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Luke Penne Ngoan Phan

Madagascar Team Report. Juliette Rakotomalala Alex Scalera. Luke Penne Ngoan Phan. Product Industry & Political Environment. Juliette Rakotomalala. Geography.

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Luke Penne Ngoan Phan

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  1. Madagascar Team Report Juliette Rakotomalala Alex Scalera Luke Penne Ngoan Phan

  2. Product Industry & Political Environment Juliette Rakotomalala

  3. Geography (Central Intelligence Agency, C. Michael Hogan, U.S. State Department, and World Wildfire Fund, 2012), (Interactive Map, 2012), (Madagascar, n.d.), (“Madagascar,” 2013), (Undefined, 2008)

  4. Product and Industry • Unique natural environment filled with a wide variety of resources • Located on the crossroads between Asia and Africa • Competitive labor force • Chromite mining and exporting • Chromite is a key industrial mineral • extremely high melting point.

  5. Political Issues • Coup d’état 2009 • How should the capital be runned? How should the country be runned? Marc Ravalomanana vs. Andry Rajoelina (Cook & Ploch, 2012)

  6. Political Concerns • Upholding of contracts and agreements • Unlawful cancelation • Takeover • Negative affects and threat to safety in light of another rise of political disagreement • Damage resources and facilities • Inhibit operations and loss of profits • Safety

  7. Solutions • United States • One of the most powerful countries in the world • United Nations • African Union • South African Union • IMF • World Bank • World Trade Organization • Rescue departments and resources, and rules and regulations (U.S. Relations with Madagascar, 2012)

  8. Mode of Entry & Economic Elements Luke Penne

  9. Mode of Entry • Currently KraomitaMalagasy, a state-owned chromite mining and exporting enterprise, is the only chromite exporting operation in Madagascar • Exports 100,000+ tons of chromite per year • 380 employees • Our company will be pursuing a joint venture strategy, pairing our financial resources with their current expertise to expand operations • Benefit from economies of scale • Shorter learning curve • Compete globally on a cost basis • Investment risk, Political stability risk, Personality risk

  10. Economic Justification • Bemanevika • Well maintained railway connecting to large coastal port • Local business relationships • Overcome language barriers • Join local free trade organizations to benefit from lower port fees • Customers • ArcelorMittal S.A. is the world’s largest steel producer • Boasteel Group Corporation (China) • POSCO (S. Korea and California) (B2B Metal, 2013)

  11. Economic-Commercial Environment • GDP: 0.06% of that in the US in 2012 • 6%-10% inflation per annum • Negative current account balance • Oil, Minerals, Wool • Labor Force in 2010: 10,184,339 • Internet users in 2011: 1.9% of population • 36% Tax rate on business profits (World Bank Group, 2013)

  12. Economic-Commercial Environment • Home to a well-developed labor force • The chief public university is located in the capital, Antananarivo • The training specializes in mining, forestry and textile production, Madagascar's three main industries • Diverse array of industrial facilities • Three chrome mines, three hydro power stations, two lighthouses, one nickel mine, one simple oil refinery and ten water storage dams (Mbendi Information Services, 2013)

  13. Economic-Commercial Environment • Marketing and consulting are relatively new industries in Madagascar • Newspapers, billboards, TV, radio • Some market research and technological advising firms • Business associations that encourage trade and enterprise • Bring American and Malagasy business people together • Host "Made in Madagascar" trade shows • Reduce customs intervention • Protect legal property rights • Offer documentation assistance to new businesses (US Commercial Service, 2011)

  14. Madagascar’s Infrastructure • Poor conditions have caused financial difficulties • 49,827 km of roads, of which just 5,780 km are paved • 211 airfields, of which only 50% are useable • Sparse telecommunications system • 3 in 1,000 residents own a telephone • 60 percent of telephones are in the capital • 1.9% of population are Internet users • 15 major ports along the coast fare much better than other infrastructure (Wild Madagascar, 2013)

  15. Travel Considerations Alex Scalera

  16. Health and Safety Matters • Get your shots • Malaria, Tuberculosis, Rabies • Never drink water unless its been properly treated • Have medical insurance • Bring a medical kit (Madagascar Health and Safety, 2013)

  17. Food • French in style • Not very spicy • National dish: Romaza • Beef with mixed greens sauteed with ginger, tomato, and onion • Lots of rice, fish, fruit and vegetables • Three Horses Beer; brewed in Antsirabe • Very strong rum (Madagascar Food, 2013)

  18. Entertainment and Sight-seeing Opportunities • Montagne d'Abre; National Park • Queens Palace • Volcanoes and Waterfalls • Diving and Surfing • Explore Mountains (Madagascar Things to Do and See, 2013)

  19. Acceptable vs. Unacceptable Behavior • Respect Elders • Shoulders to knees should always be covered • Respect wildlife • Littering • Disturbing Nature • Disrespecting Elders (Madagascar Safe and Responsible Travel, 2013)

  20. In-Country Travel • Poor roads • Taxi's; 15 seat vans • Taxi stations located on the outskirts of town and airports • Bike carts • Best way to travel: Walk (Madagascar Country Specific Information, 2013)

  21. Shopping and Souvenirs • Local Markets • Cloth Fabric • Jewelry • Woodworks (Shopping in Madagascar, 2013)

  22. Visa and Other Entry Requirements • Visa • Passport; One blank page • 6 months validity • Visa fees; May be paid in U.S • Must have shots • Fly into Antananarivo (Madagascar Country Specific Information, 2013)

  23. Travel Concerns • Flooding can halt the mining process during rainy seasons • Hours of operation will vary based on the season • Mandatory vaccines and health insurance for all employees

  24. Socio- Cultural Environment Ngoan Phan

  25. Forms of Communication • Languages: Malagasy, French, English • Variations of Malagasy Dialects based on where you are from • Style of communication: indirectly and inexplicitly • Style of business negotiation: bargaining • Business corruption: in 2012, ranked 118th out of 175 countries surveyed (“Madagascar-Communication style.,” n.d.; “Madagascar-Negotiation.,” n.d.; “Doing Business in Madagascar: 2011,” 2011)

  26. Religions (“Religion in Madagascar,” n.d.)

  27. Ethnic Groups • The largest and most dominant is Merina • The second largest is the Betsimisaraka (The Inseparable Multitude) • The third most numerous is the Betsileo (The Invincible Multitude) (“Society and Culture of Madagascar,” n.d.)

  28. Ethnic Groups • Other important peoples • Tsimihety (Those Who Do Not Cut Their Hair) • Sakalava (People of the Long Valley) • Antandroy (People of the Thorn Bush) • Tanala (People of the Forest), • Antaimoro (People of the Banks) • Bara (a name of uncertain origin) (“Society and Culture of Madagascar,” n.d.)

  29. Ethnic Groups • Smaller groups • Antanosy (People of the Island) • Antaifasy (People of the Sand) • Sihanaka (People of the Lake) • Antakarana (People of the Rocks) • Betanimena (People of the Red Soil), who are now largely absorbed by the Merina • Bezanozano (Those with Many-Braided Hair) • Mahafaly (Those Who Make Taboos). (“Society and Culture of Madagascar,” n.d.)

  30. Social, Economic, Political Elites • The president, AndryNirinaRajoelina • The prime minister who is appointed by the president, is Jean Omer Beridiky • The richest man is Ravalomanana (“Two Men, One Island,” n.d.)

  31. Socio-Cultural Concerns • Interest in working with American businesses • English is widely used in the Malagasy business world • Partnering with Independent Anti-Corruption Bureau • Help us understand the native indirect communication style “Doing Business in Madagascar: 2011,” 2011

  32. References • Central Intelligence Agency, C. Michael Hogan, U.S. State Department, and World Wildfire Fund. (2012). Retrieved on April 2, 2013 from The Encyclopedia of Earth: http://www.eoearth.org/article/Madagascar?topic=49460. • Cook, N., & Ploch, L. (2012). Madagascar’s Political Crisis. n.d.:n.d. • "Doing Business in Madagascar: 2011 Country Commercial Guide for U.S. Companies." (2011). Usembassy.gov. Retrieved Mar. 20,2013: http://www.antananarivo.usembassy.gov/uploads/ZI/VP/ZIVPQJmobFfciu9a I_lf2g/CCG-2011-Madagascar • Doing Business in Madagascar - World Bank Group. Doing Business in Madagascar - World Bank Group. The World Bank Group, 2013. Web. 25 Feb. 2013. • Interactive Map (2012). Retrieved March 20, 2013, from EDBM: http://www.edbm.gov.mg/Business-opportunities/Interactive-map • Madagascar. (n.d.). Madagascar. International Labour Organization. Retrieved February 25, 2013: http://www.ilo.org/ipec/projects/global/tackle/madagascar/lang-- en/index.htm

  33. References • Madagascar. (2013). In Encyclopædia Britannica. Retrieved from http://www.britannica.com/EBchecked/topic/355562/Madagascar • Madagascar - An Overview. (2013). MBendi.com. Retrieved Mar. 4, 2013: http://www.mbendi.com/land/af/md/p0005.htm • “Madagascar-Communication Style.” (n.d.). Culture Crossing. Retrieved Mar. 21, 2013 http://www.culturecrossing.net/basics_business_student_details.php?Id=8&CID =123 • Madagascar Country Specific Information. (2013, April 15). Retrieved from International travel information: http://travel.state.gov/travel/cis_pa_tw/cis/cis_957.html • Madagascar Food. (2013, April 15). Retrieved from Roots of the Sky: http://www.rootsofthesky.com/madagascar/people/food/ • Madagascar Health and Safety. (2013, April 15). Retrieved from Places Online: http://www.placesonline.com/africa/madagascar/health_and_safety.asp

  34. References • “Madagascar-Negotiation.” (n.d.). Culture Crossing. Retrieved Mar. 21, 2013: http://www.culturecrossing.net/basics_business_student_details.php?Id= 22&CID=123 • Madagascar Safe and Responsible Travel. (2013, April 15). Retrieved from Intrepid Travel: http://www.intrepidtravel.com/us/madagascar/safe- responsible-travel • Madagascar things to do and see. (2013, April 15). Retrieved from World Travel Guide: http://www.worldtravelguide.net/madagascar/things-to-do • Madagascar-Transportation and Telecommunications. Madagascar- Transportation and Telecommunications. Monga Bay. Retrieved Mar. 4, 2013: http://www.mongabay.com/history/madagascar/madagascar- transportation_and_telecommunications.html • "Religion in Madagascar." (n.d.). Religion in Madagascar. Retrieved Mar. 17, 2013: http://www.mapsofworld.com/madagascar/society-and- culture/religion.html

  35. References • “Society and Culture of Madagascar.” (n.d.). Retrieved April 4, 2013, from Maps of World: http://www.mapsofworld.com/madagascar/society-and- culture/ • Shopping in Madagascar. (2013, April 15). Retrieved from Madagascar Consulate: http://www.madagascarconsulate.org.za/shop.html • TOP25 World's Largest Steel Companies. TOP25 World's Largest Steel Companies. B2B Metal & Steel Products, n.d. Web. 01 Apr. 2013 • “Two men, one island.” (2013). The African Times. Retrieved April 16, 2013: http://www.african- times.com/index.php?option=com_content&view=article&id=1373%3Atw o-men-one-island&catid=63%3Amarch-2009-politics&Itemid=63 • Undefined. (2008). “Geography of Madagascar.” Retrieved on March 27, 2013, from Wild Madagascar: http://www.wildmadagascar.org/overview/geography.html • U.S. Relations with Madagascar. (2012, Dec. 19). Retrieved March 14, 2013, from U.S. Department of State: http://www.state.gov/r/pa/ei/bgn/5460.htm

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