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2025

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How to Penetrate African Markets – Partnership And Freemium Models Make Sense

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Many western companies design their business models based on high profit margins. It pays very well to be differentiated and pursue vertical markets. Horizontal markets are commoditized and a strategy to dominate within it is not always seen as a smart move by analysts. Increasingly firms try to innovate and differentiate in order to carve a niche where they can make hefty margins.

That is very good if your business is domiciled in the saturated Western Europe and U.S markets. There is growth inertia in these two markets with their ultra-competitions and intense regulations. Especially in the Pharmaceutical industry, there seems to be no way to expect growth in these matured economies.

 

So what do you do? You have to expand out of Europe and U.S to Africa, Latin America and Asia. They are the future. They have the population with enormous growth potentials. Despite the downturn in the global economy, they remain promising, especially Asia and Latin America (in this case, Brazil).

 

Having worked in Lagos (Nigeria) as a banker and traveled to many Africa nations, the high margin structure will not always work in Africa, especially in pharmaceutical industry. Many are still very poor; yet, they have the same needs as those in the developed world. From entertainment to drugs, they want to enjoy the western products. They want the new cars for their bad roads; they want the best drugs to manage diabetes; the new video games to relax; and so on. Any sense of high cost, people will abandon the product. It is very common to see people die slowly because they cannot afford drugs for treatable diseases.

 

Arguably, these drugs and cars are available in many parts of Africa. But the problem is that only few can afford them. With no insurance scheme to finance healthcare delivery, patients must pay themselves. What worked in Boston will not work in Botswana because the patient in Boston is being helped by the insurance firm while the one in southern Africa must pay cash. That is the major difference in marketing drugs between U.S and Africa.

 

Another example is in the telecommunication industry. Cellular handsets are very expensive in Africa when compared to the U.S. Understandably, a simple reason is lack of competition since not many firms have gotten into the markets. Another is the obvious fact that none of those gadgets are made in Africa. So, there are associated transportation and handling costs in selling them in Africa.

 

Nonetheless, the truth is that by not using price based model, many MNCs are undermining their potentials in developing, emerging or transitional economies like Africa and Asia. You have to offer what the customers can afford and do away with the cost based strategy. In the U.S, you can ask for any price; in Africa, you need sales volume and lower price makes it happen.

For Pharma industry, they have to rethink their strategies. It is time they cut down the prices of their drugs. Drug prices are patient problems, unlike in U.S where it is the insurance firms’ (for those that have, anyway). Many more people can give you sales volume and you will make more profits than sticking to your present pricing model and serving only less than 5% of the African market.

 

If you focus on pushing volume at good prices, more customers will come in. That alone will help you stay profitable. And they will be better off themselves by using your great products. Drugs, video games, etc must not be overly expensive in Asia and Africa compared to U.S and Western Europe.

 

Change your model and you will be happier doing business in Africa. Cut the prices and use sales volume to help people and improve your bottom line. It could be that simple.

Pandora Media Goes Wall Street – But Google Music, Apple and Microsoft Coming To Spoil The Party

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Pandora radio is the personalized internet radio service that helps you find new music based on your old and current favorites. This is what they have in their about page:

 

With Pandora you can explore this vast trove of music to your heart’s content. Just drop the name of one of your favorite songs, artists or genres into Pandora and let the Music Genome Project go. It will quickly scan its entire world of analyzed music, almost a century of popular recordings – new and old, well known and completely obscure – to find songs with interesting musical similarities to your choice. Then sit back and enjoy as it creates a listening experience full of current and soon-to-be favorite songs for you.

 

This company has followed the path of Linkedin and got listed in the US stock market. The online music service priced its initial public offer  above $16. Tekedia has maintained that while Linkedin is a good buy, Pandora could be over priced because of the competition from Apple, Google and Microsoft that will offer similar services in the near future. The Google Music could cripple this small company.

 

Recall that when Linkedin was $90+, Tekedia gave it a share value of $50. It is around $65 now and we think it will still go down. Our six months target price of Pandora is $8. It is around $13.40 now.

 

 

Apple Settles with Nokia On Patent Infringement in iPhone

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Apple has settled a patent dispute with Nokia. Nokia had demanded royalties for the use of its technologies and intellectual properties in the iPhone. Apple will pay Nokia one off fee to Nokia and henceforth royalties.  The two companies are also embarking on patent-licensing agreement that will solve all pending patent quarrels between them. This will include the countersuits that Apple brought againt Nokia.

 

Meanwhile, HP continues to challenge Oracle to honor its part in a deal to make software for Intel microprocessor for its server business. HP has maintained that Oracle entered into the agreement and must honor it because HP has already lined up customers for the servers.

 

Recently HP and Oracle have escalated legal tussles after HP fired Mr. Mark Hurd and Oracle hired him as a senior executive. Many analysts believe that Oracle reluctance to develop software for this server business of HP is to weaken HP market position. The legal problems continue even as HP continues to lose market capitalization.

 

Kamusi Is The Home of Internet Living Swahili Dictionary – To Produce Dictionaries for African Languages

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Kamusi Project is the  home of the Internet Living Swahili Dictionary. It is a participatory international effort dedicated to the languages of Africa. The mission is to produce dictionaries and other resources for African languages, and to make those resources available everywhere to everyone.

 

The Kamusi Project is the joint product of two non-profit, non-governmental organizations:
• Kamusi Project International, a tax-exempt public charity registered in Switzerland, is responsible for all project activities outside of the United States
• Kamusi Project USA is a 501(c)(3) tax-exempt American public charity, and is responsible for all project activities within the US

 

They have got sections to enjoy in that website, as follows:

  • Our history
  • Our current activities
  • The Internet Living Swahili Dictionary
  • The Edit Engine and other editorial tools
  • Software for Swahili and other African languages
  • Kiswahili Grammar Notes, a free textbook for understanding the Swahili language
  • The Swahili Clock – the only clock that counts time the East African way
  • Frequently Asked Questions

 

Got Tech Talents? Apply for Appfrica Fellowship in Uganda

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If you have great talents in the world of ICT, you can apply to become an Appfrica Fellow.

 

The Appfrica Fellows program is designed in the spirit of GeekCORPS. The idea is to allow dedicated, talented and enthusiastic programmers to come to Uganda to work with a staff of equally talented and motivated local developers to focus on knowledge and skill transfer. Men and Women alike are encouraged to apply.

 

About Appfrica


Appfrica is a small organization completely privately funded. It was originally bootstrapped by founder Jon Gosier, before we joined our partner Kuv Capital in January of 2009. We are a for-profit organization that operates under the philosophy that truly sustainable progress in various regions of Africa will come from less dependency on foreign aid money, and more accountability within local communities. As such, we invest in local entrepreneurs who are interested in creating solutions or products for their communities. This supports local economies and creates truly sustainable jobs. As a Fellow, your contributions will have immediate results in supporting the overall program while also having long-lasting unquantifiable results in the form of knowledge-share.

 

How it Works


Fellows will come to Kampala, Uganda for one month (or longer depending on your desire), and work alongside a staff of talented programmers helping to support projects while also offering mentoring and peer-to-peer advice. To participate, you’ll need to be able to at least pay your own way to Uganda.