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5.3_group_InternationalBusiness.pptxPower Generators: Business Presentation
Student’s Name
Institutional Affiliation
Introduction
Libya has one of the most competitive energy sectors in Africa
The nation's power generator sector was rated at $20 billion
The Libyan market is expected to grow by 2021 by more than ten percent
Power is increasingly becoming an essential commodity in Libya
Libya has one of the most competitive power sectors in Africa. In 2015, the country’s power generator sector was ranked at $20 billion. Within the same period of time, the market is projected to grow by more than $20 billion by 2021. The power generation, transmission and distribution networks of a country can influence the competitive status of a power generator products. In Libya, electrical power is increasingly becoming an essential commodity for the full functioning of industries and the entire social system. Although high investments have been made in the development of power generation tools, transmission, and distribution networks, a significant fraction of people still need power generators (Mordor Intelligence, 2017).
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1. Product Description
Power generators will be the main products
Other products will include:
Generator temperature control machines
Diesel generators
Transformers
Heaters
Power heat exchangers
Temperature accessories
The main products that the organization will provide to the Libyan market are power generators. The company will also be involved in the development and provision of power generation and temperature control equipments and machines. Thus, the organization's major products will include power generators, diesel generators, transformers, load banks, fuel tanks, cable ramps, quad box strings, synchronization and load sharing panels, as well as air control equipments. Other products will include coolers, remote monitoring devices, air control monitoring machines, chillers, heaters, heat exchangers, as well as temperature accessories.
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2. Management Activities Required to Analyze Internal Environment
1. Analysis of Strengths
Expansive dealer and distribution network
Strong and wide portfolio of brands
Offers customized equipments that are optimized for specific needs
Product diversification generates economy of scale
The organization is an American firm that currently enjoys expansive dealer and distribution network. The firm’s machines are distributed mainly via a international network comprised of more than 100 dealers. Some of the large and medium generators are sold under different brands through a broad network in America and Europe. The organization also has a wide portfolio of brands. The company acts as the umbrella that shelters all other power-generating brands within the portfolio. These strong brands are found in areas such as generator machineries, engines, and financial product markets. Further, the organization provides customized equipments that are optimized for specific needs.
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Management Activities Required to Analyze Internal Environment
2. Analysis of Weaknesses
Stiff competition from rival firms
Market share already exhausted
High competition leads to reduced margins and low market share
Low geographic penetration and activities
Weak financial performance
Although the company enjoys high international presence, it operates in an environment that is characterized by stiff competition as rival firms scramble for the already-exhausted market share. Thus, high competition results in reduced margins and low market share. Another weakness that the company faces is the challenge of geographic penetration and operations. The organization has not yet penetrated into certain geographical regions such as Africa and Middle East. The company also faces the challenge of weak financial performance. The organization's financial performance ahs been undergoing steady decline since 2015.
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3. External Environment
Political
Libya among the most politically unstable countries in the world
Country characterized by factional and intertribal clashes
Security threats affect the safety of foreign and local businesses
However, widespread power outages due to instability increases opportunity as people seek alternative sources of energy such as generators
A country’s political climate affects the success of foreign and local investments. Libya is one of the most unstable countries in the world. The country is characterized by political instability, factional and intertribal clashes, and security threats from domestic and foreign factions of Islamic State have discouraged foreign investments from taking place. Libya is politically fragile and uneven. Every year, the country witnesses series of protests and inter-tribal wars. These activities have resulted in widespread power outages. As a result, the country needs more power generators to complement the unreliable mains electricity that is provided by the government (Abdulla, 2010).
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3. External Environment
Economic
Economy of a country affects business wellbeing
Libya is facing financial and economic recession
Companies are responding to economic recession by cutting costs on generators
Families also seek cheaper means of getting power due to the financial crisis
The economic state of the Libyan environmental affects the success of the business in many ways. From an economical perspective, Libya is facing one of the biggest financial and economic downturn ever since the country was founded. Economic instability has resulted in companies taking austerity measures such as cutting down on their expenditures. This can adversely affect the generator business since many families will not see the need to purchase power generators. In addition, the country has advanced infrastructures such as roads, railway lines, and telecommunication technologies. These infrastructures support the effective distribution of the company’s products across the country. Furthermore, high unemployment rates have resulted in reduced labor costs, thus supporting the company (Hillebrand & Closson, 2015).
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External Environment
Socio-cultural and religious Factors
Socio-cultural differences between US and Libya affects how US companies operate in Libya
Purchasing patterns of Libyans are influenced by their lifestyles
Most families and businesses do not operate 24 hours
Therefore, they rarely need generators to meet their power needs at night.
Cultural differences between US and Libya have impacts on the success of foreign investments in power generators. The purchasing patterns of Libyans are partly influenced by their social and cultural practices. For instance, most Libyans are dominantly Muslims and rarely spend their nights in social places such as bars. Therefore, owners of clubs and bars may not see the need to buy generators. Moreover, the American company may have to change its structures to conform with the cultural practices of Libyans. For instance, Libya is a collectivized country that believes in collective and group efforts as opposed to individual efforts. Therefore, the company may change its structures of decision-making to support group consultations in decision-making (Hillebrand & Closson, 2015).
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External Environment
Environmental Factors
Libyan government is promoting environmental sustainability practices
There is growing public awareness against fossil fuel products
This adversely affects the sale of generators that use diesel and other fuels
However, low fuel costs in Libya means people prefer power generators to mains electricity
Libya is increasingly recognizing the need to promote environmental sustainability. This includes the energy sector, where the country is promoting businesses that utilize green products to generate energy and power. Environmental movements have succeeded in raising public awareness against continued use of fossil fuels. This may have negative impacts on the organization's prospects for future growth. This is because the company mainly depends on fossil fuel generators to produce electrical energy. However, fossil fuel prices are cheap in Libya because it is an oil-producing company. This means that the organization's generators can be on high demand in the country (Hillebrand & Closson, 2015).
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External Analysis
Legal Environment
Tough regulatory frameworks affect foreign investments
High taxation laws on foreign companies affects the wellbeing of the firm
Libya has poor record of rule of law
Arbitrary seizures of properties bad for foreign investments
Libya is a nation that has established strong and tougher regulatory frameworks that govern foreign investors. For instance, high income tax regime adversely affects the operation of foreign companies in the country. The country has no yet fully embraced the rule of law. Therefore, there are arbitrary seizures of properties in a climate of general political instability. Although Libyans have the right to property ownership, there are regulations and protections that have not yet been upheld in practice. Therefore, businesses and homes have been confiscated by militants, especially in the country's eastern regions and Benghazi (IBP, Inc. 2017).
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External Environment
Technological Factors
Technological revolutions have transformed business environments in Libya
Arab Spring transformed Libya from totalitarian to democratic state
Technological changes have improved the transport and telecommunication sectors that are essential for business.
ICT advancements have improved company’s market presence through online platforms.
Technological revolutions have brought rapid changes in Libya. The Arab Spring changed Libya from a totalitarian state to a democracy. There ahs been a widespread adoption of technology in different aspects. For instance, technological changes such as advancements in transport and telecommunication facilities have made business activities and transactions easier to conduct. ICT development also means increased market presence through establishment of online presence and market where Libyan users can access and purchase products. High levels of literacy in ICT and other technologies in Libya means that employees are skilled enough to use the company’s information systems (Hillebrand & Closson, 2015).
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References
Abdulla, S. (2010). An empirical analysis of Libyan business environment and foreign direct investment (Doctoral dissertation, Durham University).
Hillebrand, E., & Closson, S. (2015). Energy, Economic Growth, and Geopolitical Futures: Eight Long-range Scenarios. Boston: MIT Press.
IBP, Inc. (2017). Libya Company Laws and Regulations Handbook Volume 1 Strategic Information. New York: International Business Publications
Mordor Intelligence. (2017). Libya Power Market Outlook to 2021. New York: MI. Retrieved from https://www.mordorintelligence.com/industry-reports/libya-power-market
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