To: Dan Zisk (CEO Zedco)
From: Dominik Sauter
Date: February 1, 2013
Subject: Environmental Assessment of Nigeria
This memo will discuss the constraints that Subway will face in Nigeria. More specifically, I will explain why this country is a victim of political instability, corruption, economic insecurity, and lack of infrastructure.
Although the Nigerian form of government is very similar to ours, the country is politically unstable. The simplest definition of political stability is that people are living in relative safety without the fear of violence. Recently, Nigeria has shown signs of political instability. For example, in January of 2012, president Goodluck Jonathan decided to get rid of the subsidy on fuel. This sparked riots, protests and a nationwide strike called by labor unions. This significantly impairs Subway because large amounts of unrest and violence keep consumers from spending money. Less consumption leads to lower production and, therefore, the potential benefit to Subway in Nigeria has been hampered.
Corruption is Nigeria’s worst enemy. According to bribenigeria.com, in December 2012, police have arrested a human rights lawyer for allegedly attempting to offer a bribe to police in order to release a kidnap suspect. Furthermore, Transparency International’s Global Corruption Barometer states that the judiciary is perceived to be among the most corrupt institutions in Nigeria. Corruption is deeply engrained in the Nigerian culture and this could have major impacts on Subway’s business practices when it comes to legal issues.
Oil rich Nigeria has been enjoying a GDP growth rate of about seven percent, however, the reality is that the economy is in shambles. This is mainly because the revenues that are collected from the oil exports are not reinvested into the economy. It’s strange that the country is categorized amongst the world’s poorest nations, yet the total oil revenues for 2011 were approximately $52 billion. The economic...
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