#EMBA27
Introduction
Peter Bismuth is the President of ENOVE, a subsidiary of Groupe Bismuth, a family-run business established more than 50 years ago in Tunisia. The business manufactures and distributes products, including toiletries, batteries, and cosmetics. Among the big brands, Groupe Bismuth distributes are, L’oreal, Garnier, Gillette, Duracell, Johnson & Johnson, and Schneider Electric. Enove produces a local brand of industrial batteries suitable for purposes like electric fence powering, road signs, and railway signalling. Enove produces these batteries under their label. The business has been doing quite well in Tunisia until the Arab spring of 2010. The choice of Tunisia was rational because of its proximity to Europe, which gave access to a market potential of about 800 million people. The infrastructure wasn’t the best but it offered about 20,000km of road network, 2000km of railways, seven active marine ports, and nine international airports.
The Challenges
Despite these positives about Tunisia being the location of the business, there were challenges that prompted Peter Bismuth to think about a change of location. Compared to other major business hubs in south-east Asia, the infrastructure was insufficient to cater to the need of the Tunisian business hub. Out of the 20,000km of road network, only 360km is a rudimentary highway. Also, the seaports needed upgrade. The volume of merchandise that moved through the seven ports in Tunisia is equivalent to the 25th port in the United State alone. In addition to the fore mentioned, labour was another critical resource. Despite the high literacy of 97% in Tunisia, many of Tunisia’s population weren’t trained in the field with market demand. This basically raised the unemployment rate of Tunisia. Cheap labour was a surplus for low cadre, low skilled jobs but very few people were knowledgeable enough for the highly skilled jobs.
Furthermore, the political atmosphere in Tunisia has become a challenge to business continuity. Ever since the Arab Spring that began in Tunisia in 2010, the uncertainty over the freedom of doing business without state interference has become a great concern. Toward the end of 2014, an election was planned to elect a new government to continue the administration of the country. The people of Tunisia and the foreigners felt an excitement that the election will welcome a democratically elected government, but were concerned that a conservative, religion-based government will gain control. For three years since the Jasmine revolution, the Islamic party Ennahda had control of the interim government, a time during which economic growth flat-lined, corruption flourished, women’s rights were curtailed and capitalism was reined in. The consequence of the Islamic party winning was that the opportunity for free trade with the international community will be destroyed.
Decision Question
The rise in extreme political conservatism was coincidental with the increase in terrorism. The media also didn’t help matters because of the way terrorism was exaggerated and framed. AmChan’s survey of foreign business concerns clearly identified security as the most urgent matter for resolution. Amidst all these conundrums, Peter needed to decide on the future expansion of Enove. Should he expand within Tunisia or relocate the expansion to a neighbouring country?
Business and Money