The most appropriate, reliable, and safest, approach to expand the Kikoi cloth market into the United States would be to become a wholly owned subsidized company. In a wholly-owned subsidized company, 100% of an organization’s common stock is owned by its parent company (Kenton, 2022). Parent companies can diversify their product, manage their streamline, and reduce their risk with subsidiary companies. For property and international distribution, it is best for Kenyan citizens to legalize their subsidiaries and apply for business permits (Giacobbe et al., 2015). For example, registering with the KRA, and social services, ensures legal compliance and freedom to operate (Kenton, 2022). Parent companies offer subsidiaries interchangeable access, risk reduction, and brand recognition. Legally, subsidiaries are assets to parent companies and can operate independently from several locations. They maintain their own corporate culture, management structures, and service clients despite being owned by another entity (Park, 2012).
It can take up to one year to legitimize a Kenya subsidiary, and subsidiaries can own other subsidiaries. Applying to become a wholly owned subsidized company is a multi-step application process that can be submitted through eCitizen, an online database located on eRegulations, a website operated by Kenyan officials (Business Registration Service – Kenya, 2023). Subsidiaries in Kenya are positively impacted by the interchangeable access, risk reduction, and brand recognition offered by the relationship with parent companies. Access to intellectual property, modern equipment, and effective systems offered by a subsidiary’s parent company grows and stabilizes the Kenyan subsidiary. For the business to remain active, the subsidiary will have to pay dividends to its parent company and be in good standing (Lopez-Duarte & Vidal-Suarez, 2013).
The distribution of kikoi cloth as a business to the United States may be difficult without the establishment of a subsidiary. Legally establishing a subsidiary will prepare Kenyan business owners for the due diligence performed by the International Trade Administration, ITA, and the Customs Services Departments, CDS (Kenya Intl. Trade Administration, 2023). ITA and CDS are government agencies entrusted with controlling and monitoring export and imports.
The primary consumer groups for kikoi cloth would be experiencers and achievers.
Experiencers are known to be motivated by self-expression (VALS Survey, 2023). They are sociable, spontaneous, and love physical activity (VALS Survey, 2023). They spend a comparatively high proportion of their income on fashion, entertainment, and socializing (VALS Survey 2023). Tourists, travelers, and Kenyan natives are examples of experiencers. Achievers are fun, loving, people that can wear their wealth. They are interested in street culture and are carefree. (VALS Survey, 2023). They desire to better their lives and are motivated to strive and accomplish achievements in their lives (VALS Survey, 2023). Achievers place a high value on commitment to their families and jobs (Tondu, 2015).
Page Author: Ritchy Isaac
