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1
BUS 5103 International Business
Research Project – Introducing breakfast foods in Nigeria
Bishai, Randa & Davitt, Matthew
Table of Contents
Introduction ............................................................................................................................................................... 1
Country Feasibility Analysis ....................................................................................................................................... 1
Demographics ......................................................................................................................................................... 2
Government ............................................................................................................................................................ 2
Physical Infrastructure ............................................................................................................................................ 3
Economics ............................................................................................................................................................... 4
Country key factors and assessment......................................................................................................................... 4
Cultural Analysis ........................................................................................................................................................ 7
Market Entry Strategy ............................................................................................................................................... 8
Pricing ....................................................................................................................................................................... 10
Justification .............................................................................................................................................................. 11
Bibliography ............................................................................................................................................................. 12
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Introduction:
Johnny Bean is attempting to expand its global presence by introducing a breakfast sandwich into the
Nigerian breakfast product market. Nigeria is Africa’s largest market with a population of 182 million, with an
annual growth rate of 2.63% (Bank, 2015). Approximately 50% of Nigeria’s population is located in urban areas
and that figure is estimated to grow exponentially over the next several decades. As the urban areas continue to
grow there will be a large market for “fast-food” alternatives to traditional meals cooked by traditional means.
Urbanites will have a need for a quick breakfast alternative as they head out to work. Our concept is to
manufacture, through a “joint-venture” with a local company such as NASCO (a large packaged food
producing/distributing firm that has similar interests in Nigeria), a new breakfast alternative. We are introducing
a breakfast sandwich with Western influences along with several local ingredient options. Our Western style
sandwich will include a biscuit with egg and cheese similar to what is available in the US, as well as, several local
biscuit options that will include plantains, chicken/shrimp, bean cakes, and deep fried yams (all of which are
traditional favorites) as filler options. As we are producing locally for local markets, any meat products
introduced will be manufactured in Halal fashion so as to adhere to the predominant Muslim religion
requirements.
Our initial target market will be the population of Lagos followed by Abuja. Lagos is the second largest
city/state and a port city with the needed infrastructure to enable us to introduce a new product into the
market. Lagos is a city that is essential for global trade for Nigeria and is growing rapidly. Lagos is a trade
epicenter that has a strong US business presence and substructure that will bolster our attempts at entry. Lagos
has an ever increasing influx of younger lower/middle income people that have acquired gainful employment
allowing for a greater degree of disposable income along with a strong upper middle income sector. The
Nigerian culture has exhibited a desire for Western commodities along with a desire to fulfill needs/wants
quickly. Nigerians will spend monies to placate non-essential desires as readily as formal needs. As Western
culture continues to proliferate throughout the major city/states of Nigeria, the desire for alternative
commodities will increase. Our product allows for the fulfillment of several aspects including the first meal of
the day, a “fast-food” alternative, and a Western influence at an affordable price.
We have chosen a joint venture for a variety of reasons. The first is due to the higher tariffs, taxes, time
delays with shipping/acceptance, and general political climate. Exporting may initially sound like a good first
option but the costs that will be incurred along with the disruption in delivery will out-weigh the benefits. By
entering in a joint venture with a local company we will be able to introduce our product by a local
manufacturer/distributor in a market where there is a new initiative to “buy locally” while still brining the
younger Nigerian urban population a Western alternative along with local favorite options. Traditional “open-
air” markets are rapidly being replaced by “super-market” type facilities which will further increase the demand
for quick microwavable food options.
In effect, there is a market for pre-packaged food products in the rapidly growing urban market of
Nigeria. We are attempting to target the breakfast meal market as it is the first and most important meal of the
day and there is a strong desire for Western culture/commodities. Utilizing a joint venture with a local company
will not only allow us to share the costs/benefits of a new product but will also allow us to introduce Western
culture while adhering to local religious requirements, entertain the possibilities of entering other African
markets, and maintain the “buy local” propaganda currently promoted by the Nigerian government.
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1. Country Feasibility Analysis
1.1 Demographics
Nigeria, Africa’s most populous country, has a population of over 182 million with an annual growth rate of
2.63%. The population is split approximately in half between urban and rural areas. Nearly 50% of its population
live in urban areas with nearly 56 million in the labor force. The nation has seen a continuous drastic increase in
labor force over the last few years. Nigeria’s unemployment rate has been fairly constant within the last five
years at around 7.5%. (The World Bank, 2015)
Approximately half the country’s population are of Islamic religion which means all meat products in our
product must be halal. (The World Bank, 2015)
The UN classified Nigeria as a nation with low human development with a score of 0.527 in 2015 (United Nations
Development Programme: Human Development Reports, 2016)
1.2 Government
Nigeria is a Federal Republic with a high political risk that may have a significant impact on corporate behavior.
President Muhammadu Buhari, who won the 2015 elections, has made fighting corruption a main priority.
Nigeria’s current corruption perceptions index is 28 and it’s ranked 136 of 176 countries (Transparency
International, 2017). One of the reforms put in place that has helped the government discover historical
corruption acts is a new whistle-blower policy as of December 2016. This policy has helped Nigeria’s anti-
corruption agency recover about $53m, £120m and €547m in the past few months. Although no high-profile
convictions have been made, President Buhari’s fight against corruption has been very rewarding. (BBC News,
2017)
Implementation of government reforms have been slow, accompanied with lack of economic progress,
increased prices and unemployment might increase frustration among the population. Tension has already been
expressed through protests against the central bank during the last quarter of 2016. These factors all contribute
to potential sources of social unrest.
Moreover, Nigeria’s Islamist group, Boko Haram continuously attempts to overthrow the government and create
an Islamic state. Boko Haram continues its wave of attacks based on its belief that Nigeria is run by non-
believers regardless of whether its President is Muslim or not (BBC News, 2016). The existence and growth of
such groups in any nation lead to a lot of potential risks and uncertainty. The government has struggled to
reduce threats raised in part of the country that have just been leading to further poverty and unemployment
(The Heritage Foundation, 2017).
The Heritage Foundations 2017 rankings record Nigeria as mostly unfree with a score of 57.1, 100 being the
freest (The Heritage Foundation, 2017)
1.3 Physical Infrastructure
Infrastructure in Nigeria is lacking and inadequate power supply is a challenge (U.S. Commercial Service, 2017).
The government has been putting effort into developing its poor infrastructure, however severe economic policy
distortions and a lack of transparency in the economic system has made this challenging (The Heritage
