Strategy interview with Marc-Peter Zander, CEO and founder of africon GmbH
Have you ever thought about entering African markets with your company? Listen to the podcast now and learn more about the potentials!
Have you ever thought about opening up African markets with your company?
In this interview, Marc Peter Zander explains why there are many good reasons to take a closer look at the idea of an Africa strategy. He is the founder and CEO of africon - Germany's largest management consultancy specializing solely in Africa. In this interview, Marc takes you on a journey through Africa's hidden potential and explains how German SMEs can grow by expanding into Africa, what opportunities there are for cooperation and which countries are of particular interest.
SHOWNOTES:
Christian Underwood https://www.linkedin.com/in/christianunderwood/
Marc-Peter Zander: https://www.linkedin.com/in/marc-peter-zander-8203b910/
Africon GmbH: https://www.africon.de
Medium-Sized Business Index Africa: https://www.mittelstandsindex-afrika.de/
Underwood Ltd. https://www. underwood.de/
Hope is not a strategy https://www.hoffnungistkeinestrategie.de/
Pre-order the book Hope is not a strategy here https://www.underwood.de/shop/buch-hoffnung-ist-keine-strategie
Detailed episode description:
In this interview, Marc Peter Zander is our guest - CEO and founder of africon GmbH, the largest German management consultancy focusing exclusively on Africa.
Here, Marc and his team support clients in developing their individual strategy from market entry to local implementation on the ground. With seven own representative offices in Africa, africon covers markets with around 1.4 billion consumers. This makes it a market comparable to India and China.
Africon serves small and medium-sized companies and has already worked for brands such as Villeroy & Boch and Infineon Technologies.
With more than 25 years of experience in Africa, Marc Zander is the expert for the African continent and the corresponding strategy for companies: He was General Manager for MAN Ferrostaal AG for three years and graduated from ISM Dortmund, which was followed by a position as Assistant to the CEO of MAXDATA. From 2008 to 2011, Marc was Sales Manager at Wincor Nixdorf for Sub-Sahara/Africa. Finally, 12 years ago, he founded africon GmbH.
Where can German SMEs still grow these days?
Which regional growth strategies and markets can German SMEs still tackle in the wake of globalization? Is Africa the last great opportunity?
This is a hotly debated question among Marc and his clients. When he started africon in 2011, Marc wanted to talk to SMEs about Africa, but that didn't work. At that time, the BRIC strategies were established. Brazil, Russia, India and China were in focus, while nobody was interested in Africa.
In the meantime, most German SMEs are internationally positioned and are asking themselves where growth is still possible. Africa, as the last large continent, offers a very exciting opportunity.
The special thing about Africa is that there are 54 individual countries. The continent is inhabited by 1.4 billion people and is more challenging than China or India in terms of complexity, which means it requires a sophisticated strategy.
Has the train already sailed for German companies in terms of developing Africa?
A look at the global picture shows that China and Russia already have a strong presence in Africa. Three years ago, the Chinese government invited all 54 African presidents to China for talks. It was decided to make a global Africa strategy with China, which was recorded in 200 pages. Germany's Africa strategy is 17 pages long in comparison. So at the moment, Germany is still far behind in terms of Africa potential.
But the train has not yet been missed. China has been active in infrastructure and other issues in Africa over the last few years, but cheap roads and machinery are now run down. Africa would like to see more quality on the continent, so it is increasingly seeking dialogue with Europe, and Germany in particular, to find alternatives to current conditions.
Both China and Africa are learning how to work together economically and culturally. Marc believes that German companies still have about five to ten years to build interesting economic relationships until China has learned how to do business in Africa.
Why is there so much prejudice in Germany about Africa?
Let's start with a figure: In 2011, 0.6% of all German companies were interested in Africa and/or were working on an Africa strategy. In the meantime, this figure has risen to 3.5%. These are figures that africon has collected itself. So interest is still very low, but it is increasing.
Why is that?
Well, what comes to mind when you think about Africa for a few seconds?
What image do you have of Africa? Many people associate attributes such as poverty, famine or aid organizations with it.
In discussions about opening up the African market, africon first addresses how political instability can be circumvented. The first step is to dispel typical images in people's minds. The first step is to try to bring medium-sized and large companies closer to Africa in the first place.
One example that Marc likes to give at this point is the question:
How many Maggie cubes do you estimate are consumed per day in Nigeria ?
It's 80 million Maggie cubes per day out of a Nigerian population of 210 million people.
How does that translate into the potential of Africa?
These Maggie cubes have to be produced. There is a raw mass for this, some of which is imported locally and some from external suppliers. These cubes are formed by 1320 machines from German manufacturers and then packed in an aluminum foil, which is also supplied by German manufacturers. This packaging in turn has a paper wrapper. The process of producing a Maggie cube involves a wide variety of German SMEs that have discovered very high potential for themselves in Nigeria.
This should be mentioned as an example from which one can see that the prejudices do exist, but there are opportunities on the African continent for cooperation that are different and worth discovering.
Marc recommends taking a closer look at the topic of Africa strategy to understand exactly whether there is also potential on the ground for your own company.
How does the cooperation with africon work?
Africon does 99% active sales. So companies are contacted by africon asking if the African market has ever been considered for development.
Often the companies reply that they did not know that there is a consultancy specialized in Africa and they are open to a conversation.
In the first meeting, market potential slides are already prepared for the customer to discuss whether Africa is an exciting market for cooperation or not. In this discussion, this question can often be clarified in about 60 to 90 minutes.
If the customer is interested, a classic strategy project follows, which is divided into three phases:
- Country prioritization of the 54 African markets, some of which speak English, French, Spanish or Portuguese. Here, the SMEs get to decide where exactly the potentials lie and what a more precise clustering can look like.
- The potential markets are examined in more detail. This involves actually experiencing the markets on site and seeing local productions. This phase is usually particularly exciting for customers. Often the feedback is that Africa is different than expected.
- Using what we have learned, we will work on the Africa strategy.
The aim is to arouse people's interest and make Africa something they can experience.
Which African countries are really interesting for German companies?
This question cannot be answered in a blanket manner. If medium-sized companies need a high number of consumers in the markets they are looking for, such as for light bulbs, filters for the automotive industry or packaging materials, Nigeria with 210 million inhabitants and a now large middle class is a market that cannot be neglected. Marc would always prioritize this market - even if Nigeria has its problems. If you don't have a Nigeria strategy in the consumer sector in your Africa strategy, you're doing something wrong, Marc said.
Ethiopia is also just emerging in the consumer space with a population of 110 million, as are Kenya, Tanzania and South Africa.
For customers coming from mining and quarrying, countries like Zambia, Congo and Botswana are interesting.
It is important to weigh up the markets that are interesting for development based on individual factors. This is where africon is happy to assist.
Currently, africon is experiencing a strong demand for the discussion on how to reduce dependencies on Asia. Markets such as Egypt, Tunisia and Morocco, which are in close proximity to Europe, play a major role.
Concrete local approach to the development of an African market
There are different issues. If you start from the situation that a company wants to expand to Africa and make sales there, sales potential is already identified on site in the second phase mentioned above. This could be a distribution channel, for example. Marc's colleagues conduct on-site discussions with local customers and distributors and make recommendations for cooperation. During the trip, these are visited.
Usually the project ends for africon when the customer has successfully made the first deliveries to Africa. As it is sometimes difficult to find staff for Africa, africon provides local support to build up the business, so that africon staff are available locally for 18 to 24 months, until the customer feels that they can manage the African business on their own.
Africon is positioned on the African continent with 20 permanent employees in seven countries with its own local representation. With these seven countries, approximately 30 markets can be covered. There are also countries such as Somalia or Burkina Faso that africon does not cover.
Conclusion Africa strategy - What is the first step if you want to check the potential for your company for Africa?
Marc advises to first create an understanding within the company that Africa can be an exciting continent. As a second step, it would be good to have a person in management who drives the topic forward and dedicates himself to it. Often it is otherwise handled very stepmotherly. Marc strongly recommends that the topic be assigned to someone on the board or the management.
It is also important to obtain initial information about Africa. This can be via africon or via different providers in Germany to prioritize the markets. Africon has developed an index for SMEs where companies can find out about the markets in Africa and get a good overview. After that, the recommendation is to travel to the African continent. Being on the ground and engaging with the culture is essential.