Chapter 5 : CASE STUDY FINDINGS: Description, Analysis and Discussion

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This chapter brings alight the results of the case study. Firstly, this was a single case study, embedded which had looked two different units Ecobank in Togo and Standard Bank in South Africa involved into international competitiveness through ways different but in the same time similar at some degrees. Both companies act as leader in their own ways and challengers to international firm inside the African boundaries and progressively outside too. Secondly, the literature review is approached in the systematic ways on the basis of two different and connected hypotheses, which was developed in a dynamic and innovative perspective to set a base of a non-well covered aspect of international business which is international competitiveness of domestic firm in Africa. Step by step, theories were connected to explain why they perform so well over foreign firms by using their native assets to tackle challenges present in their home markets and disadvantage when they internationalise. The choice to do a qualitative case study was to have and allow broader image of the context. The context of African banks system of financial industry can be appreciated in such with all its complexity, at many levels and not a little, the cultural aspect is predominant to development of these companies, which associated to their abilities to build up model in an unfriendly situations and the management of volatility. The appendix 1, the BCG report describes the challengers and gives reasons of their success by taking two of them, the analysis go deeper to confirm or infirm what was developed in the empirical reviews and analyse reasons of the progression of these firms.

This case study is totally based on data analysis found via academic sources but also different international organisations, all this leading to findings develop at the following.

5.1. PRESENTATION AND DESCRIPTION

5.1.1. Knowledge as driving forces

Recalling for better performance and position in the market than other competitors, the competitive advantage is sought by firm in their building strategy for their success.

However, having an ability to develop and assimilate external resources creates a basis of sustainability. Knowledge as key resources helps firms to expand better and to survive in a heavy complex environment, in Africa. As it is known knowledge is rare and to find well-trained people is essential even in our developed economies, in Africa it is most puzzling to have self-starter people, focused and ready to deliver. And anyway, even with an improving educational system, it takes time to match certain standard observed across the globe and knowledge of the market or the environment is expensive for firms cannot be substitutable easily. Therefore, Domestic firms in general, profiting of their natives advantages, their “crazy” business environment, associated with a revenge mind-set confirmed what was developed by Hymer (1960/1976), domestic firms have a better understanding of the local market in which they operate. Therefore they can use the market specificities present in the domestic market to challenge foreign MNCs; which in Africa is factor keys of success and driving forces for a sustainable customer perspectives (Day and Nedungadi, 1994) or for market orientation (Day, 1994; Kohli and Jaworski, 1990), and knowing the market, it will not be to assess trends (Fiol and Lyles, 1985) but perhaps push new ones. Which depending of its model the Standard Bank one, by coming from a colonial heritage links two different models which allow the firm to develop a competitive advantage and maintaining it through diversification by FDI. And based on its knowl edge to step up as an expert in developing markets and its international perspective helps on the development of trust in the company; nonetheless its growth was through the MMA first of all then, in the East coast of Africa. For Ecobank, which seems to develop another type of model slightly different financial to serve pan-African interest, by using also its local knowledge to grow and its expertise to be able to adapt into the African environment and to develop suitable banking solutions for Africa and African, the foundation of its strategy and source of profits. Focusing in a niche market,
Ecobank launches adapted solutions for individual, businesses and corporates to respond to a fast growing demand within the financial sector; also, its ability to turn deregulation and volatility in its advantage leaves an open door for a greater future.

5.1.2. Knowledge for a sustainable internationalisation

Firms are undertaking an internationalisation process in a non-linear route (Hitt et al.,1997), even for the search of economies of scale and scope (Teece, 1980; Hymer, 1976; Caves, 1971). African firms are ready to take bold strategies but are cautious when arrived the time to go beyond their countries. This is confirmed by the BCG report, 65 percent of African challengers stayed inside the continent, therefore the regional integration become a phase of development and test (Peters and Waterman, 1981; Shein, 1992); maybe a cultural matter. Moreover, Standard Bank coming from a colonial heritage by using a vertical development at first, turn after a time to a vertical then mixing both development which allow the firm to develop a competitive advantage and maintaining it through diversification by FDI. Also based on its knowledge to step up as an expert in developing markets and its international perspective helps on the development of trust in the company; nonetheless its growth was through the MMA first of all then, in the East coast of Africa. However, its international development out Africa represents today 45 percent of its global presence in almost all continents. Standard Bank, operates in many countries already in Africa and some of them represent a political risks, but their expansion acting as leader push to the organisation and harmonisation of the financial sector, sometimes acts as a pioneer in the difficult market Africa but with lot of opportunities. All this then to confirm Hymer (1960 and 1976) statement but not totally set for the (Caprio et al., 2001: 4) one, unless taking it into the challenger mind-set perspective which was also confirm by BCG. In the other side, Ecobank serving pan-African interest, by using also its local knowledge to grow and its expertise to be able to adapt into the African environment and to develop suitable banking solutions for Africa and African, the foundation of its strategy and source of profits. Focusing in a niche market, Ecobank launches adapted solutions for individual, businesses and corporates to respond to a fast growing demand within the financial sector; also, its ability to turn deregulation and volatility in its advantage leaves an open door for a greater future for Ecobank which makes the theory to be rephrase in some aspects, on the development of banking solutions for African in Africa. Becoming a social actor it act for the need of the population thinking the Foreign Banks very expensive and the microfinance not adapted to them; its helps and grows with the emergence of the new middle working class, absent prior. The institution confirms totally the Hymer statement (1960 and 1976) because it well-performs for its better environment knowledge, which in many cases it helps by financial repressions faced by foreign firms towards an excessive governmental intervention in domestic financial sector (Caprio et al., 2001: 4); and its partnership with Western Union which is one of the most used service abroad by the Pan-African diaspora.

5.2. ANALYSIS AND DISCUSSION

While analysing the international competitiveness of domestic firms in Africa, many discovery have been found. First of all, the African economic is still embryonic, and is composed by big companies and very small ones, and this phenomenon is called the “missing middle” (Prado, 2011). This is According to the 2009 Milken Institute report “Stimulating Investment in Emerging-Market SMEs,” concluded that “57 percent of employment and over 50 percent of GDP in developed countries” are done by Small and Medium Enterprises (SMEs). But in opposition in the developing countries the figures showed that “only 18 percent of employment and 16 percent of GDP”. The explanation found that “if barriers to their growth were removed, SMEs would contribute more to economic development by providing jobs and income, expanding the middle class, broadening the tax base and ultimately decreasing poverty levels”.

The more solid is the knowledge of the firm on its local market, the stronger is the driving forces to out-perform against competitors. Through the use of local knowledge as element of competitive advantage and each firm on the development of their strategy, utilise it to brand itself as the “proper” African bank for African and their interest around the world; and the expert of Africa which is Ecobank. And the other Standard Bank by pushing the competition outside Africa, in opening international dimension in others continent and also arguing that is not just and African market expert but developing market expert with international dimension. This gives two different reliefs on the subject rather or not it is about taking African firms abroad outside Africa, or just developing strong companies inside the continent. Nonetheless, there is a margin to come to the absolute conclusion on it when Africa economies still suffer of instability and strong.

At the other hand, the regional integration constitutes an essential element in the internationalisation process and the development of regional banks tend to give a lift in the development of companies in Africa and the watermark of culture helps to build up a sustainable model which connect directly with the population sometimes considering foreign MNCs as predator opposed to the local needs. On one aspect or the other Ecobank and Standard bank have understood what they have to take on board to develop a sustainable model, foreign firms have to adapt as soon as possible to stay in tunes with the competition going through in Africa market. Nevertheless, the lacks of financing for SMEs constitutes and still a brake in the development of the economies in general and financial sector also, because the numbers of banked people will increase, with the risks would create a dynamic environment, which can lead to innovation therefore development.

However, a good start is noted in instance of Ecobank which is a total African bank but born global from the beginning. Also, could be found some element of tiredness in the African markets and economies perhaps, turning them to develop some models suitable for their own economies, and by revenge, line up some policies against foreign firms to protect their economies, in the competitive ways because there are not develop in a cluster’s system. Staying in Africa, for the African challengers is might be as growing in a safe land, which helps by the regional integration, moving to one country to another, will not represent a difference in term sometime of language, of culture, of currency or standard of living. At the end, connecting themselves with international standards as IFRS norms demonstrates their willingness for a bigger scope. Which, while expanding still following the normal routes of regional, continent or ex-colonial “mother land” for a proximity of language, of standards and history in common. But also because it is where is located the diaspora which uses money transfer services, or are in need of connection from their home countries. Or just participate in different projects there for the development of the continent, as was cited by the Ifad (2008/2009) the percentage of payout using money transfer is 89.4 percent of the transactions of many bank and Werstern Union counts for 40.3 percent of the total. And in some country represent the equal of the dotation of the foreign aid in development. This confirms the lack of SMEs and an economic depending and reposing just in “foreign assistance”. In spite of this the firms are MNCs and are prospering under a comprehensive environment for them.

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