1

International Marketing
ADMN 4376N 14SP
Nicole Gajadhar
129617790
Pest-C Analysis Report
International Market: Nigeria






2

Executive Summary
The purpose of this business report is to demonstrate the proposed real estate endeavour
through international expansion. Canadian Rockport Homes will be entering the Nigerian market
as an exclusive housing organization that provides eco stability and building materials.
Essentially, the company will enter the Nigerian housing market to provide people with a quality
built foundation. Each year we aim at succeeding to keeping up with changes in infrastructure,
political and economical conditions in the country of Nigeria. Rockport Homes hopes for
potential home buyers will be motivated to purchase quality homes.

This business venture is composed as cooperation. Nigeria is the one the fastest emerging
economies. It is known for their rich oil reserves and minerals that is exported across the globe.
However, with political corruption and a poorly managed government it is hard for Nigeria to
progress as a single nation. There are many risks involved with entering a foreign country to
conduct business. The market for Nigerian housing development is needed as they are
experiencing a shortage of homes due to the underlying effects of poverty and unemployment.
Furthermore, home buying in Nigeria is hindered by the lack of financial aid and infrastructure

Rockport Homes has a unique business model that allows our work ethic follows with social
responsibility which is making positive difference in undeveloped countries. This is
accomplished through the provision of affordable housing and charitable services. Profitability
will be reached annually and aiming at increasing revenues. The main target markets Rockport
Homes will look to attract young demographic of families that are living in the poorest
conditions. With our values our organization will attract consumers from all economic levels.
This report entails a detailed analysis of Nigeria economic standing and reasoning for why
Canadian Rockport Homes should expand over to the Nigerian market.






3

Table of Contents


Overview & Current Strategic Position Pg 4
Economic Situation (past, current, future forecasting)pg 5-6
Current Social SituationPg 6
Cultural Implications..Pg 7
Market Platform..Pg 7-8
Technological /Infrastructural developmentPg 8
Current Financial Position.. .. Pg 9
The political climate.Pg 9
Geopolitical Situation.. Pg 10
Competitive SituationPg 10
Conclusion & RecommendationsPg 11




















4

Overview & Current Strategic Position

Canadian Rockport Homes is a well established firm in the home building industry. Founder and
CEO William R. Malon is the visionary and moving force behind the organizations success.
Canadian Rockport Homes is a multimillion real estate company. William has plenty of
experience and credentials to support his successful efforts. His character and strong sense of
social responsibility in how the company is operated and managed were 2 key detriments
behind his accomplishments. Rockports technology for the Uni-concrete Cell process and
Tekrete was a competitive advantage for the organization which assisted in the producing a
mass number of cost efficient homes while maintaining high standards of quality. Rockports
strategy was to establish manufacturing plants in each international target market and
alternatively license the companys technology to local firms. This plan is feasible as it sets
realistic goals and aims to set their organization on an international platform. With international
competition comes dealing with cultural customs and norms.
Nigeria is one of the countrys Canadian Rockport Homes should consider. Nigeria is one of the
fastest growing economies and developing countries that can use a diminutive assistance from
an established foreign business like Rockport Homes. Nigeria is known for their rich resources
and raw materials, young demography, and oil reserves. However, their shortage of homes is
caused by the poverty, unemployment and government mismanagement. Nigerian housing
development is hindered by factors that include: inefficient mechanisms for transferring
property, the absence of long term finance for home buyers, lack of basic infrastructure and an
inadequate urban planning system, which fails to provide adequate land for housing, while at
the same time allowing unauthorized development which has a detrimental effect on property
values. (Mark Boleat, 2014)
Nonetheless, doing business in Nigeria can bring positive light to the reputation of the Canadian
brand. Taking their business to Nigeria will do more good for their organization they will increase
profits and revenue, create job opportunities for the Nigerian people and manage long-term
relationships . Entering foreign markets is not as easy because of the risks involved.
By entering foreign markets, RockPort may be challenged with unfamiliar tax issues, labor laws,
and dangerous political reform groups. From an infrastructure perspective, owned expansion
may demand new supply chain channels for efficient product flow, and, to plan and manage the
business effectively, Rockport may need to add, convert, or enhance technological software,
hardware, and capacity for local site developers.

5

Economic situation

Past
After the independence of Nigeria, which had taken place in the 1960s Nigeria increasing
economy had begun. Nigeria was already a country rich with resources that was driven by
agriculture and trade in fact the working population was engaged in producing raw goods and
minerals including rice, beans, sugar, yams , gold, bauxite ,tin, zinc and natural gas . In the
1970s Nigeria became the world's seventh-largest petroleum producer, became a member of
the Organization of the Petroleum Exporting Countries (OPEC). (unknown, 2014). Oil
revenues contributed to some of the elimination of poverty and unemployment however, the
corruption of military regime and the abrupt changes in the government have altered Nigeria
economic share of expenditures. In the 1980s there was much rivalry between the 36 states of
Nigeria over the ample disgruntlement and difference between ethnic communities and
nationalities which resulted in economic depression. Adding to the slow growth rate of national
output also included the balance of payment crisis, the mounting national output and inflation.
Current
Nigeria is currently developing into a booming economy. Gross domestic production per capita
increased by 8% over the past 7 years. Two key related macroeconomic variables the rate of
inflation and the general level of interest rates are relevant to housing finance. Loans to
finance house purchase need to be for relatively long terms, and long term financing is difficult if
not impossible in a high inflation/high interest rate environment. (Mark Boleat, 2014) Nigeria
has suffered from inflation and high interest rates. In recent years the economic situation has
taken a turn for the better. The prime lending rate has fallen from 25 per cent in 2002 to 16 18
per cent over the last few years. Inflation has fallen from double figures to around 6 per cent.
(Mark Boleat, 2014).Inflation is forecasted to vary between 7 9% over the next couple of years
Future
If there are no real changes to Nigeria military and government the country will pummel and self
destruct. Nigeria real challenge is to maintain continuance for development and making growth
more inclusive. Poverty and unemployment remain well-known among the major problems
facing the economy. One obvious rationale for this is that the benefits of economic growth have
not reached to the poor (due to corruption of oil theft). However, the Nigerian government
recently passed into law by the national assembly to focus on creating jobs and opportunities for
the country. Nigeria is to become the 25th largest economy in the world by 2028, second only
to Egypt in Africa. (ANUDU, 2014) With the continuance of fair pricing of energy and other
6

scarce commodities that they export to the foreign world provides Nigeria a large consumer and
market base. Assuming that oil prices do not decline sharply and oil output stabilizes, the
macroeconomic outlook for Nigeria in 2013 appears fairly strong. The foreign inflows that
generated the balance of payments surplus and reserve accumulation should continue, and will
stimulate domestic demand. (unknown, Nigeria Economic Report, 2014)

Current Social Situation
Poverty, disease and violence perpetually effect the social situation in Nigeria as this third world
country struggles to maintain democracy. Malaria are just one of the health epidemic currently
happening in Nigeria before a child turns the age of 5 they are at fatal risk of effected by this
treatable disease. Political unrest among the 36 states has led to corruption, terrorism and
significant casualties across the country. Power and wealth is significantly disproportionate
among the Nigerian people. A substantial percentage of Nigerians live below the poverty line,
preoccupied with the daily struggles of earning a living with diminutive opportunities of improving
their lifestyle. (Unknown, 2014) The quality of housing is very poor along with the sewage
disposal systems which impact the foundation of homes that are built in suburban towns.
On the other hand, politicians, chiefs, high-ranking civil servants accrue and flaunt their wealth
which to a degree has become accepted within the Nigerian Society. Many involved in this elite
group of Nigerians maintain wealth and power through investment networks. They secure and
distribute labor, and receive political support in return. (Unknown, 2014) These elite groups are
not without corruption and violence that yet again hinders the Nigerian people from evolving as
a united Nation. Most of the corruption is lead by the leader Boko Haram and the military regime
that has much power and political connection to control law, education, religion, and attributed
to the social injustice. The most recent crimes he committed were the kidnapping of the 250
Chibok school girls. Crime is no stranger in Nigeria, the safety of foreign visitors is highly at risk
of robbery or bribery and police authorities are not much help because they respond slowly or
not at all and provide little or no justice to support victims. Nigeria is eager to attract foreign
investment however is hindered in this pursuit by security concerns as well as by a shaky
infrastructure troubled by power cuts.





7

Cultural Implications
Nigeria is a country enriched with culture and customs. What many people do not know is
that Nigeria has many different ethnic groups and cultural practices with groups like the
Hausas, Igbos, and Yorubas. Many Nigerians communicate in english as many businesses go
international and the economy is driven by trade and exporting. About half of the Yorubas are
Christian and half Muslim. The predominantly Catholic Igbo are the largest ethnic group in the
southeast, with the Efik, Ibibio, and Ijaw comprising a substantial segment of the population in
that area (Edward, 2014) Each ethnic group are distinguished by distinctive patterns of family
life language, recreation, religion and other customs which cause them to be differentiated from
others. These varied groups share a unique background and history of tribal affairs. The
heritage of the cultural groups is passed on down to future generations. Acceptance and
rejection often is a social relation in the Nigerian culture. Major Dominant ethnic groups and
minority groups have to co-exist with one another and often times these causes a crevice
among societies. The co-existence of these ethnic groups within the similar polity has
habitually led to competitive ethnicity which started in back in the colonial days.
Competitive ethnicity was demonstrated through the discrimination of employment, entrance for
education, marriages, housing developments, business endeavors and social services.

Market Platform
Nigeria represents a potentially huge market for housing development in a country where
unplanned accommodations is surrounded by poor living conditions. In 2010, it was reported
that eighty-five percent of the urban population lives in rented accommodation,
spending more than 40% of their income on rent of these, 90% are self-built and this is
mainly due to lack of mortgage financing, and less than 5% have formal title
registration. (Unknown, 2014). With a population of more than 70 million low income people
and a small mortgage market, housing microfinance has enormous potential therefore this
gives Rockport Homes the opportunity to enter the foreign markets in Nigeria as it is a
large target consumer base in all of Africa. Studies estimated the shortage of housing in
Nigeria which resulted in between 12 -16 million units, the fast urbanizing population is
the cause of this. There are sub sectors in the Nigerian housing market which are
broken down into 3 categories: the informal sector, Formal Sector and the subsidized
sector. Right now conflict is with the informal and subsidized sectors. The housing
8

market is over-regulated and takes up to 20% for regulatory costs not to mention the
land titling system which too is also dysfunctional which make it impossible for Nigerians
to become home owners. President Goodluck Jonathan launched a government
movement to end the housing crisis. The NMRC (Nigerian mortgage refinancing
company) made their efforts to improve the access of mortgages to people who couldnt
afford nor attain them. NMRC project objectives are to improve the living conditions of
those living in poverty. Indeed, the ministry of finance has stated that based on World Bank
estimates "the successful implementation of this program will, conservatively estimated, set a
growth process in motion that will deliver 75,000 homes per annum, and generate and sustain
at least 300,000 direct and 488,000 indirect jobs after the initial project period." (Abrham, 2014)

Technological /Infrastructural development
Advances in technology have had a major impact on Nigerias Petroleum success. Due to the
advancement in technology, in part with petroleum organizations they have managed to carry
projects that support creating technological advances in the energy sector, water sector, and
telecommunications sector to improve the life of its consumers. In the past Nigeria was
dependent on other counties for technology uses of equipment. However, different gas
organizations like Shell changed the framework of creating infrastructures, The Shell Petroleum
Project and Technology section deliver differentiated technical information technology for Shell
Petroleum and drive research and innovation to create tomorrows technology solutions. (Shell
2010)
The most prominent focuses are on telecommunications and hospital technologies. Nigeria has
been advancing and continuously placing emphasis on the improvement of roads, power, rail,
and ICT segments. Infrastructure, accounts for Nigerias capital growth by 1% regardless of the
fact that unreliable power supplies slowed down its growth furthermore, Nigeria is set to join the
league of countries exploring alternative technologies to achieve a reduction in costs of
constriction of houses and infrastructure. (Emeka Anuforo, 2014)




9

Current Financial Position
Nigeria is an emerging mixed economy with a non developed financial position. Nigeria has still
suffered the repercussions of the global financial recession back in 2008.Only 15% of Nigerians
hold a bank account. High interest rates and inflation impacted the country severely. However
since then the situation has changed positively. Nigeria rebased its GDP from 1990 to 2010,
resulting in an 89% increase in the estimated size of the economy. As a result, the country now
boasts of having the largest economy in Africa with an estimated nominal GDP of USD 510
billion, surpassing South Africas USD 352 billion. (unknown, Nigeria Economic Report, 2014)




The political climate
The political situation is unstable and characterized by ethnic tensions, weak institutions and
widespread corruption. The high level of mismanagement by the government is why citizens
become frustrated and join political reforms. There is no solid government hierarchy, it is
necessary to underline that Nigeria cannot be characterized as a democratic country. In
practice, this means that the national economy depends on the political situation in the country.
(Edward, 2014) The situation is deteriorated by the fact that the political leaders of the country
are extremely corrupted and corruption affects practically all levels of political power of the
country. The major challenge facing the government is creating political consensus on a reform
agenda. Support for the incumbent president and the fact that the government has shown signs
of willingness to reform indicate that the political situation in Nigeria is gradually stabilizing.
(unknown, Nigeria:Country Risk anlysis, 2014)

10


Geopolitical Situation
There are two main parts of conflict that have had a negative impact on the geopolitical climate.
One is the geographical divide between northern and southern Nigeria and the secondary
conflict is the cultural divide of ethnicities and religion. The division of Nigerias geographical,
ethnic and cultural identity lines is effectively balanced by the countrys federal structure and the
strong emphasis of the federal government on representing six geopolitical zones and different
ethnic and cultural identities. (unknown, Nigeria Economic Report, 2014) Though Nigerias
geopolitical environment is fairly stable, instability of economies still exists in some parts of
Nigeria. Inaddtion to the geopolitical issue oil resources have impacted high revenues and
violent uprisings by the military regime who has taken control over it.


Competitive Situation
Competition will stem from local developers and builders in the Nigerian communities. Once
Rockport is established on building sites closet to the locales, competition will then increase but
not significantly because of the materials and technology used. However there is one potential
competitor called, Pozzolana cements who provide products of locally sources, readily
available raw materials with cementing properties which will serve as partial replacements
to conventional cement. Pozzolanas are known to have the advantage of being more eco-
friend, to and are sustainable as their production process entails less harmful emissions into
the atmosphere. This competitor is no real threat because this company construction uses
traditional concrete block/brick methods that take months to construct a home that Rockport can
amass in one day. Unlike Tekcrete Homes , which are built in a manufacturing plant, other
companies build on-site which is time consuming and subject to countless problems including
theft and inclement weather conditions. No housing technology Rockport is aware of exists that
can be built as quickly or as affordably as Rockport's homes.







11

Recommendation
If Rockport Homes is going to enter a particular housing sector they should evaluate all three
before coming to a decision. It is in their best interest to take interest with the informal sector
because it is in demand and is by far the largest sector to consider. The informal sector people
do not have connections with any formal financial institution and normally live in overcrowded
homes, lacking the basic amenities. Here another opportunity presents itself for Rockport
Homes for joint ventures with Nigeria funding program to provide funding and financing options
for lower incomes families. In 2013 the, World Bank and the board of directors approved a
$300 million credit with the International Development Association to boost Nigerias efforts to
provide affordable mortgages. (unknown, The World Bank Approves Funds to Support
Nigerias Expansion of its Housing Finance Market, 2014)
Alternatively, Rockport should enter the Nigerian market as a distribution because of its low
overhead costs and wide specialty material and equipment. When choosing the distribution
model, Rockport will eventually establish relationships with local distributors, who sell the
products in that particular area. The prices will be fairly made. It is imperative for Rockport to
choose the right partner. The distributor should have sufficient storage capacity and a good
distribution network, which covers the whole sub sector.









12

Works Cited
Abrham, S. (2014, 6 12). Opening up the Nigerian housing market. Retrieved from The Guardian:
http://www.theguardian.com/global-development-professionals-network/adam-smith-
international-partner-zone/nigeria-mortgages-housing-market
ANUDU, O. (2014, 06 14). Business Day. Retrieved from Nigeria to become worlds 25th largest economy
in 2028: http://businessdayonline.com/2013/12/nigeria-to-become-worlds-25th-largest-
economy-in-2028/#.U5zU6PldWYk
Edward, E. L. (2014, 6 14). Nigeria: Economic, Political and Social Issues. Retrieved from Nova Publishers:
https://www.novapublishers.com/catalog/product_info.php?products_id=7431
Emeka Anuforo, A. (2014, 6 12). Nigeria eyes reduction in construction costs with new technology.
Retrieved from The Guardian: http://www.ngrguardiannews.com/features/science/165527-
nigeria-eyes-reduction-in-construction-costs-with-new-technology
Mark Boleat, S. W. (2014, 06 14). Nigeria:Financial System Strategy. Retrieved from Boleat:
http://www.boleat.com/materials/nigerian_financial_system_strategy_2020.pdf
unknown. (2014, 6 14). Nigeria Economic Report. Retrieved from Worldbank: Assuming that oil prices do
not decline sharply
unknown. (2014, 06 12). Nigeria:Country Risk anlysis. Retrieved from EKN:
http://www.ekn.se/Global/Landriskanalyser/Afrika/Engelska/Nigeria2012ExternEng.pdf
unknown. (2014, 6 14). Nigerian National Petroleuam Corporation. Retrieved from nnpcgroup:
http://www.nnpcgroup.com/NNPCBusiness/BusinessInformation/OilGasinNigeria/IndustryHisto
ry.aspx
Unknown. (2014, 6 14). OVERVIEW OF THE HOUSING FINANCE SECTOR IN NIGERIA. Retrieved from
Finmark Trust: http://www.finmark.org.za/wp-content/uploads/pubs/A2HF_Nigeria.pdf
Unknown. (2014). The People of Nigera, Social Issues. Retrieved 06 12, 2014, from Countries Quest:
http://www.countriesquest.com/africa/nigeria/the_people_of_nigeria/social_issues.htm
unknown. (2014, 6 14). The World Bank Approves Funds to Support Nigerias Expansion of its Housing
Finance Market. Retrieved from The World Bank: http://www.worldbank.org/en/news/press-
release/2013/09/26/world-bank-support-nigeria-expansion-housing-finance-market




13