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COMPANIES SUCCEEDING IN EMERGING MARKETS

P r o f e s s o r R . S i m e o n S F S U

S U N S H I NE G RO U P L I MI TE D

A C h i n e s e C o m p a n y i n T a n z a n i a

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Tanzania  South-Eastern Sub-Saharan country in

Africa

 Unitary Presidential/Constitutional

Socialist Republic

 Colony in the 19th century of Germany

and Britain until independence and

formation in 1964

 Heavily mountainous and forested

country bordered by several large lakes

 Over 100 spoken languages with Swahili

and English being dominant

 Majority of population either Christian or

Muslim

Economic Overview  Population approx.: 55.6 million

 Approx. 66% of pop. Live below the poverty line of

$1.25 per day

 GDP: $56.7 Billion

 Averages $5.5 billion in exports and $11.7 billion in

imports, with China being a major partner in both

 Poor integration with Global Markets

 Economy heavily based on agriculture with a steadily

growing industrial sector

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SUNSHINE GROUP LIMITED C o r e V a l u e s :

 Our Mission- Is to complete customer satisfaction. To achieve this goal,

quality, honesty, reliability, ethical values and improvement are our

guidelines in the business.

 Our Vision- Is to supply low cost and value added services while

supplying steel and other construction materials of international

standards to our customers in Tanzania.

 Our Value- Sunshine has always been values-driven. These values

continue to direct the growth and business of Sunshine Group

companies.

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SUNSHINE GROUP LIMITED

G e n e r a l B a c k g r o u n d

Sunshine is a Chinese owned multi-sectoral company

established in Dar Es Salaam, Tanzania in 2012. Its original

main business scope included agricultural products trading,

meat and livestock trading, construction material trading,

logistics, and manufacturing. After becoming established,

company owners quickly realized the potential of Tanzania’s

emerging market status in a vast number of different

sectors and expanded into several other areas of the

Tanzanian economy as well.

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Subsidiaries of Sunshine Group Limited:

 Sun Shine Mining

 Sun Shine Transportation

 Sun Shine Gypsum

 Sun Shine Agriculture

 China Pesticide

 Bee Safari

 Kakakuona Clearing and Forwarding

v

 Sun Shine Card High Technology

 Sun Trust

 Sun Shine Auto Assembly

 Sun Shine Industrial

 Ocean Link International

 Sun Shine International Supply

Chain

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WHY TANZANIA ? C a p t u r i n g E m e r g i n g M a r k e t s

When listing the various subsidiaries, it is easy to see why the owners of

Sunshine chose to do business in Tanzania. Having gained independence

from European colonialism relatively recently, Tanzania’s self-governed

economy was still in early stages. From 2009-2011 Tanzania’s economy

grew at 3.5% a year. Agriculture was and is the biggest economic sector in

the country. Being experienced operators in this area, Sunshine Group

saw an opportunity to bring organization to the market, capitalize on its

growth, and profit from it.

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MODE OF ENTRY W h o l l y O w n e d S u b s i d i a r y  Sunshine came in as a wholly-owned subsidiary in

order to have full control over operations

 Sunshine Group Limited is the parent company of

the 13 subsidiaries operating in country

 Once main subsidiaries established (agr., livestock,

and construction) conducted careful and detailed

market research to find sectors in which to expand

 Expanded into existing but weak areas with

great potential, such as tourism, mining, and

card technology

24.5

22.2

3.3

17.5

12.5

3.5

4.3

12.2

Economic Sectors as Percent of Tanzanian GDP

Agriculture Industry Mining Tourism Banking

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BEYOND ENTRY E x p a n s i o n

 Once Sunshine Groups core subsidiaries were

established, executives conducted careful research to

see where else they could succeed. They targeted

existing industries in order to ease barriers to entry and

take advantage of businesses that have been proven to

work in Tanzania, eliminating risk created by cultural

differences.

 Further expanded by establishing necessary related

businesses, such as transportation and pesticides to aid

existing subsidiaries and lower costs.

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ADAPTATION STRATEGY A n E a s y F i t

 More than half of employed Tanzanians work in the

agricultural sector

 Labor force was already there and familiar

with the job

 Rather than bring something new, Sunshine

capitalized on expanding the standard Tanzanian

crops and livestock

 Most sectors Sunshine operates in were, prior to

their entry, very weak, but existent and traditional

within Tanzania, such as mining, tourism, and

transportation, creating familiarity= easy adaption

67%

6%

27%

Employment by Occupation in Tanzania

Agriculture Industry Services

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Agricultural Trading:

WHERE SUNSHINE SUCCEEDS

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Livestock and Meat Trading:

Why?

 Similar to agriculture, livestock farming and consumption of meat is prevalent in Tanzania

 Sunshine Group sets standards on their livestock and meat products, which is relatively new to Tanzania and appealing to the population

 Capable of large scale operation which outcompetes smaller local traders

Why?

 Agriculture is the dominant sector of the Tanzanian economy

 Sunshine has managed to organize a substantial portion of the market under their subsidiary

 Wide Advertising  Most agricultural trading in

Tanzania is done at local levels

 Active in agricultural trading in external markets as well

Transportation:

WHERE SUNSHINE SUCCEEDS

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Tourism: Why?

 Tourism, especially the Safari is popular in Tanzania

 Natural beauty and culture make it an appealing tourist destination and will continue too

 Sunshine subsidiary Bee Safari’s is seen by tourists as more reputable than competing local companies, gaining them more business

 Advertising outside of Tanzania

Why?

 Slowly monopolizing the industrial transportation industry

 Prior to Sunshine Tanzania had few commercial supply transport companies, allowing Sunshine Group to grab much of the market share

 Sunshine Transportation is used by other Sunshine subsidiaries

I S S U E S O F S U S T A I N A B I L I T Y

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There are several negative factors that Sunshine Group faces that could threaten sustainability of the business:

• Agricultural business is highly dependent on weather

• Instability/Corruption of Tanzanian Government

• Rising competition • Local competitors with local/public

support are becoming stronger

• Shrinking natural resources

• Uncertainty of long-term market performance

HOW TO OVERCOME THE NEGATIVES

 Excess agricultural supplies can be stockpiled for use

during seasons of low production

 Lobby for bills geared toward economic protections and

regulations related to government interaction

 Acquire promising startups to maintain market share

and thin out potential competitors

 Focus on and build up non-seasonal subsidiaries such as

Sun Shine Transportation and Sun Shine Auto Assembly

 Continue to diversify to lessen dependence on any one

business

C o r p o r a t e S t r a t e g y

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FUTURE OUTLOOK FOR SUNSHINE GROUP LIMITED

IN TANZANIA

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Future Plans:  Expand operations to Zambia and

the Democratic Republic of Congo where competition is low and resources abundant

 Invest $10 million for factory in Dodoma, TZ

 Promote Chinese language schools in TZ to help globalize business

 Produce chemicals needed by Sunshine’s China Pesticide subsidiary in-country to lower costs (they are currently imported)

 At present Sunshine Group is profitable and succeeding well in the majority of its business interest.

 They have support in Tanzania because they offer high quality products and services, pay a fair wage, and provide jobs for local Tanzanians.

 This company, along with the other 200 Chinese firms in Tanzania has increased friendly relations between the two countries.

 Overall, the future looks promising and profitable for Sunshine, who hopes to contribute to solidifying the economy and making Tanzania a global player.

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Sunshine Group Limited A Chinese company operating in the emerging market of Tanzania. An example of how to capitalize and succeed.

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THE END

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1. https://www.howwemadeitinafrica.com/seven-chinese-companies- made-africa/59407/

2. http://www.sunshinegroupltd.co.tz/index.php/company#

3. https://en.wikipedia.org/wiki/Tanzania 4. http://africa.chinadaily.com.cn/a/201805/07/WS5aefeed1a3105cdc

f651c66c.html

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