Market Attractiveness Evaluation of Sub-Saharan Africa, Applying Swot Analysis and Ahp Methods

ABSTRACTPurpose: Market attractiveness of a nation is primarily driven by the macro factors Politics, Economy, Social and Technology (PEST). Generally, traditional market selection analysis emphasizes on purely macroeconomic and political factors which perceives the market attractiveness to be related only to these two sets of factors. At the outset the analysis fails to account for social/cultural dynamism which has great impact on future potential market attractiveness and the entire nation's economy. Therefore, the objective of this research is to expand the tradition model of economic & financial and political with social/ cultural issues, technology, & infrastructure and present a model which goes beyond the traditional PEST analysis to PESTI to evaluate the potential market attractiveness of 44 Sub-Saharan countries while prioritizing on social cultural issues.Design/Methodology/approach: First, through literature review the author identifies the strengths, weaknesses opportunities and threats (SWOT) of the African continent. Secondly the author applies Analytical Hierarchy Process model to solve the complex multi-criteria decisions of evaluating the market attractiveness of a country with respect to global macro environment indicators. Statistical data from various credible sources were adopted for the weights calculation in AHP sub criteria level instead of the commonly applied intensity rating. Absolute measurement criteria are weighted independently of the evaluation of the alternative.Findings: The resulting priorities revealed attractive market growth potential and sourcing opportunities in Mauritius that, might otherwise have been overlooked. Mauritius have integrated social cultural and politics with economic factors making it the best option among the 44 evaluated Sub-Saharan countries, various regional trading blocs are also a possibility. The analysis also helped us to gain a better understanding of the trade-offs in the decision making process and a clearer understanding of the effectiveness of AHP absolute measurements in multi criteria decision problem.Research Limitations/ Implications: Follow up studies with more sub-criteria will contribute to the development of a better assessment model for the market attractiveness. The choice of criteria that are considered can vary depending upon the researcher or the industiy which the businesses want to engage in therefore the model depends on personal preferences.Practical implication: A useful tool or road map for Multinational National Enterprises searching for new markets in developing countries.Originality value: The research develops the body of knowledge on market attractiveness by addressing the shortcomings of the traditional Macro analysis (PEST) and expands the three prior studies on developing countries market potential analysis. In addition, the author adopted normalized statistical data on the sub criteria instead of the commonly applied intensity rating.Paper Type: Research PaperKey words: Globalization, Market attractiveness, Sub-Saharan Africa, Analytical Hierarchy Process, SWOT, criteria, decision alternativesINTRODUCTIONCurrently, convincing argument can be made that globalization has led to advancement in technologies and this advancement has ushered a new world without boundaries. Countries are currently interconnected by flows of knowledge and information through computers, TVs, and satellites and also the web and the internet have revolutionized and hastened how business is conducted globally. (Bhandari & Heshmati, 2005). Hence, ideas exchange has increased tremendously thus altering consumer perception and preferences while boosting countries' economies, trade, technologies and improved health care. However, understanding the global business environment and its complexities is challenging especially when, each nation's market environment is composed of unique cultural, political, legal and economic characteristics that defines or dictates how business is conducted in the nation's boundaries; this set of national characteristics may differ greatly from nation to nation. …