QUICK FACTS ABOUT GHANA ? Population size: 29,629,338 ? Location: West Africa ? Region: Sub-Saharan Africa ? Targeted region: Accra (Capital) ? Currency: Cedi (GHS) ? Ghana’s natural resources: oil, gold, diamond ? 95% of bus transport in Accra is provided by the informal sector: a mix of buses, minibuses (trotro) and taxis. ? The only formal bus transport being provided in Ghana is by the Metro Mass Transit (MMT) Limited ? National Express Group is a leading public transport operator with bus, coach, tram and rail services in the UK, Continental Europe, North Africa, North America and the Middle East ? According to National Express, passengers made 882 million journeys on their services in 2017 Threat of Substitute –Medium (5/10) ? Low service differentiation: Service differentiation in Accra’s transport industry can only be seen in price and comfort between available substitutes. Passengers have no unique value proposition which makes it easy for them to switch at any time. – Direct substitute includes trotro, Uber, taxi, Metro Mass and car sharing -Indirect substitute includes WhatsApp call and Facetime as a means of satisfying the need to meet ? Low price -performance comparison on the part of passengers makes switching easy P PESTLE ANAYLSIS & EVALUATION: OPPORTUNITY/THREAT ? Political stability -ranked 2nd in Africa and 26th globally (opportunity) (Gipcghana.com, 2018) ? Democratic political system (opportunity) ? UK -Ghana sign £20m ($35.5m) trade and investment deal (see brochure) ? Length & complex business registration process (threat) ( see brochure) ? Ghana’s legal system is a mixed system of English common law and customary law (opportunity) ? GDP from transport sector as at Jul 2018: GHS 2198.13m ( Tradingeconomics.com, 2018) ? Urbanisation rate is expected to reach 72% by 2035, according to the African Development Fund (Oxford Business Group, 2018) ? E conomic stability: Significant revenue from oil production.
$191.32m in revenue in the first half of 2017 (Modern Ghana, 2018) ? According to the World Bank, Ghana is the fastest growing economy in 2018 (McDonnell, 2018) ? Cheap available labour: minimum wage is GHS 10.65 S ? Buses account for 60% of passenger movement in Accra (Ghana Investment Promotion Centre, 2018) ? Strong sense of national identity and unity ? English as a common language in Accra (opportunity) ? Accra is the most culturally diverse region ( threat and opportunity) ? High level of literacy in Accra (opportunity) ? Openness to innovation (opportunity) ? Social movement of already existing drivers (threat) ? ICT for accelerated development policy (see brochure) (Gipcghana.com, 2018) ? Presence of digital address system in Accra to facilitate movement ? New buses adopting e -ticketing system E.g. ‘Aayalolo’ buses (opportunity) COMPETITORSINTERNATIONAL STRATEGY ? Technological innovation: use of ride -hailing apps ? Use of promo codes for free rides ? Employs local drivers. However these drivers must have their own vehicles to work with and which must comply with Uber or Taxify’s vehicle requirements ? High commissions for drivers ? There is currently no foreign company operating a Bus Rapid Transit system (BRT system) in Accra. However Scania Group is the only foreign bus company in Ghana that operates as connecting routes between Accra and other parts outside of Accra ? Scania buses are popularly know as ‘Aayalolo’ by locals • 245 connected buses • Employs local drivers • Operates an electronic cash – free ticketing system • Adapted for riders with disabilities • High value proposition for riders Rivalry Among Existing Competitors -High (7/10) ? Significantly high number of existing rivals: Metro Mass, Scania Company, and minivans (trotro) ? Increasing number of ride -hailing services in Accra: Uber, Taxify, and Yenko taxi ? Different market entry strategies heightens competition ABOUT NATIONAL EXPRESS SUBTITUTE’S INTERNATIONAL STRATEGY (UBER ; TAXIFY ANAYLSIS) MARKET ENTRY STRATEGY ; RECOMMENDATIONS JOINT -VENTURE (JV) PROS ? Sharing cost as well as benefits (see brochure) ? Easy access to new markets and market knowledge (see brochure) ? JV contracts are usually temporary and National Express will be able to compete as an independent organisation in the market in future CONS ? Sharing intellectual property ? Difficult to find a partner who shares similar or the same vision as National Express ? Different cultures and management styles can result in poor integration and co -operation ACQUISITION PROS ? Reduces barriers to enter new market (see brochure) ? Reduces training cost (see brochure) ? Easy access to market knowledge and existing customers CONS ? Creates a clash of different cultures: the culture and values that the other company established may clash with the culture and values of your existing business REFERENCES ? National Express’ vision is to earn the lifetime loyalty of their customers by consistently delivering frequent, high performing public transport services which offer excellent value (Nationalexpressgroup.com,2018) MICRO ENVIRONMENT ANALYSIS (PORTER’S FIVE FORCES) Threat of new entrants -High (7/10) ? High entry barriers such as financial (significant capital requirements) and legal barriers (see brochure) ? Expected retaliatory actions is high: Existing driver’s associations E.g.
the Committed Drivers Association of Ghana (CDAG) make it difficult for new entrants to operate differently ? Power of incumbents is medium to high E T Bargaining Power of Suppliers –Medium ( 5/10) ? Barriers to entry for the supply side is medium to high (see brochure ) ? Bargaining power of fuel suppliers is medium to high (see brochure ) ? Low cost for labour erodes suppliers bargaining power (see brochure) Bargaining Power of Buyers (Passengers) -Low (4/10 ) ? Low buyer information availability: Accra passengers do not have enough information to make good cost – benefit trade -offs. Lack of comparison and review pages for various road transport industries erodes passengers bargaining power ? Absence of unique value proposition gives passengers bargaining power since competition in the road transport industry is mostly priced based ? Increased fuel prices by government affect’s prices for public transport but has zero or little effect on bargaining power of passengers (see brochure) Purpose of travel by mini -bus use . Purpose of travel by taxi KORANTEMAA OFEI-AGYEKUM (N0820721) ? McDonnell, T. (2018). What’s the World’s Fastest -Growing Economy? Ghana Contends for the Crown.
online Nytimes.com. Available at: https://www.nytimes.com/2018/03/10/world/africa/ghana -worlds -fastest -growing – economy.html Accessed 23 Oct. 2018. ? Oxford Business Group. (2018). Myanmar. online Available at: https://oxfordbusinessgroup.com/country/ghana/transport Accessed 22 Oct.
2018. ? Modern Ghana. (2018). Ghana’s oil revenue rises by 67% in first half of 2017 – BoG. online Available at: https://www.modernghana.com/news/795374/ghanas -oil -revenue -rises- by-67- in- first -half -of -2017- bog.html Accessed 29 Oct.
2018. ? ?Tradingeconomics.com. (2018). Ghana GDP From Transport | 2006 -2018 | Data | Chart | Calendar | Forecast.
online Available at: https://tradingeconomics.com/ghana/gdp -from – transport Accessed 20 Oct. 2018 ? Gipcghana.com. (2018). Political Stability -Ghana Investment Promotion Centre (GIPC). online Available at: http://www.gipcghana.com/invest -in -ghana/why -ghana/political -stability.html Accessed 22 Oct. 2018. ? S hangPharma Innovation.
(2018). How to minimize your company’s ‘liability of newness’ – ShangPharma Innovation. online Available at: https://www.spiivc.com/how -to -minimize -your – companys -liability -of -newness/ Accessed 1 Nov. 2018. ? An effective market entry strategy by National Express reduces thethreat of earlyfailure known “liability of newness” (ShangPharma Innovation, 2018) ? “Liabilities of newness” can however be reduced through a Joint -Venture or by Acquisition (see brochure)
