Easy Jet Should Operate Flights to Nigeria - Case Study Example

Should British Airline Operate in Nigeria? Table of Contents Introduction 3 PESTEL Analysis 4 Recommendation 9 Conclusion 11 Introduction Nigeria is known country of West Africa due to its production of oil. Although it is rich, Nigeria is famous for other vices political instability, insufficient infrastructure, corruption, and poor management of economic development. Lately, Nigeria has been back on her feet in search of economic and political reforms. The signing of an IMF agreement done in August 2000 allowed Nigeria to get a debt-restructuring deal from Paris. Nigeria has started to show the will of implementing the market reforms since the year 2008. With the support given by the IMF, Nigeria achieved modernization on her banking system, removed subsidies, and resolved disputes concerning the distribution of earnings from the oil companies regionally. Currently, President Jonathan has achieved a lot by establishing an economic team that involves members who have experience and good reputation. He also planned to have increased transparency, have economic diversity within the country, and improve financial management. The main impediments to the growth include lack of infrastructures and slow means of implementing the present reforms. The government is currently strengthening its economic partnership by teaming up with the international markets to have an improvement in its markets. It is reconstructing its financial sector that had been hurt by the world financial and economic crises. It acquires the necessary support of all the supportive organizations such as the central bank governor. The country went through many challenges and for it to reach its goals; several reforms are in progress to bring the desired change, as it has been one of the citizens’ anticipation (Vargas, 2008). From the marketing analysis, the United States appears to be the leading foreign investor in Nigeria. Nigeria made an agreement with the United States in March 2009. The agreement is popularly known as Trade and Investment Framework Agreement. This agreement advanced the progressing programs and have a discussion on the way forward of Nigerian economic trade. Presently, Nigeria is working on her trade factors to improve her economical imports and exports. The focus of improving the country’s economy is through establishing a convenient and less costly transportation of goods and services. Nigeria is out to change her way of importing and exporting goods and services through having an improved means of airline transportation. The country signed an MOU with the British airline companies have a British airline, such as the Easy Jet operating from other international countries across Nigeria. The proposal of having a British airline operating in Nigeria is one of the proposed projects that are in progress. Although this project of the British airline operating across Nigeria is underway, several threats such as terrorism are one among the challenges that pose a danger to the British airlines. This essay targets to discuss the framework of PESTEL analysis to the effects of terrorism to the British airlines proposed to be established in Nigeria. The other target of this essay is to explain the possible sources of threats from the terrorists. The second part of this essay gives the necessary recommendations as to whether the British airline should scheme into the market or it should. The second part of this essay will as well give detailed, and supportive information to the stand given concerning the British airline venture. PESTEL Analysis Using PESTEL framework to discuss how terrorism can affect British Airline Proposed Presence in Nigeria PESTEL framework provides the most effective method for analyzing the competitiveness and position of the organization in a competitive marketplace. The framework takes into consideration factors such as political, social, economic, social, technology, environment, and legal factors. These factors interact in a global environment to affect the overall performance of an organization. The framework provides a clear understanding of the key drivers that drive change in the airline industry alongside providing the analysis of the ways in which these factors affect the performance of the airline industry in specific markets it plans to expand their ventures (Ritzer, 2011). One of the factors that influence the entry of the new airline into the Nigerian market is the political factors. The Nigerian government controls the airlines that operate within and outside the country. Similarly, it influences new operators such as the British Airlines that plans to venture into the Nigerian market. However, terrorism poses a great challenge to both the British Airline Company and the country (Nigeria) as a whole. Terrorism plays a significant role in influencing the performance and expansion of the airline industries. The passengers realize the fact that, using air transport increases their risks of being hijacked, or blown by terrorists. This creates a negative impact on the airline industry, including the British Airline as it reduces the number of customers utilizing their services. The recent past has witnessed a significant terrorist attack in the European Countries including their business. As such, British Airline being, one of them makes it highly vulnerable to terrorist attack, thereby influencing the market share and the performance of the airline company (Orji, 2011). Terrorism increases the costs of operations incurred by the British Airline as it ventures into Nigeria. It increases the costs used for paying for more security checks and insurance to the airline, employees, and the customers utilizing their services. This makes it more expensive for the airline industries as they strive to increase their security in order to main their competitiveness and consumer confidence in their services. International and national governments affect the performance of the airline industries by providing rules and regulations that affect their performance. British Airline has to abide by both national and international regulations to ensure safe competition and protection of the consumer and the needs of the public. In addition, political instability in Nigeria affects the performance of the British Airline Company in Nigeria. This occurs through the reduction in the number of flights and cancellation to safeguard the safety of the customers and that of the company’s assets. Migration restrictions are also likely to affect the performance of the British Airlines in Nigeria (Vargas, 2008). Secondly, the Nigerian and global economic stability will influence the entry of the British Airline into the Nigerian market. Changes in the global and Nigerian economic status imply that, the airline company has to adjust its operations to suit to the needs and demands of the global economy. For example, the recently witnessed global economic recession led to the introduction of the low cost flying planes and jets to adjust to the economic conditions facing the airline companies. Economic recession reduces the number of travelers utilizing the services provided by the British Airline Company. The costs of fuel globally keep changing due to the influence of the constantly changing global economy. This means that, the airline face uncertainty about the stability of their operations as the price of the fuel required is subject to change at any time. Terrorist threats witnessed in the recent past have made the travelers reconsider travelling by planes. This reduces the consumer demands of the airline traveling which makes the airline industries consider adopting other strategies such as low travel flights to meet the needs of the travelers and woo them utilize the services provided by the company. Also, changing prices of the fuel required by the airline industry makes the British Airline consider adopting other non-monetary methods of meeting its needs to satisfy the demands of the considered market by forming an alliance with the Nigerian airlines to increase their fuel buying power, therefore, meeting their market needs (Tennent & Friend, 2011). Thirdly, social or cultural factors will influence the performance of the British Airline as it enters into the Nigerian market. People utilize airline services for various purposes to meet their needs. The utilization of the airline travels varies depending on the season of the year and consumer preference to the services provided by the company. Therefore, the company will expect to witness high utilization of its services during times such as during holidays and festive seasons when a larger percentage of the population travel by air to different destinations. The Nigerian population has varied cultural beliefs, practices, and religion, which the company must take into consideration as it, plans to introduce its services. However, increasing incidences of terrorism facing the airline industry will affect the performance of the British Airline as it enters into the Nigerian Market. Terrorism makes the travelers have a negative attitude towards travelling by air. They became reluctant in utilizing the airline services. As such, this influences the performance of the company as it enters into a new market since terrorism results in the reduction of the travelers utilizing their services hence, decreased productivity (Shapiro, 2009). Fourthly, the legal environment will influence the British Airline decisions as it plans to enter into the Nigerian market. Both Nigeria and the European Union have developed rules and regulations that the airline industries should abide to, to ensure liberalization and the promotion of a healthy competition among the different airline companies in Nigeria and other regions around the world. On the other hand, the increasing risk of terrorist attacks targeting the airline industry results in the introduction of new legal regulations and restrictions. These legal restrictions aim at ensuring security of the passengers and the airline industry as a whole. This proves costs incurring as the airline has to invest most of its resources on implementing these strategies, thereby, influencing its performance and entry into the Nigerian market. In addition, increasing terrorism translates to the need for the British Airline to adopt procedures aiming at safeguarding the rights of the employees and the consumers. This includes providing passenger and employee information such as their location of travel and stay on their first night of travel. This ensures that, the safety and the rights of the passengers and the employees are maintained. Other legal regulations that will influence the performance of the British Airline as it enters into the Nigerian market include the need for it to establish employees union that will help in improving the relationship between the employees and their employers thus, preventing industrial actions, and operational interruptions (Ritzer, 2011). Fifth, entry of the British Airline into the Nigerian market will be influenced by the need for it to embrace the regulations aiming at ensuring the protection of the environment. The airline has to adhere to the international and national laws set to ensure that airline companies prevent environmental pollution and proper waste disposal. Controls on regulating noise, scarcity of land for future expansion and consumption of fuel will affect the performance and operation of the company. Implementing the strategies aimed at achieving and adhering to these regulations will be costly to the company. Therefore, this will result in a significant reduction in the projected performance of the company during its initial stages before the company is fully established in the Nigerian market (Orji, 2011). Sixth, technology plays a significant role in influencing the entry of the British Airline into the Nigerian market. Increasing rates of terrorism witnessed globally have direct implications to the airline industries. They have to adopt technologies that will help in heightening of security to prevent the incidences of terrorism attacks to the airline. In addition, the company will have to adopt new technology to ensure efficiency and effectiveness in the management of its operations. For example, the company will have to introduce online booking, and customer care to allow the customers to book their flights without necessarily travelling to the airline headquarters/offices. Adoption of the new technology will enable the company to maintain its competitiveness in the Nigerian market, which translates to its competitiveness (National, 2004). Terrorism is caused by numerous factors. For example, empirical evidence shows that, corruption is highly implicated to contribute to terrorism. Corruption predisposes member of society to poverty. This act as root causes of terrorism as the poor feels neglected and turns to terrorism as a solution to their problems. Terrorist groups also act as a key source of terrorism threats. Nigerian groups such as Boko Haram provide a significant source of the terrorism threat since they can destabilize national security affecting the operations of the airline companies. Other global militia groups such as Alshabab acts a key threat of global terrorism as they are often implicated in most of the terrorist attacks globally. In the recent past, some religious groups have been implicated to be a great source of the terrorism threat. Such religions are believed to spread messages related to terrorism to their followers. Therefore, this necessitates the need for the adoption of security measures to respond to the increasing security threats facing the airline industry (Mwenda & Muuka, 2009). Recommendation The British airline has to venture in Nigeria only if Nigeria succeeded in uprooting the issue of terrorism, which may greatly affect such business venture. Nigeria should establish the main factors that result in the act of terrorism. From some few analyses done, endemic poverty and corruption are the basis of terrorism among the people of Nigeria. The terrorist group of Boko Haram came out because of some groups fighting for their rights thinking that they face oppression from the government. The government of Nigeria must seek the best solution in dealing with the terrorist groups and establishes a rapport with their leader. Through the established rapport, the country is able to know the basis of the terrorists’ urge of engaging in the act of destroying the country. The country has to establish the root cause of terrorism to have its development go high. The government should ensure of creating job opportunities for the youths and other people of interest. The revitalized economy of the country enables the creation of many job opportunities. The government should check on ways of creating employment to keep youths busy so as not to get influences of political issues and other negative influence. The government should come up with an economy that is much vibrant because it will create many employment opportunities changing the lives of youths to the positive directions (Kouzes & Posner, 2012). The Nigerian government should support some programs such as Amnesty given to the militants in the Niger Delta. Such programs should be in practice also in the north of Nigeria specifically the north- east. A massive number of desperate youths get training from such programs, making them the useful members of the country, rather than having them as terrorists. The best solution is through training youths to be developers of job opportunities rather than depending on seeking for employment. They should be introduced to major ways of being their own employers through having some entrepreneurship skills. Concentrating on the center of youths should be the government concern because the same youths are the vulnerable groups to influences of terrorism and other major vices that may ruin the country’s economy. Research done recently showed that the youths who do not meet their expectations of life go through strains and life pressure. The pressure surrounding them lead into adoption of crime being the only channel they can get what they desire (Holt, 1998). The Nigerian level of poverty is high; the government should ensure that this issue is under control. It should provide seeds to the farmers and train them on the best ways of conducting farming activities for a better harvest. The marginalized areas should undergo reclamation through the irrigation to have crops grown in those areas as a way of reducing poverty. If farmers achieve the best of their produce, they will have great interest for market and because of this reason, they will end up supporting the issue of import and export of farm produce. This is a means of getting citizens of Nigeria push for the establishment of fast airline, which in this case is the British airline. The Nigerian citizens, who have knowledge on the benefits of establishing the British airline, will ensure that any involvement in terrorism is a pull backward to the country’s economy (Doole & Lowe, 2008). Conclusion The government of Nigeria should establish a dialogue between the conflicting religions of Islam and Christians. For quite some time, terrorism has been on the brim due to conflicts existing between the Muslims and the Christians. The government should ensure that the two religious groups come in terms for the sake of the security of the country. The country should ensure that terrorism is uprooted to pave the way for the establishment of British airline. The uprooting of terrorism will ensure the presence of security for the international investors such as the British airline companies. The fight against terrorism will give safety assurance of safety to the investors against aircraft hijacking and kidnapping of passengers (Hirschman, 1970). Conclusively, the government of Nigeria should set its market safe for attracting international investors. References Doole, I., & Lowe, R. (2008). International marketing strategy: analysis, development and implementation. London, Cengage Learning. Hirschman, A. O. (1970). Exit, voice, and loyalty: responses to decline in firms, organizations, and states. Cambridge, Mass, Harvard Univ. Press. Holt, D. H. (1998). International management: text and cases. Fort Worth, Texas, Dryden Press. Kouzes, J. M., & Posner, B. Z. (2012). 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