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|South African Companies Finds It Hard To Rule Kenyan Market by Ropie(m): 4:43pm On Aug 28, 2007|
Official statistics from the South African Institute of International Affairs (SAIIA) shows that companies in that country have been investing an average of $1.4 billion a year in Africa since 1991 surpassing UK, US and France. However, compared good run in Africa, it is not so in Kenya.
The reasons they have failed in Kenya is the fact that they take a domineering outlook in managing their outfits, which does not go well with Kenyans. The problem comes when South Africans corporate chiefs fails to appreciate that unlike the less sophisticated African markets, a "one-size-fits-all" approach cannot work in Kenya. Kenyan businesses are very developed in all systems, procedures and processes than those in markets South Africans have conquered.
Stanbic Bank, the only South African corporate which managed to penetrate the Kenyan market. Its Kenya country manager said, "sounds a bit like the way one hears some people describe Kenyans in Tanzania or Americans in Europe. My take is there are different communication style- e.g South Africans or Kenyans or Americans can be regarded in some cycles as 'too direct' or 'aggressive' in their work ethic and style."
The laying of the East Africa Sub-marine System (EASSY) which sould connect East Africa to Southern African countries to international fibre optic system stalled bcoz of the battle of the control btw. Kenya and South Africa. While the South Africans want to have full control, Kenya pushed for control be spread among 23 participating African countries along the Open Access model, where even non-investors in the system can access at reasonable rates. Kenya's lobby saw 17 nations decline to sign the agreement. With the dispute yet to be cleared, Kenya resort to lay its own cable, The East African Sub-marine Systems (TEAMS), linking Mombasa, Kenya to Fujaira in U.A.E which is underway.
The major failure by South Africans to enter Kenya was when SABMiller set up their own brewery in Kenya with their brand Castle larger, only to close b4 the end of 1 year. It couldn't compete with Kenya's east and central Africa largest brewer, East African Breweries Ltd (EABL) which marketed Kenya's brand Tusker under 'my country my beer'. SABMiller later sold its plant to EABL. B4 they came to Kenya, EABL tried to enter South African market with the brand Tusker, but was blocked by South Africans. Today, Tusker beer is the largest selling beer brand in East and central Africa with Kenyan being the largest consumers.
A month ago, South Africa's food chain, Nandos closed its outlets in Kenya due stiff competitions by the locals and furthermore, Kenyans are so patriotic that they buy Kenyan goods.
South Africans see Kenya will their competitor very soon in the African continent as many Kenyan companies have started investing in other African countries. From the banking to retail shops.
In your opinion, is South Africa Africa's major player? Should we allow South African companies have full control of their other African branches (100% ownership)?
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