Reference no: EM132352182

The US and Ethiopia have very different cultures, political environments, and economic issues. An American corporation's unfamiliarity with Ethiopia, and its status as a foreign company, creates some degree of risk in entering the Ethiopian market.

Knowing that recently the former ruling elite (and their minority tribe's dominance) has been overturned, that there has been an abortive coup attempt this summer, that there are a multitude of ethnicities with over 60 languages, and that anti-government demonstrations have in the past two years have been met with police violence and a national transportation and Internet lockdown, we could say that Political Risk is high.

Knowing that Ethiopia has one of the world's fastest growing economies means that Economic Risk is low. Although the culture is somewhat 'distant' from the US (although not as distant as countries such as China), English is the preferred second language for educated people and there is a very low crime rate; thus Cultural Risk might be regarded as only moderate. What entry strategy should an American company choose to manage the largest risks in Ethiopia (cultural, political, or economic) and why?

Check Hofstede's web site for Ethiopia and the US at https://www.hofstede-insights.com/country-comparison/ethiopia,the-usa/ to compare culture dimension differences with the US. Google recent political and economic news on Ethiopia to judge those of risks (news items no more than one year old). Which risk seems to be the greatest? Which entry strategy deals best with that kind of risk?