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Introduction
In this report, Kenya, which is an East African country, is analyzed with the aim of establishing the best market entry strategy for M-box video game. The report is divided into different parts; the first one being the market intelligence report. The market intelligence report is followed by an analysis of the business environment and finally a section or report on opportunities for market entry.
In the first phase, the researcher shall present general information regarding the country Kenya in all its aspects. Some of the key characteristics of Kenya captured in the report relate to governance, infrastructure, Information technology, geography, and the economy.
The information on Kenya is analyzed with the aim identifying the market characteristics and consumer behavior in Kenya. Moreover, such like information offers critical Practical Avenue around which the entry strategy can be harnessed. Ultimately, the aim of the report is to provide information that can be used in designing a proper market mix that will make the M-box product to find a place in the Kenyan market.
Market Intelligence Report
Basic Information
This report is triangulates data researched on a country called Kenya. The country is situated in East Africa. The capital city of Kenya, which is the business hub in the whole of East Africa, is called Nairobi. In terms of structure, the country is divided into eight provinces, which are governed by provincial commissioners (Central Bureau of Statistics).
However, because of the new constitution that was enacted recently, senators shall govern the provinces, and a lot is going to happen in terms of devolution of the powers of the president. Formerly, the president wielded a lot of power and acted like he was above the law. In the new constitution that was promulgated mid this year, the president shall no longer be above the law.
The 8 provinces are further divided into 69 districts, which are further subdivided into 497 divisions, 2,427 locations, and finally divided into 6,612 sub locations (Central Bureau of Statistics). A citizen of Kenya is properly referred to as a Kenyan, while products or materials from Kenya are referred to as Kenyan origin.
Demographics
The population of Kenya is, as per the July 2010 estimate, 39,002,772 (Central Intelligence Agency). However by August 25, 2009 the population of Kenya had been estimated to be 38,610,097 (Kenya National Bureau of Statistics). In addition, Kenya has a high population density occupies the close to 67.2km2. The population of Kenya further comprises of more than 40 ethnic groups.
Moreover, the age structure of Kenya follows a format of this nature: individuals aged between 0 to 14 years consist about 43% of the population. The 43% translates into about 6,244,321 male, and 6,104, 181 female (Kenya National Bureau of Statistics). Of the general population, the individuals aged between 15 to 64 years are about 54% with 7,845,083 among them being male, and 7,826,442 female.
Finally, the individuals aged over 64 years add up to only 3% of the total population. The 3% consists of an estimated 343,449 male and 445,182 female (Kenya National Bureau of Statistics). Further, considering the rural-urban spread, Kenya’s urban rural population is 67.7% (26,122,722) rural and 12,487,375(32.3%) rural (Kenya National Bureau of Statistics).
Kenya has got many towns but the major ones include, Nairobi with a population estimate of 3,138,369), Mombasa, Nakuru, Kisumu, Eldoret, Nyeri, Machakos and Meru (Kenya National Bureau of Statistics). In addition, in all the regions of Kenya, the official languages that are used include English and Kiswahili.
Apart from these official languages, Kenya exhibits other ethnic languages based on the prevalent ethnic groupings. The major ethnic groupings in Kenya according to Rough Guide are the Kikuyu that make up to 22% of total Kenyan population, Kisii 6%,Luhya 14%, Luo 13%, Kamba 11%, Meru 6%, %, Kalenjin 12%, other African ethnic groups 15%, non-African e.g. Asian, European, and Arab are only 1% of total population.
Like all African people, Kenyans are very religious. Religion permeates across the lives of many Kenyans, just like other societies. The Kenyan inhabitants have moved from the initial African Traditional religion to other foreign religious practices that are considered modern. In other words, Kenya is a multi-religious country with three quarters of the population professing Christianity.
However, as presented by Krapf (73), the Roman Catholics take up to 33% of the population, protestants 45%, indigenous beliefs 10%, Muslim 10% Bahá’í Faith about 1%, Buddhism 0.3 %, and others faiths are represented by about 2% of the total population.
Another factor worth mentioning in this area of demographic composition is life expectancy for Kenyans. Life expectancy for Kenyans seems to have been going down rather than rise. For instance, in 2006, the Kenyans life expectancy was estimated at, 48.93 years. However, in the latest estimate, life expectancy stands at 47.02 years (Kenya Safaris Guide).
On the other hand, regarding fertility, Kenya’s fertility rate for women stands at 3.88 children born/women, while by 2006 this figure was standing at 4.91 children born/women (Kenya Safaris Guide).
In addition, the infant mortality rate in Kenya is 54.7 deaths/1,000 live births, while this figure was standing at 59.26 deaths/1,000 live births in 2006 (Kenya Safaris Guide). Due to various factors, including poor infrastructure, erratic climatic conditions, and many more, 32% of the Kenyan population lives below the poverty line (Kenya Safaris Guide).
Education
The education sector in Kenya has over the years had more male attendance compared to women due to some previous cultural beliefs. However, due to girl child emancipation programs as of now the literacy levels among females is only ten points less than that of males. The literacy level of females is 75% while that of males is at 85%.
Furthermore, in the past, the number of children that used to be enrolled in primary education was seemingly lower, and this figure used to be further aggravated by the increased number of school dropouts. Nevertheless, the education system in Kenya offers eight years of primary education which has now been made accessible to all through the introduction of free primary education that is funded by the government.
Before free primary education started in 2003, many young boys and girls found themselves having to drop out of school at the age of six years. Back to the education system, after primary education individuals proceed to undertake four years of secondary education. Those who are successful i.e. pass the Kenya Certificate of Secondary Education exams are taken into university and other institutions of higher learning.
University education in Kenya takes up four years at undergraduate level, a minimum of two years for masters’ studies and a minimum of three years for Doctoral seminars and research. The main languages used in schools in Kenya are English and Kiswahili. However, many other languages are also taught as per institution of learning’s policies.
Further, in terms of enrolment, Kenya’s primary school enrolment rate was very low during the 1980s due to lack of fees. Majority of Kenyans are rural poor and engage in subsistence farming leading to reduced number of children enrolling in primary school.
And even further, the number of dropouts used to be high as a result of failure to meet up to the fee payment demands. However, the introduction of free primary education in Kenya has seen the enrolment rate rise drastically over the recent years.
By 2002, the enrolment in secondary school was a little bit lower compared to the age group that qualified for such enrolment; the enrolment figure stood at 23% of total qualifying youth (Kenya National Bureau of Statistics). This state of affairs prompted the government to come up with interventions aimed at promoting secondary education.
Consequently, the government’s expenditure on education has been rising. In 2002, expenditure on education took about 8% of the GDP. By 2004, government expenditure on education had gravitated to a high of about 30% of total government spending.
In relation to the total population, in 2010, the total number of pupils that enrolled for pre-primary education stood at 2,247,071, which comprised of 1,150,890 males and 1,096,181 females (Kenya National Bureau of Statistics).
On the other hand, the number of pupils that enrolled for primary education stood at 9,425,390 out of which 4,838,278 were male and 4,587,112 female; a figure that indicates an increased number of girls enrolling in the primary education (Kenya National Bureau of Statistics).
Considering enrolment into the secondary education a total of 1,796,467 students enrolled with 962,887 being males and 833,580 females (Kenya National Bureau of Statistics). Finally, the number of students taking up University education as per recently released statistics stands at 198,119, comprising of 115,094 males and 83,025 females (Kenya National Bureau of Statistics).
Kenya has five public universities and many other private universities. The five public universities include, the University of Nairobi that was established in 1956, Kenyatta University established in 1972, Jomo Kenyatta University of Agriculture and Technology established in 1981, Egerton University in Nakuru founded in 1939 and Moi University outside Eldoret that opened its doors in 1984 (Kenya Safaris Guide).
There are also other higher education opportunities offered by national polytechnic and other mid level colleges. However, in terms of literacy, Kenya has a 78.1% literacy level, comprising of 86.3% males and 70% females (Kenya National Bureau of Statistics).
Health
Kenya has over the years been hit by tropical diseases such as malaria, and tuberculosis. However, recently, the major health problem, which has been declared a national disaster, is human immunodeficiency virus (HIV), which according to the United Nations Development Program (UNDP), as of 2006 stood at 16% of Kenyan adults However, the Joint United Nations Programme on HIV/AIDS (UNAIDS) has given the HIV infection standings to be at 6.7%, a much lower figure compared to the one of UNDP (Kenya Safaris Guide).
Governance
Kenya gained its independence on December 12 1963 from the United Kingdom, and it was officially declared a republic on December 12, 1964. Since then Kenya has moved from a single party presidential republic to a multi-party presidential republic. Currently, the country is being governed under a semi-presidential system headed by President Mwai Kibaki and Prime Minister Raila Odinga (Kenya Safaris Guide).
Besides, the official currency of Kenya is KES (Kenya shilling). In addition, the country recently enacted a new constitution which could see the transformation of the leadership structure to a better system of governance which does not concentrate power upon the president.
Geography
Kenya is located at “1° 16′ 0″ S, 36° 48′ 0″ E -1.266667, 36.8” (toolserver.org). And the surface are of Kenya is 580,081km2 (Central Intelligence Agency).
In addition, Kenya shares borders with the Indian Ocean to the southeast at the equator, Uganda (933km) to the west, Tanzania (769km)to the south, Somalia (682km) to the northeast, Sudan (232km) to the northwest, Ethiopia (861 km) to the north, and Lake Victoria to the southwest (Kenya Safaris Guide).
In addition, Kenya has 536km of its coastline in the Indian Ocean (Kenya Safaris Guide). However, Kenya is advantaged because due to its coastline, it has become a major entry point to the landlocked countries in the larger East and Central Africa.
Kenya’s largest cities include Nairobi, Mombasa, and Kisumu. Nairobi is Kenya’s main manufacturing centre; Kisumu is the main port on Lake Victoria, while Mombasa is the main seaport to Kenya (Kenya Safaris Guide).
Moreover, other smaller cities in Kenya include the following; Nakuru, and Eldoret in western Kenya (Kenya Safaris Guide). Interestingly, the population census of 2009 indicated that Nairobi had a population of 1,346,000, while Mombasa had 465,000, Kisumu 185,000, Nakuru, 163,000, and also Eldoret had 105,000 (Kenya Safaris Guide).
In terms of climate, Kenya’s climatic conditions vary from arid especially in the interior parts (north and northeast) to tropical climate along the cost (Kenya Safaris Guide). However, there exist intermitted droughts in the countries which hamper most parts.
Nevertheless, less than 15% of Kenyan land receives some sort of rainfall of about 760 millimetres annually, and this is mainly along the coast as well as in the south-eastern highlands close to Lake Victoria; this is as a result of the tropical monsoon winds in the mentioned areas (Kenya Safaris Guide).
Kenya’s Gross Domestic Product (PPP) according to the 2009 estimate stood at a total of $65.059 billion and the Per Capita income of $1,782 (International Monetary Fund).
In addition, the normal GDP as of 2009 estimate stood at a total of $36.508 billion, while its corresponding Per capita GDP stood at $938 (International Monetary Fund). And its currency is Kenya shilling, which has over the years remained relatively stable against the United States dollar.
Labour
In Kenya, the backbone of the economy is agriculture, which has constantly remained the occupation of many people as well as their source of livelihood. As of 2006, 12 million people were estimated to comprise of Kenya’s labour force, of which nearly 75% of them being in the agriculture sector.
Moreover, a great deal of the population works under small-scale agriculture, however nearly 6 million of the labour force was found to be working outside small-scale farming and pastorals (Kenya Safaris Guide).
Contrary to this estimation, the 2004 classification found 15% of the population unemployed (Kenya Safaris Guide). However, other figures still consider the unemployment figure in Kenya to be higher than the aforementioned; sometimes up to 40% (Kenya Safaris Guide).
Exports: the major exports in Kenya include; horticultural products and tea, estimated at US$1,150 million as of 2005 (Kenya Safaris Guide). This figure stands ten times higher the value of coffee exports, owing to the fact that coffee is Kenya’s most exported product (Kenya Safaris Guide).
Other exports include pyrethrum, petroleum, fish, cement, as well as sisal (country profile 2007 14). These exports therefore make up a great part of Kenya’s income from international trade.
Imports: the main imports for Kenya are chemicals, manufactured goods, crude petroleum, machinery, as well as transportation equipment. In addition, most of the exports for Kenya are mainly destined for Africa, and then the European Union. However, specifically, Kenya majorly imports from the United Kingdom, the Netherlands, and Tanzania.
In terms of raw materials, Kenya’s main supplies include the United Kingdom, Japan, United Arab Emirates, and India. Kenya mainly exports garments to the United States in accordance with the African Growth and Opportunity Act (AGOA) terms (Kenya Safaris Guide).
However, in spite of the fact that AGOA promotes the Kenyan industry, competition threats still hamper Kenya’s international trade especialy from the Asian countries, and this has made Kenya to still harbour a trade deficit against the United States (Kenya Safaris Guide).
Furthermore, Kenya, as of 2007 had an external debt that totalled to US$6.7 billion, which was forecasted to have been settled by 30% of Kenya’s 2007 GDP (Kenya Safaris Guide).
Infrastructure
The infrastructural system of Kenya comprises of road transport, rail transport, water transport, as well as air transport. However, water transport only takes up a very small proportion of the transport system in Kenya.
It is important to note that Kenya needs a lot of investment in the road and rail transport in order to help improve, maintain and expand this system to higher standards since these are the most important measures that could help streamline the economic and infrastructural development in Kenya.
The actual paved road network in Kenya is estimated to be about sixty four thousand kilometres. The road network in Kenya carries over 80% of the passengers, and it covers many parts of the country (Kenya Safaris Guide). Furthermore, most of the passengers and freight are carried by road.
However, due to corruption in contracts, as well as under-investment across many parts, Kenya has left the road network in a situation that demands attention, due to the fact that it bears high levels of road accidents and deaths, making it the highest road accident region in the world (Kenya Safaris Guide).
Another aspect that hampers the road network in Kenya is road safety. This comes as a result of having many minibuses (over 25,000 of them), making up around 78% of the public transport system of Kenya.
However, the government has respondent from time to time to this issue of road carnage, during the 2004 Kibaki administration when matatu owners were obliged to install safety instruments in order to help avert the then high level of road accidents.
Unfortunately, this led to increased costs on the part of passengers due to hiked fare, resulting to people overcrowding in trains as an alternative in order to cut down their transport expenditure.
But it is quite promising from the fact that the government has embarked on an infrastructural rehabilitation program as a strategy to spearhead the country towards the strategic plan which is actually captured in the vision 2030, a road map to technological advancement in Kenya (Kenya Safaris Guide).
Well, it is also important to have a glimpse at the railroad system in Kenya. This system takes about 2,778 km, which is of narrow –gauge a fleet of 156 locomotives, and a one-meter track, as well as 7,000 wagons and coaches, in addition to container-carrying Railtrainers (Kenya Safaris Guide).
In addition, Kenya’s rail transport operates under the authority of Kenya Railway Corporation (KRC), which is in charge of both Kenya as well as Uganda in the East African area. Most importantly, there is a major railway that runs from Mombasa, through Nairobi, and then to the border of Uganda; however, there is also another commuter rail that operates within the suburbs of Nairobi (Kenya Safaris Guide).
Further still, the railroad corporations of both Kenya and Uganda came to an agreement upon which they formed a merger that saw them jointly offer their merged railroad for concession towards privatization to investors (Kenya Safaris Guide).
Hence, this led to the Rift Valley Railways (RVR) as the winning concessionaire, which is governed by the South African company referred to as ‘Sheltam Rail Company’ (Kenya Safaris Guide). as a result, this saw the South African Company gain rights to 1,920km in Kenya, that carries about 2.3 million freight tons, as well as 4.7 million passengers annually (that is, in the final years of 2000, and 2003) (Kenya Safaris Guide).
Kenya’s main seaport is Mombasa, which is also the major sea outlet for Kenya as well as for other landlocked countries within East and Central Africa (that is, Uganda, Burundi, Rwanda, the eastern Democratic Republic of Congo, as well as Southern Sudan), and is managed by the Kenya Ports Authority (KPA) which was put in place in the 1978 (Kenya Safaris Guide).
In addition, the KPA is in charge of port operations in Mombasa, and other inland container deports situated in Nairobi, Kisumu, and Eldoret (Country profile: Kenya 200715). Further, there exists other small port in Kiungu, Lamu, Kilifi, Funzi, Malindi, Mtwapa, Vanga, and Shimoni, to which KPA has jurisdictions (Kenya Safaris Guide).
Notwithstanding, the water port in Mombasa is deep, therefore it can handle all forms of ships, in addition to 300,000 containers annually (Kenya Safaris Guide).
Kenya in 2006 recorded an increase in the port traffic up to 14.4 million metric tons in terms of freight, however as a result of corruption, and poor infrastructure, the business at the port stands at risk of failure, and Kenyan authorities ought to step up to the task and clear out the mess (Kenya Safaris Guide).
Well, there are plans underway to improve a number of port facilities in Kenya, and if all goes well, there is bound to be major progress in this business.
In Kenya, there are over 200 airports as well as airfields, among which 15 have paved runways (four of which are less than 3,000 meters), and some 55 airfields in Kenya are still available for commercial purposes (Kenya Safaris Guide).
Nevertheless, three airports in Kenya deal with international flights, and they include, the Jomo Kenyatta International Airport (JKIA) in Nairobi, the Moi International Airport in Mombasa, and the Eldoret International Airport (Kenya Safaris Guide).
In addition to these international facilities, there are others such as the Wilson Airport located in Nairobi, as well as others in Malindi, Kisumu, and Kakuma, in addition to other airstrips across the country.
Fortunately, the government approved what is referred to as the Northern Corridor Transport Improvement (NCTI) project in 2004, which includes the United States’ $41 million meant for aviation development in Kenya with regard to safety in JKIA and MIA, in addition to new navigation and perimeter fencing in the so mentioned airports (other improvement measures include baggage-handling equipment and security equipment (Kenya Safaris Guide).
This endeavour is meant to promote development in the region with regard to international linkages and trade. As a result Kenya stands a better chance of standing out as one of the major business investment centres in the world.
Moreover, the improvement plans are aimed at increasing the runway capacity from 2.5 million passengers to 5.5 annually, with an aim of obtaining the status of category one from the United States Federal Aviation Administration, which will see Kenya have a direct flight system from JKIA to the United States airports, and consequent boost in the tourism industry as well as trade (Kenya Safaris Guide).
And hopefully, Kenya is inclined towards being a regional hub in African.
Another very important infrastructural facility worth mentioning is the pipeline industry, in which case, herein referred to as the Kenya Pipeline Company (KPC). This company is a government enterprise that was established in 1973, and actually transports nearly 90% petroleum products for domestic consumption in the Kenyan market (Kenya Safaris Guide).
Within KPC is the Mombasa-Nairobi pipeline, which has received tremendous increase due to restrictions on the transportation of petroleum in order to ensure that the petroleum products are protected against diversions ((Kenya Safaris Guide).
Additionally, the KPC has got a great deal of dominance in the energy sector within the neighbouring countries including Burundi, Rwanda, Tanzania, Uganda, Sudan, as well as the Democratic Republic of Congo (Kenya Safaris Guide).
The telecommunication industry in Kenya has significantly grown. It is believed that the telecommunication industry is bound to promote sustained economic development. This comes as a result of the rapid growth that occurred between 2000 and 2006. In addition, over the years what has been witnessed is increase in cell phone subscribers from 24,000 as of 1999 to 5million by the year 2005 (Kenya Safaris Guide).
Another aspect in the telecommunication industry is that during 1984 there were 106,000 landline telephone subscribers, contrary to the 2005 figure, which stood at 282,000. Moreover, there has been tremendous increase in the number of telephone users. In fact, it is believed that at least 63.2% of households in Kenya possess mobile phones (Communications Commission of Kenya).
Additionally, initially there used to be a cellular system that used to be dominated by two licence holders Safaricom, and Celtel. However, Econet Wireless came into play and currently offers immense competition in the industry in the line of data transfer.
In fact, the Kenyan telecommunication industry has grown immensely, and it appears that in the region of East and Central Africa, Kenya has an upper hand in telephone usage. In relation to this, there has been seen a lot of growth in this area due to newly emerged players in the industry.
In fact, Kenya’s mobile coverage takes up to 77% of the population, and it covers close to 25 million Kenyans – however, it has 27% geographic coverage signifying that there are other areas, which need boosting in order to benefit from the telecommunication, sector (Communications Commission of Kenya).
Kenya now has a telecommunication industry that harbours players such as Safaricom, Orange Kenya, the newly named Airtel, the Yu network, and Telecom Kenya. All these players have entered into a new phase of competition with increased rate of telephone fee reduction both in areas of messaging services, data transfer, and the commonly used caller services (Communications Commission of Kenya).
This in turn has brought in new players in more subscribers leading to increased telephone usage in the region. This feature puts Kenya at a great platform for technological advancement in the East African region.
The mass media in Kenya is very expansive; characterized by more than six television broadcast station (Communications Commission of Kenya). According to the Communications Commission of Kenya, as of 2007, there were six television broadcasting corporations in Kenya.
It is further noted that currently, there are over 42 radio station, with each language group seemingly being represented by a radio station (Communications Commission of Kenya). Regarding radio stations, some of them include, Pwani FM, Coro FM, KBC English Service, Family 96.5FM, Metro FM, KBC Kiswahili, Easy FM, 98.4 Capital FM, (radio-station-directory.com, n d), Kameme FM, Inoro FM, and Romogi FM.
Similarly, there are 16 TV stations, which are licensed by the Communication Commissions of Kenya such as KBC, Metro, Family, KTN, Nation, STV, Citizen as well as Channel 5 (Export Processing Zones Authority).
Kenya has a total of eight newspapers, including, the Daily Nation, the Standard, the East African, Business Daily, Kenya Times, Coast week, Nairobi Star, and People Daily (Kenya-advisor.com).
The Daily Nation is owned is owned by the Nation Media Group, a private company (this company also owns Nation TV, the Nation FM radio station, as well as other numerous newspapers (Kenya-adivisor.com).in addition, this Daily Nation which is in English Language was introduced by Aga Khan IV in 1960 as a counter to colonialisms (Kenya-advisor.com).
The Business Daily, on the same note, is owned by the Nation Media Group with an aim of promoting business in the country. The Kenya Times, on the other hand, was established in 1983 by former regime of Moi with the name Kenya Times (it was though renamed after the KANU defeat as a result of the introduction of multiparty democracy that started in 1992), and became a mouthpiece of the government thereafter (Kenya-advisor.com).
The Coast week newspaper rather deals with entertainment, shipping information, sports, tourist information, among other purposes (Kenya-adisor.com). However, the Nairobi Star is a recent establishment in the Kenyan media, and is bound to grow and reach other newspapers’ standards.
The total number of internet service providers registered as of 2004 was 73, among which only 16 were in operation supplying services to around 1,030,000 users as well as more than 1000 cyber cafes and other telephone bureaus (Export Processing Zones Authority).
In addition, there had estimated to be about 520,000 personal computers which were actively in use in Kenya as of 2004 indicating that there was 1.6 computers per hundred inhabitants, and with an internet bandwidth of 28Mbps (Export Processing Zones Authority).
However, the following are the most dominant Internet Service Providers in Kenya which are strongly in operation; Blue-Internet Service Provider, Ericonet ISP, KDN ISP, Skyweb ISP, ISP Kenya, Access Kenya Group, TESPOK, IS Internet Service Provider, Africa Online, Nairobi Net, UUNet, Swiftglobal, and Wananchi Online (Ostamyy.com).
Finally, there are a number of things that have happened in the ICT industry in Kenya that command recognition pertaining to the manner in which the country’s ICT industry wishes to move. For instance, the installation of the fibre-optic cables across the country offers promising results in the industry.
There are other measures such as the Digital Subscriber Lines (DSL), which have been undergoing licensing by ISPs, and now the country is set to have a greater opening to the outside world. Another thing is that there has been the introduction of the Integrated Services Digital Network (ISDN) service.
There has also been some major competition on Telkom Kenya regarding international telephony services from the mobile service providers in Kenya. This offers unique promising progress in this industry with regard to innovation and technological advancement.
Business Environment Analysis Report (BEAR)
The introduction of M-box to Kenya is likely to be affected by the factors mentioned in the Market Intelligence Report. However, the effects of those factors on the success of M-box in Kenya could be either negative or positive. The aim of this section is provide an analysis on the manner in which the factors are likely to influence the business of M-box Corporation in Kenya.
However, in overall, the Kenyan business environment is promising as the country enters into new era of technology with people daily gaining access to computer, mobile phones, newspapers, internet, as well as other services due to the progress towards the attainment of Vision 2030 which is meant to spearhead the country into a middle-level earner country. The factors shall now be discussed below.
Demographic factors
The population of Kenya has been ranked 33 in the world as indicated by the Central Intelligence Agency report about Kenya. The population has shown signs of growth owing to the fact that a greater percentage of the population is below the age of 30. In other words, these very energetic individuals are bound to embrace the introduction of M-box in the country.
Additionally the official languages in Kenya English and Kiswahili have gained international reputation in the ICT industry since they can now be accessed in the computer system. This factor is likely to offer promising results to the country because in terms of access to the M-box game, many people are bound to be interested in it like other games in the market.
Religion is another factor that can hamper the introduction of M-box. On this note, it should be realized that M-box does not have any contradicting views against religion. Moreover, a greater percentage of the people in Kenya are Christians who do not seem to have any contradicting view against religion. In addition to this, the population structure indicates that the youth are the majority in Kenya.
This people tend to like adventurous lifestyle as well as challenging situations, and the M-box game can offer such challenges during their leisure time. Additionally, the life expectancy still stands moderate at 57.86 years characterized by an average fertility rate. Therefore, the introduction of M-box will have a long-term stay in Kenya based on these factors.
The education system has a lot to offer since many people are gaining access to education and the study on ICT has gained ground in both primary, secondary and university institutions.
This means that the awareness of students on ICT staff is getting better day-in-day out. Moreover, the number of people inhabiting major towns in Kenya is high in Nairobi, which has the highest population. In other words, the marketing of M-box could actually take a shorter time to gain ground among most of the young people.
However, there are other factors such as mortality rate, which is likely to affect the adoption of M-box, and therefore, the M-box Corporation should consider this before attempting to introduce it. In other words, they can institute social responsibilities that could help reduce mortality rate.
Governance
The Kenyan government exhibits a democratic type of leadership, and with the introduction of the new constitution, which calls for highly devolved leadership and freedom of expression among the people, there is hope for the acceptance of M-box within the political side.
Owing to the fact that the M-box is inclined to provide creativity and determination in the minds of many people, there is likely to be business free environment.
The discussed issues notwithstanding, the government of Kenya has been committed towards the promotion of trade and industry hence a favorable environment for business. The Kenyan currency in the region of East and Central Africa (Kenyan shilling) has continually stood higher at an average of 75 against a unit of American dollar. This therefore means that returns from international trade could favorably promote the two countries.
Geographical factors
Kenya’s geographic location offers great access to the international market with its coastline in the Indian Ocean from where major shipment occurs even for the East African region. In other words, the flow of goods and services back and forth Kenya is set to work effectively.
Similarly, in the major towns in Kenya, there are numerous industries where various people work in manufacturing, agriculture and other international trade. This people are likely to become major consumers in of the M-box technology.
However, the climatic conditions of Kenya exhibits a greater part of the country with arid and semi-arid environment, which is likely to hamper the sale of M-box due to the series of things that come as a result of poor climatic conditions and lack of farming.
Moreover, almost three quarters of the Kenyan population depend on agricultural business. This poses a threat to the M-box Corporation, as the income that people tend to receive from agriculture in arid and semi-arid regions is low.
Economic Factors
This is the greatest factor that should be born in mind whenever intending to establish a marketing strategy. The Kenyan labor force comprises of about 75% agriculturalists many of whom are small-scale farmers. In this regard, their produce mainly goes to consumption rather than other luxurious measures.
The unemployed make up over 15% of the population, which again indicates that the number of eligible customers shall remain low.
However, there are quite many people as well who live in the major cities and who depend on service industry as source for employment. This could help promote the M-box, since these people are likely to embrace the M-box market. Kenyan export market is also promising because, of its reliance on horticultural business.
This implies that there is not going to be any competition in terms of products. Not only that, Kenya also relies on importation of ICT materials and other industrial productions.
The Kenyan inflation rate has relatively remained low, and there has been increased GDP. This is inclined to be a great boost to the business environment in the county regarding the acquisition of technological materials such as computers and other games.
Infrastructural Factors
The infrastructural system could be considered with mixed results in the light of M-box. The majority of Kenyans rely on road transportation. This is likely to affect the speed of transportation of M-box products. However, the effect of air transport on the transportation of M-box could be positive. This is because; there is a network of airfields in major towns in Kenya.
This could help bring the M-box products closer to other regions, after which they could then be distributed through the road network. Similarly, the coastline and its port facilities could be used to effectively deliver products through the sea into Kenya, since there are other depot facilities in major towns. Therefore, about infrastructure, there are mixed factors both in favor and against the introduction of M-box in Kenya.
However, due to the trend that Kenya is taking of late, the factors in favor prove to be more than those against. Moreover, owing to the countries strategic vision towards vision 2030, there is bound to be greater infrastructural developments in the country to help boost international trade.
From the initial discussions regarding the use of common infrastructure, a lot is underway, and this area does not offer much opposition to the establishment of M-box in Kenya. Many people have embraced the mobile usage in Kenya, and this is a big boost to the gaming industry because the M-box Corporation could be creating a portable game that could be used in mobile phones.
The same applies to the rise in the internet industry with various internet service providers working hard to ensure that there is increased number of internet subscribers to enjoy the gaming industry through online interactive gaming, which could help increase interest in people in the gaming industry.
There are numerous newspapers, radio stations, and television-broadcasting houses, among other mass media services are going to help market the M-box game through a series of advertisements and public awareness campaigns.
Other factors
Generally, the government of Kenya is accessible through many other ways. In addition, in case there is need for more information, one could easily access such information over the internet. For instance, there is the government website and the American embassy website, which are also very resourceful information sources for investors on how to conduct business in Kenya
Report On Opportunities For Market Entry
Export Opportunities
One of the biggest exports from Kenya is tea. Kenya’s production capacity for this product remains largely unexploited. The export of tea from Kenya yields over Kshs. 36,072 million. However, exports to America only make up to 3% of the total exports compared to exports towards other African states, which make up to 47% of the total exports.
Kenya has a good relationship with America diplomatically and thus exploring how to increase Kenyan tea exports to the USA could help cement that relationship further. Cementing bilateral business relationships is critical for expansion of Kenya’s export potential.
Foreign exchange rates are also a key determinant of bilateral trade relations. Kenya is advantaged in its export deals because; the value of the Kenya shilling against the American Dollar makes it favorable for Kenya to trade with the US in the tea industry.
Another opportunity that Kenya offers any foreign investors is great harbors and other forms of transport. The strategic geographical position that Kenya enjoys against other neighboring countries makes it a viable business center.
Besides Kenya has been improving its air transport facilities over the years and is likely to accommodate many passengers and freight. This could help promote the tourism industry as well as other export services to America as well as other European countries.
Import Opportunities
Kenya, like many other African countries are burdened with the threat of diseases such as HIV. This has in term elicited the need for ARV drugs and other medical products for treatment of the symptoms of AIDS.
Secondly, many hospitals in Kenya are in dire need of medical equipment due to high cost of acquiring them. The only thing that Kenya should work towards is reduction in tariffs on medical and pharmaceuticals the way they did with computer products. This could slightly lower the costs of imports.
Japan is Kenya’s trade partner in the import market. Many Kenyans are middle-income earners. This means purchasing high cost cars could not work for Kenya. The road network in Kenya has been going through major reconstruction and there are many roads under construction in Kenya.
This means that the road network in Kenya is improving in the near future, and that there are likely to be many people interested in owning cars than the ones who currently have.
Based on this understanding, and using the fact that Kenya has an opening to the sea in Indian Ocean. Additionally, based on the developments in the internet industry, Kenya could greatly benefit by incorporating the e-marketing services in the importation of cars from Japan.
Conclusion
The report on Market Entry Strategy project has explored all the features that Kenya exhibits in terms of infrastructure, economic conditions, climatic conditions, geographic factors, and telecommunications. The Market Entry Strategy has been done in a manner that Cunningham’s strategies of market entry have been at the background of conducting the research.
The factors include; technical innovation strategy, product adaptation strategy, availability and security, low price, as well as total adaptation strategy (Cunningham 9). Moreover, as the report developed, factors that make penetration into the Kenyan market hard or easy were delineated.
Developing a market entry strategy is not easy. Often when companies or organizations enter a new market niche, they meet high resistance. Often, organizations encounter various countertrade factors. However, Shipley and Neale (49) put it; one must make sure that the benefits are more than the disadvantages. However, the most important is a good relationship between the trading partners.
For instance, Chinese products easily access or enter the Kenyan market due to good rapport between Kenya and China. As Collett (19) explains, there is need for a mutually satisfying relationship between importers, exporters, transporters, and the governments.
Therefore, it is in the opinion of this report that by capitalizing on the good relationship between countries, marketers are better placed to introduce a new product into an international market without experiencing much resistance.
Works Cited
Central Bureau of Statistics. Census cartography: the Kenyan Experience. 2010. Web.
Central Intelligence Agency. Kenya. The World Factbook. 1999. Web.
Collett, W. E. “International Transport and Handling of Horticultural Produce” in S. Carter (ed.) “Horticultural Marketing”. Nairobi: Network and Centre for Agricultural Marketing Training in Eastern and Southern Africa, 1991.
Communication Commission of Kenya (CCK). Communications Statistics Report. 2008. Web.
Export Processing Zones Authority (EPZA). Kenya’s Information and Telecommunications Technology Sector: Kenya’s ICT Industry. 2005. Web.
International Monetary Fund. Kenya. 2010. Web.
Kenya-Advisor.com. Overview of Kenya Newspapers. 2010. Web.
Kenya Safaris Guide. Kenya Population Statistics, Age, Birth Rate, Life Expectancy. 2010. Web.
Kenya National Bureau of Statistics. Kenya: 2009 Population and Housing Census Highlights. 2010. Web.
Krapf, Johann Ludwig, Travels, Researches, and Missionary Labours in Eastern Africa. London: Frank Cass & Co. Ltd, 1960.
Ostamyy.com. Internet Service Providers Kenya.2010. Web.
Shipley, D. D. and Neale, C. W. “Successful Countertrading. Management Decision”. Marketing Management Journal, 26, 1, (2000): 49-52.
Toolserver.org. Kenya. 2010. Web.
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