Strategic Analysis for Rwanda - Case Study Example

Quantitative Literacy Case: Rwanda Name Tutor Date University Location Introduction Taiwanese technology firm Alpha Response Technology Solutions (ARTS) intends to get into the Rwandese technology industry. It necessitates a comprehensive strategic analysis which criticizes the business propensity of Rwanda. Arts intends to get into the market by establishing a manufacturing plant within the Rwandese special economic zone (Arrion, 2017). This will involve a pastel analysis of the country’s economy and the industry competition paying attention to Positivo BGH. Rwanda is a leader in technological in central and the sub-Saharan Africa making it a potent market for such an investment. However, the country has a haughty history thus this analysis will explore the opportunities in the country, assess the threats, and make a suitable recommendation for ARTS while moving on to make the investments. Background PESTEL Analysis Field Analysis Country information Rwanda experienced genocide in 1994. It was a devastating ethnic war between two largest ethnic communities; the Tutsi’s and Hutu’s (HISTORY.com, 2015). This genocide resulted in the deaths of over 800,000 people. It left families torn apart diminishing any hopes for a fulfilling life as a union in the future (Arrion, 2017). The acting government has restored the faith by foreseeing the restoration and building the arms of government to ensure that the government if fully functional. The government has also re-enforced the Rwandese police force by recruiting and training more police and military officers to ensure that there are law and order in the nation. The country generated a GDP of USD 8.6 billion. Incentives to enter the Rwandan Special Economic Zone The economy is predicted to grow more given the countries policy which is welcoming investors. The country has had a consistent economic growth of 6.9%. Some of the contributing factors for the exemplary economic performance include economic forces such as a free market economy and its decentralized industry and service sectors as well. “Vision 2020,” of the country has established a six pillar ““a private sector-led economy.” the priority of a private sector lead economy creates a suitable environment for entry into the Rwandan technological manufacturing. The enactment of the policies such as the Rwanda Industrial Policy; Special Economic Zone Policy; Small and Medium Enterprise (SME); Medium Enterprise (SME) Policy and Strategy and the t; Special Economic Zones Law Current Foreign Investment ARTS intend to primarily dominate the technology industry locally before the firm can venture in the investment in international trading. The government is, however, working on the countries infrastructural development. Other issues that resulted to the IPI include corruption (Market Research Reports® Inc., 2016). The government has been running a vehement anticorruption campaign by popularizing reporting across different reporting media platforms such as radio, television, and written media. This will assist corporations to operate in an even business environment. The government has also established stronger procedures to address business complaints against regulatory and tax agencies and strengthened government capacity to negotiate for large investment deals and put in place more effective dispute settlement procedures more so with long-term investors. Local market development The local market in Rwandan market is consistently growing given the gradual growth of the economy and population in the country. The government strategic plan also places an ideal market for marketing of technological products with the strategic plan being forecasted to be primarily driven by ICT. The university laptop program will also see a significant growth in the market for technological products (Market Research Reports® Inc., 2016). This will present an ideal entry of the firm into the industry to acquire a significant share of the market as the market grow’s. ARTS' Motivation to Enter Rwanda The government “vision 2020” relies in on ICT for the reduction of transaction costs that will see a significant growth in the Rwandese economy. The government also intends to increase productivity relying on technological innovations to revolutionize. This presents new trade opportunities to international organizations by presenting incentives and protection of foreign investors. The GoR has laid down strategies to increase access to knowledge with the implementation of the laptop program for the university students and campaigns to popularize mass communication presents a growth in the market for computers making it an ideal investment economy. Figure 1: ICT Remains the Most Attractive Area for Foreign Direct Investment 5 Forces analysis for ARTS Field Impact Supplier power Supplier’s power of the Rwandese market is fairly equal to the industry. This gives room for Art to establish their supply lines. This gives Arts a better bargaining power. Buyer power The bargaining power of customers is low which poses a challenge to ARTS. However, the government has laid down policies to subsidized firms that are willing to liaise in the implementation of the laptop program, it will make it possible for ARTS to make sales effectively despite the low consumer bargaining power. Competitive rivalry The competitive rivalry of the Rwandese is manageable since there is only on one competitor in manufacturing who is Positivo BGH. Despite the prior rivalry of the CEO’s, the competition is healthy for doing business. The firm is in a position to fight the rivalry presented by the firm by diversifying their product (GT80S Titan SLI 18.4in Core i7 Notebook) to suit the requirements of the Rwandese Market. ARTS will affirmatively license the technology to avoid legal wars with Positivo BGH (Alph.ca, 2017). Threat of substitution The threat of substitution is negligible since the market is only beginning to boom. The market for laptops is much more promising with the inclusion of subsidies to laptops for university students. The possible substitute products could be desktop computers and tablets (Alph.ca, 2017). Threat of new entry The Rwandan market is in the growth phase thus the government is welcoming investors in the country. This raises the threat of new entrants given an open industry entry policy. ATTS therefore has to come up with strategies that will help them acquire a large market share before the market is flooded. Qualitative Analysis Comparison of ARTS' primary product line with that of Positivo BGH Specifications Product Alpha Response Technology Solutions (ARTS) GT80S Titan Positivo BGH Z110 Category Notebook Notebook Processor Core Intel®, i7, 6920HQ Intel i7,  N2840  RAM 4GB 4GB Processor Speeds  2.16GHz 2.16GHz Graphics  NVIDIA GeForce GTX980M graphics in SLI  Intel® HD Graphics  Resolution 1366 x 768pixels 1366 x 768 pixels Operating System Windows 10, Blu-ray writer Windows 10 Hard Drive 1TB 500GB Color Black and Grey  Black Producing and releasing the Titan for sale to the Rwanda domestic market versus sale to a Western market. The GT80S Titan retails at retailing at Rwandan Franc 3,000,012.82, AUD4999 or USD3792.37. The pricing would, however, be affected by the markets ability and the forces in the demand and supply chains (Aalph.ca, 2017). The productions costs would also be significantly reduced given the tax reliefs proposed by the government for foreign investors. Summary Rwanda experienced genocide in 1994. It was a devastating ethnic war between two largest ethnic communities; the Tutsi’s and Hutu’s (HISTORY.com, 2015). This genocide resulted in the deaths of over 800,000 people. The historical incident affected the economic development of the country which has resulted to low infrastructural development in the country. The country’s gross domestic product (GDP) Supplier’s power of the Rwandese market is fairly equal to the industry. This gives room for Art to establish their supply lines. This gives Arts a better bargaining power. The buyer’s bargaining power is a threat to the firm since the bargaining power of customers is low. However, the government has laid down strategies to subsidized firms that are willing to liaise in the implementation of the laptop program as stipulated in the “Vision 2020.” Competitive rivalry of the Rwandese industry is manageable since there is only one competitor in manufacturing (Positivo BGH). The firm is in a position to fight the rivalry presented by the firm by diversifying their product (GT80S Titan SLI 18.4in Core i7 Notebook) to suit the requirements of the Rwandese Market. Licensing is advisable for the technology to avoid legal wars with Positivo BGH (Alph.ca, 2017). The economy is predicted to grow more given the countries policy which is welcoming investors. The country has had a consistent economic growth of 6.9%. Some of the contributing factors for the exemplary economic performance include economic forces such as a free market economy and its decentralized industry and service sectors as well. ARTS should move and establish the manufacturing enterprise and comply with government’s regulation to avoid denial of some of the benefits accrued to foreign investors. Conclusion Rwanda is a developing economy which gives ARTS an ideal industry entry opportunity. The “Vision 2020” presents the international investors with suitable investment legal environment and tax policies. The people are therefore in a position to make a smooth entry in to the industry. The government is also working on the countries infrastructural development to enable more industrial development. Other issues that resulted to the IPI include corruption (Market Research Reports® Inc., 2016). The threat of substitution in the Rwandan technology industry is negligible since the market is only beginning to boom. The market for laptops is much more promising with the inclusion of subsidies to laptops for university students being subsidized. The possible substitute products could be desktop computers and tablets (Alph.ca, 2017). The organization is in a position to enter and acquire a market share before the threat of substitution and new entrant’s increases. Recommendation The pricing of the products in Rwanda, the firm is in a position to make impressive profit margins. Thus the firm should make the investment in the Rwandese economic zone making it possible for the firm to make exploit the reliefs awarded by the government to foreign investors. This will significantly increase the sales made by the organization significantly leading to the development of a good approach to the management of the challenges they are experiencing. While the market in Rwanda may not have an appealing customer bargaining power, the government has laid down strategies that make the investment in the country appealing. ARTS should move and establish the manufacturing form and comply with government’s regulation to avoid denial of some of the benefits accrued to foreign investors. Consequently, the retailing prices locally will lead to a realization of impressive profit margins. References Alph.ca. (2017). Alpha's Product Family. [online] Available at: http://www.alpha.ca/ [Accessed 16 Apr. 2017]. Arrion, M. (2017). Joint Governance Assessment (JGA) Review 2009. [online] http://www.devpartners.gov.rw/fileadmin/templates/documents/UN_Rwanda__JGA_2008-2009. Available at: http://www.devpartners.gov.rw/fileadmin/templates/documents/UN_Rwanda__JGA_2008-2009.pdf [Accessed 16 Apr. 2017]. Asaba, S. (2015). Positivo BGH to Kick-off Laptop Production | Rwanda ICT. [online] Rwandaict.com. Available at: http://rwandaict.com/technology/positivo-bgh-to-kick-off-laptop-production/ [Accessed 16 Apr. 2017]. Asaba, S. (2017). Rwanda: Positivo BGH to Kick-off Laptop Production. [online] allAfrica.com. Available at: http://allafrica.com/stories/201509090157.html [Accessed 16 Apr. 2017]. French, H. (2016). How Rwanda's Paul Kagame Exploits U.S. Guilt. [online] WSJ. Available at: https://www.wsj.com/articles/SB10001424052702303603904579493440845328418 [Accessed 16 Apr. 2017]. HISTORY.com. (2015). The Rwandan Genocide - Facts & Summary - HISTORY.com. [online] Available at: http://www.history.com/topics/rwandan-genocide [Accessed 16 Apr. 2017]. Market Research Reports® Inc. (2016). Rwanda. [online] Available at: http://www.marketresearchreports.com/countries/rwanda [Accessed 16 Apr. 2017]. Read More