Report on International Business in Nigeria
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Added on 2020-05-28
Report on International Business in Nigeria
Added on 2020-05-28
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Running head: INTERNATIONAL BUSINESSInternational BusinessName of the Student:Name of the University:Author’s Note:
1INTERNATIONAL BUSINESSExecutive summaryThis report introduces about the country based business opportunity for Risual, a UK based ITcompany that aim towards expanding its business internationally in Nigeria. In order to do so,the report analyses the company, its proposed expansion strategy, general description of Nigeriaincluding PESTLE analysis, international trading and financial status followed by opportunities,issues and suitable recommendations of expanding and conducting business in Nigeria. Afterthorough analysis, Risual has decided to expand their business globally to Nigeria. Nigeria isconsidered as the business hub of Africa with an estimated population of 22.5 million people.The company has conducted a thorough analysis of the macro environment of Nigeria thereby,analyzing the political, economic, social, technological and environmental aspect and confirmedthat international expansion in Nigeria is suitable. This is because of the increasing demand ofthe IT in Nigeria along with increased educated and entrepreneurial population that is facilitatingbusiness opportunities for international business organizations. However, Risual needs toconsider the potential issues of doing business in Nigeria that includes corruption, poverty,violation of intellectual property rights law and foreign exchange restrictions. Post identificationof the potential issues of carrying out business in Nigeria, Risual needs to find suitablerecommendations for overcoming them effectively.
2INTERNATIONAL BUSINESSTable of ContentsTable of ContentsAssessment Task 3: Country-based Business Opportunity.............................................................3Introduction......................................................................................................................................3Overview of the company................................................................................................................4Describing the proposed expansion.................................................................................................4General description of the chosen country......................................................................................5PESTLE analysis of Nigeria............................................................................................................5Status of Nigeria in the international trading and financial system.................................................9Opportunities and risks offered by Nigeria...................................................................................11Internationalization potential of the Risaul....................................................................................13Issues found in doing business in Nigeria.....................................................................................14Suitable recommendations for overcoming the issues in Nigeria.................................................16Conclusion.....................................................................................................................................17References......................................................................................................................................19
3INTERNATIONAL BUSINESSAssessment Task 3: Country-based Business OpportunityIntroductionIncreased number of similar business organizations in the market gives rise to tough andcompetitive business environment. As the business organizations have similar products andservices to offer to the customers, attracting them becomes comparatively difficult. This givesrise to saturated business environment where the business organizations faces issues in terms ofattracting new customers and increasing the customer base as well as earning increased revenuefor the company (Beamish 2013). As a result, the business organizations aim towards global orinternational expansion, as this provides an opportunity for the business organizations topenetrate new markets and increase the customer base and business profit. Global expansion alsohelps the business organizations to gain competitive advantage and sustain in the competitivemarket (Cavusgil et al. 2014). However, the business organizations have to verify and validatevarious factors before aiming for global expansion. The business environment, need of theservice or product in the host country, foreign policy and international trade are some of thefactors that the business organization need to analyze before international expansion. This report introduces about the country based business opportunity for Risual, a UKbased IT company that aim towards expanding its business internationally in Nigeria. In order todo so, the report analyses the company, its proposed expansion strategy, general description ofNigeria including PESTLE analysis, international trading and financial status followed byopportunities, issues and suitable recommendations of expanding and conducting business inNigeria.
4INTERNATIONAL BUSINESSOverview of the companyRisual is a UK based business organization that was established in the year 2005. RichardProud and Alun Rogers founded the business organization. Risual provides IT based services incollaboration with the aligned consultancy. The sole business operating strategy of Risual isMicrosoft platform. Over the past 12 years, the business has been able to achieve necessarysuccess. This is because the business organization aimed towards discovering new technologiesby understanding the new challenges. In addition to, the business organization also aimedtowards finding new solutions for the identified challenges thereby, overcoming them. Thishighlighted the major reason for the huge success the company achieved over the past 12 years(Bird and Mendenhall 2016). Based on the existing business strategy and operations, the company has invested hugelyin order to expand the business in respect to technology by taking required guidance from theavailable experts. Based on the current IT market scenario in the UK, the company is planningfor international business expansion in Nigeria. The international business expansion provides anopportunity for Risual to gain competitive advantage by penetrating new markets and increasingthe customer base. As the UK market is saturated by IT business organization, internationalexpansion to Nigeria provides better business and market opportunities for the company (Penrose2013). Describing the proposed expansionRisaul is planning to expand internationally to Nigeria based on the current demand ITdemand of the country. The business organization is proposing its expansion in Lagos, one of thelargest cities in Africa. Lagos is the business hub of the country featuring different business
5INTERNATIONAL BUSINESSorganizations from different business market. The business organization need to consider thecultural differences of both the countries that exists distinctively. Thus, the human resourcemanagement of the company needs to describe the product or service that they aim towardsproviding to the Nigerian customers along with analyzing the existing market followed bydeveloping and implementing marketing strategy (Zander, McDougall-Covin and Rose 2015). General description of the chosen countryNigeria is a federal republic in West Africa and is officially a democratic secular country.Nigeria has 36 cities out of which the five largest cities are Lagos, Kano, Ibadan, Abuja and PortHarcourt with an estimated population of 22.5 million people. The GDP per capita of the countryis USD 3,000. It has been seen that the collective buying power of household earnings is USD1,000 to USD 5,000. Compared to the rest of Africa, the most significant factor for the Nigeriansis price. Around 61% of the Nigerian population is literate and English is the official language ofthe country (Watts 2013). PESTLE analysis of NigeriaThe PESTLE analysis of Nigeria includes: PESTLEFactorsPoliticalPolitically stable since 1999Regional political leader in AfricaFederalism system of the operatinggovernmentPeople’s Democratic Party is the largestpolitical party of NigeriaEconomicNigeria’s economy has risen from $170billion to $451 billion74 million people comprises ofNigeria’s labor forceGross Domestic Product is risen to
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