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Tuesday, June 4, 2019
Entrepreneurship and Microfinance in Uganda
While in Uganda I noticed the prevalence of entrepreneurship suddenly. There are so many independently owned shops that sell the same product or do the exact same service. Also, even at the equator the shops placed right next to each other sold the same products and tried to comparatively price their products. The business strategy used by these entrepreneurs in Uganda is to set everything at a “tourist price,” meaning a price in which only tourists would pay. These entrepreneurs know that the standard Ugandan would always bargain, and if we were not partnered with the MUB students we would be overpaying. Microfinance plays a role because to start business- a shop in this case- these individuals could take out a loan. Microfinance is like banking for people who do not have a lot of money. Question: How could entrepreneurs of individual shops make their businesses more original in a sustainable way while still continuing competitive prices?
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Microfinance has had a huge impact on the trip, being one of the major topics that we have been reviewing and learning about. To address you question, Maya, I think that business owners could become more original or differentiate themselves from the rest of the shop owners by hand making items that other owners don't have, making higher quality items, or importing items that other sellers don't have. All of these options can help to diversify what venders have to offer and make the shop owners more money! Microfinance would allow the shop owners to purchase the different materials in the beginning to try out these methods of business to see if they work.
ReplyDeleteEmma:
ReplyDeleteOne of the things I learned while at the craft markets was that many individuals would make one item like bracelets or bowls, then they all share among each other the items that they make so each shop has some of each. Since it would be a lot more work on the shop owners to make all of the different items on their own, I think that not sharing with everyone would make the different shops and the items they have more unique.
Ways in which entrepreneurs of individual shops could make their businesses more original is selling different products for customers to purchase and buying those that are unlikely to be sold by their neighboring competitors. Also, Mr. Bitature pointed out that many of small business owners are not necessarily prioritizing and likely only thinking about short term goals versus long term goals that can make an impact not only on their families but also their communities, providing others an employment.
ReplyDeleteThe easiest way for small business, especially ones selling to tourists, could become more unique is they could not share their crafts with each other (like Emma said). But I am curious as to how much the women make and how consistent the profits are in terms of being able to provide for their families. In addition, I would suggest that an improvement that could be made would for women to find other crafts being made and bring those into their shops, creating an inventory that is differentiated from the rest.
ReplyDeleteIf these business owners decided to specialize in one product they could potentially be making lots more profit. As you said they are all selling the same items, it doesn't matter where you go to find a Uganda jersey because you can get one anywhere. If a shop owner were to look deeper at the market and found an item not being commonly sold and dedicated their shop to only producing the highest quality of that good, they could make a lot more than other shops. By doing this they would create a monopoly and be able to set their own price creating a larger profit.
ReplyDeleteMany of the craft dealers in tourist areas have ordered similar products to sell. There was an example at the shop near the old theater in which multiple shop owners recommended I go to another shop in the circuit for a certain product. I believe that that validates the idea that the shopowners would succeed in specialization if they work collectively together.
ReplyDeleteThe struggle with differentiating their shops is the lack of new ideas and skills. The women all know how to do beading and how to sew, the problem is that then their work is not worth as much as it could be. Each of the shops is also individually owned or owned by a small group. In order to be more successful, they should combine their efforts and stop working in competition with each other. This was they could eliminate the bargaining process and charge a price that they believe is fair. With that, their main targets are the tourists, and most of them are willing to pay that extra price and still feel like they got the product at a very inexpensive price.
ReplyDeleteI feel as though entrepreneurs becoming more original by diversifying their products from others would make them stand out and justify higher prices. This is because there would be less competition. If competition in price is still desired, changing their approach to a product or service would provide originality among the providers while still allowing competition. This would promote improvement and creativity which would better suit sustainable development.
ReplyDeleteGreat post !! Thanks for sharing valuable content.
ReplyDeleteClick here to know more UN sustainable development goals.