Question 1 (Marks: 100)

Read the two cases below and answer the question as indicated.

Case 1: Famous Brands Expansion

The Famous Brands Group listed in 1994 with one brand and a limited supply chain. Today our enterprise consists of, among others, 2 824 restaurants and about 3 968 employees in three geographic regions. Our progress shows how Famous Brands has grown from a modest company into a vertically integrated company whose brands are represented by restaurants worldwide.

Our South African and selected African market brands are supported from South Africa by our Manufacturing, Logistics and Retail operations. To service our markets, we have a fleet of trucks and 10 manufacturing facilities. We build and maintain relationships with all partners in our business model system. We believe that this, and our growing footprints, will help us achieve our vision. Below is our global footprint where you will see some detail of the many restaurants we have in our countries of operation.

*Africa Middle East

Table 1 – Famous brands stores in Africa

Country Number of Stores

Ethiopia 4

Sudan 8

Nigeria 60

Zambia 39

Angola 10

Botswana 41

Namibia 49

South Africa 2 470

Kenya 16

Malawi 12

Zimbabwe 9

Mauritius 16

Mozambique 5

Eswatini 7

Lesotho 4

Adapted from Famous Brands. N.d. Our Footprint. [Online]. Available at https://famousbrands.co.za/about-us/our-footprint/ [Accessed 10 January 2024].

As per above table the group has quite a number of stores in Sub-Saharan Africa including 16 stores in Mauritius.

During 2010, Famous Brands began laying the foundations for an extensive presence on the island of Mauritius. The Mauritian economy is one of the fastest growing in sub-Saharan Africa, with a healthy growth rate per annum. In just three decades, the country has transformed from a mono-crop sugar dominated economy to a services-orientated one. The Mauritian culture is evolving, and more people are eating out. In addition, the government has embarked on a tourism drive aimed at increasing the number of tourists.

Source: Adapted from: Famous Brands. 2010. Famous Brands strengthens foothold in Mauritius. [Online]. Available at: https://famousbrands.co.za/famous-brands-strengthens-foothold-in-mauritius- with-aggressive-store-roll-out/ [Accessed 2 January 2024].

Case 2: Mauritius: Wooing The Wealthy And Adding Value

The configuration of Africa’s investment and wealth landscape is experiencing a drastic shift, with Mauritius emerging as the central disruptor.

Two reports give credence to this fact. The first, “Doing Deals in Sub-Saharan Africa 2023” by KPMG, shows that 14% of C-suite executives would choose Mauritius for an acquisition or investment over the next two years. The small island nation, with a population of 1.3 million, is tied in terms of percentage with Kenya and Ghana, and behind only South Africa, Nigeria and Tanzania.

The “Africa Wealth Report 2023” by Henley & Partners, for its part, asserts that Mauritius is fast becoming the preferred permanent resident for the superwealthy. Of the 1,200 high-net-worth individuals who migrated within Africa over the past decade, a larger number opted for Mauritius than any other country. In the next 10 years, millionaires in Mauritius will exceed 8,500, up from 4,900 currently, Henley & Partners predicts. Becoming the disruptor-in-chief in Africa’s dealmaking, investment and wealth structures is no fluke. The country has been deliberate in seeking to attract the wealthy.

Mauritius is again diversifying, after Covid-19 jolted the economic structure built on tourism, agriculture, trade and financial services. The country has rebounded strongly from the ravages of the pandemic. Last year, it posted 8.5% GDP growth—the fastest in 35 years—after an 11% contraction in 2020.

Part of current growth in Mauritius is being driven by widespread realignments of traditional sectors, with an emphasis on adding value in subsectors such as sugar and fisheries as opposed to raw exports. The country is also expanding its manufacturing sector, which posted 10.4% growth in the 2022-2023 fiscal year.

The country’s efforts to increase the competitiveness of traditional sectors and open new economic frontiers are resonating well with foreign investors. The 2022 Index of Economic Freedom report by the Heritage Foundation ranks Mauritius as the freest and most business- friendly country in Sub-Saharan Africa.

Adapted from: Njiraini, J. 2023. Mauritius: Wooing The Wealthy And Adding Value. [Online]. Available at https://gfmag.com/economics-policy-regulation/mauritius-wooing-the-wealthy-and-adding-value/ [Accessed 2 January 2024].

Assignment Instructions:
The rapid pace of globalisation over the past few decades, coupled with trade liberalisation and growing capitalism across the world, has opened up opportunities for companies to expand beyond their borders easily.

In the context of Famous Brands and Mauritius, complete a comprehensive discussion and analysis as follows:
• Given the above information, one notes that over the past few decades, Famous Brands has made significant strides in expanding its business to various countries and is likely to continue doing so. In this regard, recommend suitable internationalisation business strategy/ies that the company should adopt.
• Mauritius is a small island nation that has made great strides in successfully attracting foreign firms, such as Famous Brands as well as wealthy individuals.
o Critically discuss the role of the Mauritian government in ensuring an investor friendly environment.
o Differentiate between trade liberalisation and protectionism and comment on this in regard to Mauritius. Justify whether adopting a policy of trade openness has been beneficial to the country or not.
o Analyse the key market dynamics of Mauritius that have aided trade liberalisation in the country.
Essay Guidelines:
• The length of your essay should be 2500 – 3000 words (excluding in-text references and reference list).
• In order to compile this assignment successfully, you are required to read widely. You need to consult various national and international publications (not older than five years, unless seminal sources).
• Support your discussion with relevant theoretical and practical examples that relate to the cases provided. In addition, consider the industry or context being analysed and use examples from industry. Ensure that these examples are relevant to the discussion and used within the right context.

Answers to Above Questions on International Business

Answer 1: The expansion of business activities into the international market provides significant opportunity and also poses challenges as well. In the given case scenario of Famous brand, expansion of its business activities in the market of Mauritius requires the company to decide appropriate market entry strategy which could be to establish partnership with local franchise in Mauritius. It also needs to adapt strategy in relation to brand adaptation, quality and consistency, marketing and brand awareness, and in relation to continuous learning to achieve further improvement.