One Kenyan bank decided to expand to Uganda: it’s a neighboring country., and you can get there in one hour. Before becoming a Pan-African bank, it made sense for them to become an Eastern African one. The bank enjoyed momentum in Kenya, and the management team took for granted that the brand would be embraced by Ugandans with the same enthusiasm as by Kenyans. They acquired a bank in Uganda, taking over 26 branches and opening 18 more in the first year. The new branches were hosted in 3- or 4-floor office buildings.
It turned out they didn’t have the success they had expected. What did they learnfrom the Uganda experience?:
- the regulatory framework for the banking industry in Uganda was very differentfrom that of Kenya: Uganda’s regulations are very strict;
- local connections (with the regulators, the Central Bank, etc.) are of paramount importance: the local team of the acquired bank was very well connected, but as they felt threatened those connections backfired for the Kenyan bank;
- anything coming from Kenya is seen as an imposition in other Eastern African countries: you need to be careful and introduce yourself as a local brand.
(to read the whole article: http://blog.iese.edu/africa/2014/06/25/the-challenges-of-internationalizing-in-east-africa/)