Rwanda Dimension Technology: Treading Water in Africa
Chadd Nygeres, Michael Byrne, Andreas Schotter, Mary Teagarden
Jules Munyampeta, founder and CEO of RD Tech Rwanda, was at a crossroad. He was questioning his company’s current strategy. The ICT (information and communication technology) market in Rwanda had transformed significantly since the company was founded in late 2005 with the help of two foreign investors, Preston Winter and Nathanael Brice. RD Tech began as a computer importer that sourced new laptop computers from Dubai. Munyampeta soon realized that the market for new computers in Rwanda was very small, and subsequently had great success with a new approach—importing and selling refurbished used computers from the United States. The lower price point for refurbished used computers allowed RD Tech to expand its market and have a greater impact on Rwandan society, a goal of its founder and investors. Originally, the company sold personal computers to individuals, but quickly shifted focus to schools and government institutions as a result of changes in government policy. This shift resulted in rapid growth, and RD Tech Rwanda expanded distribution of refurbished computers throughout Rwanda, Burundi, and eastern Democratic Republic of Congo. Three years after start-up, the company had net sales of US$413,000 with a profit of $60,000.
RD Tech survived the impact of the global financial crisis, competition from Chinese entrants into the Rwandan market, and NGOs, such as One Laptop per Child, providing free computers to schoolchildren when, suddenly, sales came to a crashing halt. The Rwandan government made rapid technological advancement a priority for public schools and local governmental agencies, the company’s two largest market segments, but refurbished computers and monitors were no longer acceptable for these institutions. As he reflected, Munyampeta considered his options. Was integrating the refurbishment operations into the East African supply chain the answer? Would this strategy deliver sufficient cost savings to justify the initial capital outlay and continuing operational costs? If so, could Winter and Brice raise the capital required to make the change? Or might a return to the original unsuccessful model of selling new computers now be feasible? Munyampeta wondered if, instead of focusing on a growth strategy, he should be considering a liquidation strategy.
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