Harvard Case - Kickstarting Tomato Jos in Nigeria
"Kickstarting Tomato Jos in Nigeria" Harvard business case study is written by Sophus A. Reinert, Risa Kavalercik. It deals with the challenges in the field of Business & Government Relations. The case study is 47 page(s) long and it was first published on : Feb 2, 2018
At Fern Fort University, we recommend that Tomato Jos prioritize a strategic approach to navigate the complex Nigerian landscape by focusing on building strong business and government relations, fostering innovation, and ensuring environmental sustainability. This strategy involves a multi-pronged approach encompassing government policy and regulation, competitive strategy, corporate social responsibility, and international business.
2. Background
Tomato Jos is a social enterprise operating in Nigeria, aiming to address the challenges of food insecurity and poverty by improving the tomato value chain. The case study highlights the company's initial successes, including securing funding and establishing a processing plant. However, Tomato Jos faces significant obstacles, including unreliable infrastructure, volatile market conditions, and a challenging regulatory environment. The case study explores the company's need to navigate these complexities and secure its future growth.
The main protagonists are:
- Misan Rewane: Founder and CEO of Tomato Jos, a passionate entrepreneur driven by social impact.
- The Tomato Jos team: Dedicated individuals committed to the company's mission and facing the challenges of operating in a complex environment.
- Nigerian government: A key stakeholder with the potential to support or hinder Tomato Jos's growth through policy, regulation, and infrastructure development.
- International investors: Essential for providing capital and expertise, but also bring expectations regarding financial returns and sustainability.
3. Analysis of the Case Study
This case study can be analyzed through the lens of Porter's Five Forces framework, highlighting the competitive landscape and the challenges Tomato Jos faces:
- Threat of New Entrants: High, due to the relatively low barriers to entry in the agricultural sector and the potential for new players to enter the market.
- Bargaining Power of Buyers: Moderate, as Tomato Jos relies on a network of smallholder farmers who have limited bargaining power, while large buyers like food processors have more leverage.
- Bargaining Power of Suppliers: Low, as Tomato Jos can source tomatoes from various farmers and has the potential to develop its own supply chain.
- Threat of Substitute Products: Moderate, as consumers have alternative options for tomato products, including imported goods and local substitutes.
- Competitive Rivalry: High, as Tomato Jos faces competition from established players in the tomato processing industry, including multinational corporations and local competitors.
Furthermore, the case study highlights the importance of strategic partnerships for Tomato Jos, particularly with:
- Government agencies: To secure access to resources, infrastructure, and favorable policies.
- International organizations: To gain access to funding, expertise, and market networks.
- Local communities: To build trust and ensure sustainable sourcing of tomatoes.
4. Recommendations
Tomato Jos should pursue the following recommendations:
1. Strengthening Business and Government Relations:
- Develop a comprehensive government relations strategy: Engage with relevant government agencies at both federal and local levels, including the Ministries of Agriculture, Trade, and Industry.
- Build relationships with key policymakers: Establish strong connections with influential figures in the government to advocate for policies that support the company's goals.
- Proactively engage in lobbying efforts: Advocate for favorable regulations and incentives for the agricultural sector, including tax incentives, government subsidies, and infrastructure development.
- Participate in public-private partnerships: Collaborate with government agencies on projects that benefit the tomato value chain, such as infrastructure development, research and development, and training programs.
- Embrace corporate social responsibility (CSR) initiatives: Demonstrate commitment to social and environmental responsibility to enhance the company's reputation and build trust with stakeholders.
2. Driving Innovation and Growth:
- Invest in technology and analytics: Leverage data-driven insights to optimize operations, improve efficiency, and enhance decision-making.
- Develop innovative solutions for the tomato value chain: Focus on improving yield, reducing waste, and enhancing product quality through research and development.
- Explore new product lines and markets: Expand beyond tomato processing to offer value-added products and tap into new markets, both domestically and internationally.
- Embrace digital transformation: Leverage technology to improve communication, streamline operations, and enhance customer engagement.
- Build a strong brand identity: Develop a recognizable brand that resonates with consumers and differentiates Tomato Jos from competitors.
3. Ensuring Environmental Sustainability:
- Adopt sustainable agricultural practices: Promote environmentally friendly farming methods among its network of farmers, including reducing water usage, minimizing chemical inputs, and promoting soil conservation.
- Invest in renewable energy sources: Explore options for using solar or wind power to reduce the company's carbon footprint and dependence on fossil fuels.
- Implement waste management systems: Minimize waste generation and explore options for recycling and composting to reduce environmental impact.
- Promote sustainable packaging: Use eco-friendly packaging materials and minimize packaging waste.
- Engage in environmental monitoring and reporting: Track the company's environmental impact and publish transparent reports to demonstrate its commitment to sustainability.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core competencies and mission: Tomato Jos's core competencies lie in its commitment to social impact, innovation, and sustainability. The recommendations align with the company's mission to address food insecurity and poverty while promoting sustainable development.
- External customers and internal clients: The recommendations aim to improve the company's competitiveness and attract new customers while empowering its employees and fostering a positive work environment.
- Competitors: The recommendations address the competitive landscape by focusing on differentiation, innovation, and building strategic partnerships.
- Attractiveness: The recommendations are expected to enhance the company's financial performance by improving efficiency, expanding markets, and attracting new investors.
Assumptions:
- The Nigerian government will continue to prioritize agricultural development and create a more favorable environment for businesses.
- Tomato Jos will be able to secure the necessary funding to implement its growth strategy.
- The company will be able to successfully navigate the political and regulatory landscape.
6. Conclusion
By implementing these recommendations, Tomato Jos can navigate the complex Nigerian landscape, achieve sustainable growth, and fulfill its mission of addressing food insecurity and poverty. The company's success will depend on its ability to build strong relationships with government stakeholders, embrace innovation, and prioritize environmental sustainability.
7. Discussion
Alternatives not selected:
- Focusing solely on domestic market: While this might seem safer, it limits the company's growth potential and exposes it to the volatility of the Nigerian market.
- Ignoring government engagement: This would hinder access to resources, infrastructure, and favorable policies, ultimately limiting the company's success.
- Ignoring environmental sustainability: This would damage the company's reputation and limit its ability to attract investors and customers.
Risks and key assumptions:
- Political instability: Political instability in Nigeria could disrupt the company's operations and hinder its growth.
- Regulatory changes: Unfavorable changes in government policies could negatively impact the company's operations.
- Economic downturn: A decline in the Nigerian economy could reduce consumer spending and affect demand for tomato products.
Options Grid:
| Option | Advantages | Disadvantages | Risks |
|---|---|---|---|
| Strengthen Business and Government Relations | Access to resources, infrastructure, and favorable policies | Time-consuming, requires strong political acumen | Political instability, regulatory changes |
| Drive Innovation and Growth | Enhance competitiveness, expand markets, attract investors | Requires significant investment, risk of failure | Technological disruption, market volatility |
| Ensure Environmental Sustainability | Enhance brand reputation, attract investors, reduce environmental impact | Requires investment, potential for operational challenges | Regulatory changes, consumer preferences |
8. Next Steps
- Develop a detailed government relations strategy: Identify key government agencies and policymakers to engage with.
- Establish a team dedicated to innovation: Focus on developing new products, processes, and technologies.
- Implement a comprehensive sustainability program: Set clear targets and metrics for environmental performance.
- Secure funding for growth initiatives: Explore options for attracting new investors and securing additional funding.
- Monitor progress and adapt the strategy as needed: Regularly assess the effectiveness of the recommendations and make adjustments based on changing circumstances.
By taking these steps, Tomato Jos can position itself for success in the challenging but rewarding Nigerian market. The company's commitment to social impact, innovation, and sustainability will be crucial to its long-term success.
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Case Description
In the spring of 2016, Mira Mehta (HBS'14), faced a difficult decision. Following a successful Kickstarter campaign, and winning the second place in the HBS New Venture Competition-Social Enterprise Track, she had moved to Northern Nigeria, where she founded the tomato paste company Tomato Jos. Though her brand had gained traction, however, she had, in the face of endless foreseen and unforeseen obstacles, yet to produce any actual paste. As the Nigerian government pondered new tariffs to protect local alternatives against the competition of ostensibly cheap and low-quality "killer tomato paste," Mehta considered a job offer from a major agricultural company that would secure her financially, but at the cost of her independence, and, perhaps, of her dreams.
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