For all her problems, Nigeria has gotten some things right. She is still an investment haven; she is still the beautiful bride that is currently being courted by many international businesses that seek to create greater returns for their investment. The factors that influence the attractiveness of a country for investment includes:
|FACTORS||Degree (of 20)|
|Market growth rate||18.0|
|Access to international/ regional markets||14.4|
|Availability of incentives||3|
|Local Capital Market||2.5|
At present, we have the five most important factors: a very high market growth rate (as seen in the telecommunication business), a large market size, access to regional markets, skilled labour pool and relatively cheap labour. Though someone might give me a knock on the skilled labour pool, but just let that one pass.
What is the nature of products that sell in our markets?
A close look at the nature of products that sell in our marketshowcases two major things:
- A global feel: Any selling product today must not look like it was made in Aba. It is not that people do not want to have Aba goods, it is just that our tastes have been conditioned for the global feel.
- Local Content Appeal: Though the winning products all have a global appeal, they must not be totally out of touch with our African feel and values. A case in point is the Nigerian music and video industry, which has succeeded in achieving a certain degree of global feel-value and a local content appeal. Another good example is in our designer clothes and highbrow restaurants. Mr Bigg’s eatery had to introduce the Village Kitchen to achieve this very balance.
Characteristic of the players
If you should take a good look at the firms that have thrived in our nation, you would notice this commonality – the provision of a product/service with a global appeal that meets a local need. In the pharmaceutical industry, our local need relates more to our disease burden and the purchasing power of the populace. One should not forget that the pharmaceutical industry is not limited to drugs and medical devices, but encompasses the food processing industry – an area that is still very much untapped.
Generally, the majority of our earnings are spent on these global-feel, local need products. If your product/service is not in this category, you may need to work harder at it.
To participate in the market, some of the options include:
- Import the products and achieve effective marketing.
- Be a representative of a foreign firm and achieve effective marketing.
- Develop the capacity to produce the products locally and yet, achieve effective marketing.
- Develop the product/service with some unique characteristics and enjoy some exclusivity, while achieving effective marketing.
You do not have to look far to find examples of option No. 1, 2, 3. It is a game of numbers, most of the indigenous firms that have thrived, have done so by doing the first three.
The challenge with the first three, especially for a growing firm, is that the world has gone global. Asian firms do not need a middle man any longer to sell in Nigeria. Walmart can sell here and foreign investors can now repatriate 100 per cent of their investment.Now, this has immediate implications for the workforce and the future economy but that is beyond the scope of this article. The point to note is that Nigeria is attractive primarily because of the consumption power of the growing middle class; hence, relatively larger firms with greater marketing force and more affordable global-feelproducts would have all to gain, if they could meet the needs of this class.
It is obvious therefore that for a growing firm in Nigeria that seeks to be a player in the pharmaceutical industry, there are some really big odds to overcome. For most developed indigenous firms, the core competence is selling (the first three) and now globalisation implies that they would have to compete with global firms with greater manufacturing competence, finance and relatively more organised government.
The Cheetah Challenge
It would not be wise for this firm to bury its head in the sand and convince itself that all is well, even for indigenous firms with impressive balance sheets, the time to engage is now. Now is the time to seek means for not only achieving continual prosperity but also the survival of the future generation. The answers would not only be a purely business decision, it would be more of a nationalistic posture. It is nationalistic because there could be other immediate ways to make money without having to engage in the struggle that could be demanded.
So, here are the questions:
How can I create or find a highly finished product with a global appeal and a local feel?
- How can I best leverage finance?
- How can I integrate research and development to my product offering?
- How can I maintain specialised technical skills?
- How can I maintain great managerial capacity and
- still be good at marketing?
The Cheetah in the Challenge
To be able to develop a successful solution in the midst of this challenge, the demands on the management of this firm would be a bit higher than that of just selling a good product, since he may need to now create that good product. There is so much competition and the market is constantly moving; his best bet would be to have a niche market and to keep innovating around that niche market.
His innovation would be around product, processes and people.
In the pharmaceutical industry, this innovation could be expensive. This firm would need a certain level of thought leadership and technical partnerships for the development of products, services and processes that offer greater value. One of the challenges would be to be able to merge his business capacity with novel technical competence borne from academic research, and this should not be a short term engagement, it should be done in a manner that leverages the best of tax incentives and other government shelters that favour indigenous research and development.
Some examples of where he could look to develop better products and processes would be in the:
- Herbal Medicine
- Information Technology
- Food processing industry
- Proprietary products
He would need to become a thought leader in the chosen area of interest and to seek partnerships with other thought leaders.
There would be need to create a framework for:
- Knowledge building.
- Capturing relevant technical expertise, including intellectual property acquisition.
- Developing an effective local and international business network for future business opportunities. This would be necessary for leveraging of financial structures.
- Maintain a strong grip on marketing.
The goal therefore is to create new products and services with certain levels of exclusivity. It is a necessary goal and for some firms it could be the only goal worth pursuing.
Though the role of the government in protecting and advancing this processes cannot be overstated, for the individual firm, the acquisition of innovation should be a sustained management strategy and should be pursued even in relatively stable indigenous firms. The development of Asian pharmaceutical giants was arrived at via conscious focus on technical capacity acquisition and the development of novel products, while maximising the benefits of a large market size.
Smart State Council. (2008) “Attracting investment into Queensland’s knowledge-intensive industries” Brisbane, Queensland Government.