Innovis Telecom: Entrepreneurial Internationalization – Case Solution

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Innovis Telecom: Entrepreneurial Internationalization Case Answers

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Which country should Innovis Telecom expand to next? Ghana, Philippines, or Tanzania?

In 2015, the financial targets of Innovis Telecom were to maintain a revenue growth rate of 30% over the five years to come, have a profit before taxes above 20% by 2017, and sign at least one managed service deal generating more than 10 million dollars revenues every year and raise 5 million dollars in 2016.

Innovis Telecom has the financial capability to enter only one new market between Ghana, Tanzania, and the Philippines. Which one should it expand to in order to meet its targets?

Setting up a contract in Ghana would be both costly and short in terms of timing. The project would require building a team of considerable size very quickly by hiring local people. However, the local human capital available lacks experience in Ghana, so Innovis would need to deploy important resources to get the formation done in so little time.

All in all, this would induce high costs. Inflation is also worrying as it hits 16%. Besides, the contract is still in an early stage of negotiation.

Knowing that it usually takes between 4 and 6 weeks to have a good idea of the revenues that would be agreed in the contract, that there are only two weeks left until the Innovis board meets, and that the board has never heard about this possible deal before, the project looks too premature to be recommended.

It is more complex to give a clear assessment of the best project between Tanzania and the Philippines, as the first one ends up being a “safe option” compared to the second one, which has significant potential.

Tanzania has the undeniable advantage of benefitting from a border with Kenya and Uganda, countries where Innovis Telecom operates. Therefore, such a location would ease doing business.

Moreover, Innovis is already registered as a company in Tanzania, which would save costs. On the one, there is a workforce available there. On the other hand, the fact that the work ethic is not as strict as in India could be detrimental to the perceived view granted to Innovis by the shareholders.

Regarding the competitive rivalry, although the locally based competitors have the advantage of being well-rooted in the market and knowing the local conditions, Innovis