Strategic Analysis of the Nigerian Car Industry: A Report

This report provides a detailed analysis of the Nigerian car industry, utilizing secondary data and analytical tools such as PESTLE and Porter's Five Forces to assess market dynamics. The report examines data collection methods, key findings related to economic conditions, technological advancements, and competitive forces, and identifies critical issues impacting the sector. The analysis highlights the influence of government policies, economic growth, and consumer behavior on the car industry's performance. Strategic recommendations are offered, focusing on technological innovation, eco-friendly practices, and affordability to enable businesses to succeed in the competitive environment. The report concludes with a list of cited references for further research and validation of the analysis conducted.

Global Business

Table of Contents
Data collection and analysis........................................................................................................3
Findings and critical issues..........................................................................................................3
Strategic recommendations..........................................................................................................4
REFERENCES................................................................................................................................5

Data collection and analysis
In order to get deeper insight about the Nigeria car industry several tools and models
have been applied by the researcher. With the aim to provide suitable solution of issues data has
been gathered by researcher through the means of secondary sources. For this purpose, several
book, journals and scholarly articles have been evaluated by researcher which is related to the car
industry of Nigeria. The rationale behind the selection of secondary data sources that it provides
deeper insight about the existing and past performance as well as trends of car industry. Hence,
PESTLE analysis has been conducted by researcher to get about information about the external
factors that have high level of impact on the growth and success of Car industry. Such tool has
been applied by the researcher because it furnishes information about the political, economic,
social, technological, legal and environmental factors. By assessing this, one can get information
about the level of risk and opportunities which are prevailed in the Nigerian car sector. Along
with this, porter five forces tool also have been undertaken by researcher. The reason behind the
selection of such model is that it helps in evaluating bargaining power of buyers and suppliers,
competitive rivalry, threat from new entrants as well as substitute products. Hence, by making
evaluation of all such aspects researcher can provide clear view about the growth and
performance trend of Nigerian car sector.
Findings and critical issues
From secondary data analysis, it has been identified that government of Nigeria places
more emphasis on the manufacturing of cars which can be afforded by common man. Moreover,
raising living standard of people is one of the main objectives of Nigerian government. Thus, by
considering such aspect it can be stated that companies which are involved in the manufacturing
of cars are performing activities under the pressure of government. Along with this, it has been
identified that growth level of Nigerian economy declined from 4.9% to 2.7% at the end of 2015
(Nigeria Economy Data, 2017). By considering this, it can be said that growth of car sector is
lower in Nigeria. Moreover, economic condition has greater influence on the purchasing power
and overall decision making of people. Income, level of education and employment etc. are the
main factors that closely impact the purchasing decision of customers.
In the recent times, current rate of unemployment in Nigeria is 8.2%. Hence, such rate is
neither too high nor too lower which in turn entails that by manufacturing and offering cars at

affordable prices entrepreneur can attain success in the competitive business environment.
Technological advancement is slow in Nigeria which in turn closely impacts the growth and
success of firm. Hence, by providing customers with highly advanced cars business entities can
build or sustain competitive edge over others. Further, from investigation it has been identified
that now people lay more emphasis on using eco-friendly cars. In this regard, business entities
require performing its business operations and functions in an effectual way.
By doing secondary data investigation, it has been assessed that it is not possible for to
manufacturers to easily take entry in the car sector. Moreover, for starting the manufacturing
operations entrepreneur requires more fund. Hence, high capital requirement imposes threat in
front of new entrants. Hence, barrier from new entrants are highly lower in the case of Nigerian
car sector. Further, absence of large number of car seller also entails that threat from substitutes
is absent in the case of car industry or sector. In addition to this, it can be stated from porter five
force analysis that bargaining power of buyers are highly lower (Oyeleke and et.al., 2016).
However, customers want to purchase car from the manufacturer who charge affordable prices.
Competitive rivalry within the Nigerian car sector is not so high. On the other side, in Nigerian
car sector bargaining power of buyers is very high. Moreover, for manufacturing car business
unit has to purchase sub parts from suppliers. Hence, from the overall investigation it can be
stated that business entity can attain success in the car sector by entering with unique or
advanced technology.
Strategic recommendations
On the basis of issues which are assessed above it is recommended to BMW to make
focus on using highly advanced technologies. This in turn enables them to provide customers
with cars at affordable prices. Along with this, by using eco-friendly engines and parts client can
influence the decision making aspect of people live in Nigeria.

REFERENCES
Books and Journals
Oyeleke, P. and et.al., 2016. Assessment of some heavy metals in the
surrounding soils of an automobile battery factory in Ibadan,
Nigeria. African Journal of Environmental Science and Technology. 10(1).
pp.1-8.
Online
Nigeria Economy Data. 2017. Online. Available through: <
http://www.focus-economics.com/countries/nigeria>. [Accessed on 11th March 2017].