In the global business world

In the global business world, multi-national companies operate with customised international marketing strategies to obtain and retain competitive advantage in the markets in which they operate. This essay will attempt to evaluate the international marketing strategy of an international company called Econet Wireless International (EWI).

EWI is a Zimbabwean owned international telecommunications, media and mobile technology group. The result of Dr Strive Masiyiwa’s vision, Econet began in mobile telephone service in July 1998, after years of legal battles. Thus, it began leading the change in the telecommunications, media and mobile technology terrain.

Cateora et al (2009) define international marketing as the performance of business activities that direct the flow of the company’s goods and services to consumers or users in more than one nation. It is the performance of business activities including marketing research, product development and management, and marketing intelligence, across national boundaries with the view of satisfying human wants and needs and achieving company’s predefined objectives.

EWI’s international marketing strategy borrows from the Ansoff Matrix. Ansoff’s product/market growth matrix suggests that a business’ attempts to grow depend on whether it markets new or existing products in new or existing markets. The output from the Ansoff product/market matrix is a series of suggested growth strategies which set the direction for the business strategy and is summarised in the table below:

Existing product New product
Existing market Market penetration
• Increase sales to the existing market
• Penetrate more deeply into the existing market
• Little risk involved Product development
• New product developed for existing markets
• Moderate risk
New Market Market development
• Existing products sold to new markets
• Moderate risk Diversification
• New products sold in new markets
• high risk because both product and market are new and unknown

The way EWI makes use of the four components of Ansoff Matrix in its international marketing strategy is explained below:
a) Market Penetration
The organisation tries to grow its market share through sales of existing products to the present market, for example, Econet Zimbabwe trying to grow its market share from 70% to 80%. They achieve this through promotions such as offering discounted tariffs. This is implemented through ensuring that they get enough capital to support the reduction of cost on pricing. The company has budgets to steer ample resources towards promotion and advertising.

b) Product Development
Coming up with new or modified products, for example, EcoCash has been modified to include an account, that is, EcocashSave. They invested in a Research and Development department, tasked to come with more innovative product. They also need to emphasise on Total Quality Management to avoid product recalls, for example, in Nigeria where the cards had quality problems.

c) Market Development
The company seeks for and finds new markets in which to expand, for example they go into a totally new market such as penetrating Canada. They can do this through acquisition of licensing in that country. Before acquiring the license, they would need to carry out market research to ensure that the market is attractive and can be profitable for them. They should also ensure that they have enough capital to successfully implement this marketing strategy and the need to have the right management and organisational structures.

d) Diversification
Kwese is a brand of Econet Media Limited, the media arm of EWI. The Kwese network is a converged media company with pan-African businesses in Pay TV, Free-to-Air TV, and Digital. It is premised on the concept of TV everywhere and anywhere.

Besides making use of the Ansoff Matrix, EWI has also used other international marketing strategies such as blue ocean, joint ventures and multi-branding.

a) Blue ocean
EWI has used the blue ocean strategy to identify an untapped market to run away from competition. For example, Econet came up with Econet Solar where they tapped into solar provision market to ensure that their customers’ phones’ battery life did not affect their network accessibility. In this global village where clients have become complicated, the only way to survive in business is through eliminating competition through investing in new technology and/or research and development. As a result, they can realise much in terms of profit.

b) Joint Ventures and Strategic partnerships
Their business model enabled them to offer quality products at competitive prices. They collaborated in the form of strategic partnerships and joint ventures. For example, they penetrated markets such as Nigeria, Kenya, Botswana, New Zealand, Lesotho, Malawi and Burundi. Their joint venture was with Altech in South Africa. The benefit of this partnership firm was listed in the Johannesburg Stock Exchange thus exposing them to a new source of capital. Their mutually formed company, Newco, would have eventually taken over almost all Econet’s companies, allowing EWI to backward integrate with a supplier which in terms of future growth, would enable them to develop an even wider product offering. This alliance was mutually beneficial, with Econet getting access to technology products, finance and administrative structures while Altech got the opportunity to diversify riding on EWI’s mobile network.

c) Multi-branding
EWI used its name in countries where it had a controlling stake such as in Nigeria, Lesotho, New Zealand, Malawi and Burundi. In countries where it was the minority shareholder, it operated under different names, namely Mascom (Botswana), Gulfsat Maghreb SA (Morocco). Their management structure was such that in each country, the operation was headed by a national, who knew the business climate in that country but the financial aspect was headed by an expatriate from head office thus maintaining effective control and providing support. This encouraged business relations in those nations as the national heading the operation could negotiate deals from a knowledgeable point.

The major potential benefits of an EWI’s international marketing strategy are:
• Exposure to fresh opportunities and alternative cultures, bringing greater breadth of vision.
• Wider access to sources of supply.
• Access to wider opportunities in mergers, acquisitions, joint ventures and partnerships.
• New product possibilities in meeting new market demand.
• Opportunity to develop worldwide presence and branding.
• Increased competitive edge through ability to cross-feed supply and sourcing.
• Potentially greater profitability.

In conclusion, it is evident that EWI has utilised Ansoff’s Matrix and other marketing strategies to explore directions for strategic growth and to consider both expected returns and risks. It is also clear that building an international marketing strategy can be complicated. Despite the complications involved, EWI has always focused on the customers and their needs enabling the company to acquire the much-needed confidence to make better business decisions.