Game is one of South Africa’s largest retail stores.

It consists of 93 large-format stores and thinks of itself

as a driven discount cash retailer of consumer goods and general merchandise, electrical appliances,
and non-perishable items for home, leisure, and business use. As a discount cash retailer, Game has a
high-volume, low-margin operating model that depends on making a high volume of sales at a lower
price as well as on a sound and consistent promotional strategy. Game started expanding into Africa in
the early 1990s when it realized that its South African market would mature quickly and that there was
little space for investment in the already over-traded market. Recognizing the retail market potential of
the neighboring Southern African countries, Game started investing in Africa by opening its first store in
Botswana in 1993. It was only when the company decided to invest further afield, specifically in Uganda
(2004), Nigeria (2005), Tanzania (2006), and Ghana (2007), that the reality of Africa kicked in. The
opening of the Nigeria store was known to be a bit of a disaster after the first container of stock was
held up for nine months at the local customs office because of Game’s refusal to submit to bribery. By
2010, Game had a presence in 11 African countries and was planning to expand its footprint in Africa in
another six countries over the next five years. Game had found that it could not simply cut and paste its
South African business model into other African contexts. The company therefore had a separate
business plan and business model for every country. For example, whereas in South Africa every store
stocked 12,000 active products, some remote African stores such as Game Kampala had only 8,000. This
was because the logistics of supplying the full range of products was prohibitive and Game realized that
the market was satisfied with a slightly more limited choice. Game also had to make a “fundamental
mind shift” to think smaller when doing business in Africa. Shopping centers were an unknown concept
in most African countries, so Game opted for stand-alone stores in most instances, and in some
countries it developed its own small shopping centers, consisting of one or two anchor shops and a few
other outlets. Still, securing financing from the local banks proved to be trying, as the bank officials did
not understand the concept of a shopping mall, having only had to finance ventures like roads and
bridges in the past. Regarding the supply chain to the African countries, until about three or four years
before, all distribution of stock had been managed centrally from South Africa. Game’s experience in
Nigeria changed this. While it was never part of the original procurement model, Game decided it was
best to turn to local suppliers in Nigeria because restrictions on certain imported products meant that
even one restricted product could hold a whole container back. In other countries, however, Game
imported up to 90 percent of its stock from South Africa without any major difficulties. Logistical
challenges were the order of the day for Game in Africa. A large portion of its goods had to be
transported by road, but getting those goods to certain countries meant that in some cases truck drivers
had to cross five different borders. The drivers therefore had to build up good relations with the various
border officials to speed up the process, particularly because Game incentivized the drivers with
bonuses if they were able to deliver the goods on time. By 2010, it had become evident that despite the
risks, it was indeed very profitable for the company to invest in Africa. Game stores in Africa generated
far higher profit and return on investment than their South African counterparts. To date, Game has
been fortunate not to have had serious competition from international players, although the company
did face some competition from the other South African-based supermarket retailer, Shoprite Holdings,
as well as the informal market. However, Game expected a complete change in the African business
landscape and foresaw that more and more international businesses would start realizing the
investment potential of Africa. The company was fairly convinced that big multinational players such as
Wal-Mart and Carrefour, which had previously shied away from investing in Africa, would form
partnerships with existing investors in Africa rather than risk going alone.
Thinking globally

13-10. Explain why Game chose the countries it entered and why in that order.

13-11. How does the African retail market differ from the more developed world, and what are the
implications for doing business there?

13-12. In September 2010, Wal-Mart announced that it was making a $4 billion bid for Massmart, the
holding company of Game. Why was Wal-Mart entering the African market for the first time, and why
was it choosing this entry mode?

Source: The case is based upon a Wits Business School case of the same name which was originally
prepared by Stephanie Townsend and John Luiz. See original cases for references and source material.

Q: Explain why Gome chose the countries it entered in that order.

A: Today Game is one of South Africa's biggest retail stores and has 93 large format stores. It has a high-
volume, low-margin operating model and its goal is to sell as many product as possible at a low,
affordable price. Game started to expand at the beginning of 1990s. They realized that the market of
South Africa would mature quickly and that there was a little space for investment in the already over-
traded market. So they took the opportunity and opened their very first store in Africa in 1993 in
Botswana. As they saw the success of the store they thought that it would be remuneratory to open
more and built up more Game retail stores specifically in Uganda, Nigeria. Tanzania and Ghana..
However the first decade of Game was very successful the opening of the Nigeria store was an absolute
disaster. At that point they realized that they cannot just copy the stores into different countries but
they have to take into the consideration that different countries demand different business plans.
Game adalah salah satu toko retail terbesar di Afrika Selatan. Ini terdiri dari 93 toko berformat besar dan
menganggap dirinya sebagai peretail diskon yang didorong oleh barang-barang konsumen dan barang
dagangan umum, peralatan listrik, dan barang-barang yang tidak mudah rusak untuk penggunaan di
rumah, liburan, dan bisnis. Sebagai pengecer diskon uang tunai, Game memiliki model operasi volume
tinggi, margin rendah yang tergantung pada membuat volume penjualan tinggi dengan harga lebih
rendah serta strategi promosi yang baik dan konsisten. Game mulai berkembang ke Afrika pada awal
1990-an ketika menyadari bahwa pasar Afrika Selatann akan matang dengan cepat dan bahwa ada
sedikit ruang untuk investasi di pasar yang sudah terlalu diperdagangkan. Menyadari potensi pasar retail
negara-negara tetangga Afrika Selatan, Game mulai berinvestasi di Afrika dengan membuka toko
pertamanya di Botswana pada tahun 1993. Itu hanya ketika perusahaan memutuskan untuk berinvestasi
lebih jauh, khususnya di Uganda (2004), Nigeria (2005) , Tanzania (2006), dan Ghana (2007), bahwa
realitas Afrika muncul. Pembukaan toko Nigeria dikenal sebagai sedikit bencana setelah wadah pertama
persediaan disimpan selama sembilan bulan di lokal kantor bea cukai karena penolakan Game untuk
tunduk pada suap. Pada 2010, Game hadir di 11 negara Afrika dan berencana untuk memperluas
jejaknya di Afrika di enam negara lain selama lima tahun ke depan. Game telah menemukan bahwa ia
tidak bisa begitu saja memotong dan menyisipkan model bisnis Afrika Selatan ke dalam konteks Afrika
lainnya. Oleh karena itu perusahaan memiliki rencana bisnis dan model bisnis yang terpisah untuk setiap
negara. Misalnya, sedangkan di Afrika Selatan setiap toko menyediakan 12.000 produk aktif, beberapa
toko Afrika terpencil seperti Game Kampala hanya memiliki 8.000. Ini karena logistik penyediaan
berbagai produk sangat mahal dan Game menyadari bahwa pasar puas dengan pilihan yang sedikit lebih
terbatas. Game juga harus membuat "perubahan pikiran mendasar" untuk berpikir lebih kecil ketika
melakukan bisnis di Afrika. Pusat perbelanjaan adalah konsep yang tidak dikenal di sebagian besar
negara Afrika, jadi Game memilih toko yang berdiri sendiri di sebagian besar contoh, dan di beberapa
negara mengembangkan pusat perbelanjaan kecil sendiri, yang terdiri dari satu atau dua toko jangkar
dan beberapa outlet lainnya. Tetap saja, mendapatkan pembiayaan dari bank-bank lokal terbukti
berusaha, karena para pejabat bank tidak memahami konsep pusat perbelanjaan, karena hanya perlu
membiayai usaha seperti jalan dan jembatan di masa lalu. Mengenai rantai pasokan ke negara-negara
Afrika, sampai sekitar tiga atau empat tahun sebelumnya, semua distribusi stok dikelola secara terpusat
dari Afrika Selatan. Pengalaman gim di Nigeria mengubah ini. Sementara itu tidak pernah menjadi
bagian dari model pengadaan asli, Game memutuskan bahwa yang terbaik adalah beralih ke pemasok
lokal di Nigeria karena pembatasan pada produk impor tertentu berarti bahwa bahkan satu produk
terbatas dapat menahan seluruh kontainer. Namun di negara lain, Game mengimpor hingga 90 persen
sahamnya dari Afrika Selatan tanpa kesulitan besar. Tantangan logistik adalah urutan hari untuk Game di
Afrika. Sebagian besar barang-barangnya harus diangkut melalui jalan darat, tetapi membawa barang-
barang itu ke negara-negara tertentu berarti bahwa dalam beberapa kasus pengemudi truk harus
melintasi lima perbatasan yang berbeda. Oleh karena itu pengemudi harus membangun hubungan baik
dengan berbagai pejabat perbatasan untuk mempercepat proses, terutama karena Game memberi
insentif kepada pengemudi dengan bonus jika mereka dapat mengirimkan barang tepat waktu. Pada
2010, menjadi jelas bahwa meskipun ada risiko, memang sangat menguntungkan bagi perusahaan untuk
berinvestasi di Afrika. Toko game di Afrika menghasilkan keuntungan dan laba investasi yang jauh lebih
tinggi daripada rekan-rekan mereka di Afrika Selatan. Hingga saat ini, Game telah beruntung tidak
memiliki persaingan serius dari para pemain internasional, meskipun perusahaan memang menghadapi
beberapa persaingan dari pengecer supermarket berbasis di Afrika Selatan lainnya, Shoprite Holdings,
serta pasar informal. Namun, Game mengharapkan perubahan total dalam lanskap bisnis Afrika dan
meramalkan bahwa semakin banyak bisnis internasional akan mulai menyadari potensi investasi Afrika.
Perusahaan itu cukup yakin bahwa pemain multinasional besar seperti Wal-Mart dan Carrefour, yang
sebelumnya menjauh dari investasi di Afrika, akan membentuk kemitraan dengan investor yang ada di
Afrika daripada mengambil risiko sendirian.

T: Jelaskan mengapa Game memilih negara yang dimasukkan dalam urutan itu.

A: Today Game adalah salah satu toko retail terbesar di Afrika Selatan dan memiliki 93 toko format
besar. Ini memiliki model operasi volume tinggi, margin rendah dan tujuannya adalah untuk menjual
produk sebanyak mungkin dengan harga rendah dan terjangkau. Game mulai berkembang pada awal
1990-an. Mereka menyadari bahwa pasar Afrika Selatan akan matang dengan cepat dan bahwa ada
sedikit ruang untuk investasi di pasar yang sudah terlalu diperdagangkan. Maka mereka mengambil
kesempatan itu dan membuka toko pertama mereka di Afrika pada tahun 1993 di Botswana. Ketika
mereka melihat keberhasilan toko, mereka berpikir bahwa akan lebih menguntungkan untuk membuka
lebih banyak dan membangun lebih banyak toko retail Game khususnya di Uganda, Nigeria. Tanzania
dan Ghana .. Namun dekade pertama Game sangat sukses, pembukaan toko Nigeria adalah bencana
mutlak. Pada titik itu mereka menyadari bahwa mereka tidak bisa hanya menyalin toko ke negara yang
berbeda tetapi mereka harus mempertimbangkan bahwa negara yang berbeda menuntut rencana bisnis
yang berbeda.