• Advertise
  • Contact Us
  • About Us
  • Supplier Directory
  • Login
  • Subscribe
  • Logout
  • My Profile

  • CORONAVIRUS
  • LOGISTICS
    • Air Cargo
    • All Logistics
    • Express/Small Shipments
    • Facility Location Planning
    • Freight Forwarding/Customs Brokerage
    • Global Gateways
    • Global Logistics
    • Last Mile Delivery
    • Logistics Outsourcing
    • LTL/Truckload Services
    • Ocean Transportation
    • Rail & Intermodal
    • Reverse Logistics
    • Service Parts Management
    • Transportation & Distribution
  • TECHNOLOGY
    • All Technology
    • Artificial Intelligence
    • Cloud & On-Demand Systems
    • Data Management (Big Data/IoT/Blockchain)
    • ERP & Enterprise Systems
    • Forecasting & Demand Planning
    • Global Trade Management
    • Inventory Planning/ Optimization
    • Product Lifecycle Management
    • Sales & Operations Planning
    • SC Finance & Revenue Management
    • SC Planning & Optimization
    • Sourcing/Procurement/SRM
    • Supply Chain Visibility
    • Transportation Management
  • GENERAL SCM
    • Business Strategy Alignment
    • Education & Professional Development
    • Global Supply Chain Management
    • Global Trade & Economics
    • HR & Labor Management
    • Quality & Metrics
    • Regulation & Compliance
    • SC Security & Risk Mgmt
    • Sustainability & Corporate Social Responsibility
  • WAREHOUSING
    • All Warehouse Services
    • Conveyors & Sortation
    • Lift Trucks & AGVs
    • Order Fulfillment
    • Packaging
    • RFID, Barcode, Mobility & Voice
    • Robotics
    • Warehouse Management Systems
  • INDUSTRIES
    • Aerospace & Defense
    • Apparel
    • Automotive
    • Chemicals & Energy
    • Consumer Packaged Goods
    • E-Commerce/Omni-Channel
    • Food & Beverage
    • Healthcare
    • High-Tech/Electronics
    • Industrial Manufacturing
    • Pharmaceutical/Biotech
    • Retail
  • REGIONS
    • Asia Pacific
    • Canada
    • China
    • Europe
    • Latin America
    • Middle East/Africa
    • North America
  • THINK TANK
  • WEBINARS
  • PODCASTS
  • VIDEOS
  • WHITEPAPERS
Home » Multinationals, Local Companies Square Off in Race to Capture Africa's Growing Consumer Market

Multinationals, Local Companies Square Off in Race to Capture Africa's Growing Consumer Market

November 13, 2015
BCG

The multinational corporations that have been coming to Africa are looking to tap into economic growth that has averaged more than 5% a year since 2000. However, for many of these MNCs, success has been limited. Several MNCs that have enjoyed top-line growth on the continent have nevertheless been losing market share and have been outmaneuvered by local companies, the report says.

"International companies are absolutely right about the long-term potential of Africa," said Patrick Dupoux, a BCG senior partner and coauthor of the report. "The surprise that some of them have gotten is the quality of the local competition that has emerged. African companies have access to a local ecosystem of suppliers, customers, talent, and stakeholders that is beyond the reach of most MNCs. That makes these companies very formidable in certain cases."

The report highlights several situations in which international companies have lost ground to local players in Africa. These market-share setbacks have occurred in industries as diverse as beverages, cement, cosmetics, pharmaceuticals, banking, and insurance.

Equally Skilled but Very Different
The competition between locally based companies and multinationals is not one-sided. Local companies, which the authors call African Lions, have four main advantages over MNCs, the report says. These advantages are the Lions' single-minded focus on African markets; the greater experience their executives have operating in local markets; their management teams' superior grasp of market data and intelligence relevant to Africa; and their fast decision-making and adaptability. The authors call these attributes Focus, Field, Facts, and Flexibility -- the four Fs of the African Lions.

"These local companies are at home in Africa and know the markets intimately," said Lisa Ivers, a BCG partner in Casablanca and coauthor of the report. "They are fast moving and entrepreneurial.

They sometimes play by different rules. These are all factors that work to their advantage."

Multinationals have their own strengths. Some of them have been in African markets longer than the local companies themselves. In some of these markets, international companies have been able to use superior resources, brands, platforms, and processes to keep Africa-headquartered rivals at bay.

Each group of competitors has something to learn from the other. For instance, from African companies, MNCs can learn focus – which comes from having highly experienced management teams in Africa and taking a long-term view. If MNCs are to improve their positions in Africa, they must show some of this same focus, the authors say, starting with moving to longer tenures for their expatriate executives.

For their part, local companies can learn from MNCs how to offer a more predictable experience to end customers, to their supply-chain partners and to their own employees. Local companies can also learn how to manage volatility from MNCs.

The Continent's Bright Future
The report doesn't ignore the challenges that Africa faces, including the steep drop in oil prices (a blow to Africa's oil-producing economies), the still-high incidence of infectious disease on the continent, and the high-profile attacks by militant groups such as Boko Haram and Al Shabaab. But the authors say these challenges aren't enough to undermine Africa's positives, notably:

--  A big uptick in outside investment. In sub-Saharan Africa alone, foreign direct investment surged by a factor of five from 2001 to 2012.

--  Favorable demographics. Within a few decades, the proportion of Africans in the workforce will exceed the proportion of Europeans and the proportion of Asians who are working.

--  A more stable political environment. More than half of Africa's 54 countries now hold democratic elections, compared with fewer than 10 in 1990.

Africa's favorable economic and demographic trends explain why so many big-company CEOs now make Africa a destination in their travels.

"The question for many companies isn't whether to come to Africa; it's how to do it profitably," said coauthor Ivers. "In the next few years, there's going to be a lot of investing and partnering as companies try to figure that out."

A copy of the report can be downloaded at BCG Perspectives.

Source: Boston Consulting Group

RELATED CONTENT

RELATED VIDEOS

Global Trade Management Business Strategy Alignment Global Supply Chain Management Food & Beverage Middle East/Africa
KEYWORDS African consumer spending African GDP African retail supply chain BCG Business Strategy Alignment Food and Beverage foreign direct investment Global Logistics Global Supply Chain Management Global Trade Management international trade Middle East/Africa Supply Chain Analysis & Consulting supply chain management: Middle East Africa
  • Related Articles

    Wanting Piece of Air Cargo Market in East Africa/Middle East, Djibouti to Get Two Major Airports

    Big Three U.S. Air Carriers Square Off Against Top Three Persian Gulf Airlines Over Open Skies Agreements

    Piracy Off Somali Coast Drops Significantly, But Attacks Ratchet Up in West Africa, Off Indonesia

BCG

U.S. Manufacturing Exports Have Become the Engine of the American Economy

More from this author

Wake up to Coronavirus Updates and the latest Supply Chain News!

Subscribe to our Daily Newsletter

Timely, incisive articles delivered directly to your inbox.

Popular Stories

  • Coronavirus-watch-Armada

    Virus Update: Cadila Looks to Double Vaccine Capacity; Pfizer Makes South Africa Deal After Standoff

    Coronavirus
  • Ocado

    Kroger Is Amassing a Robot Army to Battle Amazon, Walmart

    Logistics
  • Why Is There a Global Semiconductor Shortage?

    Watch: Why Is There a Global Semiconductor Shortage?

    Coronavirus
  • Mathematics

    Solving Supply-Chain Disruption Comes Down to Mathematics

    Data Management (Big Data/IoT/Blockchain)
  • Rubber Tire

    Rubber Scarcity Creates New Headache for Beleaguered Automakers

    Coronavirus

Digital Edition

Scb feb 2021 lg

2021 Supply Chain Management Resource Guide

VIEW THE LATEST ISSUE

Case Studies

  • Remote Implementation: A Dose of the Right Medicine for B2B Pharmacy

  • LSP Saves Customer $1.5 Million a Year With MPO Global Inbound Management

  • Auto Supplier Wows Key Client Using riskmethods Supply Chain Savvy

  • Integrating Shipping and Compliance Saves Conglomerate Millions

  • How a Consumer Goods Giant Upped Its On-Time Delivery Performance

Visit Our Sponsors

Yang Ming 6 River Systems ArcBest
Armada aThingz BluJay
Burris Logistics DSC Logistics DCSA (Digital Container Shipping Association)
DHL Resilience360 Flash Global Genpact
Geodis GEP GreyOrange
Honeywell Corporate Honeywell Intelligrated Infor
Inmar Kibo Commerce Kinaxis
Logility Magnitude Software MPO
Old Dominion Oliver Wight OpenSky
Paccurate Ports America Purolator
QAD Precision Red Classic Riskmethods
S&H Systems Snapfulfil TGW Systems
Tradepoint Atlantic Transportation Insights Watson Land Company
Westfalia Technologies Workjam
  • More From SCB
    • Featured Content
    • Video Library
    • Think Tank Blog
    • SupplyChainBrain Podcast
    • Whitepapers
    • Webinars
  • Digital Offerings
    • Digital Issue
    • Subscribe
    • Manage Your Subscription
    • Newsletters
  • Resources
    • Events Calendar
    • SCB's Great Supply Chain Partners
    • Supplier Directory
    • Case Study Showcase
    • Supply Chain Innovation Awards
    • 100 Great Partners Form
  • SCB Corporate
    • Advertise on SCB.COM
    • About Us
    • Privacy Policy
    • Contact Us
    • Data Sharing Opt-Out

All content copyright ©2021 Keller International Publishing Corp All rights reserved. No reproduction, transmission or display is permitted without the written permissions of Keller International Publishing Corp

Design, CMS, Hosting & Web Development :: ePublishing