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Preparing to export

Consultation and bespoke research

Taking a strategic approach

British companies are advised to undertake as much market research and planning as possible. Doing business with Kenya can be challenging, but taking a strategic approach is the key to making the process manageable. The first step is to spend some time thinking about your company's Kenya objectives.

The questions listed below should help you to focus your thoughts. Your answers to them will highlight areas for further research and also suggest a way forward that is right for your company. You may then want to use this as a basis for developing a formal Kenya strategy, although this may not be necessary or appropriate for all companies:

Your aims

  • Do you wish to buy from Kenya, sell to Kenya or both?

  • Do you wish to establish your own company presence in Kenya (for example through licensing, as a joint venture, a wholly-owned subsidiary, franchising, direct or indirect exporting, setting up an agency or an appointed distributor, acquisition or FDI)?

  • Do you need to be involved in Kenya at all?

  • Do you see Kenya as part of a wider plan including other African markets?

Your company

  • What are the unique selling points for your product or service?

  • Do you know if there is a market for your product in Kenya?

  • Do you know if you can be competitive in Kenya?

  • Are your competitors already in Kenya? If so, what are they doing?

  • Do you have the time and resources to handle the demands of communication, travel, product delivery and after-sales service?

Your knowledge

  • Do you know how to secure payment for your products or service?

  • Do you know where in Kenya you should start?

  • Do you know how to locate and screen potential partners, agents or distributors?

  • Have you carried out any Kenya-specific customer segmentation, and do you know how to best reach potential customers in-market?

It is unlikely that you will have the answers to all these questions at the outset and these ‘knowledge gaps’ should form the basis for further research and investigation. Some of these questions will require quantitative research in your sector, while others involve more contextual and cultural considerations. Talking to other people in your industry and regularly visiting Kenya will give you access to the most current advice, and such experience can often lead to new insights and form the basis for further research. You will be able to find out some free information from carrying out desk research.

 

Start-up considerations

UK companies can enter the Kenyan market by the following entry strategies:

  • licensing

  • joint ventures

  • wholly-owned subsidiary

  • franchising

  • direct or indirect export

  • set up an agency or an appointed distributor

  • acquisition

  • foreign direct investment – set up an entire operation

It is advisable to have a local representative either on a commission basis or as an importer/distributor. This is especially recommended for companies new to the market, with limited knowledge of target customers.

Joint venture partnerships and acquisition options are chosen by many foreign companies. Their success depends on the nature of the product/service and the level of domestic competition. This is ideal for companies that have a more advanced knowledge of the market, seeking to gain further control of local business.

Companies that are registered as limited liability companies such as registered companies or branch offices are regulated by the Companies Act (Cap 486). See: www.kenyalaw.org/kl/fileadmin
/pdfdownloads/Acts/Companies%20Act.pdf

The principal types of business enterprise in Kenya are:

  • registered companies (private and public)

  • branch offices (of companies registered outside Kenya)

  • partnerships

  • sole proprietorships

  • co-operatives

The Kenyan Investment Authority (KIA) provides a guide to setting up a business in Kenya. See: www.investmentkenya.com/index.php?option=com_content&view=article&id=10&Itemid=170

[Source: Department for International Trade (DIT)/gov.uk]


 

 

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