Week Two- Journal Entry

Posted: September 6th, 2013

Week Two- Journal Entry

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Week Two- Journal Entry

I researched the history of Kenya and found out that it is the largest economy in east and central Africa, making it one of the largest business hubs in Africa. The country gained independence in the year 1963 after an armed rebellion against the British colonialists from the Mau Mau freedom fighters (Pateman, 2004). Despite the bitter history with the Western powers, Kenya is considered as one of the greatest western allies in Africa given the historical relations. Kenya is made up of 42 ethnic tribes spread out around the country, making it relatively diverse in terms of the culture. The Kenyan coast and the vast Northeastern province are predominantly Muslim. In addition, majority of the Kenyans are Christians.

I fund also that given that Kenya has 42 ethnic tribes, they all fall under various categories such as Bantu, Nilotes, Cushites, Semites, Asians and Whites. In addition, the population in Kenya is distributed into various tribes as Kikuyu 22%, Luhya 14%, Luo 13%, Kalenjin 12%, Kamba 11%, Kisii 6%, Meru 6%, other Africans 15%, and Asians, Europeans, and Arabs 1% (Pateman, 2004). The combination of all of the identified ethnic groups makes Kenya one of the most ethnically diverse countries in the African continent. This determines how they perceive products and how each community consumes various products within the market. Hence, culturally offensive products would accrue losses to any aspiring international entity such as Walmart.

However, the ethnic diversity has been a source of confrontation between the various tribes on claims of inequality. Kenya could be termed as a modern African country as people gave up on some aspects of their cultures and embraced modernism. This is vital for an entity, which relies on sale of modern products, as the populace will be able to make purchases from the entity. As a retail entity, it is essential for the Walmart to ensure that there is ample consideration of consumption patterns with respect to cultural values and norms in the country.

The legal framework within Kenya allows for the ease in setting up of business despite claims of corruption between entities and government agencies and officials seeking entry into m the country’s market in illegitimate ways. Furthermore, the legal frameworks have improved given the changes, which have enabled Kenya to increase its economy and increase competitiveness. Despite such challenges, Kenya offers a lucrative market given the embrace of the various cultures towards modernism in an effort to reap from the same. Social classes determine consumption patterns within any market. Hence, Wal-Mart would have to ensure to have a targeted niche market in the market.

In addition, the country is divided into social classes. The majority of the society is considered as poor given the blatant corruption and laws, which are rarely enforced by corrupt authorities. The second largest class is the middle-income class, which has rapidly grown for the past decade given the sound economic growth in the country. This social class is attributed for driving the rapid growth of the retail market making it one of the most targeted market niches in Kenya given the ability and need of this class to spend. The smallest social class is the rich who hold majority of the wealth in Kenya and are seen as having a role in the Kenyan politics (Pateman, 2004).

The political atmosphere in Kenya currently could be described as uncertain given the nearing general elections, which tend to polarize ethnic communities given the inequality among the various communities in terms of resources, infrastructure and opportunities in government. The political violence, which occurred after the 2008 elections, was detrimental to the economy as well as business, which underwent numerous losses from looting and theft of their commodities. Thus, it is essential to ensure that there is a relatively stable political environment before entry into the market. Political tensions tend to have a lot gravity and polarization along ethnic lines as they could erupt into violence or worse still, civil wars. Such alters investors’ thoughts such as Walmart of investing into any market given instability as no entity wants to make losses.

References

Pateman, R. (2004). Kenya. New York: Benchmark Books.