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QUICK FACTS ABOUT GHANA

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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)

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