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When a business expands into a new international market, many obstacles and uncertainties stand before it. Although Africa is the fastest-growing continent today, managers in the region must deal with a variety of questions in order to achieve continued growth. In a market that has a volatile history like Africa, managing uncertainty effectively has been a critical aspect for many companies. International business managers also deal with many uncertainties as regulatory differences and political disputes are common when a company operates in several markets. Analyzing how managers in Africa deal with uncertainty can provide us with great insight on how to successfully manage an international business.
The first strategy to deal with uncertainty is to focus on long-term trends rather than the short-term landscape. In the short-run operating conditions may not be ideal for business in a new market. However, if you analyze long-term trends and determine where the market is heading, a business can gain a competitive advantage by entering a new market where competitors are hesitant to enter due to short-term problems. Take for example, the Nigerian cement producer Dangote. The company is currently investing across Africa as well as in Burma and Iraq. These countries are far from certain in the short-term and the current business environment is nothing close to ideal. However, the Nigerian cement producer believes that the long-term direction of these markets suggests that demand in both countries is likely to create significant future opportunities. This strategy incorporates a certain amount of risk, but focusing on the long-term can be used to mitigate the fear of short-term uncertainties.
A long-term mindset also allows a business to take action rather than wait for uncertainties to be resolved. If an international company hesitates and waits to enter a market based on uncertainty, this company may lose out on growth opportunities. Keep in mind that their competitors may not be as indecisive. In the wake of uncertainty, great opportunity can lie. Wealth and opportunities can be created by helping customers solve the problems caused by uncertainty. In the African country of Kenya, Equity Bank has helped people and local businesses open savings accounts. Physical distance from the major banks was the major problem faced by customers in smaller towns. Therefore, Equity Bank took their services directly to the people by banking out of trucks and local marketplaces. These customers no longer have to deal with the uncertainty of not having the necessary transportation to get to their bank. If viewed differently, as in the case above, uncertainty can become an opportunity rather than a problem.
Businesses in the global marketplace have struggled with uncertainty in the ongoing wake of the financial crisis. Managing uncertainty is by no means an easy task. However, as shown by various businesses in Africa, simply changing your perspective can be the solution to the ever persisting waves of uncertainty.
Sources:
"What Africa Can Teach U.S. Business Leaders About Uncertainty" by Jonathan Berman, Businessweek
"Aspiring Africa" by The Economist
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