Succeeding in the Middle East and Africa, despite unpredictability, is a matter of strategic adaptation.
Many companies are looking to invest and expand in the Middle East and Africa (MEA) – and with good reason. According to new research from Harvard Business Review, the MEA region will experience economic growth second only to Asia-Pacific in 2017. It also has a population of 1.5 billion, creating opportunities for multinational growth across industries. Lower oil prices, currency volatility and geopolitical uncertainty persist; however such obstacles can be overcome, and in some cases, turned to a company’s advantage.
Growth requires more strategy in MEA, as it is often necessary to create demand, rather than simply offer Western products or launch new products. Companies can gain the insight needed to help them locate new sources of demand by developing strong relationships with local partners and government leaders. This requires having a local presence – international executives, recruited at home or in-country, who can quickly identify problems, trends, customers and opportunities.
That said, adapting one’s product offerings is important for growth in MEA. Currency depreciation and price sensitivity are primary considerations in markets from Nigeria to Egypt, and from South Africa to Turkey, according to Harvard Business Review. Expensive imported products have become less competitive. Therefore, to capture market share, multinationals must offer a better value or establish highly differentiated value propositions, for example through innovation.
Succeeding in MEA also requires sales and distribution partners with more robust capabilities. Turning tactics like systematic demand creation and differentiated product offerings into profits depends on having skilled local dealers and distributors. After all, their roles will expand from taking orders and handling logistics to include more complex responsibilities such as identifying sources of demand, developing growth strategies, and selling new, innovative solutions.
In a poll, companies in Sub-Saharan Africa ranked business development and marketing skills as the top capabilities they need. In order to make more complex sales to larger customers, distributors need specialised training.
Operational shifts are necessary in a climate of slow growth and rising competition, as companies must find new customers and compete with lower-cost rivals. By identifying untapped opportunities, offering the right products the right way, and cultivating skilled sales and distribution partners, multinationals can grow profitably in MEA, and even develop resistance to future disruptions.