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Analysis Of ARTS Versus Positivo BGH Rwanda

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Question:

Discuss about the Analysis of ARTS Versus Positivo BGH Rwanda.
 
 

Answer:

Introduction

This paper provides a quantitative assessment for the creation of Alpha Response Technology Solution (ARTS), a Taiwanese Technology firm. The quantitative assessment is meant to provide critical data that would enable the company to break into the Rwandese market and be successful. Alpha Response Technology Solution (ARTS) intend to compete against Positivo BGH, accompany which is already established in the country of Rwanda. The main product solution for ARTS is GT80S Titan SLI 18.4in Core i7 Notebook. This kind of Notebook is specifically built for use in the analysis of Western Business Market. It retails at 4999 or 3792.37(82 Rwandese francs). ARTS’s Chief Executive Officer happens to have shared the same classroom with the Chief Executive Officer of Positivo BGH during their time in University. The two officers also share an emotional rivalry regarding ownership of CPU designs. The CEO OF ARTS claims that his CPU designs were copied by his former university classmate who is currently the CEO of Positivo BGH. The claimed computer design was used by Positivo BGH Company when it made its first entrance into the Rwandese Computer market.

 

PESTEL analysis with county information related to Rwanda

Rwanda is a landlocked country located in the eastern part of Africa. It is bordered by four countries. There is DRC on its western side, Tanzania to the East; Uganda is located in its northern part whole Burundi is located on its south. The nation has a total population of about 11.64 million. Out of the population, 48% are males while 52% are females. The nation has made huge strides in economic development with the support that it has obtained from the World Bank and IMF. As a result, it has been able to enjoy a stable economic growth over the last 10 years.

Description of the incentives to enter the Rwandan Special Economic Zone

Alpha Response Technology Solution (ARTS) intends to introduce Notebook computers into the Rwandese market. The brand of the Notebook will be is GT80S Titan SLI 18.4in Core i7. The notebooks would retail at 4999 or 3792.37(82 Rwandese francs).
 The notebooks would have the following specifications;

Intel i7 6920HQ CPU, NVIDIA GeForce GTX980M graphics in SLI, 1x HDMI, 32GB DDR4 memory, Super Raid 4 512GB solid state drive, 1TB hard drive, 1x USB Super Port Type-C, 18.4in Full HD anti-glare display, Windows 10, 5x USB 3.0, Blu-ray writer, Gigabit LAN, Dynio 7.1io, 1x Mini DisplayPort,   Bluetooth 4.2.

 

Explanation of current foreign investment in Rwanda

There is currently a laptop manufacturing company in Rwanda. The company is known as Positivo BGH and it originates from Argentina. The company has so far produced many laptops in the tiny country. The aim of the company when it first entered the market was to supply the government of Rwanda with digital devices (Asaba , 2016, p. 3). It was expected that production of the laptops locally would greatly reduce the shortage of digital gadgets which has been experienced in most of the learning and teaching institutions in the country. Many schools had complained of the shortage and there was a need for the improvement of the teaching of ICT programs in the learning institutions. Positivo BGH led by the CEO Mr. Juan Ignacio Ponelli started its operations in the country in July 2014 (Eleni & Parke, 2016, p. 1). As at late 2015, the company had assembled a total of 7,800 computer units. According to the Chief Executive Officer of Positivo BGH, he believes that his company has brought one of the best technology to the African country of Rwanda. The manufacturing firm for Positivo BGH is located in Special Economic Zones (Positivo BGH, 2017, p. 9). The area is geographically and physically secured. There is a single body that administers the entire area. The government has supplied some incentives in these areas that have promoted the work of the foreign investors. There is a simplified and liberal business economic regulation in the area

Explanation of ARTS' motivation to enter Rwanda

There are a number of factors that have motivated ARTS to enter the Rwandese market. They include;

  1. Political stability

The country is very stable politically. The Rwandese people learned a lot of lessons from the 1994 genocide and they don’t wish to be dragged into such a situation again. They have been very tolerant and peaceful since the genocide occurred. In the country’s general election of 2013, female candidates won 64% of the total contested seats (Balakrishnan, 2016, p. 3). That was evidence that the country’s democracy has tremendously grown.

  1. Good and steady economic growth

The country has a set vision which they are looking towards. It is entitled as vision 2020. There are goals that the people of Rwanda would like to achieve by the year, 2020 (Darid , 2016, p. 5). The government of Rwanda intends to transform the economy of the country from agriculture based to an economy that is knowledge-based. The country also hopes that it would be able to fall under middle-income country by then (Kanamugire & Afadhali, 2016, p. 12). The government has therefore put in place economic development strategies. There are also measures that have been put in place to ensure that poverty is eradicated in the country. Since 1994, the Rwandese government has focused on economic transformation, youth empowerment, productivity and rural development. The country managed to meet the majority of the 2015 and 2016 Millennium Development Goals that it had set (Balakrishnan, 2016, p. 3). There was a huge improvement in the standards of living among the people of Rwanda. There was a drop in the mortality rate. The government of Rwanda has also put a lot of focus on development policies. The news of the introduction of ARTS into the Rwandese market would, therefore, be received with a lot of joy (Eleni & Parke, 2016, p. 13).

  • The rivalry between the two companies

There is a bitter rivalry between Positivo BGH and ARTS. The CEO of the two companies was once classmates in the university. In addition, The Chief Executive Officer of ARTS Claims that Positivo BGH copied his CPU designs. As a result, he is willing to enter the same market with Positivo BGH and compete against it. The CEO of ARTS would be willing to outdo his rival company, Positivo BGH so as to prove that he was the mastermind behind the design of the CPU of the notebook that was being produced by Positivo BGH (Positivo BGH, 2017, p. 64).

 

5 Forces analysis for ARTS

5 FORCES

Analysis

Buyer power

Power buyer refers to the possibility of customers shifting from the products of Positivo BGH to those of ARTS. How possible will ARTS convince the customers so that they can shift allegiance? There is a number method that can be used by ARTS to win Rwandese customers. The first method is through the production of better products than those of Positivo BGH. The company must also strengthen their service delivery. The second method is through convincing influential customers that their products are the best ( Miller, et al., 2011, p. 23). Influential customer are able to convince the rest of the customers

Supplier power

In this case, ART company has to keenly assess the possibility that suppliers of items used in the manufacturing process can raise the prices of the items. If there are few suppliers, then they are likely to raise prices at will. However, if the suppliers are many then they would not be able to raise easily. Suppliers are more powerful when they are few than when they are many ( Miller, et al., 2011, p. 32).

Competitive rivalry

It is important for any business company to note the number of its competitors. They should also be aware of the competitor’s capacity. A company would have very little power in the market if I am faced with many competitors that are offering similar products. Buyers and suppliers would have many alternatives in case they are not satisfied by the products of the company. However, if there is no other company that is capable of matching you in the market then you would have great control. As a result, ARTS would only face one competitor in the market that is PositivoBGH. If ARTS is capable of producing products that exceed those of Positivo BGH, Then it would have full control of the Rwandese market ( Miller, et al., 2011, p. 39).

 

 

Substitution threat

 Substitution comes about when people discover a different way of carrying out a duty that you do. Your power would hence be weakened. For example, if ARTS come into the market and produces expensive notebooks which are used to perform some duties, then the people may resort to a manual way of carrying out the duties. Substitution may come about very easily. Every business company is afraid of substitution (Asaba , 2016, p. 43).

Threat from new entry into the market

The possibility of other players entering the market is likely to affect the power of other players which are already in the market. A company that has little protection in regard to its technology is likely to lose its position with the arrival of other players. Positivo BGH is likely to be threatened by the arrival of ARTS since it had copied its CPU design from the CEO of ARTS (Mindtools, 2016, p. 27). ARTS, therefore, has the capacity to improve on the design.

 

 Comparison of ARTS primary product line with that of Positivo BGH

ARTS

Positivo BGH

ARTS produces technology design for its products

Copied its technology design from the CEO of ARTS.

ARTS intends to enter the Rwandese market so that it can be able to produce Notebooks

Positivo BGH has already started manufacturing computers in the African country of Rwanda

Likely return for producing and releasing Titan for sale to the Rwanda domestic market versus Western market

Rwanda market

Western market

There is a high return for realizing titan since there are few competitors

There is low return for the release of titan because there are many competitors

There would be low return for producing titan because most of the raw materials would have to be imported. The importation process would hence be expensive. Skilled labour would also need to be imported.

There would be high return for producing titan since there would be readily available raw materials and skilled labour.

Recommendation based on the 5 Forces analysis for ARTS

ARTS must put in place strategies that it would use to win customer in Rwanda. At the moment all the customers buy their computers and computer products from Positivo BGH. ARTS and Positivo BGH would be the only companies in Rwanda. As a result, they would be able to dictate the market since they are few. They would have full control of the market. However, they should be aware that future entrance of any other company into the market would reduce their control power in the market. ARTS must, therefore, ensure high quality of its products in order to remain competitive in the market even when another company enters the market.

 

References

Miller, F. P., Vandome, A. F. & McBrewster, J., 2011. Porter Five Forces Analysis, s.l.: VDM Publishing.

Asaba , S., 2016. Tech News, Rwanda, s.l.: New Times Rwanda.

Balakrishnan, K., 2016. Rwanda. Washington: World Bank.

Darid , F., 2016. Rwanda Foreign Direct Investment, s.l.: Trading economics.

Eleni , G. & Parke, P., 2016. Why this South American Company is making laptops in Rwanda, s.l.: CNN.

Kanamugire, J. & Afadhali, J. P., 2016. Positivo now produces new computers in Rwanda, s.l.: The East African.

Mindtools, 2016. Porter’s Five Force, s.l.: Mindtools.

Positivo BGH, 2017. Create your own experience, s.l.: Positivo BGH.

OR

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