ShoeCo Expansion into
Ethiopia
Andrew Calvert, Olivia Carey, Ben Cummings, Simon
Flaherty, and Maile Handy
Overview
02
01
Overview
04
Alternatives and
Recommendations
05
Implementation
Overview
03
SWOT
PESTEL
06
Risks and
Contingencies
Analysis
Alternatives and
Recommendations
Implementation
Risks and
Contingencies
Analyzing within ShoeCo
-Wide range of footwear products
-Relentless focus on efficiency
-Contract manufacturing for various
brands
-Providing private-label goods
-Development of own brands
-Modest success exporting into
Ethiopia through local third-party
distributer
-Low revenues through importing into
Ethiopia
-Ethiopian market offers growth
opportunity
-Forecasted $40 million in exports
from proposed factory
-Tax incentives and low cost of
inputs
-Aggressive plan of expanding into
Ethiopian market
-Risk of investment into new factory
-Overall profitability of exports
Overview
Analysis
Alternatives and
Recommendations
Implementation
Risks and
Contingencies
Analyzing the Ethiopian Market
P
E
- Government
investment drove
the economy
- Rapidly
expanding
economy
-Attracted foreign
investors to
increase
manufacturing
- Government
favors
manufacturing
industry
Overview
S
T
- Strong human
resources
- 10,000 university
graduates
annually
- Multiple
infrastructure
limitations
- 1/3 of population
lives 5+ hours
from nearest city
E
L
- Government
investment to
improve
infrastructure for
better trade
routes
- Granted customs
exemptions for
capital goods
- Natives
returning to
Ethiopia viewed
as best-trained
talent
Analysis
Alternatives and
Recommendations
Implementation
Risks and
Contingencies
- Protection of
private property
Alternatives and Recommendations
Scale: 1-5
Recommendation
Long-Term
Profitability
Ease of Entering
Ethiopian Market
Opportunities for
Expansion
Totals
Local Agent or
Importer
2
3
3
8
Licensing
Arrangement
4
5
3
2
4
4
3
5
4
9
14
11
Joint Venture
Subsidiary
Overview
Analysis
Alternatives and
Recommendations
Implementation
Risks and
Contingencies
Implementation Timeline
Educate company
representative about
Ethiopian culture
Create base of
employees to work in
factory
Product advertisement
through social media
1
4-5
16
2-3
5-15
Find a partner within
the Ethiopian market
Overview
Analysis
Construct factory
Alternatives and
Recommendations
Implementation
Risks and
Contingencies
6
Risks and Contingencies
Risks
Contingencies
Poor understanding of local
market and customs
Educate executives on
the local culture
and expectations
Government corruption and
lack of transparency
Create closer
relationships with government
officials
People unwilling to work
Offer larger company
incentives
Infrastructure limitations
Build factory in
accessible location
Overview
Analysis
Alternatives and
Recommendations
Implementation
Risks and
Contingencies
Questions?