High capital requirement Product differentiation Switching cost Supply-side economics Bargaining power of suppliers Supplier competition Supplier switching cost relative to firm switching costs Impact of inputs on cost or differentiation Strength of distribution channel Supplier concentration to firm concentration ration Presence of substitute inputs Bargaining power of customers Buyer price sensitivity Buyer volume Ability to backwards integrate Buyer information availability Buyer switching costs relative to firm switching costs Availability of existing substitute products Differential advantage of industry products The threat of new entrants There is also a need for high capital requirement Product differentiation Moderate customer switching costs Access to distribution channels The threat of substitute products or services Buyer switching costs Buyer propensity to substitute The relative price performance of substitute. A number of substitute products available in the market. Quality depreciation Substandard product Current Foreign Investment The Rwandese government understands that private sector development is important if the country is to achieve middle-income status by 2030 and reduce the country over-reliance on direct foreign aid.
Since 2000, the Rwandese government has undertaken pro-investment policy reforms that have expanded trade in products and services, improved investment climate, and increase levels of FDI (Beaumont, 2010). Currently, the country enjoys strong economic growth, high rankings in the World Bank’ s Ease of Doing Business Index, ” and a reputation for low corruption (Mwanza, 2016). The country has presented many opportunities for companies, including information and communications, renewable energy, infrastructure, and so forth. Rwanda Development Board (RDB) offers one of the fastest business registration processes in East and Central Africa: A new business can register online and receive approval to operate in the country in less than 24 hours, and RDB helps foreign companies to secure required certificates, approvals and work permits (Beaumont, 2010).
In addition, the country’ s investment law provides permanent residence and access to land to new investors who invest a minimum of 500,000 dollars.
There are neither statutory limits on foreign control or ownership nor any official economic that discriminates against foreign investors. Incentives to enter Rwandan Special Economic Zone The Special Economic Zones (SEZ) program have been designed to provide foreign companies with commercial and industrial land, transport linkages, improving on availability of electricity, availability of skills, market access, and Increased tax revenue through expanded tax base hence reducing the budget deficit Environment protection (Manson, 2015). Provide designated serviced land for foreign companies, as well as quality, reliable infrastructure, competitive fiscal regulations and streamlined administration procedures (Manson, 2015).
SEZs program gives cluster anchor companies with suppliers and other services providers, thereby encouraging knowledge transfer and creating jobs in skilled industries (Manson, 2015). ARTS motivation to Enter Rwandan Market The Rwandese government has simplified how foreign companies can register their companies, obtain permits and apply for work visas (Mwanza, 2016). The Rwandese government have strengthened and modernized their banking infrastructure and financial sector: financial institutions are not interlinked so the transfer of currency can be carried out without conversion to U. S. dollars. This has reduced the time taken for a company to transfer its capital from an average of 4 days and a loss of five per cent, to one day (Beaumont, 2010).
In addition, over the years, Kigali has been rated as one of the safest cities in the world, with very low incidences of government corruption and petty crimes, which has made it easier for ART to attract skilled employees to work in the country.