More and more corporations and medium-sized companies Company establish branches in developing countries. What are the challenges and how do you best prepare for expansion? An assessment and basic tips.


Characteristics of starting a business in developing countries

A poor supply of food to the population. The result is malnutrition and hunger. Poor health care. Hardly any educational opportunities and a high illiteracy rate. Many unemployed and an overall low standard of living. common poverty.

Characteristics, several of which often apply to the developing countries of the world. And the current list of developing countries from the Development Committee (DAC) is long: it includes over 140 countries  Organization for economic cooperation and development (OECD). Around a third of these countries are in Africa.

Africa: Popular expansion target for German companies

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More and more German companies are expanding into countries that appear on the OECD list. Despite – or even more so – because of Problems In the developing countries. Because start-ups always make a contribution to progress. They create jobs, improve the level of education and the infrastructure and boost the economy Economy

African countries are a particularly popular destination for expansion. Forerunners are huge corporations such as various car manufacturers with their locations in South Africa. The medical technology is also strongly represented. For example, one German company operates 30 dialysis centers in South Africa and four in Zimbabwe. Further examples of German expansion are the production site of the pharmaceutical industry in Kenya, cement plants in Namibia and mining companies in Mozambique.

Progress on the example of Rwanda

One of the smallest African countries enjoys particularly strong growing popularity among German companies: Rwanda. The most densely populated country in the heart of Africa is currently considered a model country of progress.

After the terrible genocide in the 90 years, today's Rwanda has long been stable again. And it can become a blueprint for other emerging countries in Africa and worldwide.

6 tips on starting a business in developing countries

But what do companies have to pay attention to if they want to set up in developing countries? Below I would like to share 6 basic tips on how to expand to Success can be.

1. Use development potential for companies

More and more medium-sized companies from Germany are also daring to gain a foothold here. The opportunities and the development potential are enormous. Skilled workers can be developed and trained on site.

Despite all my positive experiences in Rwanda, I know that the decisionestablishing a branch in a developing country is a real challenge.

2. Use positive mood

The foreign Engagement is very much appreciated here, as I found out when I arrived at the airport. A customs officer asked me the reason for my trip.

"I've founded my company in Kigali," I replied. His young face turned into a huge smile. "You are coming to give work to our people?" Was his next question. Then he truly congratulated me and I have rarely had a warm welcome.

3. Preparation is everything

The legal and administrative framework in many developing countries is complicated. Therefore, it is essential to get informed in advance and visit country-related events. Various associations, counseling centers and chambers of commerce are a good starting point.

You can support them accordingly when starting up a business. In addition, local partners who have in-depth knowledge of the regional market and legal system as well as local experts help.

4. Everything is nothing without culture

Probably the most important factor is to focus on the respective culture. Local conditions must always be taken into account and accepted by the expanding company.

Suppressing cultural peculiarities is counterproductive and will lead to failure in the long term.

5. Use the potential of local employees

local people Employees are Solution, in order to properly deal with the different mentalities in foreign cultures and customers to generate. No manager from Germany knows as much or can get into the thinking of the People empathize with the colleagues on site.

For example, in Africa it is completely normal to wait longer for results or Meetings to wait - because the clocks tick differently here. The business model must therefore always be adapted to regional conditions and ethnic structures.

6. Communication is the key to success for companies

The right Communication can do a lot. Therefore, employees who can express themselves perfectly in the respective national language are essential at the new location. That’s how personal is in African countries – despite digitization Contact us very important.

Most Shops are handled here personally. So you have to get involved with the foreign meeting and business structures. In Rwanda, for example, you always hit the whole thing directly Team and not just a business partner.

Conclusion: Starting a business in developing countries creates a future

The expansion of companies into developing countries is an important and necessary step in the right direction.

Because the activities of foreign companies can help in the long term to eliminate the initially mentioned, negative features of the developing countries. This is how a developing country can really develop and progress becomes visible.

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