Kenya Case Study

When imagining being an entrepreneur in the United States people typically only think of the luxurious side of the job, such as, setting your own hours, being able to call all the shots, and being able to make big paychecks on your own terms; very rarely, if ever do people consider the amount of obstacles that must be overcome and hard work that has to be done in order to build a successful business. This proves to be even more accurate in poor, underdeveloped countries such as Kenya. Kenya is a large sub-Saharan African country located in Northeast Africa. In 2007, when this supermarket case study was conducted, Kenya had an estimated population of roughly 35 million with a population growth rate of 2.56 percent. In addition, nearly 80 percent

The most imperative aspect of developing your own business is having a reliable source of financing and investors to help form your business. In Kenya, many entrepreneurs were unable to raise the kind of capital necessary for operating businesses from day to day due to the lack of stability in their government and economy (Llosa, 2008). In the United States, entrepreneurs have numerous financing options to choose from when beginning their own business, whereas, entrepreneurs in underdeveloped countries are not presented with as many viable options. With nearly 43 percent of Kenyans living on less than a dollar a day, virtually no middle class, and an extreme gap between the wealthy and poor, Nakumatt’s financing options were almost non-existent compared to that of an American entrepreneur (Llosa,

However, 80 percent of the supermarkets in Kenya are part of a chain and only small percentages were independently owned (Llosa, 2008). This is a challenge that most American entrepreneurs experience as well. Most consumers in America will turn to a trusted chain brand over a small independent store unless the small store presents a differential factor or competitive advantage over the chain store. Nakumatt did precisely that by building its store from the inside, with human resources and staff managers, out. Nakumatt’s operations manager, Thiagarajan Ramamurthy, believes that manpower is the most important concept in the 5 M’s of business and when manpower is properly applied the other 4—material, money, market, and missionary, will follow. Nakumatt’s ultimate goal was to maintain a good name in society and be more than just a supermarket to the people of Kenya (Llosa, 2008). By building the Nakumatt brand around manpower, they were able to separate themselves from the competition and connect with the consumers around