- INTRODUCTION
Businesses internationalize to increase brand awareness, gain access to new markets and technologies, improve risk management, reduce export costs, and increase profits (Vinhas da Silva et al, 2023). Internationalization of business does not only enhance productive capacity, but it also grants true independence from volatilities in the local market. Multinational Corporations (MNCs) like Dangote Group actualize their global expansion goals by strategically exploring economies of scale, cross-border commerce, capital, and other competitive advantages (Moradlou et al, 2021).
However, the internationalization process requires companies to design and differentiate products that satisfy the demands of foreign consumers whose habits, tastes or cultural needs may be different from the domestic market. In setting objectives and evaluating performance, companies therefore identify their internal core competencies (e.g., workforce capacity, patent, and strategy) and examine competitors’ performance in those areas to determine business prospects. Thus, Dangote Group’s business expansion concerns are not only how to increase market share and profitability but to identify effective market penetration strategies that can sustain business growth with minimal risks (Misbauddin & Nabi, 2019). The aim of this report is to critically analyse Dangote Group activities using appropriate international business theories. Three theoretical frameworks applied in this study are: (a) the Dunning Theory of Eclectic Paradigm (b) Economies of Scale/Monopolistic Advantage, and (c) the Uppsala Model. The report is structured into four parts: Section 2 presents an overview of Dangote Group’s profile, business environment, and activities; Section 3 aims at closing the gap between theory and practice using the Group’s diversification patterns, whereas Section 4 discusses a new international initiative for the company with highlight on the benefits/reasons for the proposed business decision.
2.0 THE COMPANY
Dangote Group is a Nigerian multinational brand founded by Aliko Dangote in 1978 to provide value-added products and services. The company operates a fully integrated business in agriculture, manufacturing, mining, transportation, port operations, logistics, real estate and more sectors. The Nigeria-based conglomerate comprises eighteen subsidiaries with strong presence in ten African countries. Dangote Cement is listed on the Nigerian Stock Exchange (NSE) with market capitalization valued at $14 billion (almost twenty percent of the total NSE capitalization). According to Dangote Group’s financials for fiscal year 2021, revenue increased by 33.8 percent to ₦1,383.6 billion with an impressive EBITDA that rose by 43.2 percent (₦684.6 billion), indicating a record-high margin of 49.5 percent. Profit after tax also increased by 32.0 percent (₦364.4 billion). The Group has over 30,000 employees across all business segments.