Strategic Management Considerations for Venezuela and Nigeria
In this project, the focus is on conducting a PESTLE analysis for Venezuela and Nigeria to assess key strategic considerations regarding political, economic, social, technological, legal, and environmental factors. The analysis delves into the political landscape and economic challenges facing Venezuela, with insights on government institutions, oil reserves, and societal impacts. The objective is to provide a comprehensive evaluation for potential business expansions in these countries.
Download Presentation
Please find below an Image/Link to download the presentation.
The content on the website is provided AS IS for your information and personal use only. It may not be sold, licensed, or shared on other websites without obtaining consent from the author.If you encounter any issues during the download, it is possible that the publisher has removed the file from their server.
You are allowed to download the files provided on this website for personal or commercial use, subject to the condition that they are used lawfully. All files are the property of their respective owners.
The content on the website is provided AS IS for your information and personal use only. It may not be sold, licensed, or shared on other websites without obtaining consent from the author.
E N D
Presentation Transcript
Strategic Management Friday Group Project www.gbsge.com Switzerland
Strategic Management Technical Exercise Utilizing the PESTLE Analysis You are a member of the Strategic Management Team for a medium sized organization that manufactures and sells specialized oil and gas exploratory, drilling and production equipment to a wide range of global oil and gas companies. One of the major strategic initiatives being considered by the Strategic Team is expanding existing U.S. based manufacturing operations of this equipment to both South America and the African continent to reduce shipping distance of material and establish a local presence. The targeted country in Africa being considered is Nigeria, which would allow shipment of equipment to African oil producers in Angola, Ivory Coast, Ghana, Cameroon, Gabon, DRC and Equatorial Guinea. The targeted country in Latin America under consideration is Venezuela, which would allow shipment of equipment to Latin American oil producers in Brazil, Mexico and Colombia. 2 www.gbsge.com
Strategic Management Technical Exercise Utilizing the PESTLE Analysis The company s CEO asks you to participate in a project team to perform an environmental scan that will focus on key considerations that need to be examined for both countries under consideration, Venezuela and Nigeria, and to be brutally honest in your evaluation and comments. In order to begin accumulation of basic information, you will utilize the PESTLE tool and perform a basic PESTLE analysis, covering specific areas that could impact the company and its operations. Your team assignment is to discuss and prepare a list of topics that should be considered from a strategic point of view, listing topics of concern under each of the PESTLE categories. 3 www.gbsge.com
Venezuela Political: In Venezuela today, no independent government institutions remain to act as a check on executive power. The Venezuelan government under Maduro and previously under Ch vez has stacked the courts with judges who make no pretense of independence. The Venezuelan government has jailed political opponents and disqualified them from running for office. At time of writing, more than 340 political prisoners were languishing in Venezuelan prisons or intelligence services headquarters, according to the Penal Forum, a Venezuelan network of pro-bono criminal defense lawyers. 2017 August - Chief prosecutor Luisa Ortega goes into exile, saying she was sacked because the government wanted to stop her investigations into alleged corruption and human rights abuses. 4 www.gbsge.com
Venezuela Economics - The proven oil reserves in Venezuela are recognized as the largest in the world, totaling 297 billion barrels (4.72 1010 m3). Oil industry is Nationalized and established as the main source of revenue for the Venezuelan economy. Venezuela has almost 300 billion barrels of proved oil reserves, the world s largest. Most of those 220 billion barrels are in the Orinoco bitumen belt - Venezuelans are facing severe shortages of medicine, medical supplies, and food, seriously undermining their rights to health and food. In 2017, the Venezuelan health minister released official data for 2016 indicating that, in one year, maternal mortality increased 65 percent, infant mortality increased 30 percent, and cases of malaria increased 76 percent. Children are arriving with very precarious conditions of malnutrition, said Dr. Hun ades Urbina Medina, the president of the Venezuelan Society of Childcare and Pediatrics. He added that doctors were even seeing the kind of extreme malnutrition often found in refugee camps cases that were highly unusual in oil-rich Venezuela before its economy fell to pieces. Parliament grants the President special powers to deal with devastating floods, prompting opposition fears of greater authoritarianism. 5 www.gbsge.com
Venezuela Social: - Drug trafficking. - Criminal Groups - Venezuela is a powder keg. Once a rich country held together by strong leadership and heavy social spending, it is now in economic disaster and could slide into widespread social disorder, triggering instability throughout Latin America. 6 www.gbsge.com
Venezuela Technological: Oil technology and technology in general is not playing a big role in the Venezuelan culture right now because of lack of investment and new projects. 7 www.gbsge.com
Venezuela Legal Municipal tax:Venezuela has a federal structure, with three levels of executive and legislative power. 8 www.gbsge.com
Venezuela Environmental: Environmental issues include sewage pollution into Valencia Lake, oil and urban pollution of Maracaibo Lake, deforestation, soil degradation, and urban and industrial pollution, especially along the Caribbean coast. 9 www.gbsge.com
Nigeria Political: - The ongoing Boko Haram conflict in the northeast, cycles of communal violence between pastoralists and farmers, and separatist protests in the south defined Nigeria s human rights landscape in 2017. - Notably absent for much of the year was President Buhari, who traveled overseas on two extended medical leaves for an undisclosed illness. Vice President Yemi Osinbajo acted as interim president on both occasions. - Corruption continues to plague Nigeria despite the Buhari administration s increased efforts at reform and oversight. 10 www.gbsge.com
Politically, Nigeria seems to be stable except for the uprising of the terrorists in the Northern part of the country. Also, another faction in the South-South agitating for their rights over the oil revenue may make the business in that area to be volatile. There has been series of oil pipes vandalization across the oil rich cities in Nigeria. 11 www.gbsge.com
Nigeria Economics - Nigeria is a middle-income, mixed economy and emerging market, with expanding manufacturing, financial, service, communications, technology and entertainment sectors. - The west Africa nation fell into a technical recession in the first half of 2017 as its finances were hit by low oil prices and declining crude output following militant attacks on pipelines in the Niger delta region. - A 60% drop in Oil Revenue and Foreign exchange earnings is the immediate cause of the current crisis. 12 www.gbsge.com
Nigeria Social: - A huge population dependent on assistance. - Presently over 70% of the country's population live under the poverty line and this percentage has rapidly increased from almost 35% in 1992 to over 70% in 2010 and on. And rapid population growth is not the only cause of poverty in Nigeria. Corruption is a great contributor to this social issue. 13 www.gbsge.com
Nigeria Technological: - Lack of modern technology in Nigeria. - The Government does not value technology as much as they should. Also, Nigerians do not trust things made in Nigeria. - Level of Technology determines level of socio- economic development in Nigeria -Technological development has direct relationship with standard of living - Technological development depends on the Leadership Vision Development of local technology Institutional framework Enabling policy Funding Capacity building etc. 14 www.gbsge.com
Nigeria Legal: - Nigerian press, bolstered by strong civil society, remains largely free. Journalists, however, face harassment, and the implementation of a 2015 Cyber Crime Act threatens to curtail freedom of expression. - Tax laws: Nigeria operates progressive tax system for Personal Income Tax. The more a person earns, the more he is expected to pay as tax. 15 www.gbsge.com
Nigeria Environmental: - Oil spills, desertification, deforestation and loss of natural habitat all constitutes some of Nigerias greatest environmental challenges. - Solid Waste and Poor Sanitation. - Water Pollution and Air Pollution: 70 percent of the industry is located in the city of Lagos; therefore the level of air pollution is also high in this area. Almost, a million cars on the roads of Lagos, Nigeria consume 40 percent of total fuel of Nigeria and these cars inject almost three tons of lead into the air on daily basis 16 www.gbsge.com
Final Decision After the environmental scan we see that there are many issues that could impact the company and its operations, neither Venezuela nor Nigeria suitable to start the business. 17 www.gbsge.com
