Airtel mCommerce Services Limited is a system for realizing money transfers that dominates the African market, and that made efforts to succeed in the market of India. The system is based on the principles of mobile commerce, and those subscribers who use Airtel can make transfers and monetary transactions in order to pay for services or exchange money between bank and Airtel accounts (Ranjan & Upadhyay, 2015).
These transfer services are available to users with the help of mobile technologies. The purpose of this case study analysis is to discuss differences in operating in the African and Indian markets that influence Airtel’s success and propose a strategy that is appropriate for entering the market of India.
Comparison of Socio-Cultural and Economic Aspects in India and Africa
In order to analyze the difference in outcomes for Airtel in African countries and India, it is important to focus on the comparison of socio-cultural and economic factors. The reason is that these factors determine the potential customers’ attitudes to using Airtel services. Emerging markets in African countries and India develop according to certain rules, and when a company focuses on the multi-regional expansion, it is necessary to take these features into account (Akbar, 2016a).
It is possible to identify such similarities between India and Africa as the focus on hierarchal relations, the domination of the low-middle-income population, and the rising interest in innovative technologies (Mudida & Lago, 2015; Ranjan & Upadhyay, 2015). However, in spite of the fact that both Africa and India are discussed as attractive to develop electronic commerce and other market sectors based on innovations, there are still important differences in social and economic situations, as well as cultures (Akbar, 2016c).
In African countries, the impact of the banking system is lower than it is in India. The centralization related to governance and banking operations is higher in India (Vollmer, 2013). The impact of restrictions on banking operations and mobile banking is also observed in this country. However, it is important to state that, in comparison to African countries, the population of India is mostly unbanked, many people do not use mobile devices, and they prefer using cash for their operations (Ranjan & Upadhyay, 2015).
Furthermore, the level of literacy in India is lower than in African countries, and the population can be discussed as poorer. In addition, in African countries, the market is open and less regulated (Asongu, 2014). There are possibilities for collaborations with the telecom industry and academic institutions, and this fact accentuates the level of literacy and openness to innovations in African countries (Ranjan & Upadhyay, 2015). In India, more attention is paid to organizations, and Indians do not discuss themselves as prepared for using mobile-based transfers.
Strategy to Prepare for India
The strategy developed for emerging markets should demonstrate the potential for the further growth. It should be effective in order to win the competitive advantage in the market and address the customers’ needs (Akbar, 2016b). Thus, in order to make a strategy effective in the context of emerging markets in the Asian region, it is necessary to concentrate on the needs of the dominating population in the concrete country (Akbar, 2016d).
In states where the majority of the population is poor, people have no opportunities to make individual choices, and they rely on the centralized power and authority of banks, for instance (Akbar, 2016e). In India, the consumer-oriented approach that is appropriate for African countries cannot be effective, and the focus should be on using the poor people of India as the target population in order to make the market active.
From this perspective, the strategy proposed by Airtel mCommerce Services Limited for India should be based on the differentiation focus strategy in order to guarantee that the company aims at making services available, attractive, and non-expensive for potential customers in India (Zhang, Zhu, & Liu, 2012). However, there can be certain barriers to realizing this strategy because the Indian market has potential competitors, and Airtel’s goal is to accentuate the advantages of the proposed services in a manner attractive to potential customers. The alternative strategy depending on differences in costs is not appropriate for this case because costs of money transfers are comparably equal in the market.
Recommendations for Airtel to Execute the Strategy
The strategy execution process can be complicated with reference to the market realities. It is important to concentrate on the specifics of developing business in India and focus on the economic potential of developing mobile-based money transfers in this context. Strategies that are effective in certain countries of the region cannot be replicated in other countries (Gupta & Bhaskar, 2016).
Therefore, the first step of the strategy execution process is the improvement of relationships with the authorities in India to overcome the problem of centralization in the country. It is important to cope with the issue of limitations for mobile banking and money transfer operations. The expected outcome of this step is the solution to the problem of limits for transferred money.
The problem is in the fact that the Indian population does not discuss Airtel’s services as useful because they can easily use mobile banking or refer to traditional cash operations. Furthermore, the potential customers do not regard mobile-based money transfers as secure, and more attention should be paid to improving the safety of operations, as well as to communicating this message (Bhatti, 2015). Therefore, the second step is the development of local partnerships, as it was in African countries. The purpose is to sign contracts with information technology players and merchants in order to guarantee the expansion of the provided services and the increased security for users. The outcomes will be associated with the increased interest of customers in using Airtel Money. The number of subscribers will grow.
The next step is the development of the user-friendly technology. In order to make the services attractive to customers, it is necessary to invest in developing applications for mobile phones that are simple. The design of this application should be easy to understand in order to address even illiterate people who use mobile phones. This step requires additional resources and investments because Airtel can experience difficulties with improving the technology (Ranjan & Upadhyay, 2015). The expected outcome is the expansion of partnerships, and the increased number of subscribers to use their mobile phones for making transfers.
Conclusion
Airtel mCommerce Services Limited needs to address the population in India and make money transfer services more attractive than the use of traditional banking or mobile banking. The analysis of the case indicates that people in India have particular biases regarding the use of mobile technologies for financial operations, the low level of literacy is also a barrier, and a specific strategy should be used in order to propose money transfer services in this region. Airtel should work to overcome restrictions on financial operations and guarantee the easy access to the proposed services while developing mobile phone applications.
References
Akbar, Y. H. (2016a). Topic 2: Survey of emerging markets [PowerPoint slides]. Dubai, UAE: Hult International Business School.
Akbar, Y. H. (2016b). Topic 3: Institutional voids, how to overcome and leverage them [PowerPoint slides]. Dubai, UAE: Hult International Business School.
Akbar, Y. H. (2016c). Topic 4: Developing business strategies in emerging markets [PowerPoint slides]. Dubai, UAE: Hult International Business School.
Akbar, Y. H. (2016d). Topic 5: The emerging market multinationals [PowerPoint slides]. Dubai, UAE: Hult International Business School.
Akbar, Y. H. (2016e). Topic 6: Bottom of the pyramid [PowerPoint slides]. Dubai, UAE: Hult International Business School.
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