ARTS Rwanda Market Entry Strategy

This assignment delves into ARTS's strategic decision to enter the Rwandan market for their electronics products. It requires an in-depth analysis of several factors, including the competitive landscape with companies like Positivo BGH, a Porter's Five Forces analysis to assess industry attractiveness and potential challenges, and a PEST (Political, Economic, Social, Technological) analysis to evaluate the broader Rwandan context. The assignment also examines ARTS's motivations for entering the market and explores incentives available within Rwanda's Special Economic Zones.

Running head: STRATEGIC MANAGEMENT
Strategic Management
Name of the Student:
Name of the University:
Author Note:

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Executive Summary:
The report gives an overview of pest analysis of Rwanda and describes the incentives that is
about to penetrate Rwanda Special economic zone. There is also discussion of the about the
current foreign investment in Rwanda in the report. The report also describes the motivating
factors that are acting in favor of Alpha Response Technology Solution (ARTS) in entering the
market. There is also analysis of five forces model of the company mentioned. The report also
compares and contrasts the primary product line of ARTS and Positivo BGH. Further, the report
gives numeric identification of the profits for the products of ARTS in the domestic and
international market along with recommendations.

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Table of Contents
Introduction......................................................................................................................................3
1. PEST Analysis of Rwanda...........................................................................................................3
2. Incentives Supposed to Enter Rwandan Special Economic Zone...............................................6
3. Current Foreign Investment in Rwanda.......................................................................................6
4. Alpha Response Technology Solution (ARTS) Motivation for Entering Rwanda.....................7
5. Five Forces Analysis of ARTS....................................................................................................8
6. Table Comparing and Contrasting Primary Product Line of ARTS and Positivo BGH...........10
7. Table Identifying the Return for Production and Release of Titan for Sale in Rwanda Domestic
Market Compared to Sale in Western Market...............................................................................13
8. Recommendations......................................................................................................................13
Conclusion.....................................................................................................................................14
References:....................................................................................................................................15

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Introduction:
The report gives an overview of the PEST analysis of Rwanda in a tabular form. There is
also description of incentives that are about to enter the special economic zone of Rwanda in the
report. The report also explains the current foreign investment in the country and at the same
time explains Alpha Response Technology Solution (ARTS) motivation in entering Rwanda.
Further, the report also describes the five forces analysis of ARTs along with a written
description. There is also a contrast and comparison about the primary product line of ARTS
with Positivo BGH. In the report, there is also a numeric identification on return for the
production and release of Titan in Rwandan domestic market versus the sale in the Western
market. The report also gives a written recommendation for the venture carried out.
1. PEST Analysis of Rwanda:
The PEST analysis of Rwanda in represented in a tabular form (Nyamasyo, 2012):
Political Environment
The head of the state for Rwanda is the
president who is the sole decision maker along
with the cabinet. In addition to this, the
president is also responsible for exercising the
mercy prerogative, ratifying and negotiating
Economical Environment
The economy of Rwanda is dependent on
agriculture with tea and coffee being the major
products exported. Tourism is another sector
that is having rapid growth. However, a major
part of the Rwandan culture is dependent on

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treaties, signing presidential orders
commanding the armed forces and declaring
the any emergency and wars. In order to elect
the president there is a voting system carried
out every seven years along with the other
members. However, the legal system of the
country based on the customary law and the
German and Belgian civil law systems while
the judiciary acts independently. The progress
made by the Rwandan government in the
judiciary system largely praised by the Human
Rights.
the dance and music that is helping the country
economically. Traditional arts known as
imigongo which is a cow dung art is quite
popular in the country. However, the
contribution of the industrial sector is 14.3
percent of GDP in the year 2010. Since then,
the economy of the country has strengthened
with an estimation of per capita income of
$1,592 a year compared to only $416 in the
1994. The prime export market comprises of
Germany, China and United States. The big
step for the country was to join the East
African Community in the year 2007.
However, economic reforms in the country is
still under process but the country undertook
some reforms that were impressive like the
creation of the business friendly ambience for
the private sector. In future, the country plans
to be one of the established economies of the
world.
Social Environment
The Rwandan government rather than focusing
Technological Environment
Most of the electric supply in the country

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on increasing the national budget prioritized
the funding of water supply development. This
funding also has donor support that led to a
rapid increase in the safe water in the country.
Thus, more than 55 percent of the population
had access to safe water. The country since the
precolonial times has remained unified with the
population drawn to just one linguistic and
ethnic group known as Banyarwanda.
However, the geography of the country is such
that it has mountains in the west and the
eastern region dominated by savanna thereby
providing ample scopes for tourism. The
climate however varies from temperate to
subtropical type with two dry and two rainy
seasons.
generated by means of hydroelectric sources
until the year 2000. Presently two power
stations are responsible for the providing 90%
of electricity. Rwanda has moved a step ahead
in terms of education since the government is
responsible for providing free education in
state run schools followed by a secondary
program. There is a common trend observed in
the country as most of the children fail to
attend schools, as they are unable to purchase
books and uniforms. The government has
therefore taken the matter seriously and
provided a vision for improving the situation
through the implementation of development
program. The government also spends a major
part of its finances in healthcare significantly
high compared to the previous year. The
government has also implemented compulsory
health insurance that now covers almost 90%
of the population.

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2. Incentives Supposed Entering Rwandan Special Economic Zone
The incentives that are supposed to enter Rwanda’s Special Economic Zone are as follows
(Behuria, 2017):
 Increase in the domestic and foreign investment in private sector
 Increase in the creation of jobs
 There will be generation of income that is both indirect and direct through forward and
backward linkages with business that are outside the special economic zone.
 Enhanced diversification and increase in export growth and foreign exchange
 There will be industrial development and existence of other sectors that provides
specialized and serviced infrastructure.
 There will be technological transfer and Up gradation of Skills
 There will be increase in tax revenue through expansion of tax base thereby reducing
budget deficit.
 There will be provisions for environmental protection
 There will be facilities for import substitution because of increased manufacturing of
products used for local consumption.
 The balance of payment deficit will reduce.
3. Current Foreign Investment in Rwanda
Due to the political stability and measures taken for increasing the business climate in
Rwanda have increased the flow of foreign direct investment (FDI) in the recent years (Booth &
Golooba-Mutebi, 2012). However, according to the UNCTAD World Investment Report 2017,
the FDI remains still weak amounting to USD 380 million in the year 2015 and USD 409 million

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in 2016. This reason being the political unrest in the neighboring country which is the
Democratic Republic of the Congo which has considerably discouraged foreign direct
investment in the that area. Moreover, the potential attractiveness of Rwanda is also weak in
terms of poor infrastructure, landlocked position, low human resource capacity, high operating
cost and limitation of natural resources. Nevertheless, the country has many assets that include
substantial reserve for methane gas, expanding mining facilities, lesser amount of corruption and
liberal governmental policies in transforming Rwanda into a service hub.
The country however launched a new investment code in May 2015 aiming at the
attraction of foreign direct investment into new technologies, energy and tourism (Huggins,
2014). The new code for investment remains aligned with the development program of the
government named 'Vision 2020', for improvement in the business climate.
Figure: Foreign Direct Investment in Rwanda
Source: (Steflja, 2012)
4. Alpha Response Technology Solution (ARTS) Motivation for Entering Rwanda
There are various motivation factors for ARTS to enter Rwanda. Firstly, the Kigali
Special economic zone that the company plans to enter is consist of Phase 1 and Phase 2 each of
which is properly serviced with proper roads, water, electricity, sewage and fiber optic cables,
water and firefighting systems (Marijnen & Van, 2012). Moreover, Rwanda is a country where

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the Government acts pro actively in developing the country and where the GDP growth stands at
8.8 percent considered high enough for attracting investors. Moreover, the products
manufactured will have a fair competition in the market. A survey conducted amongst children
aged between 9 and 12, showed that though they are interested in laptop but they have never seen
one. Thus, the government has taken an initiative for the distribution of laptop amongst such
children thereby in initiating a revolution (Kagabo, 2012). The measure will not only lead to a
transformation of an agrarian society that is impoverished but will also strength the society to use
it as a tool against any lingering ghost.
5. Porter Five Forces Analysis of ARTS
The Porters Five Forces Analysis of Alpha Response Technology Solution (ARTS) is as follows:

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Figure: Tabular Representation of Porter Five Forces Model
Source: (Lee, Kim & Park, 2012)
Threat of Entry
Companies like ARTS will have to consider the barriers while making an entry with its
new products (Seamans, 2013). Therefore, ARTS must consider the loyalty of customer,
differentiation in product, market share and advantage in cost as a defensive tool against the new
competitors.
Power of buyers
Buyers possess the power of influencing the quantity and price of the products sold.
Powerful buyers can bargain on switching costs or volume but also opt for substitute products
(Babatunde & Adebisi, 2012). There is also the impact of price sensitivity that impacts
relationship between buyer and seller Therefore, ARTS must consider the power of buyers
before launching its product in the market.
Power of Suppliers
According to Porter’s five forces analysis, suppliers too have power in influencing the
price and input or resource availability (Baum, 2013). Suppliers become powerful when
companies remain dependent on them and hence cannot make a switch due to lack of alternative
sources or high cost. Thus, the company before venturing into the Rwandan territory must
consider its suppliers.
Competitive Rivalry

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Competitive rivalry measures the level of competition amongst the existing firms. This
has been found the intense rivalry not only lead to limitation of profits and but also initiates
competitive that includes increase in advertising expenditure, reduction in price or spending on
innovation and improvements of products and services (E. Dobbs, 2014). ART must also make
an analysis of the level of competition amongst the existing firms.
Threat of Substitution
Most companies threatened by the presence of substitute products as they might act as a
replacement of their own. The threat of substitutes is high when companies outside the industry
offer prices that are more attractive and comparatively lower. In such cases, there exist an
opportunity for the buyers in making tradeoff between performance and price (Yunna &
Yisheng, 2014). Therefore, ARTS might consider the threat of substitute and revise its price
accordingly if required.
6. Table Comparing and Contrasting Primary Product Line of ARTS and Positivo BGH

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ARTs Product Line Positivo BGH Product Line
The primary product line of ART is GT80S
Titan SLI18.4 in core i7 Notebook.
The primary product line of Positivo BGH
include:
1. Mini Notebook
2. 2 in 1 Notebook
3. Net book
The product features include:
a. 32GB DDR4 memory
b. Processor is Intel i7 6920HQ CPU
c. NVIDIA GeForce GTX980M graphics in
SLI
d. Super Raid 4 512GB solid state drive
e. 1TB hard drive
f. Screen Size is18.4” full HD anti-glare display
g. Operating system is Windows 10, Blu-ray
writer
h. Killer Gigabit LAN
i. Dynaudio 7.1 Audio
j. Bluetooth 4.2
The product features of Mini Notebook
include:
a. Small in size and easily portable
b. Screen Size is 11.6”
c. Operating System is Windows 8.1 Pro
d. Processor is Intel® celeron® n2840
e. Ram memory is 2 GB
d. Storage is 320 GB

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k. 1x HDMI
l. 1x Mini Display Port
m. 5x USB 3.0
n. 1x USB Super Port Type-C
NA The Features of 2 in 1 Notebook Include:
a. The 2 in 1 Notebook is a customized product
as per the needs of the clients. The notebook is
one of its kinds in terms of technology,
versatility and mobility.
b. Screen Size is LED 10" 1280*800 (TN o
IPS)
c. Operating System is Windows 8.1 support
d. Processor is Intel® Bay Trail Atom® Quad
Core
e. Memory is 1 GB / 2 BG
f. EMMC is 16GB / 32GB / 64GB

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NA
The features of Net book Include:
a. Known as Schoolmate 15-R
b. Provides educative solutions related to IT
that not only optimizes learning but also
education
c. The screen size is LED 10,1" (1366 x 768)
HD
d. The operating system is Windows 8.1 &
Linux support
e. Processor is Intel® Celeron® N2808
Quad Core
f. Ram Memory is 2 in 1 (sdhc/mmc)
g. Storage is 320GB / 500GB
7. Table Identifying the Return for Production and Release of Titan for Sale in Rwanda
Domestic Market Compared to Sale in Western Market
Return for Production and Release of Titan Return for Production and Release of Titan

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for Sale in Rwanda Domestic Market for Sale in Western Market
With all the latest features and the estimated
price quoted the return for production and
release of Titan for Sale in Rwanda domestic
market would be approximately around USD
3.5 billion.
The return for production and release of Titan
in the Western Market could be approximately
around USD 41.5 billion.
8. Recommendations:
Thus, the table shows that return for release and production of titan for sale in Rwanda
domestic market is less than the return for release and production of titan for sale in western
market. Therefore, the company must focus on building its products keeping in mind Rwanda
domestic market rather than focusing on building products based on the analytics market of the
western business. The company must also set a price keeping the local people of Rwanda so that
it becomes more affordable and can capture a substantial market.
Conclusion:
The report concludes by providing recommendations on the venture undertaken by
ARTS. There is also tabular representation of the profits of the company in the domestic and
international market. The report also does a comparative analysis of primary product line of
ARTS and Positivo BGH. There is also analysis of five forces model for ARTS in the report.
Further, the report also describes about the motivation factors acting for ARTS in entering the
Rwandan market and at the same time also discusses about the current state of foreign direct

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investment in the country. There is also discussion about the incentives that are about to enter
Rwandan special economic zone along with a pest analysis.
References:
Babatunde, B. O., & Adebisi, A. O. (2012). Strategic Environmental Scanning and Organization
Performance in a Competitive Business Environment. Economic Insights-Trends &
Challenges, 64(1).
Baum, M. B. (2013). Introduction. In Service Business Costing (pp. 1-18). Springer Fachmedien
Wiesbaden.
Behuria, P. (2017). The political economy of import substitution in the 21st century: the
challenge of recapturing the domestic market in Rwanda.
Booth, D., & Golooba-Mutebi, F. (2012). Developmental patrimonialism? The case of
Rwanda. African Affairs, 111(444), 379-403.

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E. Dobbs, M. (2014). Guidelines for applying Porter's five forces framework: a set of industry
analysis templates. Competitiveness Review, 24(1), 32-45.
Huggins, C. D. (2014). ‘Control Grabbing’and small-scale agricultural intensification: emerging
patterns of state-facilitated ‘agricultural investment’in Rwanda. Journal of Peasant
Studies, 41(3), 365-384.
Kagabo, p. (2012). foreign market entry strategies adopted by kenya commercial bank limited in
rwanda.
Lee, H., Kim, M. S., & Park, Y. (2012). An analytic network process approach to
operationalization of five forces model. Applied Mathematical Modelling, 36(4), 1783-
1795.
Marijnen, E., & Van der Lijn, J. (2012). Rwanda 2025: Scenarios for the future political stability
of Rwanda. Rwanda Fast Forward, 13-28.
Nyamasyo, C. (2012). Strategic Planning and Performance of Small and Medium-Sized
Enterprises (Smes): A Survey of SMES in Kigali (Doctoral dissertation).
Seamans, R. C. (2013). Threat of entry, asymmetric information, and pricing. Strategic
Management Journal, 34(4), 426-444.
Steflja, I. (2012). The high costs and consequences of Rwanda’s shift in language policy from
French to English. The Africa Portal backgrounder series, (30), 1-10.
Yunna, W., & Yisheng, Y. (2014). The competition situation analysis of shale gas industry in
China: Applying Porter’s five forces and scenario model. Renewable and Sustainable
Energy Reviews, 40, 798-805.