Developing a channel strategy for a diesel engine supplier in Mozambique

Abstract

With the current global economic growth slowdown more and more companies are looking towards Africa for its future sales growth. Due to it being consistently one of the best performing economies in the world, Mozambique has also caught the eye of potential investors across the globe. It has experienced remarkable growth in a region where its neighbours sometimes battle to achieve only a third of the growth that Mozambique is able to achieve year after year and yet very little is known about this country and the trading conditions there. If its rating on the global Ease-of-doing-business and Corruption indexes are anything to go by, it would seem like a very hostile environment for foreign companies, should they desire to start a business there. Its dependence on China as the major investment partner has also raised some questions about the sustainability of this growth when considering the happenings in the Chinese economy and the economic growth slowdown they are experiencing. With questions around its economic diversity and its ability to sustain current growth rates in the future as the starting point, foreign investors planning to commence operations in Mozambique need to find accurate and relevant information about the business environment, the markets, its potential competitors and clients in order to choose the best strategy for the achievement of the overall goal of any company – increasing the wealth of the shareholders. To capitalise on the opportunities available, companies need to analyse their external and internal environments. The main objective of this study is to analyse and to evaluate the competitive environment of a selected world leading diesel engine supplier in Mozambique to determine whether the economic growth currently experienced in Mozambique is sustainable and whether it justifies further capital investment by the company to achieve a reasonable market share. The research approach that was firstly followed consists of a literature study and secondly of an empirical study. The planning tools utilised in this study are the SWOT and PESTLE analyses. Both have formed part of the strategic planning process of many firms over the past century and have proved to be a key part in putting together the information needed from which to build a sustainable strategy. This study evaluates both of these planning tools and applies them to the chosen company for this case study. Following on the corporate appraisal of the PESTLE and SWOT techniques and a review of the summary of responses received during the empirical study, the study is summarised and elaborates on conclusions and recommendations for the selected company, emanating from the study