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Africa is a challenging region for expansion, as there are specific socioeconomic factors not present in other locations. Bharti Airtel is a major Indian telecom provider with significant plans for expanding internationally (Palepu & Bijlani, 2012). While Africa did appear to be a suitable place that had a population correlating with India, some factors were unaccounted for and made it difficult for Bharti to reach its expected presence. This paper will discuss why the challenges that Bharti’s executives experienced during expansion in Africa were unexpected for the company.
It is common for businesses to adjust their organizational culture to fit the local context. Bharti has a preference to utilize outsourcing and operates in a single country rather than a region consisting of multiple states, each one requiring a specific approach (Palepu & Bijlani, 2012). However, such a drastic change in an acquired firm’s structure often meets significant resistance from local employees. The telecom industry in Africa was overestimated due to political factors that Bharti failed to incorporate in its assessment. Africa’s infrastructure lacks the same interconnectedness as in India, which makes operators charge up to 15 times more for calls (Palepu & Bijlani, 2012). The costs of operating in Africa did not meet Bharti’s calculations, which were based on a different region. Moreover, the talent shortages related to insufficient training opportunities for locals, combined with Africans’ perspective on work that differs from Indians’ ethics, required more expatriates to be transferred there (Palepu & Bijlani, 2012). Such a discovery sent the firm stumbling behind schedule, resulting in unsatisfactory performance.
In conclusion, Bharti did not account for social, political, and technological factors to the fullest extent and had to adjust its strategy afterward. The multitude of countries, a different mindset of Africans, high costs of infrastructure usage, and other challenges put Bharti significantly behind the expected mark. Through the firm’s investments in both talent and finances in this regional division, its market share began to grow, albeit slowly, and the future of the company remains undetermined.
Reference
Palepu, K., & Bijlani, T. (2012). Bharti Airtel in Africa (9-112-096). Harvard Business School. Web.
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