Business model for Nigeria

Assignment on Business model for Nigeria By: ABC Date Introduction Growth of manufacturing and service sector in Nigeria depends on political and environmental situation as well as strategies used for growth. I am planning to start business in Nigeria. It required all factors like political issues, culture, economic issues, resources cost and many other. In this report, I discussed all these factors before starting business relationship with Nigeria. First, culture is very important factor. It affects success of business. Every country has its own culture. It varies from country to country. Culture is considered in first section. Political issues are also considered in next section of this report. Religion also affects success of business weather it is manufacturing or service sector. Cost of material labor, energy is also discussed. Cost of raw material is important in maximizing profitability. Country overview Overall analysis of company is made on basis of culture, environment, society, religion and resources. Culture Nigeria is located in Western Africa. Abuja is its capital. Ethnic groups are more than 250. These groups include Hausa, Fulani, Igbo, Yoruba, Tiv, Kanuri, etc. official language in Nigeria is English. In business communication, English is used as primary language but in rural areas, it is not compulsory. Other languages that are spoken include Kanuri, Yoruba, Hausa, etc. Ethnic groups prefer to communicate in their own language. It means that vast variety of language exists. In order to communicate with people it is essential to identify target audience. This is not only important for outside communication but inside communication can also be affected with this diversity. Workforce contains different ethnic group people and communication requires understanding. CITATION kwi14 \l 1033 (kwintessential.co.uk, 2014) Nigeria has highest population and natural resources are available in country. Industrial sector in Nigeria is well educated. It is oil producer country and rank on sixth number as per its production. Family structure in Nigeria is strong and close bonding exist. Hierarchy is given due importance. Age and position is considered factors of respect. Greeting includes shaking hands with one another. They also discussed questions related with family and health. Muslims, Christians and other people with indigenous beliefs lived there. On the continent of Africa, Nigeria is known as super power. Nigerians feel proud to be part of that country. Gift giving habit is common in Nigerians. They bring nuts, chocolates and fruits when they visit other person’s house. Style of business communication differs from company to company and as per location. Before developing business relationships, they prefer to establish personal relations with that person. Direct, indirect, verbal and non-verbal communication is used in this country. Political makeup Business and environment has direct relationship. It is the environment that, determined success or failure of business. Political factors include labor law, tax policies, environmental law, trade policies, stability, tariff rates etc. in Nigeria politics is not stable. Political stability is important for business environment. In case of instability, foreign investments are not encouraged. Foreign investments results in increased GDP. Democracy is available in Nigeria. It is federal republic country and power of ruling is enjoyed by executive president. Head of state and government is president. West minister system also influences government of Nigeria for managing lower and upper houses. Power o legislation is enjoyed by government, senate and representatives house. These two chambers combine to make national assembly. National assembly keeps eye on government’s executive arm. Supreme Court, is highest judiciary. Theory that is used for separation of power in Nigeria is baron de Montesquieu. Legal system in Nigeria is based on British common law and judiciary independence. Constitution system provides framework. It includes English, Common, Customary law and Sharia. English law is derived from law off British. Common law is developed for independence of colony. Customary law is derived from traditional practices and norms. In northern part, law of Sharia is used. Universal suffrage is used for election of president. CITATION Ade13 \l 1033 (Adeleye, 2013)President is known as head of government and chief of the state. Executive branch is consisted of ministries of federal. From 36 cabinets, at least one member should be included from each cabinet. Senate confirmed appointments made by president. National assembly includes senate and House of Representatives. National assembly ha s360 while senate has 109 members. These are appointed for four years. One member of senate is appointed for federal capital. David Mark is president of Nigeria from 2007. Judicial branch includes Supreme Court, High Court, Court of Appeal and trial courts. Administrative division is consisted on 36 states and one territory. State is further has areas of local government. It has 771 local government areas. Foreign relations are better with neighboring countries due to democratic state. CITATION Han07 \l 1033 (Hanson, 2007) Studies focused on flaws in political and federal structure. In his book, federalism and Ethical conflict, author discussed constitutional flaws in Nigeria. He claimed that power of government is reduced in case of strong federalism structure. Economic institutions and politics is weak. CITATION Uki03 \l 1033 (Ukiwo, 2003)Religious issues In Nigeria, ethno-political challenge is emerging rapidly. Nigeria consists of Muslims and Christians. There exists conflict between these two religions. Culture and ethical differences is a reason that cannot be overlooked. Religion is linked with ethical, political, justice and poverty issues. Conflict between Abel and Cain is reflected by migration of Muslim herders into farmland. With the change of climate and natural resources, large desert has been created. With the expansion of Sahara, people moved towards south that resulted in conflict among farmers. Another Islamic group named Boko Haram, also contributed. CITATION Mar12 \l 1033 (Markoe, 2012)This group believes that non-Islamic education is sin and they want to implement Islamic law in Nigeria. This group is activated in north of Nigeria. They killed 5000 civilians between 2009 to 2014. It also originated corruption and human rights violation. It was revealed that they planned bombs and attacks in Churches and at public places. This group does not have global ideology and tactics. In one study, researcher discussed ethno-political conflicts. He said that there are ethnic groups lived in Nigeria not less than 400. Conflict among these groups resulted in approximately loss of 3 million. Total number of conflicts is hard to measure. This resulted in lack of religious freedom in society. People are afraid of moving and enjoying their life. There are various causes of religious issues in Nigeria. These include domination, oppression, discrimination, nepotism, bigotry, victimization, neglect etc. CITATION Sal10 \l 1033 (Salawu, 2010). Due to these issues corruption and terrorism is increasing in society. In Kaduna, Christians protested against the Sharia law that was introduced in the city. After this protest, both Churches and Mosques were targeted. It also resulted in violence of human right by killing people publically. CITATION Mas00 \l 1033 (Mason & Talbot, 2000)Economic issues One of important problem discussed in recent report published by the economics is inflation. It was stated in this report that cost f doing business in Nigeria has been increased. Economy of Nigeria is highly dependent on oil sector. Prices of raw material and other goods are directly affected by change in oil prices. It was also analyzed by economists that inflation will further increase in future. As per 2015 data, it is measured as 8.4%. Interest rates are estimated to be increase in future. CITATION KAN15 \l 1033 (KANO, 2015)Other economical issues include terrorism and corruption. Devaluation of currency increased cost of imports and reduced global competitiveness of domestic products due to higher prices. Domestic manufacturing is discouraged by people due to high prices. Due to this factor, foreign investment in country has been discouraged by investors. There exist political instability and uncertainty. Resources in economy contain 95% foreign earning and government revenue is only two third. Poverty and unemployment are popular in this country. Rate of unemployment is 80% and rate of poverty is above 60% in country. North Nigeria violence has created terrorism and economic damage in society. It was stated in 2014 report that cost of doing business in Nigeria would increase by 40% in future. There exist shortage of chronic power and oil revenue is decreasing despite of availability of oil. Foreign and public debt is increasing in country. As per data of 2015, government is paying 9% of its revenue in form of interest. Public debt constitutes 12% of GDP. More borrowing is required by government for increasing oil revenue that is one of the greatest challenges in country. All these issues should be concern before doing business in country. It requires strategic planning. Available resources There is the need to consider resources in country before establishing business relationships. Factors of production are important for processing off goods. land, labor, capital material availability is discussed under. People People include labor farce and employees. In Nigeria, large part of population is associated with the profession of agriculture. Labor cost varies from region to region. Labor is available at lower cost because of increased unemployment discussed above. 70% labor force is engaged in agriculture, 10% in industries and 205 in services business. Unskilled labor is available easily in Nigeria. Most people are poor and they engaged in lower level jobs. As per skilled employees, young population is unemployed. It means that it does not has working experience. It required training and skills. Material & energy As per material, Nigeria is rich in natural resources. Natural resources include iron, coal, ore, natural gas, zinc, lead, limestone, Arabic land, petroleum and oil. Extraction of resources is important profession in Nigeria. It has coal reserves. This is used by metal industry, railroads and power plants. Electricity is used to make from coal. Iron ores are available in country. Gypsum, gold, phosphates, rock salt, kaolin, uranium, topazes and sapphires is available in different regions. Manufacturing sector success is based on these minerals. Famous manufacturing sectors in Nigeria include paper mill, pulp and steel mills. Other manufacturing like beverages, tobacco, textile and cements required imports from foreign countries. CITATION Udo13 \l 1033 (Udo, 2013)Transportation infrastructure In Nigeria, road transportation system is given importance. Road network is controlled by local authority up to 67%. Government spent 20% budget on roads but their contribution for GDP is low. What issues might you need to plan for: Issues include corruption, high cost of business, poverty, inflation, uncertain government, dependency of business in oil, low foreign investment and diversified culture. Cost of doing business is higher so it will require more funding or initial investment. Due to inflation, raw material and other cost of processing will increase. Due to diversified culture and ethnics, business would face problems. Foreign direct investment in country is lower and it will be risky to start business. Planning should be made for identifying culture of different people. Target should be made for marketing products. There are more than two religions in country. Muslims and Christian requires separate targeting because they are changed as per their values and norms. For manufacturing and distributing food products planning of food laws and policies should be made. Obstacles need to consider Obstacles that should be considered is difficulty in expanding business. When you would want to go from one region difference will be found in culture and life style of people. North and south Nigeria is different, as different variety of people exists there. Other obstacle is that country is rich in natural resources like minerals but for beverages and food industry raw material, required imports from other countries that will direct affect profitability in case of fluctuation in currency. Strategy to consider Strategies should focus on identifying needs of customers as per their culture and religion. Muslims should be targeted only by Halal products because they do not eat other than Halal products. Employees and labor should be given training. Marketing of products will be made by identifying culture. Social media can be used as well as on shop marketing can also be introduced as per requirement of customers. Strategy should include demographic segmentation of people’s income and age group. CITATION art11 \l 1033 (articles.bplans.com, 2011) Goals will be defined with clear vision. Analysis of competitors is also important for success of business. Industry growth and strategies will also be concerned. Goals of company will be categorized into two categories. Vision will be achieved by establishing mission statement and every employee would be committed towards this mission for overall success of business. Recommendations It is recommended for organization that it should built vision and broke down into different steps for achieving overall goal. Bonding between workforce and timely communication is important for success. Some factors like terrorism cannot be fully controlled but can be minimized by increasing security. Marketing strategies of competitors should be considered for success of business. Political regulations as per that organization should be kept in mind. Culture should be identified and products should be varied on basis of diversified needs. It is important to consider all issues related with politics, religion and economy. Availability of material and labor should also be considered for success of business. References BIBLIOGRAPHY \l 1033 Adeleye, A. (2013, March). Nigeria’s political system and the people. Retrieved April Monday, 2015, from http://www.vanguardngr.com/2013/03/nigerias-political-system-and-the-people/ articles.bplans.com. (2011). Business Startup Strategy. Retrieved April Monday, 2015, from http://articles.bplans.com/business-start-up-strategy/ Hanson, S. (2007, April). Nigeria’s Creaky Political System. Retrieved April Monday, 2015, from http://www.cfr.org/nigeria/nigerias-creaky-political-system/p13079 KANO. (2015, APRIL). To the victor the toils. Retrieved apRIL MONDAY, 2015, from http://www.economist.com/news/finance-and-economics/21647666-low-oil-price-has-revealed-grave-problems-africas-biggest-economy kwintessential.co.uk. (2014). Nigeria - Language, Culture, Customs and Etiquette. Retrieved April Monday, 2015, from http://www.kwintessential.co.uk/resources/global-etiquette/nigeria.html Markoe, L. (2012). Nigeria: Five Things To Know About Religious Violence. Retrieved April 2015, from http://www.huffingtonpost.com/2012/07/14/nigeria-religious-violence_n_1672693.html Mason, B., & Talbot, C. (2000, February). Religious conflicts in Nigeria. Retrieved from https://www.wsws.org/en/articles/2000/02/nige-f28.html Salawu, B. (2010). Ethno-Religious Conflicts in Nigeria: Causal Analysis and Proposals for New Management Strategies. European Journal of Social Sciences, 13(3), 345-353. Udo, R. K. (2013). Resources and power. Retrieved April Monday, 2015, from http://www.britannica.com/EBchecked/topic/414840/Nigeria/55294/Resources-and-power Ukiwo, U. (2003). Politics, ethno-religious con£icts and democratic consolidation in Nigeria. J. of Modern African Studie, 41(2), 115–138.

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