Introduction
Mission and vision statements are a common prerequisite for effective organizations to set unified goals and objectives. They provide a framework for business operations that ensures the franchise works to achieve the stipulated targets and culture. Amazon is influenced by CEO Jeff Bezos’ ideologies and beliefs that stimulate success factors in business operations. According to Hahn et al. (2018), Jeff Bezos informs the franchise activity with his philosophical standpoint of ‘never stop innovating’ (pg. 18). Consequently, the vision is to be recognized as the world’s most customer-oriented company, allowing its customers to gain access to and discover anything they need online (Solanki, 2019). In addition, they set out to offer their services and products at the lowest prices possible.
On the other hand, the company has a guiding mission that guides the company’s objectives. Accordingly, the mission is associated with providing the best quality choices of products at the lowest prices and utmost convenience (Solanki, 2019). These statements guide the business to continually grow into one of the renowned global franchises in the product distribution sector. Through the influence of its management’s mindset and its strong vision and mission statements, the business instills a system that drives its operations and continually influences the growth of the franchise.
Foreign Market Decisions
Country of Expansion
Nigeria was selected as an appropriate state to facilitate the company’s enterprise expansion. The country is identified among the few African countries that have embraced the use of AI technology and encouraged by the governments alongside South Africa, Ghana, and Kenya (Gwagwa et al., 2021). Amazon has already expanded into South Africa, and the enterprise deems it acceptable to invest on the northern side of the Continent to diversify the franchise locations.
Nigeria Location Context and Analysis
Nigeria is part of the Sub-Saharan countries located in the West African Region. The country is located on Longitude Latitude 10° 00′ N and 8° 00′ E. Further, Ijabiyi (2019) identifies that the study area is a coastal country with a significant port harbor in Lagos experiencing a high frequency of shipping and port activities. The nation accommodates around 208 million people based on 2020 statistics (Olanrewaju et al., 2020). The country is also situated off the shores of the Atlantic Ocean, strategically located for maritime operations. The nation is strategically located as a coastal nation and is accessible through Trans-African Highways and Trans-Saharan Corridors. Thus, the nation is well connected to the entire Continent, which is strategic for foreign trade.
Factors Influencing the Choice to Penetrate a Foreign Market
Amazon is a global company campaigning to be among the best organizations worldwide. E-commerce has become a trend reshaping the retail economy as organizations strive to take advantage of technology and gain a comparative advantage over the competition (Adiguzel, 2019). In particular, the internet has opened up organizations to international trade, which has been explored rampantly. This factor leads the company to establish strategies to gain ground in its business economic growth in foreign trade. According to Jeff Bezos, as described in D’Agostino (2018), the company’s beginning was envisioned to grow to the magnitude of the Amazon River running across nations and aims to be the best worldwide. These targets necessitate permeation of the company to the entirety of the globe as remote areas also strive to adopt technology and innovation. Introducing the computer-based franchise is anticipated to stimulate the nation’s enhancement of its technological capacity in embracing digital platforms.
The chosen location facilitates expansion efforts into Africa to increase the company’s presence globally. In Africa, Nigeria is among the few nations that have embraced the use of AI technology encouraged by the government (Gwagwa et al., 2021). The decision anticipates easier international trade negotiations with the government support in enhancing technological development. In accordance, Butcher et al. (2021) attest to the efforts and advancements that Nigeria has made in incorporating AI technology in its national sectors. There have been efforts of AI technology permeation into the education and business sector, encouraging expansion due to the nations’ willingness to integrate advanced technology. We hoped to access the biggest markets in Africa and establish a dominant continent market. According to the Department of International Trade (2022), Nigeria is among the biggest economies with a significant population density serving as a lucrative recipient of business influence. The statistics imply that Nigeria offers an environment with diverse needs that would serve as a suitable market for our AI product.
Market(s) selection for research
Marketing research is instrumental in supporting marketing management in an enterprise. The necessity is reiterated based on the impact of information on effective managerial decision-making (Babin et al., 2020). Consequently, the plan needs to identify relevant market targets to be examined for decisive business operations. As a retail company, Amazon is encouraged by Nigeria’s recognition as the country with the highest start-up ecosystems that adopt AI technology (Butcher et al., 2021). This indication informed the selected area for market research targets to identify possible incorporation of the merchandise in the setups in Nigeria’s start-up ecosystems.
Distribution Strategy
The company requires a clear understanding of distribution factors that may affect the facilitation of goods transportation. Consequently, the company requires establishing a comprehensive distribution strategy for the efficiency of service provided to the customer. Objectively, this should entail on-time delivery of goods at relatively low costs. Therefore, the infrastructural conditions, distribution channels, intermediaries, and distribution barriers are closely examined as integral factors in developing a business strategy. The strategy aims to determine the relevant framework that will guide distributions for effectiveness and efficiency that should ascertain a degree of company success.
Infrastructure analysis
The Amazon franchise is famous globally as a retail franchise that secures clients through e-commerce. The company is responsible for its shipping and delivery activities and may be hindered in facilitating its function due to infrastructural limitations or advantages. The interconnectedness of the country is adequately facilitated by the links provided by the major transport corridors (African Development Bank, 2019). Analysis indicates the essential provisions b corridors such as the Trans-African highway connecting Dakar and Lagos, the Cameroon and Nigeria corridor, and Trans-Saharan Highway. The country links to various countries through the corridors that inspire trade. On the other hand, the internal system faces the challenge of traffic congestion (Orji et al., 2017). However, the system has integrated intelligent traffic systems to resolve the challenge (Salisu, 2020). The system stands to improve traffic coordination and stimulate adequate traffic flow.
The maritime technology is important in analyzing Nigeria as a coastal nation. The Lagos port experiences significant pressure due to rampant shipping and port indicative of a prospering trade (Ijabiyi, 2019). Elsewhere, the nation has made significant progress in technological infrastructure as one of the few countries that adopt AI systems (Gwagwa et al., 2021). Telecommunication infrastructure in Nigeria is well established with privatized organizations that provide the service (Oluwafemi & Adebiyi, 2018). The systems facilitate the functional communication needs that can facilitate the supply chain value system. The analysis shows that Nigeria’s infrastructure is functional and has interventions to mitigate the challenges.
Distribution barriers
Business globalization has become a common trend in business as companies strive to gain competitive advantages in the global economy. Global enterprises face significant challenges that hinder expansion into new regions that can be identified as diverse and varying from one place to the other. However, challenges exist that impede enterprise attempts to make international expansion strategies such as cultural barriers, political systems, language and policies, and legal frameworks.
Cultural Barriers
Firstly, expansion into new geographical locations is susceptible to encounter a diversity of cultures. According to research, globalization of production and marketing expansion are faced with managing the challenge of cultural indifferences that strain the supply chain system (Ocansey et al., 2020). Gupta and Santhosh (2017) argue that even as enterprises develop marketing strategies and strive to meet the trend of business globalization, the cultural factor has yet to be solved. Additionally, Ocansey et al. (2020) reveal various levels of culture that vary from Continent to Continent, to regional boundaries, and among different countries. In this discourse, a nation’s cultural identity highlights the variations in ways of life. The recurring challenge necessitates strategic intervention to facilitate an effective business operation. Ocansey et al. (2020) reported that culture is essential in determining consumer behavior. These are dictated by the geographical context of the traditions, beliefs, values, norms, and religion.
In this discourse, incorporating local marketing strategies will not be effective in cross-cultural trade. In such an instance, the inference to the marketing sector faces the challenge of relevance as the enterprise strives to meet a particular demand. Insufficient analysis of culture, a determinant of the product’s acceptability, creates a challenge for expansion. Further, Ocansey et al. (2020) disclose a new conceptualization of culture that should be actively considered. As reported in Ocansey et al. (2020), business or organization-related culture is overlooked, which is described to exist in five dimensions. “individualism versus collectivism, long-term versus short-term, orientation, power distance, masculinity versus femininity and uncertainty avoidance” (p.151). These dimensions are examined in research as factors determining the ideal foreign marketing strategies that conform to regional demand attributed to being culturally indifferent.
Determining the collective culture of the Nigerian market is essential as a distribution strategy. According to Anwana and Affia (2018), the economic setup of Nigeria is mainly agricultural, accounting for 40 % of exports. On the other hand, Chete et al. (2014) argue that the nation’s economy is dictated by a high frequency of primary sector production. The data inference indicates a cultural barrier in the high affinity for agriculture. This presents a risk for the business on the acceptability of the product in the market. Subsequently, the notion calls for the enterprise to prioritize the inclusion of cultural interference in the business strategy plan.
Legal or Policy Frameworks
Further, different geographic locations have unique policies and institutional frameworks that guide businesses’ internal and external interaction. According to USTR (2020), enterprise globalization is dictated by the nation’s legal provisions that influence the extent of business operations. Arguably, national policies create significant hurdles for international or foreign trade. In USTR (2020), trade barriers are highlighted and distinguished to cause a hindrance to foreign trade. The information considers the limitations of trade policies such as customs duty, trade licensing, and tariffs that may be unfavorable for foreign business operations. In addition, USTR (2021) identifies concerns that undermine the marketing of technology products based on government-imposed subsidies. As depicted in Evenett (2019), nations have engaged in market distortion through such subsidies to influence the promotion of local business enterprises. The activity falls under state mercantilism ideology and selective subsidization mechanisms that instigate biased foreign trade environments. Consequently, the USTR (2021) report argues that third-world nations tend to subsidize agricultural foreign trade tariffs and policies that disadvantage the technological market entity. The challenges create an unsuitable, biased market environment, resulting in business inefficiency and the competitive environment that is fundamental for success.
Corruption
Subsequently, corruption is a growing phenomenon that goes unchecked globally and creates a hurdle in business interactions, especially for foreign trade. According to USTR (2021), corruption takes various forms in trade, affecting customs and tariff impositions. The effect of corruption of this kind nullifies market access in international trade negotiations. The implications are detrimental to businesses such as Amazon that are affected by trade licensing decisions and trade negotiations to facilitate their business activities. Therefore, a corrupt trade system in a nation is a potential risk that should be carefully examined to establish the business’s cost.
Political stability is an essential consideration in the potential issues that may impede business globalization. Political influences determine the economic environment that a business works in and stipulate the condition of sales. In some instances, nations experience currency value fluctuation and associated economic growth levels. In accordance, USTR (2021) alludes to the challenge of currency devaluation that impedes profitable business activity. Consequently, an unstable nation or the fallout of nations into challenges such as civil war are factors that present a crucial challenge to globalization efforts. The issue exposes businesses to loss, either through property or financial and economic costs incurred. Therefore, the state of affairs in a selected nation should be carefully established to assess the suitability of expansion efforts in decision-making.
Nigeria’s corruption status is an essential area of consideration to assess the actions to be taken by the business strategy. Nigeria portrays corruption and bribery risks as a crucial challenge to economic investment in Nigeria (Department of International Trade, 2022). Despite developing a strong legal framework, the Criminal Code, and the Corrupt Practices and Other Related Offences Act, a significant percentage of companies and businesses in Nigeria struggle to facilitate bribes and gifts as prerequisites for tender allocations and supply. The application of the law is flawed and equally biased in upholding integrity in business. Moreover, the state’s political scene is necessitated as a feature influencing Nigeria’s economic growth.
The factor of political stability affects the economic field in which our product strives to compete, which is expected to ensure the relevance of the business. Department of International Trade (2022) indicates that Buhari’s leadership regime contributes to the cause by promoting a transition into democratic management. The governance under Buhari since 2015 has been dedicated to influencing stable economic growth and the prevention of corruption (UNODC, 2019). However, there is a respite for Amazon’s business plan due to the low frequency of corruption in the private sector. This promotes the tolerability of the AI product with less influence of corruption in the distribution sector.
Distribution channel
Distribution channels are essential in supply chain management, denoting the form or mechanism through which businesses deliver products from the manufacturer to the consumer. Research by Hahn et al. (2018) reveals that Amazon’s distribution channel has experienced shifts and transformations towards efficient delivery of products to customers. Initially, the distribution channel depended on postal services such as FedEx and UPS as the central delivery mechanism from production to consumers (Hahn et al., 2018). Amazon resorted to a self-managed supply chain strategy when faced with third-party inefficiencies and ineffectiveness for on-time delivery of products (Hahn et al., 2018). Their strategy invoked the need to acquire warehouses and purchase trucks and delivery vans. The strategy allows the company to take full responsibility for distribution activity from their warehouses to the customers (Hahn et al., 2018). The intervention influences accountability of market activity and direct authority on ensuring customer satisfaction.
International intermediaries
International intermediaries are a vital consideration in the establishment of cross-national distribution services. The significance of international intermediaries is defined by their role as middlemen between the business and the market in foreign nations (Medin, 2021). Intermediaries have been attributed to be influential at various levels of the economy, influencing market flows and business access to the market. They have been considered to vary as public actors, non-profit organizations, or private sectors that facilitate a network between various stakeholders at micro and macro levels of the economy (Varga & Rosca, 2018). The information reveals that international intermediaries play a role in connecting two entities in different nations and extended networking to access local micro levels of business.
Consequently, critical examination of the ideology of how business strategies use intermediaries is a common area of research. Literature reveals that they have been embraced globally in supply chain management, organizing the market flow of a substantial amount of manufactured goods (Sharma et al., 2021). Blum et al. (2018) argue that the intermediaries are an essential component in reducing the cost associated with the consolidation of products for export and the relay of the products to the consumers after import in the area of business expansion. They facilitate a trade-off of costs incurred in using other channels that are susceptible to challenges of unsuitable tariffs (Blum et al., 2018). Therefore, business success is largely dependent on the alignment of their products with intermediaries and the market.
Intermediaries in Nigeria will be valuable and effective in establishing the business and transport of goods with limited government legal and policy limitations. Additionally, their role ensures the supply chain is accepted in the community through engagement with the locals. The action of trusting intermediaries helps the company eliminate the potential barriers of distribution such as culture and local practices such as bribery and corruption. Moreover, they reduce unnecessary distribution costs such as tariffs and customs for international trade.
Information Management Systems
The global community has actively embraced the shift to a new technological era. Subsequently, organizations in this modern world have intensified the necessity of transitioning to digital and computerized platforms for business activities. Adopting technology has become a prerequisite for fast-growing economies in which organizations compete globally. The company considers the input of technology in data management to enhance decision-making.
Global information needs
Effective data management becomes instrumental in establishing comprehensive knowledge of financial conditions, supply chain management, and company operations. According to Varadarajan (2020), customer information is important to aid businesses in leveraging market demand and offering quality products that the market values. On the other hand, global information needs require a proper analysis of the local policies and legal frameworks that stipulate limitations and business activities. The data is essential to assess the factors that influence the success of business globalization and expansion. Utilizing information technology requires bulk data to make accurate projections requiring customer preferences to establish customer demand areas.
Global information sources
Global information sources may be distinguished into external and internal information sources that are necessary for market research. Relevant internal data can be derived from POS statistics and transactional data. Hariharan (2018) argues that the financial statements and transactional records provide relevant insight into internal activities. Customer relationship management systems have been identified as tools to distinguish customer needs based on localities (Hariharan, 2018). Internal records and archives are data sources that provide insight on projections of business outcomes based on trend analysis. The use of device sensors that are integral components of the Internet of Things helps determine usage of vehicular monitoring: location, mileage, routes taken, and timelines (Hariaran, 2018). Consequently, technology can be instrumental in the collection of primary data.
Conversely, global information sources can be external denoting data acquired from organizations outside the business. Government policy documents significantly provide a legal framework that sets a blueprint of the business form that can be developed in the economy. Additionallly, Hariharan (2018) identifies that social media has been considered a potential source through which enterprises can establish market flows, demand, and acceptance of certain products. Documentation such as research papers, third-party data sharing, business journals, and articles reveals some market conditions. The vast sources are essential to understanding the market and factors that influence business operations.
Technology for managing information
The company prioritizes the establishment of appropriate local data management systems. In order to facilitate this activity, the company is determined to establish data centres that are capable of handling big data components that are crucial for the use of AI-based systems. As presented in Pereira et al. (2020), the company as a digital marketing enterprise integrates the advanced technology of big data analysis, the integration of artificial intelligence (machine learning), and alignment with the internet of things (IoT). The system is essential to facilitate information on market dynamics and customer preferences. These systems can enhance marketing systems and supply chain management. The managerial group is facilitated with AI data projections and analysis that inform decision-making in the expansion and growth of the enterprise. Implementing the business plan and start-up in Nigeria requires Amazon to establish data centres within the local communities to facilitate big data management of local preferences and needs. In addition, for distribution strategy, the Internet of Things is essential to track products through technology on the digital platform. Amazon will have enhanced its accountability and transparency for having an open
Conclusion
Conclusively, international trade is a phenomenon that has faced transformation and change and has influenced the transition of economies. The report identifies the potential factors that affect the success or failure of business in the foreign market. Arguably, the foreign is described throughout the report to inspire comprehensive research and dynamic analysis of market conditions. In this regard, the task of business management is a tough and complex realm that requires scrutiny. Consequently, the factors that impede business success have been highlighted in the document revolving around various dimensions and sectors. Companies fail to account for cultural barriers essential to product relevance and service delivery. Business entry without adequate understanding of the ways of life is detrimental as the intended target may be unresponsive depending on the company’s approach. The issues brought out in the paper indicate an integral challenge of communication that limits the networking of the
Therefore, it is highly recommended that businesses establish appropriate systems to facilitate their success. Establishing an appropriate mission and vision statement is essential to create a dominant company culture that is adaptable across different cultures that vary from different locations. In addition, business expansion should adopt strategic mechanisms to adapt to different cultures. The most reasonable way to resolve cultural indifferences is to appropriately represent the expansion area residents who understand the culture and are an innate attribute. However, this factor doesn’t demerit the need for the company employees to establish a comprehensive knowledge of the traditions and cultures in the location. The knowledge is a significant step towards expressing the acceptance of cultures and ensuring the business is well monitored and meets its targeted recipients in an accountable and relevant manner.
Furthermore, global trade necessitates the strategic selection of expansion areas to eliminate the risk of internal affairs affecting the business, such as political instability, corruption, and unsuitable policies that may be biased or inclined to cause unprofitable business. This provides a reduced risk in operations costs as the company expands. In addition, establishing a policy and distribution strategy is essential to establish potential ways of taking advantage of networks provided by intermediaries in reducing the costs involved in foreign trade.
Adopting appropriate technology is essential for business success and should be a necessary investment for company expansion. Ideally, a global company should encourage prioritization technology to enhance information management. The adoption of computerized information management can be tapped by establishing localized data centres to facilitate effective data collection and processing for decision making. The suggestion is instrumental for managerial purposes to accurately identify challenges or areas of strength to be tapped into or challenges that need to be resolved. The use of such information increases the product market by identifying additional market needs presenting new opportunities for the growth and expansion of the company.
Conclusively, a company’s management should be willing to establish multidisciplinary strategies. The report highlights that foreign trade is influenced by a plethora of determining factors of success or failure. Seemingly, this calls for staff diversification, especially in managerial positions, to facilitate effective business operations and execution of strategies set out. These cross-cutting issues need to be considered and integrated to ensure a close interaction of various departments through information sharing and reporting. These factors ensure the company’s progress by inculcating a culture based on integrity, transparency, and accountability to its stakeholders and intended market.
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