TECNO Mobile's Growth Strategies in Africa
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Case Code: BSTR548 Case Length: 18 Pages Period: 2007-2017 Pub Date: 2018 Teaching Note: Available |
Price: Rs.500 Organization: TECNO Mobile Industry: Mobile Phone Industry Countries: China Themes: Strategic Management, International Management, International Marketing |
Abstract Case Intro 1 Case Intro 2 Excerpts
Excerpts
TECNO Enters Africa
Africa, with a population of over 1.3 billion people and a growing consuming middle class, attracted global Original Equipment Manufacturers (OEMs). The African market was experiencing a transition from feature phones to smart handsets and from life without a smartphone to using smart devices to create content on the go. Various factors including widespread internet service networks, a young population requiring education in information and communication technology (ICT), and the growth of ICT using enterprises were responsible for this shift. The increased availability of 3G and even 4G networks in many African countries also created a thriving market. The annual mobile-phone shipments were increasing every year due to the rising smartphone penetration in Africa. At the end of 2007 there were about 280.7 million mobile phone subscribers in Africa, representing a penetration rate of 30.4%. With feature phones still accounting for more than a 60% market share, there was a vast untapped market that many OEMs were eyeing. According to Ha, "We started to zero-in on the African market as early as 2008 after the competition intensified in China."...
TECNO's Strategies in Africa
In Africa, TECNO’s strategy was in line with the maxim ‘Think Globally, Act Locally’ wherein it designed products according to the needs of the customers. It developed mobile devices targeted specifically at the bottom of the pyramid customers....
Marketing
TECNO ensured widespread distribution of its phones and marketed its products well. TECNO advertised and sold its products mainly through physical stores. Its print ads and blue and white logo could be found everywhere from shopping malls to country fairs in many African countries. From the sales booths in Kumasi, Ghana, to the mobile phone wholesale centers in Nairobi, Kenya, TECNO products were ubiquitous. Huge billboards of the Chinese smartphone brand dotted the streets. In Uganda, TECNO posters were seen on the streetlights of affluent neighborhoods and also alongside the roads of small towns. According to analysts, this advertising strategy increased the reliance of local retailers on TECNO as they didn’t have to spend much on advertising....
Empowering Communities
TECNO was one of the few companies which believed in giving back to society and infused the CSR culture into its business module across all its markets. The company launched various CSR projects from time to time. The brand contributed significantly to improving the livelihood of people in the African community. The company and its employees were active players in public interest undertakings. A volunteer community was reportedly formed within Transsion to organize public interest activities...
Results
Over a period of one decade (2007-2017), TECNO became the fastest growing mobile phone manufacturer in Africa. It came in for high praise from customers and according to some analysts it became the official phone of the masses in the continent. Being a pioneer in the production of dual SIM mobile phones in Africa, TECNO tasted instant success with its products. It became the No.1 dual-SIM mobile phone provider in major African markets...
A Growing Global Footprint
After dominating Africa, TECNO had bigger plans for its brand. Leveraging on its success story in Africa, TECNO expanded to other emerging markets in the Middle East, Southeast Asia, and South America. Ha said the company could export its successful business model which had seen it become the top selling smartphone manufacturer in sub-Saharan Africa, to other emerging markets wherein it could create an entertainment ecosystem tailor-made for young consumers across markets based on their needs and habits...
Challenges Ahead
TECNO’s journey in Africa was not without its pitfalls. Like many other Chinese phone companies which had faced a challenge from counterfeiters, TECNO also faced the challenge of beating counterfeit TECNO products. Further, since many markets were flooded with counterfeit phones, it would be challenging for TECNO to differentiate itself from such unapproved fake brands. For example, in some parts of Nigeria, it was estimated that counterfeiters had more than 10% of the market share...
Exhibits
Exhibit I: Smartphone Adoption in Africa (% of Connections)
Exhibit II: TECNO Product Portfolio (2008-2016)
Exhibit III: TECNO Mobile Phones’ Series and their Models
Exhibit IV: Africa Mobile Phone Brands Market Share by segments Q3 2016
Exhibit V: Market Share of Different Phone Brands in Major Countries of Africa
Exhibit VI: Smartphone Shipments in Africa (2016) by Vendor
Exhibit VII: Consumer Demand: TECNO Mobile vs Infinix
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