Sharing International Business and Middle Eastern Culture

-->

Last week's assignment helped me discover a technology that is must needed in the international sector that Westerners take advantage of with our high exposure to easy access to electronically generated funds.  Introducing mobile wallets in Africa and India...

MGMT 338: International Business

ARTICLE REVIEW # 1

Name:  Michelle J Epperson

Source Citation: The Economist

Article Summary:

Technology in Kenya is expanding and building the economy through the invent of a communication automated teller machine (ATM) via mobile phones.  M-PESA, a subsidiary of Safaricom, allows developing companies an opportunity to send and receive monies electronically.  M-PESA holds “two-thirds of the country’s telecoms market”.   According to the article, 70% of the adult population afford this service and its market produces 25% of Kenya’s GNP.  With this in mind, the concept is attempting to move into emerging industries existing in neighboring India and Bangladesh however via bKash (India) and BEAM (Bangladesh) of Gray Ghost Ventures based in Atlanta.   Other nearby market holders is India Airtel and Vodafone.  

Anand Shrivastav, BEAM’s CEO and founder have coined this technology as “the agnostic option” working on any wireless network as opposed to the previous hindrance of supporting only one.  The mobile wallet is an example of inspiration from Shrivastv himself based on medical treatment that was needed by his driver’s ill mother.  While attempting the process of payment in a money order for medical services and no nearby banks, his mother passed before treatment could rendered after the arrival of the funds were delivered.  Offering solutions for these countries in the area of mobile communication banking makes provisions “…to help the unbanked expand their reach,” states Gray Ghost Ventures CEO, Arun Gore.  As far as foreseeing a competitive disadvantage, banking regulations in India make a local competitor within the nation unlikely.  However, this technology was introduced as a provision of assistance as well as opening an expanding market. 

Impact/Implication

I felt this article topic broadened my potential understanding of the nature of international business as revealed in “Protect markets, Profits, and Sales” (Ball, Geringer, McNett, Minor, p 22).  M-PESA is protecting its home market through Safaricom by maintaining two-thirds of Kenya’s market yet there is no mention in the article as to why M-PESA did not consider marketing with India or Bangladesh.  The same idea in neighboring areas was sparked through Gray Ghost Ventures in Atlanta moving into the highly regulated banking industry of India and Bangladesh and joining forces with bKash and BEAM.  In essence, Gray Ghost Ventures was able to “establish foreign operations in markets where their principal accounts are located to prevent competitors from gaining access” (Ball, Geringer, McNett Minor, p 22).  Other strategies that may be relevant are “Acquire Technology and Management Know-How and Satisfy Management’s Desire for Expansion (Ball, Geringer, McNett, Minor p 23).  The mobile wallet industry in Atlanta’s U.S. market lacks attractiveness with North America’s wide range of technology, electronics and communications existing market so spreading that to developing countries is indeed an appreciated service.  Opening up the new market through venture capitalism is also a viable management’s solution to expand the market especially if a service is nearby but not readily accessible or latent to those outside of the local area.

Works Cited:

The Economist. Mobile money: All together now. (Jan. 17, 2013) http://www.economist.com/blogs/schumpeter/2013/01/mobile-money (accessed 1/18/2013)

Ball, D.A., Geringer, J.M, Minor, M.S. & McNett, J.M. (2013). International Business: The Challenge of Global Competition. New York, NY: McGraw-Hill/Irwin