P.E.S.T.

ANALYSIS
Should Forever21 move to Nigeria?

Nigeria.
Nigeria is located in Western Africa bordering on the Gulf of Guinea between Cameroun and Benin. Nigeria is divided into 4 main political regions, with a further division into 36 states and 1 territory. The latest national population census taken in July, 2006 puts the total population of Nigeria at 150 million. The largest population concentration is in Lagos which is also where most of the economic and industrial activity takes place in.

POLITICAL FACTORS
These entail the extent and process of government direct or indirect intervention and influence on businesses in an economy. Specifically, political factors include such areas as tax policy, labour law, environmental law, trade restrictions, tariffs, incentives, other encouragements and political stability. Political factors may also include goods and services which the government wants to provide or be provided (merit goods) and those that the government does not want to be provided (demerit goods or merit bads). Furthermore, governments have great influence on the health, education, and infrastructure of a nation

POLITICAL SYSTEM
The Nigerian political system constitutes three tiers of government which are distinctive and interrelated. They are the executive, the legislature and the judiciary. The country is further divided into the nation, the state and the local government.

Political factors
The monetary policy of Nigeria is mobilized and in control to manage the supply of money in a way which does not result in excessisive appreciation or devaluation of the currency. Nigeria today has an extendedlist of prohibited items. According to business day 2009), Nigeria has up to 80 banned items in its prohibition list.
The Nigerian market is full of clothes with foreign labels which already have global recognition.

Economic factors
These include economic growth, interest rates, exchange rates and the inflation rate. These factors have major impacts on how businesses operate and make decisions. For example, interest rates affect a firm's cost of capital and therefore the extent to which a business grows and expands. Exchange rates affect the costs of exporting goods and the supply and price of imported goods in an economy.

Economic factor
One important factor which could influence the consumption pattern of the Nigerian consumers in the clothing industry is the income levels. As a developing country, with a per capita of $2,300 , coupled with the current global economic crises, which has crippled employment, and making more redundant, Nigerian consumers might be Sceptical about spending, especially on more fashionable cloths.

Exchange and interest rates

This is the rate at which one currency may be converted into another.
One US dollar is 157 Naira As Nigerias economy is open to international trade and is heavily dependent on imports of rawmaterials, any instability in exchange rate permeates into prices of these imports and eventually into the domestic price.

sOCIAL FACTORS
In Nigeria, although their traditional attires, which are worn on occasions like weddings, funerals and festivals which is still valuable a valuable custom, it is worn mostly by older people in society. This is because the younger generation has been influeced by the western culture. They now tend to wear more stylish clothing such as jeans, t-shirts, skirts etc
Nigeria is a combination of people of all ethnicities, races and languages.

Social factors
In spite of the economic situation in Nigeria, consumers judge foreign products in relation to the estimation of the goods being manufactured in other countries. Realistically, Nigerian(locally) made clothes as opposed to the imported ones as the cost of labour is comparitevely low and the materials are internal Clothing industrial in Nigerian society is blooming especially foreign label clothes because it differentiates the rich from the poor, due to the exposure of the western culture most consumers that go to other country of origin for schooling, working or business preferred their lifestyles and the ways they dress.The consumers buying pattern has change over time, they younger adults in Nigeria prefer to wear be best outfit and latest shoes due to the kinds of events and occasion they are attending, this reasons usually influence younger consumer to purchase.

Competitive environment
The clothing Industries in Nigerian are faced with lot of competition. There are a lot of locally made fabrics that are popular in the market and also other retail sellers travel outside Nigeria to other countries to like china to shop. This is because they can get cheaper goods and other option when they come back they make their products cheap, affordable and enlighten in order to satisfy customer needs and wants. Thus, Nigeria likes fashion and there are lots of boutiques in the country meaning competition is quite high.

tEchnological factors
Technology has helped the fashion industry to improve tremendously. Since 1960 the Nigerian internet sector has suffered delay by the countries immature infrastructure, but recently things are changing as rivalry intensifies and new internet technology has been able to convey wireless broadbanTechnology is fast improving in the Nigerian economic with the effect of broad brand and wireless internet various purchase has being made and customer has also use this median to check what is happening in the fashion industrial and the new fashion trends.

Furthermore forever21 will be able to use the internet technology to publicize and advertise their different brands of Nigerian products and this will createawareness in the country. Thus, various consumer has made has made order for different verity of clothes through online because it is ease to access. Majority of the fashion industrial in Nigeria has an online shop in other to prevent query and crowd. An examples like during sales in Nigeria most consumer purchase their product online in other to reduce querying up in shop.d access across different state in Nigerian.

AnALYSIS
Nigeria, having a diversified social structure and complex business environment, also poses many merits and demerits for companies.
The fact that its political environment isnt really stable shows there might be a risk to the company coming to Nigeria. The country has the fastest growing telecommunication as well as the largest oil and gas sector, which generated over 90% of the foreign exchange earnings towards the country.

Analysis
Nigeria has:
- Strong banking financial sector - Easy provision of medium and long-term loans

- Controlled money supply

- Avalaibility of young, active, mobile labor force - Great potentials for furure growth and investment

analysis
Weaknesses:
- Local environment- The lack of infrastructure, which includes power supply supply, communication, road networks, and security have kept the cost of starting businesses high in the country. This could be an obstacle to forever21s productivity and competitiveness.

THREAT OF NEW ENTRANTS

New entrants in business have a way of raising the level of competition in a particular industry an inturn reduce its attractiveness According to five porter's models substitute refer to products in other industrials and when an establishment has lot of substitutes it makes it unappealing to the consumer because they can easily switches from one product to another. The main factor behind substitutes in clothing market is the price and the style. Majority of consumer are attracted and motivated by the price of the products in the shops because most of the shops frequently have offers and sales promotions on products which attracts customers. The current price war among various shops in Nigeria has left smaller retailers having a difficulty in setting prices to be as low as leading retailers like collectible. Most shoppers are motivated by price and will substitute their regular shop for the next which offers a more attractive price list.

THREAT OF SUBSTITUTE PRODUCTS

The free entry and exit within the Nigerian clothing market, coupled with the greater importation of foreign clothes and the greater number of local clothes traders gives the consumer a number of choices. Threats of substitutes are really high and this has a significant impact on the prices and more importantly the power the consumer has. More substitutes mean that the customer has options, which, as noted by Porter, means that one producer cannot influence the market by ruling prices. In order to match each other's competition strategies, due to the threats posed by substitutes, shop owners resort to various promotional strategies, which are normally prices wars'.

analysis
The upper and middle class of nigerians are brand conscious and even if forever21 clothes are not really popular brand, they just opened stores in the uk last summer, the fact that it is imported Nigerians will buy it.