It seems the “new China” is where the old China is focused. Africa is the new emerging economy and China appears to have an early foothold in many markets that American companies would like to tap. Some big names – Wal-Mart, Harley-Davidson, and Google – all want a piece of the action. Apparently, similarities between African regimes and the Chinese government make it easier to strike deals. Still, U.S. companies are not locked out. Caterpillar has a new order. Harley-Davidson had a successful showing at African Bike Week. Cummins is developing its own Africa operations.
- What are the factors driving China’s competitive advantage and limiting it for U.S. companies in Africa?
- Discuss the strategic intent of Africa for the companies mentioned in the article.
- Africa appears as what level of strategy for companies like Cummins and Harley-Davidson?
- Using Porter’s Five Forces Model, how would you rate the attractiveness of Africa right now for Cummins?
SOURCE: J. R. Hagerty & W. Connors, “U.S. Companies Race to Catch Up in Africa,” Wall Street Journal (Retrievable online at http://online.wsj.com/article/SB10001424052748703841904576257233342891732.html)