Global Business Environment

Country: Angola
Country: Angola
Product: Solar powered devices
Product: Solar powered lighting systems

Aishwarya Lahiri: 120, MBA (Ad)

Contents
• About the country
• PESTEL analysis
• Company profile
• About the product
• Scope of product
• Energy Industry
• SWOT
• Plan of Action
• Proposed entry plan
• Porter’s 5 forces analysis
• Activation and promotion
• Conclusion
• Bibliography
Angola
• Capital: Luanda
• Area: 1,246,700 km sq
• Population(2008): 17,000,000
• Literacy: 67.4%
• Work force (2009) 7.7 million: Agriculture 26%,
unemployed 27%
• Government type: Republic
• Portuguese colony -> slave trade
• Angola changed from a one-party Marxist-Leninist system
ruled by the MPLA to a nominal multiparty democracy
following the 1992 elections
PESTEL [P
• Political
• Independence obtained 11th Nov, 1975 ]
• Angola changed from a one-party Marxist-Leninist system ruled by the
MPLA to a nominal multiparty democracy following the 1992 elections,
in which President dos Santos won the first-round election with 49% of
the vote to Jonas Savimbi's 40%; a runoff never took place. The
Constitutional Law of 1992 establishes the broad outlines of government
structure and delineates the rights and duties of citizens. The government
is based on ordinances, decrees, and decisions issued by a president and
his ministers and on legislation produced by the National Assembly and
approved by the president. The Assembly is generally subordinate to the
executive.
• Principal officials:
President--José Eduardo dos Santos
Prime Minister--António Paulo Kassoma
• Economic factor [E
• Bottom 10% of most socioeconomic indicators
•
•
IMF estimates that Angola's real GDP increased by 16% in 2008
Still recovering from 27 years of nearly continuous warfare
]
• Remains beset by corruption and economic mismanagement
• Despite abundant natural resources and rising per capita GDP, it was
ranked 157 out of 179 countries on the 2008 UN Development Program's
(UNDP) Human Development Index
• Subsistence agriculture sustains one-third of the population
• Rapidly expanding petroleum industry reached OPEC cap of 2 mn barrels
per day in 2008. (83% of GDP, 95% of exports, and 83% of government
revenues in 2008. Angola also produces 40,000 bpd of locally refined oil)
• Exports to Asian countries have grown rapidly in recent years, particularly
to China
• Diamonds make up most of Angola's remaining exports, with yearly
production at 6 million carats
 [S
• Social
]
• Ethnic groups: Ovimbundu 37%, Kimbundu 25%, Bakongo
13%, mestico (mixed European and native African) 2%,
European 1%, other 22%

• Religions: indigenous beliefs 47%, Roman Catholic 38%,

Protestant 15%
 [T
• Technological
]
• Angola is understandably not very well developed on the
technological side, owing to:

a) Years of Civil war ravaging all systems

b)Immense brain drain problem
 [E
• Environmental
]
• Mainly agricultural
• Climate: semiarid in south and along coast to Luanda; north has cool, dry
season (May to October) and hot, rainy season (November to April)
• Terrain: narrow coastal plain rises abruptly to vast interior plateau
 [L
• Legal
]
• Both specific and ad valorem duties are levied; but, as a member of the World
Trade Organization, Angola is reviewing the need for reductions in tariffs and
non-tariff barriers. Specific duties are assessed by weight. Additional taxes are
levied on luxury items and preferential treatment is accorded to goods from
Portugal, Mozambique, Guinea-Bissau, Cape Verde, and São Tomé and
Princípe. All imports require a license and are handled by one of several state
companies. Most exports are similarly handled by state agencies.
Company Profile
• My company is Solaris Solar Energy Solutions,
Solutions
which provides day to day and industrial level solar
energy solutions.

• This company is amongst the top companies in India

who provide such solutions.

• The company wishes to expand operations into

Angola, seeing a huge potential for development as
well as opportunity.
Solar powered lighting systems

• The basic element: The solar cell

• Photovoltaic cells are made of special materials
called semiconductors such as silicon. When light strikes the
cell, a certain portion of the energy of the absorbed light is
transferred to the semiconductor. The energy knocks electrons
loose, allowing them to flow freely. This flow of electrons is a
current, and by placing metal contacts on the top and bottom of
the PV cell, we can draw that current off to use externally.
Usage
• Apart from the solar cells, a PV system also requires:

1.A battery (or a grid to connect to)

2.An inverter to convert the AC supply to DC
3.A well ventilated enclosure to house batteries that require
acid to run
4.Wiring, etc

My product to be sold in Angola is solar powered lighting

devices.
Scope of the product
• The product Solaris is selling is Solar powered Road, House and
Industrial lighting systems.
• It is a well known fact that constant civil war has ravaged the roads
and infrastructure. The lighting systems would come in at an
appropriate time when Angola is rebuilding the nation.
• The system of solar lighting is such that power generated but not
utilized can be collected and sold to the local grid or power
company. Thus it also provides users extra income.
• The current global scene of the world is the GREEN
AWARENESS and ACTION. This would contribute majorly in
favour of Angola’s global image.
• Houses and industries that are outfitted with such a system go up in
value. Thus, it holds good for potential sellers of such property too.
The Energy Industry
• Angolan energy industry is primarily based on oil, which is
its primary export (80% of its budget). Next is biomass and
wood fuel and charcoal.
• Electricity is available to less than 20% of population
• Pollution and deforestation problems arising from charcoal
and wood respectively.
• Solar irradiation levels are high in Angola, solar energy
is a good option to reach far flung areas with no access to
grids.
• 2002 Strategy called for explorations into renewable
sources of energy for rural electrification.
Plan of action
Entry mode
• My intended entry mode would be a Joint Venture
with the Government of Angola.
Angola

• It is well known that the roads and travel

infrastructure has been almost completely demolished
by the long civil war in the country. The idea is to
light roads and homes with solar energy lights,
provided by the government.

• Since Angola is also looking out for foreign

investors, it is a great opportunity to invest in such a
venture.
 • Buyers

• The buyer that I intend is the Government of Angola. Firstly, a

negotiation will have to be done by which FDI rules, subsidies,
taxes, import duties etc will be taken care of. Continuing with a
programme started in May 1999, the government has abolished fixed
exchange rates and allows them to change according to market
demand. A restrictive monetary policy has been introduced with
controls the rate of inflation to quite an extent. These measures do
not and have not shown immediate effect, but is predicted to bring
about an environment where investments opportunities are more
lucrative.

• A deal will be negotiated by which a deal will be set up with a

present company that is in the same business. They will be providing
the labour that will set up thse lighting systems on the roads and
houses that sign up for it.
 • Substitute

• Angola’s prime export is Oil and consequently, natural gas. Thermal

power and more important to us, electric energy would come from
Oil and natural gas.

• Angola also has massive hydroelectric capabilities.

• Wood fuel is largely used in rural areas.

• 80% of Angolans rely on biomass for their fuel needs.

 • Competitor

• The first competition is from substitutes, like hydroelectric power

etc

• The second and more relevant competition is from other producers

in Angola or outside who produce and sell solar electricity devices.
Companies like African Energy, Green Energy, Kevin Power
Solutions, Shanghai Roy Solar Co. Ltd. (all of which are based out
of Africa) and the Angola based Uzuri Enterprises are direct
competition to Solaris.
 • Suppliers

• Since the product will be manufactured in India, the silicon essential

to the battery system will be mined from the North eastern area if the
Garo hills, rich with silica.

• Being an area where Communism and Naxalism is active, there is a

possibility that labour unions and bodies may create problems, even
if labour rights are adhered to. This poses security issues.

• Suppliers of other parts of the system, shippers, installing staff in

Angola will also have effect on this system.
 • Potential Entrants

• Potential entrants are a threat if they were to be competing in the

same category. Indeed, there are many opportunities for such a
scenario to happen. As mentioned earlier on slide 21, companies
such as those mentioned could easily be competition.

• However, if some such companies including Solaris, operating

inside of Angola or only distributing power solutions in Angola were
to come together, it would be possible to build up a formidable
source of replenishable energy for Angola, helping it to actually
become a forerunner in the global Green Drive.
Activation and promotion
• This particular product will be marketed as a product brought to the public
by the Government and by Solaris India.
• Since the lighting systems are to be introduced at infrastructure level,
homes and industry, the benefits should be demonstrated to the public by
first installing in the streets and then encouraging the public to use it for
themselves, by showing what kind of “tangible” benefits the usage of these
lights bring (savings and earnings, no pollution, one time expenditure,
increase of value of property, advantages of renewable sources of energy,
etc)
• Looking into the condition of the masses, it is the best idea to promote it
via
a) word-of-mouth
b) Street theatre and other interactive demonstrations
c) Honest demo of working, leading to greater understanding and acceptance
d) Start up loans and/or incentives to those who install it
Conclusion
• The product has the potential to raise the standards of Angolan life,
although it may mean some initial expenditure.

• A start up loan and/or benefits, honest look-into-the-future will

bring about a change in the attitudes of Angolan people who do not
have very high literacy levels and are hence immovable from set
mindsets

• A JV with the Government will not only help in proliferation of the

product, it will also help in developing the government’s image.
Years of Civil war has led to the government being riddled with
corruption and malpractice. A positive change o this kind will help
in raising the peoples’ morale and the trust in the government, as
well as global image of Angola in the Green Drive.
Bibliography
• https://www.cia.gov/library/publications/the-world-factbook/geos/a
o.html
• http://travel.state.gov/travel/cis_pa_tw/cis/cis_1096.html#country
• http://www.state.gov/r/pa/ei/bgn/6619.htm
• http://www.eia.doe.gov/emeu/cabs/Angola/pdf.pdf
• http://www.nationsencyclopedia.com
• http://www.iea.org/impagr/cip/pdf/AngolaInterviewIssue37.pdf
• http://www.doingbusiness.org/ExploreEconomies/?economyid=7