Business Management Report: WeWork's Kenyan Market Analysis

This report provides an analysis of WeWork's potential for expansion in Kenya, focusing on the business's competitive environment and growth opportunities. The report includes an executive summary, introduction, PEST analysis (political, economic, social, and technological factors), and Porter's Five Forces analysis to assess industry rivalry, buyer power, supplier power, threats of new entrants, and threats of substitutes. The report also offers recommendations for WeWork's expansion strategy in Kenya, including leveraging its first-mover advantage and focusing on unique product offerings. The conclusion highlights the favorable prospects for WeWork's success in the Kenyan market, considering both the competitive market and the general external environment. The report references several sources to support its findings.

Running head: BUSINESS MANAGEMENT
BUSINESS MANAGEMENT
Name of the Student
Name of the University
Author Note

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EXECUTIVE SUMMARY
We Work is a workspace company that is based in the New York City. The company
is known to be one of the leading producers of workspaces. They aim to cater to the
freelancers, small business concerns, startups and entrepreneurs. The company has a working
population of almost 100,000 members and has an annual turnover of around $20 billion
roughly. It is located at over 23 cities across the United States and 16 different countries all
over the world. The report that follows attempts to analyze the prospects of the expansion of
the company in the Southern and Eastern Africa, especially in the country of Kenya.

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Table of Contents
Introduction....................................................................................................................3
Discussion......................................................................................................................3
PEST Analysis...........................................................................................................3
Porter’s Five Force Analysis......................................................................................4
Recommendations..........................................................................................................6
Conclusion......................................................................................................................6
References......................................................................................................................7

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Introduction
We Work is an American business enterprise that aims to provide its clients with a
shared space of work (Wework.com, 2017). It also provides services and communities for the
freelancers, entrepreneurs, small businesses, startups and the other large business firms.
Headquartered in New York City, the company was founded in 2010. The company was
founded by Adam Neumann and Miguel McKelvey (Wework.com, 2017). The company is
known for building and designing virtual and physical communities for the entrepreneurs to
share office space and other services.
The following report attempts to assess the general and the competitive environments
that the company may face if they try to expand in Kenya. The overall goal of the report is to
help the concern with the long-term opportunities for growth of the concerned business.
Discussion
The major ways to analyze the competitive environments of a business is to analyze
the concerned area with the help of the Porter’s five-force model (Dälken 2014). The PEST
Analysis is needed to analyze the political, economic, social and the technological aspects of
the company that may be necessary to help the concern to expand in their country of choice
(Shabanova 2015).
PEST Analysis
The PEST Analysis of the company analyses the political, economic, social and
technological aspects that might be taken into consideration.
 Political factors
 The legal system of the country is found to be a blend of the Islamic
law, the English common law and the customary law.

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 The trade practices of the country are restricted.
 The Land Act, the Condominium and Mortgage Financing Act are
strict thereby not allowing the real estate market to be active.
 Economic factors
 The rates of interest and inflation highly influence the cost of the
financing of the housing projects that in turn increase the cost of the
apartments that the company plans to provide.
 The access to the long term funds, the low levels of income and the
informality of the risks to credit, the high rates of interest and the lack
of supply in case of new constructions (Njoroge 2013).
 Social factors
 Growth of population
 Changes in the lifestyle changes
 Attitudes towards the concepts of leisure and work
 Technological factors
 Provisions of multi-level car parking
 Installation of security software
 Error free wireless internet connection

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Porter’s Five Force Analysis
The Porter’s Five Force model helps the concerned company to have an idea of the
challenges that it may face in the concerned area of expansion (E. Dobbs 2014). There are
five factors involved in the above-mentioned analysis.
 Industry Rivalry – The sharing industry is an upcoming trendy industry that
seems to be more competitive. The industry rivalry refers to the rivalry
amongst the concerns that work in the same business sector or provide the
clients with similar products (Rothaermel 2015). We Work may face a high
level of threats from the existing companies like Design Build, offering the
same benefits to the clientele. The company may find it difficult to attract the
customers of the other companies. Thus, they may have to deal with a smaller
client base on expanding to the new market at Kenya.
 Buyer Power – We Work may also be affected by the number of the
companies that provide the clients with similar products and services. This
may in turn affect the annual turnover of the concerned company. They
provide their clients with the option to share the workspace. This may prove to
be an advantage that they have over the other competitors like Gebeya.
 Supplier Power – The companies that provide their clients with shared
workspaces do not own the assets that they provide. Thus, the owner of these
assets do have a say in the matters that they may or may not allow on the
properties that have been let out for the sharing purposes. The suppliers also
have a say in the price that is set by the company, We Work in this case. This
also may affect the annual income of the company.

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 Threats of New Entrants – In the case of We Work, the threats faced due to the
new entrants is medium. The concept of the shared workspaces is trendy in
today’s world. A number of firms are found to be interested in this work
arrangement. The advantage of being one of the first movers that the company
in discussion has over the other competitors is important (Njeru, Stephen and
Wambui 2013). The costs of starting up the company is high. This prevents
the competitors from entering the market thereby reducing the threats to the
annual turnover of the company.
 Threats of Substitutes – We Work faces a medium level of threat from the
substitutes in the field of its work. There are plenty of traditional options
available for workspaces that may be provided by the company that may
include hotels, single homes. A number of customers in the modern times are
on the look for options to share workspaces because of their added advantage
of being cheaper. These arrangements add value to the company, as they are
less accurate in the personnel projections.
Recommendations
The company must focus on the advantage of being the first company of its kind to be
expanding in Kenya. In order to achieve success, they should concentrate on the uniqueness
of the products and services that they offer. There should be enough creativity in the products
that they aim to sell. The company may also try to expand in the country by providing their
customers with broader spaces that can be shared for the purpose of work
Conclusion
In conclusion, to the above discussion, it may be said that there exists high prospects
of flourishing of the company, We Work if they plan to expand in the Kenyan market. The

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population of the country being high, the annual turnover of the company may face a huge
gain if the company expands in this area. The analyses of both the competitive market and the
general external environment are seen to be favorable for the expansion of We Work in the
Southern and Eastern African market, especially in the country of Kenya.

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References
Dälken, F., 2014. Are porter’s five competitive forces still applicable? a critical examination
concerning the relevance for today’s business (Bachelor's thesis, University of Twente).
E. Dobbs, M., 2014. Guidelines for applying Porter's five forces framework: a set of industry
analysis templates. Competitiveness Review, 24(1), pp.32-45.
Njeru, N.E., Stephen, M.M. and Wambui, M.A., 2013. Analysis of factors influencing
formulation of strategic plans in Embu North District, Embu County, Kenya. Global Business
and Economics Research Journal, 2(5), pp.116-129.
Njoroge, S.G., 2013. Operations stratergies in Kenya’s real estate sector. Unpublished MBA
research project.
Rothaermel, F.T., 2015. Strategic management. McGraw-Hill Education.
Shabanova, L.B., Ismagilova, G.N., Salimov, L.N. and Akhmadeev, M.G., 2015. PEST-
Analysis and SWOT-Analysis as the most important tools to strengthen the competitive
advantages of commercial enterprises. Mediterranean Journal of Social Sciences, 6(3), p.705.
Wework.com (2017). Mission | WeWork. [online] WeWork. Available at:
https://www.wework.com/mission [Accessed 14 Nov. 2017].
Wework.com (2017). WeWork Coworking and Office Space. [online] WeWork. Available at:
https://www.wework.com/ [Accessed 14 Nov. 2017].