{"id":451,"date":"2014-06-25T12:00:53","date_gmt":"2014-06-25T11:00:53","guid":{"rendered":"https:\/\/blog.iese.edu\/africa\/?p=451"},"modified":"2016-10-28T14:45:26","modified_gmt":"2016-10-28T13:45:26","slug":"the-challenges-of-internationalizing-in-east-africa","status":"publish","type":"post","link":"https:\/\/blog.iese.edu\/africa\/2014\/06\/25\/the-challenges-of-internationalizing-in-east-africa\/","title":{"rendered":"The challenges of internationalizing in East Africa"},"content":{"rendered":"<p>If you are an Africa connoisseur (or if you have followed this blog), you will know that <a href=\"https:\/\/blog.iese.edu\/africa\/2014\/04\/16\/from-nigeria-to-kenya\/\"><strong>Africa is not a single entity.<\/strong><\/a> And neither are African regions: not all countries in one region are the same. This is more obvious in Western Africa where the anglophone\/francophone distinction is\u00a0 immediate. It may be less obvious in Eastern Africa where English is predominant. Managers from companies aiming at <strong>internationalizing in East Africa<\/strong> need to bear this in mind, and <strong>be ready to cope with the challenges<\/strong>.<\/p>\n<figure id=\"attachment_453\" aria-describedby=\"caption-attachment-453\" style=\"width: 300px\" class=\"wp-caption alignleft\"><a href=\"https:\/\/blog.iese.edu\/africa\/files\/2014\/06\/20140423_140312-e1403587838311.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"size-medium wp-image-453\" src=\"https:\/\/blog.iese.edu\/africa\/files\/2014\/06\/20140423_140312-e1403587838311-300x167.jpg\" alt=\"Some African international banks\" width=\"300\" height=\"167\" srcset=\"https:\/\/blog.iese.edu\/africa\/files\/2014\/06\/20140423_140312-e1403587838311-300x167.jpg 300w, https:\/\/blog.iese.edu\/africa\/files\/2014\/06\/20140423_140312-e1403587838311-1024x573.jpg 1024w, https:\/\/blog.iese.edu\/africa\/files\/2014\/06\/20140423_140312-e1403587838311-624x349.jpg 624w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><\/a><figcaption id=\"caption-attachment-453\" class=\"wp-caption-text\">Some African international banks<\/figcaption><\/figure>\n<p><strong>One Kenyan bank decided to expand to Uganda: <\/strong>it&#8217;s a neighboring country.,\u00a0and you can <a href=\"https:\/\/blog.iese.edu\/africa\/2014\/06\/04\/intra-africa-business-travel\/\">get there in one hour<\/a>.\u00a0\u00a0Before becoming a <a href=\"https:\/\/blog.iese.edu\/africa\/2014\/04\/02\/pan-african-banks\/\">Pan-African bank<\/a>, it made sense for them to become an Eastern African one.\u00a0The bank enjoyed momentum in Kenya, and the management team <strong>took for granted that the brand would be embraced by Ugandans with the same enthusiasm as by Kenyans<\/strong>. They acquired a bank in Uganda, taking over 26 branches and opening 18 more in the first year. The new branches were hosted in 3- or 4-floor office buildings.<\/p>\n<p>It turned out <strong>they didn&#8217;t have the success they had expected<\/strong>. <strong>What did they learn<\/strong> from the Uganda experience?:<\/p>\n<ul>\n<li>the <strong>regulatory framework<\/strong> for the banking industry in Uganda was <strong>very different<\/strong> from that of Kenya: Uganda&#8217;s regulations are very strict;<\/li>\n<li><strong>local connections<\/strong> (with the regulators, the Central Bank, etc.) are of <strong>paramount importance<\/strong>: the local team of the acquired bank was very well connected, but as they felt threatened those connections backfired for the Kenyan bank;<\/li>\n<li><strong>anything coming from Kenya is seen as an imposition in other Eastern African countries:<\/strong> you need to be careful and introduce yourself as a local brand.<\/li>\n<\/ul>\n<p>They learned these lessons and <strong>took a different approach to enter Tanzania<\/strong>: they studied the regulatory framework extensively; they were aware not to create a divide between Kenyans and Tanzanians in the team; the &#8216;face&#8217; of the bank is formed by locals, and with local networks. Overall, they took a more cautious approach to expansion. opening only five branches, in low-rise offices. As a result, <strong>the Tanzanian operation was the first international subsidiary to break even in one year<\/strong>.<\/p>\n<p>Have you had <strong>any related\u00a0experiences with international expansion?<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>If you are an Africa connoisseur (or if you have followed this blog), you will know that Africa is not a single entity. And neither are African regions: not all countries in one region are the same. This is more obvious in Western Africa where the anglophone\/francophone distinction is\u00a0 immediate. It may be less obvious [&hellip;]<\/p>\n","protected":false},"author":1654,"featured_media":458,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[100235,77626],"tags":[7967,45502,139,80751,951,80746,1340,1394],"class_list":["post-451","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-differences-within-africa","category-entrepreneurship-in-africa","tag-banking","tag-east-africa","tag-finance","tag-internacionalization","tag-kenya","tag-regulations","tag-tanzania","tag-uganda","megacategoria-mc-africa"],"acf":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/blog.iese.edu\/africa\/wp-json\/wp\/v2\/posts\/451","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blog.iese.edu\/africa\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.iese.edu\/africa\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.iese.edu\/africa\/wp-json\/wp\/v2\/users\/1654"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.iese.edu\/africa\/wp-json\/wp\/v2\/comments?post=451"}],"version-history":[{"count":11,"href":"https:\/\/blog.iese.edu\/africa\/wp-json\/wp\/v2\/posts\/451\/revisions"}],"predecessor-version":[{"id":464,"href":"https:\/\/blog.iese.edu\/africa\/wp-json\/wp\/v2\/posts\/451\/revisions\/464"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/blog.iese.edu\/africa\/wp-json\/wp\/v2\/media\/458"}],"wp:attachment":[{"href":"https:\/\/blog.iese.edu\/africa\/wp-json\/wp\/v2\/media?parent=451"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.iese.edu\/africa\/wp-json\/wp\/v2\/categories?post=451"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.iese.edu\/africa\/wp-json\/wp\/v2\/tags?post=451"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}