International Business Environment in Kenya

This assignment is focused on understanding the international business environment in Kenya. It covers various aspects of doing business in Kenya, including government policies, regulations, culture, language, and market conditions. The assignment also delves into the effects of leadership styles on strategic plan implementation, provision of business information services to small-scale enterprises, critical success factors for franchised restaurants entering the Kenyan market, and determinants of micro and small enterprises growth in Kenya.

Introduction
The present business scenario is such that firms have to search for new ways by which they can focus on
business expansion on an international basis. An increased usage digital technology as well as reduction in
entry barriers has made this task quite easier one than ever before. But still the firms are required to focus
on a lot of areas before they think of making international expansion (Hamilton and Webster, 2015). These
are inclusive of business environment of new nation, trade blocs, free trade agreements as well as tariff and
non-tariff barriers. The present report thus lays emphasis on the expansion plan for COOK which is
specialised in cooking and selling of frozen and easy made meals that are made with home taste. The firm is
planning to expand its business internationally by importing dried nuts for UK market and exporting dried
milk to Africa. The study has thus laid emphasis on assessing the business environment of Kenya and
opportunities/ threats to be faced by the firm for global growth. Focus will also be given on examining the
trade agreements and its impact on overall operations of COOK company.

Advantages and disadvantages of the different types of exporting processes for exporting merchandising and services by
COOK
Methods Advantages Disadvantages
Direct exporting No need to invest in overseas production facility
Maximum economies of scale
Reduced dependence on existing markets.
A direct understanding can be derived about
needs and preferences of the buyers which
allows for customising the product offerings.
It is advantageous when some of the client prefer
direct dealing than keeping an intermediary in
between.
Expensive on account of tariffs, marketing and
transport.
Need to make consumer base
Hard to overcome trade barriers (Gioeli, 2014).
There is often a need to invest a lot of time, energy
as well as money
l
Indirect
exporting
through
intermediary
Business dealings are easy as intermediary can
act as translator and interpreter (Gikonyo, Berndt
and Wadawi, 2015).
Provides assistance with local travel
arrangements
Guides with respect to government regulations
The intermediaries tend to work with numerous
businesses.
They priorities clients on the basis of products,
incentives as well as base pay.
Use of an export
management
company
Carries out entire market research.
Is ready to take ownership of goods
Utilizes existing foreign distributors or sales
agents for putting the product in market.
Increased competition due to other products offers
by export company (Chege, Wachira, and Mwenda,
2015).
Profit margin of EMC increases selling prices and
also adds to cost.
Piggyback
exporting – it is
the technique
where established
export distribution
system sells the
products.
No need to have a full-fledged international
experience
Faster entry into international market
Little or no financial commitment (Marshall,
Ockwell and Byrne, 2017).
Very low level of control
Recieving of inadequate market feedback
lower sales and brand erosion
The best technique to be used by COOK for exporting dried milk in Kenya is through indirect exporting via intermediary
such as foreign agent who can be hired for his knowledge about business practices; languages and culture of Kenyan
market.

The documentation that is required e.g. e, terms of payment, customs document
Various documents are required by the company to ensure towards proper exporting of the products. These are as
follows;
 Letter of credit – it can be used by COOK as an instruction by the bank to overseas bank for paying the
seller when the delivery conditions have been met. The bank does guarantees to pay the outstanding amount
in case payment has not been made.
 Packing List – COOK will be required to issue the packing list so as to show how goods have been packed
for inspection and shipping purpose. It includes description scout product; Hazardous information, packing
details etc (Kamoche and Siebers, 2015).
 Commercial invoice – It will provide details about buyer and seller; shipment delivery details; information
about notifying parties as well as description of goods.

An evaluation of the different methods of tapping into new international markets, including its limitations and benefits
Joint venture – Cook can enter into joint venture which is a technique of…the method is advantageous as it provides
a chance to COOK for getting better access to resources including staff and technology. The risks can also be shared
with the venture partner. On a negative note, this strategy can create an imbalance in the level of expertise, investment
as well as assets that is brought in by different partners. The difference in cultures and management styles of Kenya
and UK can further pose issues. Success can only happen if thorough research and analysis is carried out with respect
to the business objectives that are required to be set.
Franchisee – Another technique that can be used by COOK is of franchisee which can aid the company on account of
their established reputation, brand image, management skills, work ethics and support. Moreover Franchises have
been known to have higher success rates on account of big business network. There is further a presence of less risk
in the area of finance, laws and politics when COOK will make an entry into Kenya. It will also be easier for COOK
to finance its business activities in Kenya as banks are most likely to lend money to buy a franchise if there is a
presence of good reputation. On a negative note, the Franchise agreements often put a lot of restrictions on the manner
of operations and may dictate on running the business which may lead to very little room for creativity. Profits are
further required to be shared with the franchisor. Overall Franchising may not guarantee sure shot success to COOK
as the need is to focus on managerial principles such as decision making; serving consumers; hard work among others.
Licensing – it can be regarded as a contractual arrangement by which the company transfers the right to make or
distribute the product in a foreign nation by paying some fees or percentage of sales. This can act as a good choice for
COOK as it will allow for easy entry into African market followed by a requirement for less capital. There is also a
potential for greater ROI and lower risk (MacLean and Brass, 2015). However, there is a very low level of control on
the business and poor management may damage the reputation of COOK. Moreover, issues may arise if the licensee
asks for technical assistance, training of employees from management of COOK which may increase the overall cost
factor for the company.
Recommendations on appropriate methods and countries to meet specific business requirements
As per the above given methods of tapping into new international markets by COOK company in Kenya, the best
technique seems to be of licensing due to requirement of less capital where the saved money can be used in other
areas such as advertising etc. The company further requires generating a good return of investment which can only be
possible through the use of this technique. It is best to set the terms and a condition in advance with respect to whether
there is a need to train the employees or any technical assistance is required.
Conclusion
From the above report it can be concluded that Kenya is a good choice for COOK company in order to export dried
milk as the country is a commercial gateway of East Africa and has been enjoying a steady growth which will be 5
percent per annum in the coming 5 years. However there is also a presence of many challenges in form of cultural
barriers; local competition; taxation; supply chain as well as operational risk among others. But trading blocs and
agreements such as Economic Partnership Agreement will help in generating competitiveness, industrial development
and increased connection with global value chains. But the company will have to care of tariff as well as non-tariff
barriers that are likely to be there for the company. Other than this, the exporting technique to be used by COOK can
be indirect exporting via intermediary like foreign agent so as to get support with respect to business practices;
languages and culture of Kenya.

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