ARTS Company Market Entry Strategy

This assignment analyzes ARTS Company's potential success in the Rwandan market. It compares sales data from Rwanda and other Western markets, highlighting profit margins and return on production. Based on the analysis, the document recommends a foreign direct investment strategy for entering the Rwandan market, emphasizing product innovation, aggressive marketing, and continuous adaptation to local competition.

Running Head: Business Environment 1
Business Environment and Strategic Management

Business Environment 2
Contents
Introduction......................................................................................................................................3
PESTEL analysis.............................................................................................................................3
Incentives to enter in Rwanda..........................................................................................................5
Current foreign investment in Rwanda............................................................................................5
ARTS’ motivation to enter in Rwanda............................................................................................6
Five forces analysis of ARTS..........................................................................................................7
Product line of ARTS and Positivo BGH........................................................................................8
Rwanda domestic market versus sale to a Western market.............................................................9
Recommendations............................................................................................................................9
References......................................................................................................................................11
List of table
Table 1: Growth in FDI...................................................................................................................6

Business Environment 3
Introduction
Business Strategy is helpful in planning the business of an organization for the long-term
basis. Strategic management is concerned with the various business activities i.e. raising fund for
producing products and services and getting profit in the business. This report identifies the
famous technology company Alpha Response Technology Solutions. This is Taiwanese
Technology Company and seeking to expand the business in the Rwandan Special Economic
Zone. Before entering in new market, it is important to understand the environment of the
market. By the analysis, this report provides the recommendations to the company to expand the
business in the new market (Cateora, 2008).
PESTEL analysis
Company is going to expand the business in Rwandan and the market of the country can
be analyzed by the PESTEL analysis. The PESTEL analysis of the country Rwandan is described
below:
Political  Strong and favorable policy and legal
environment,
 Politically stable country,
 Legal system supports government,
 Citizen contributes to the government
decision making process by e-
participation and e-parliamentary
channels, and
 Tax regulations are favorable for FDI
Economic  Low disposable income of Rwandan
population,
 Exchange rate is low and attractive for
the foreign investors, and
 Financial system of country is
underdeveloped and access to credit is

Business Environment 4
poor
Social  High level of literacy in country,
 Population is drawn from the ethnic
and linguistic group,
 People use principal language,
 Rwanda is in the African Great Lakes
region and highly eminent, and
 Climate of the country is pleasant with
two rainy seasons and two dry seasons
each year (Twagiramungu, 2006).
Technological  Developing country and have growing
technology gradually,
 People do not have much technological
skills,
 Power is only in the government of the
country,
 Low average of innovation and
creativity in the country, and
 Limited access of foreign and local
technology by local organizations
Ecological  Country is covered with the diverse
ecosystem i.e. natural ecosystem,
Forested area and agro-ecosystem,
 Rural settlement of Rwanda has been
scattered by unplanned settlement,
 Agriculture is the most crucial sector
for the country’s economy, and
 Variations in the temperature ranges
and rainfall are creating some
irregularities (United Nations Rwanda,
2017).

Business Environment 5
Legal  Open liberalized economy for the
economic growth,
 Effective participation in the
international trade for the sustainable
growth path,
 No significant trade barriers,
 The export/import licensing process is
simple and fast, and
 There can be temporary entry of
products without any duties (Kigali,
2010)
Incentives to enter in Rwanda
The country Rwanda is Special Economic Zone that is geographically specified and
physically secured area for the companies. The country is offering some incentives to the
entering companies i.e. more liberal and simplified economic regulations for the business
operations. The Special Economic Zones of Rwanda has fiscal, social, and infrastructure policies
for the new entrants in the country. The most important goal of the country is to facilitate
economic growth by reducing tariffs and effective customs controls. Special Economic Zones of
Rwanda creates attractive business environment for the new companies. Goals of the country is
to utilize the public resources i.e. increase domestic and foreign investment, export expansion
and diversification, development of industrial and non-agricultures sectors and establishment of
employment and income (Baines, Fill & Page, 2011).
Current foreign investment in Rwanda
According to the report of National Institute of Statistics of Rwanda, the big part of
investment in the country comes from the European Union (32%) and East African Community
(14%). This is increasing in inflows of the country and indicating that the country is attracting
foreign investment from the global market for improving business environment and existing
investments. In recent years, most of the investments are approved from Kenya, South Africa,

Business Environment 6
Germany and United Kingdom. According to this report, there are some reasons the investors
now have confidence in Rwanda and they are investing in the potential economic sectors in the
country. Rwanda is attracting the investors for all the sectors (National Institute of Statistics
Rwanda, 2017). In May 2015, the country launched a new investment code to attract FDI into
tourism and new technologies. Coffee, tin, tea, telecommunication and energy are some sectors
that have attracted most of the foreign investments in Rwanda (Santander, 2017). The growth of
the foreign investments in Rwanda in recent years can be seen in the described table.
Table 1: Growth in FDI
(Source: Santander, 2017)
ARTS’ motivation to enter in Rwanda
ARTS’ is a Taiwan technology is seeking to expand the business in the Rwandan
Economic Zone. There are some factors that motive the company to enter in Rwanda. Those
motivational factors are as follows:
 Rwanda has strong economic growth and has high ranking in the World Bank’s business
index. The country has the reputation for the low corruption.
 The country provides various opportunities for the foreign direct investment in various
sectors. ARTS would get profit and opportunities in the technology sector in terms of
infrastructure, information and communication (Chen & Mujtaba, 2007).
 General labor is available in the country and that would be very beneficial for the
company ARTS. There is higher institute of technology, vocational institutes and private
universities that are providing better trained graduates every year. So, there is great
opportunity for the company to hire skilled people for the business operations.

Business Environment 7
 Rwanda is the stable country along with the low crime rates. ARTS would get security of
the business there. There strong police and military providing security from the criminal
activities and disturbance.
 Company has established a trade free zone including current and future communication
infrastructure which would be very beneficial for the technology company (The New
Times, 2013).
Five forces analysis of ARTS
Five forces analysis is very helpful for the company to understand the new market in
which it is going to enter. The analysis for the company Alpha Response Technology Solutions
is described below:
Threats of new entrants (High)  There are barriers to entry for new
entrants due to economy of scale,
switching cost, and high trade and
government policies etc.
 There is cost disadvantage in the
technology industry.
 Various distribution channels are
available that restrict new entrants.
Bargaining power of buyers (High)  There is low switching cost for the
product so bargaining power is low,
 Buyers purchase a large portion of the
total revenue of the company, and
 Products are undifferentiated so buyers
do not switch to other products,
Bargaining power of suppliers (High)  The suppliers are large so bargaining
power of suppliers is low,
 Companies are not regular customer of
the suppliers so they can’t bargain,
 Available products creates high

Business Environment 8
switching cost in terms of suppliers,
and
 Substitute products in the industry are
not available so suppliers have low
bargaining cost,
Threats of substitute products (High)  The threat of substitute products is low,
 Buyers face low switching cost in the
industry,
 The qualities and performance of the
other products are similar, and
 Buyers value to the differentiated
products and reduce the threats
Competitive Rivalry (Intence)  In the technology industry, high exit
barriers, strategic operations, high fixed
and storage costs create rivalry,
 New entrants create rivalry for existing
company, and
 Rapid growth, effectiveness and
competition also create rivalry.
Product line of ARTS and Positivo BGH
Product line is the crucial part of the business of any organization as it is helpful in
attracting the customers and improving the revenue. The comparison of product line of ARTS
and Positivo BGH is done in the given table.
Alpha Response Technology Solutions Positivo BGH
 Cloud solution,
 Enterprise solution,
 Public cloud,
 Laptops i.e. All in one 1800, All in one
2300,
 Notebooks i.e. Serie A, Serie, Z, Serie,

Business Environment 9
 Hybrid solution,
 IT support i.e. desktop support, server
support, and network monitoring
 Network design and development i.e.
email solution, portal solution,
collaboration tools, system integration,
document management solution etc.
 Voice over IP solution,
 GT80S Titan SLI 18.4in Core i7
Notebook,
 1TB hard drive (Alpha Technology,
2017)
E and Serie FX,
 Tablets i.e. 10”, 8”, 7” and Y710 Kids,
 All in one laptops including high
performance and optimization of space,
and
 Desktops i.e. D600, D660, and D651 )
( POSITIVO BGH, 2017)
Rwanda domestic market versus sale to a Western market
Sale to the
Rwanda domestic
market
Sale to a
Western
market
Sales 100000 120000
Cost of sales 60000 84000
Gross profit 40000 36000
Expenses 12000 10800
Net profit 28000 25200
% return on
production 28% 21%
Recommendations
From the above analysis of the sales of Titan in the Rwanda domestic market and in the
other western market, it is observed that company would get profit and returns in the Rwanda
market. The study shows that ARTS Company would be successful in using foreign direct
investment to enter in the Rwandan market. So it is recommended that the company should use
same strategy in the Rwandan market which it is using in other countries. Company should

Business Environment 10
continue innovations and come up with the new and unique products which would be helpful in
competing with the other companies in terms of products. ARTS should have aggressive
marketing to attract more customers in Rwandan market.

Business Environment 11
References
Alpha Technology, (2017), Cloud Solutions for Alpha Anywhere, accessed on 16th September
2017 from http://alphatechnologysolutions.com/cloud
Baines, P., Fill, C. & Page, K. (2011), Marketing, (2nd), New York: Oxford University Press
Cateora, P.R., (2008), International Marketing (13th), NY: Tata McGraw-Hill Education
Chen, L. Y. & Mujtaba, B., (2007), The Choice of Entry Mode Strategies and Decisions for
International Market Expansion: Journal of American Academy of Business, Cambridge, 10(2),
pp. 322-337
Kigali, (2010), MINISTRY OF TRADE AND INDUSTRY, accessed on 16th September 2017 from
http://www.minicom.gov.rw/fileadmin/minicom_publications/policies/
Trade_Policy_Rev_NPC_.pdf
National Institute of Statistics Rwanda, (2017), Rwandan Foreign investments increased over
last two years, , accessed on 16th September 2017 from http://statistics.gov.rw/node/813
POSITIVO BGH, (2017), Products, accessed on 16th September 2017 from
http://www.positivobgh.com/products/
Santander, (2017), RWANDA: FOREIGN INVESTMENT, accessed on 16th September 2017 from
https://en.portal.santandertrade.com/establish-overseas/rwanda/investing-3
The New Times, (2013), Special Economic Zones Accelerating Rwanda’s economic growth and
Development, accessed on 16th September 2017 from
http://www.newtimes.co.rw/PDF_ads/Special%20Economic%20Zones.pdf
Twagiramungu, F., (2006), ENVIRONMENTAL PROFILE OF RWANDA, accessed on 16th
September 2017 from http://www.vub.ac.be/klimostoolkit/sites/default/files/documents/rwanda-
environmental-profile.pdf
United Nations Rwanda, (2017), Environment, accessed on 16th September 2017 from
http://www.rw.one.un.org/mdg/mdg7
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