Harvard Case - MitiMeth: A Nigerian Social Enterprise Goes Global
"MitiMeth: A Nigerian Social Enterprise Goes Global" Harvard business case study is written by Makarand Gulawani. It deals with the challenges in the field of International Business. The case study is 11 page(s) long and it was first published on : Aug 11, 2022
At Fern Fort University, we recommend that MitiMeth adopt a phased approach to internationalization, focusing on building a strong foundation in key emerging markets before pursuing more aggressive expansion strategies. This approach will allow MitiMeth to leverage its existing strengths, navigate the complexities of international business, and achieve sustainable growth while maintaining its social impact mission.
2. Background
MitiMeth is a Nigerian social enterprise that manufactures and distributes affordable, high-quality water filters to combat the widespread problem of contaminated drinking water in developing countries. Founded by two young entrepreneurs, the company has achieved significant success in Nigeria, earning recognition for its innovative product and social impact. Now, MitiMeth faces a crucial decision: whether to expand its operations internationally and, if so, how to approach this complex endeavor.
The case study's main protagonists are the two founders, who must navigate the challenges of internationalization while balancing their social mission with the need for profitability and growth.
3. Analysis of the Case Study
The case study presents a compelling scenario that highlights the complexities of international business for a social enterprise like MitiMeth. Several frameworks can be applied to analyze the situation:
- Porter's Five Forces: This framework helps assess the competitive landscape and identify potential threats and opportunities. MitiMeth faces competition from established multinational corporations (MNCs) with deep pockets and extensive distribution networks. However, the company also possesses a competitive advantage through its focus on affordability and social impact, targeting underserved markets that larger companies may overlook.
- Diamond Model: This model emphasizes the factors that contribute to a nation's competitive advantage. Nigeria's abundant natural resources, growing population, and government support for social enterprises provide a favorable environment for MitiMeth's growth. However, challenges such as infrastructure limitations and political instability require careful consideration.
- Global Market Entry Strategies: MitiMeth can choose from various entry strategies, including exporting, foreign direct investment (FDI), joint ventures, and licensing. Each strategy has its advantages and disadvantages, and the optimal choice depends on the company's resources, risk tolerance, and market conditions.
- Internationalization Process Model: This model outlines the stages of internationalization, from exporting to foreign direct investment. MitiMeth is currently in the early stages of internationalization, and the case study explores the potential for further expansion.
4. Recommendations
MitiMeth should pursue a phased approach to internationalization, focusing on the following key steps:
Phase 1: Market Research and Pilot Launch (12-18 months)
- Identify Target Markets: Conduct thorough market research to identify potential markets with high demand for affordable water filters, a favorable regulatory environment, and a strong social impact potential. Consider factors such as population density, water contamination levels, income levels, and government policies.
- Develop a Global Marketing Strategy: Adapt the existing marketing strategy to resonate with the cultural nuances and preferences of the target markets. Leverage digital marketing channels and partnerships with local NGOs to build brand awareness and trust.
- Pilot Launch in a Single Market: Choose a single market with a strong potential for success and launch a pilot program to test the product, marketing approach, and distribution channels. This will provide valuable insights and learnings for future expansion.
Phase 2: Strategic Partnerships and Expansion (24-36 months)
- Form Strategic Alliances: Partner with local distributors, NGOs, and government agencies to leverage their expertise and access to local markets. This will help MitiMeth navigate cultural differences, regulatory requirements, and logistical challenges.
- Explore FDI Options: If the pilot launch proves successful, consider establishing a subsidiary or joint venture in the target market to gain a stronger foothold and control over operations.
- Expand to Additional Markets: Based on the learnings from the pilot launch, gradually expand into other promising markets, prioritizing those with similar characteristics and potential for social impact.
Phase 3: Sustainable Growth and Innovation (36+ months)
- Optimize Operations and Supply Chain: Implement efficient manufacturing processes and a robust supply chain to ensure consistent product quality and cost-effectiveness. Consider local sourcing of raw materials to reduce transportation costs and support local economies.
- Invest in Innovation: Continuously improve the product and develop new solutions to address emerging challenges in water purification and sanitation. This will help MitiMeth maintain its competitive edge and expand its market share.
- Develop a Global Sustainability Strategy: Integrate environmental sustainability into all aspects of the business, from sourcing raw materials to manufacturing and distribution. This will enhance the company's reputation and attract socially conscious investors and customers.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core Competencies and Mission: MitiMeth's core competency lies in its ability to manufacture affordable, high-quality water filters and its commitment to social impact. The phased approach allows the company to leverage these strengths while gradually expanding its reach.
- External Customers and Internal Clients: The recommendations prioritize the needs of both external customers (consumers in developing countries) and internal clients (employees, partners, and investors). The focus on social impact and sustainable growth ensures long-term value creation for all stakeholders.
- Competitors: By focusing on underserved markets and building strong partnerships, MitiMeth can differentiate itself from larger competitors and create a sustainable competitive advantage.
- Attractiveness: The phased approach minimizes risk and maximizes potential for success. The pilot launch allows for data-driven decision making and adjustments, while the strategic partnerships and FDI options provide access to resources and expertise.
6. Conclusion
MitiMeth's decision to go global presents a significant opportunity to expand its reach and impact, but it also requires careful planning and execution. By adopting a phased approach, focusing on key markets, and building strategic partnerships, MitiMeth can navigate the complexities of international business and achieve sustainable growth while maintaining its social mission.
7. Discussion
Other alternatives, such as a rapid expansion strategy or a purely export-based model, were considered but deemed less suitable for MitiMeth's current stage of development and its commitment to social impact.
Risks:
- Cultural Differences: Misunderstanding cultural nuances can lead to marketing failures and strained relationships with partners.
- Regulatory Challenges: Navigating complex regulatory environments can be time-consuming and costly.
- Political Instability: Unforeseen political events can disrupt operations and affect market access.
- Exchange Rate Fluctuations: Fluctuations in exchange rates can impact profitability and make it difficult to plan for the future.
Key Assumptions:
- The target markets identified for expansion have a strong demand for affordable water filters and a favorable regulatory environment.
- MitiMeth can secure strategic partnerships with local distributors, NGOs, and government agencies.
- The company can adapt its marketing strategy to resonate with the cultural nuances of the target markets.
- The pilot launch will provide valuable insights and learnings for future expansion.
8. Next Steps
- Conduct a detailed market analysis of potential target markets. (3 months)
- Develop a detailed internationalization plan outlining the phased approach and key milestones. (6 months)
- Secure funding for the pilot launch and initial expansion activities. (6 months)
- Form strategic alliances with local partners in the chosen pilot market. (6 months)
- Launch the pilot program and gather data for evaluation. (12 months)
- Based on the pilot launch results, make decisions about further expansion and investment. (12 months)
By following these steps, MitiMeth can successfully navigate the complexities of internationalization and achieve its ambitious goals of expanding its reach and impact while maintaining its commitment to social responsibility.
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Case Description
In January 2022, MitiMeth was a Nigeria-based innovative social enterprise that produces handcrafted products made from natural fibres-agricultural waste and aquatic weeds-that are otherwise considered to be waste or a hazard to the environment. MitiMeth added value to this material by transforming it into well-designed furniture and home furnishings, storage boxes, lamps, kitchen and dinner ware, stationery, and souvenir items. Mitimeth's initiative of transforming this environmental nuisance into marketable products provided work for more than 600 people from over twenty-five communities in Nigeria. Despite challenges in exporting from Nigeria, MitiMeth had made good progress in reaching international markets. MitiMeth had already gone through several challenges, and the COVID-19 pandemic only added to the difficulties the enterprise had experienced. Mitimeth needed a plan that ensured MitiMeth's long-term sustainability.
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