NBS8045 The International Business Environment Assignment Questions

NBS8045 Assignment Questions

This exam consists of one question with two parts. You are required to answer both parts of the question. Both parts carry equal marks.

Exam Questions

Referring to the case study “Glovo plans to double investment in Africa in next 12 months” distributed earlier and reproduced below, answer BOTH parts of the question below. Both parts of the questions carry equal marks. In answering, please make sure that you refer to lecture material and course readings where appropriate.

A.  What are the key PESTLE (political, economic, socio- cultural, technological, legal and environmental) issues in the business environment that should be considered by Glovo in its expansion in Africa?
B.  Based on your analysis of the business environment, what is your assessment of Glovo’s decision to invest in Africa?

Case Study

Glovo plans to double investment in Africa in next 12 months

BARCELONA, Sept 7 (Reuters) – Spanish delivery app Glovo is expanding its operations in Africa, its leading region for growth, and plans to double its existing investment there to 50 million euros ($59.3 million) over the next 12 months, its co-founder said. Glovo’s overall revenues have doubled in the past six months, said Sacha Michaud, who is also vice-president of public affairs.

“Africa is a massive opportunity, (and) is going to be a key part of Glovo’s business going forward,” Michaud said. “We have

been growing very well there and we believe we are in a position to lead the market.”

Glovo started operating in Nigeria around six weeks ago, in the business capital Lagos. It plans to enter Tunisia in October through a service in the capital Tunis, and last month expanded to a second city in Ghana, Tema. Nigeria, with a population of around 200 million, is the largest of the 23 countries in which the Barcelona-based company has a presence. Glovo is the market leader in 80% of the countries in which it operates, Michaud said.

Glovo plans to operate in around 30 countries within a year, with most new openings in Africa, where it is now to be found in six countries, he said, including Morocco, Uganda, Kenya and Ivory Coast. Michaud said revenue growth has been fuelled by a steady rise in orders, with its quick grocery service being its fastest-growing unit.

Challenges 

The company is still making overall net losses, though it is operationally profitable in some markets, such as Southern Europe, he added.

Executives are still considering taking Glovo public within three years, he said, while stressing it wants to remain independent, and currently has a solid cash position after raising 450 million euros in April.

Michaud said he was not phased by weak infrastructure and the unpredictable regulatory environment in countries like Nigeria, insisting Glovo was in it for the long haul and that it hands autonomy to its local managers.

With food and drinks delivery service Jumia Foods – a unit of New York-listed e-commerce platform Jumia Technologies – as one of its main competitors in Africa, Michaud said he was confident Glovo could lead the market early on in Nigeria thanks to its multi-category approach.

Grocery sales account for half of its business in some African countries, he said.

Were the bet on Africa eventually to turn sour, the company would not rule out exiting the region as it did in Latin America last year, when it sold its operations to Delivery Hero – which owns a 37% stake in Glovo – for up to 230 million euros.
“If the market is not working or we don’t think it fits into the strategy, then we will make the right decision,” Michaud said. ($1 = 0.8425 euros)

End of Case Study

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