Proposal On Exportation Of High The Equipment To Tanzania
MGT 370 International Supply Chain Management
The market dynamics around the world today forces most businesses to increase their market base as the primary aim of all business premises has always been going global and being recognized internationally. The massive advancement in technology and new products entering the market has led to creative thinking among business owners. The art of the business is that you must provide quality products and services according to the consumers’ specifications in order to outwit the other competitors. The emergence of most companies offering similar products and services has reduced the monopoly enjoyed by most companies and organizations when they were the only service providers in the market (Posner, 1978). Various businesses investigate the market trends and venture into profitable ideas; which will help the company grow. Most managers have been forced with the tasks of traveling from country to country looking for potential business grounds as well as attending various trade shows and exhibitions to keep up with the current trends in a business set up. Improvements in the communication and transport network across the world have made delivery of various products faster compared to older days when accessing some places were not possible.
International Logistics, Inc. is a major leading company in terms of manufacturing and distribution of hi-tech equipment. Its operations involve looking for markets where their manufactured products can be sold. They have been successful in the services, but the recent development of a potential exporting country has made them launch research on the country where the products will be delivered. Exporting is a challenging activity as it involves linking the producer to the customer. More factors have to be put into consideration such as the demand for the products in the desired country. After keen analysis, there was a country which most of the distributors liked exporting their goods and services to. The company has grown over the years and still wanted to improve and be the leading export corporation in the entire world. The country which most exporters marked was identified to be Tanzania. A research had to be carried out on why most of the distributors preferred it and the environment which can facilitate good business to thrive.
In most of the trade shows and exhibitions attended, there was a general agreement of many traders on exporting their products to an African country Tanzania. There was a need to research what factors may favor good business in the country. This lead to the launch of the research and some experts sent to Tanzania on a venture strategy.
Tanzania is an African country situated almost in the middle of the African continent. The country has undergone various transformations since claiming the independence and ending colonization which dominated African countries. After colonization, the country has struggled under poor leadership and intercommunity wars which made it suffer economically. The country has since gained back its developmental agenda and is back in the paths to greatness. Tanzania is the number 1 country in Africa with the fastest growing economy (Lyons, 2010). With its high population and the large size of the country, demand for various products and services has gone up, and most investors have turned their interests in the country. The country is rich in minerals, and the exploration of the minerals and recently found oil has made it a favorite point for most of the exporters.
Tanzania is strategically located almost at the center of Africa. It connects the Upper part and the southern parts of Africa. It is located next to a water body, the Indian Ocean which makes transportation of goods through the ship very convenient. The country has good transport networks involving road transport as most roads leading to major towns are tarmacked and electric train system which ensures that goods take the least possible time on transit when they land at the port. The electric train connects the country to neighboring countries including West Africa. The country has five international airports and direct air flights to the US; hence making it convenient when transporting perishable and fragile goods. The airports link all the African countries as their airlines have no restrictions on operating in other continent member airports. The country is a member of the East African Community (EAC) which involves ten member countries namely: Tanzania, Uganda, Burundi, Rwanda, Kenya, South Sudan, Eritrea, Djibouti, Ethiopia, and Somalia. These countries have no trade barriers in their borders and goods and services can be exchanged freely (Ravenhill, 1979). With exportation of products to this specific country, the products will be distributed among the ten countries with no extra taxes and other barriers. Tanzania is also a member of the Common Markets for Eastern and Central Africa (COMESA) which links it to the southern parts of Africa as well. This can be an excellent business opportunity as any exports brought to this country will sell even in the southern part of Africa.
The country enjoys good political stability since the adoption of the new constitution. The leadership transition has been peaceful as opposed to other countries which are often posed with conflicts following elections as some leaders refuse to hand over power when they lose an election. The past four elections which happen after every five years have been peaceful, and the communities live in a peaceful manner. The leaders have a good relationship with the citizens, and this has helped restore the confidence of the citizens in their country. A friendly environment is essential for proper business.
There is a large population in the country which broadens the market base. The country’s population has been growing very fast making the citizens innovative enough on how to feed the growing population. More investors have laid down various manufacturing, processing and innovative industries which have led to the country’s growth. The infrastructure has been on the improvement as there are more skyscrapers, mushrooming in the whole country. The economy is also a 24-hour economy which ensures running of businesses both day and night. This will significantly boost a chance of a company thriving in the area.
Transport costs to the country from the US is cheaper and shortened since there are direct flights to the country. The presence of the bordering ocean makes bulky goods accessible to the country to the Indian Ocean. The products can be easily shipped when packaged in containers. The taxes in the country are not high hence encouraging goods many goods into the country. This will enable the companies willing to trade with them to bring more products and services as the country residents are also friendly people. The security in the area is also a good factor to consider since the business will be in a secure environment.
However, the country still experiences some challenges being a third world country. It is faced with such difficulties as tribalism where it is still ethnically based, and citizen’s community organizations are still based on tribes (Burgess, 2010). Apart from major towns, the rural areas are geographically divided according to the tribes. This affects the national cohesion values but is not a factor which can adversely affect the business set up. Another challenge which the country experiences are terror attacks. This doesn’t happen periodically but it is sometimes faced with terrorist acts, but the security forces have always responded quickly and efficiently to such threats. Since terrorism is a worldwide problem, this cannot discourage a business opportunity since terrorists can attack any part of the world. The country is also faced with some corruption and misuse of the public funds. Some selfish leaders in the government often put their interests first before considering the people they represent. There is hope for much improvement in this sector as more anti-graft bodies have been put in place to tackle this. This factor cannot affect the progress of a business.
Comparing the advantages and disadvantages of Tanzania, the benefits outweigh the challenges. The challenges are not factors which can directly affect the success of a business but are the country’s personal problems since it is still a developing country. It can favor business opportunities more, and many returns can be realized through proper coordination of the business.
The assessment for the country mentioned earlier was carried out for a period of 4 weeks. This involved a group of investigators who were sent to go and pile reports about the environment for a successful business in that country. They toured the whole country and interviewed top government officials on the possibility of exporting goods to them where the government promised a safe, secure environment with sound policies that ensure a business survives. The government officials promised free taxes on the first two weeks imports to make the business be stabilized first. The customs duty to be paid thereafter was still too little, and the company will still realize huge profits. The investigators also interviewed other prominent business owners in the country about the challenges they had been facing, and the problems were not that harsh to stop business. The assessment of the area also involved touring the neighboring countries and getting used to their policies.
The national language of the country was found to be English which needed no translations. Since the company is based in US and English is a universal language between the two countries hence no communication barriers when trading with each other. The team that toured the country also checked on the availability of the market. They carried samples of the items to be exported and found that most of those products were needed and there was scarcity as no company had started offering such products to the country. The country authorities even suggested that the company could build one their African head office in the country as it is centrally placed and can search most African countries.
The assessment also involved checking at the country’s growth rate as ranked by the international bodies and its sustainability. The country was listed highly by world organizations as they were luring investors to invest in the productive country. Tourists also preferred it due to the coastal region as those has also led to the growth in the economy (Wade, 2001). The trends observed showed that the country was in a continuous growth graph and the challenge it often experiences doesn’t affect it much as the economy has never declined.
Another assessment involved studying the country’s historical background up to the present day. It was found to be a country that struggled so much after independence but later found the right track to prosperity.
Transport is a significant factor to consider when in business. The customer’s needs have to be taken care of first. The goods should reach the targeted place in good time, and there should always be constant supply to avoid a deficit in the market which may lead to an emergence of a competitor.
Transportation of goods from the US to Tanzania is to be enhanced by direct air flights to the country. The country has four worldwide recommended airports where the cargo planes can land and deliver perishable and delicate goods in time. Bulky and large quantities of products can be delivered through the ship which connects to Tanzania through the Indian Ocean. Once the products reach the port, they will be taken to the branch office which will be built by the fast electric train or even the trucks as there are good quality roads. From the branch office, goodwill then gets distributed to the whole outlets in the country, and some transited to the neighboring countries. There were still other flight routes within the members of Tanzanian’s trade blocks as the goods will still move to the country without attracting double customs duty. Whenever there is an urgent order for a product, the product will be delivered just in a matter of few days through the planes which take minimum time to fly from the US to Tanzania.
A good business should be able to grow and market globally. The aim should be reaching all parts of the globe with your services and products. With this in mind, there is a need for new ventures on a frequent basis in order to expand your business base. A business which can sell globally will be regarded as of high quality (Samli,1998). The international standards organization will guarantee the products quality marks which make them accepted by all types of people. Choices we make in life are all about taking risks and so is the business. The operators must agree to take risks regarding some tough decisions on other places sustainability to their business.
Looking at all the factors above relating to Tanzania as a target nation for exports, the advantages of doing the business in that country are more compared to the few challenges it experiences which cannot affect a business. The security and market are available making it a target for many investors who had contemplated the benefits of being part of the fastest growing country in Africa. Many interests have to be taken regarding the market trends and possible setbacks during the first stages of entry into the market before the business becomes stable in the region.
After analysis of the country and assessing various aspects of the business plan implementation in the area, the following recommendations can be made:
I. International Logistics, Inc. should consider exporting to Tanzania as it is secure and the demand for the products are high in the country.
II. Head office with a large warehouse should be constructed in the country to allow for storage of large quantities of exports landing there.
III. Ensure that the products meet the international quality standards so that the quality body of Tanzania will not subject the products to low standard ratings.
IV. The senior management should write specific objectives and targets for the goods exported to Tanzania and ensure that the business must always be working towards realizing the goals.
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