Luxury company in the African market Research Paper

Luxury company in the African market - Research Paper Example Some of the notable countries that have continued to register increase in the number of dollar billionaires include South Africa, Nigeria, Kenya, Angola and Libya among others. Through the large investments in terms factories and farming, the wealth class has created many opportunities that have positive impact on the living standards of the middle class individuals in the rural areas. This paper seeks to discuss the entry strategies and the opportunities as well as limitations that Mercedes-Benz Company, a renowned manufacturer of luxurious vehicles would face in the Kenyan market. In its effort to enter Kenyan market, Mercedes-Benz a German based company will have adequate opportunities that will make the company achieve high sales and profits. Being one of the countries based in the East African region, Kenya population stands at 43 million people. The country headquarter is based in Nairobi with an estimated population of 6 million people in the year 2013. Based on the high deman d as the result of the increase in population, wealth individuals who most of them are allocated within the city of Nairobi, the demand for luxurious products has risen (Kitching, 2011). Even though the demand for other luxurious brands such as clothes and shoes, mobile phones and electronics is high, the demand for motor vehicle brands especially among the young and old rich Kenyans has drastically gone up (Daniel, 2011). Kenyan currency in referred to as Kenya Shillings (KSH). The country GDP stands at $79,890 billion. The key sector that has contributed to the Kenyan improved economy includes tourism that contributes up to 60% of the GDP. Tourism in Kenya is the main source of foreign exchange. For example, in 2012, tourism generated more than $900 million. Other sectors that have significantly contributed to the GDP include agriculture that contributes approximately 25%, industry and manufacturing with a contribution of 15% and energy. The increased foreign currency has positive ly impacted on the investment in the countries thus resulting to more job opportunities. Opportunities One the major opportunity that Mercedes-Benz will face is the high demand of its brands especially by young and reach people working in the tourism sector as well those in the music industry. The improved transport system in the city of Nairobi and other towns such as Mombasa and Thika has opened investment opportunities in the city. As a result, large companies have highly invested in Kenyan capital and its outskirts. Some of the notable companies that employ large number of people include Safaricom, East African Breweries, Daily Nation Company, British America Tobacco and Delmonte Company among others. In addition to the large amount of tax the companies pays to the government, the firms have resulted to increased household income not only for the top managers but also for other employees. This implies that by establishing a branch in Nairobi and Mombasa, Mercedes-Benz will effec tively meet the increased demand of its brands. Kenyan market for luxurious motor vehicle is unexploited (Aldwin, 2010). This implies that the company will not face stiff competition from other companies. Additionally, the countries offer