External Environmental Analysis

External Environmental Analysis

External Environmental Analysis is a tool for identifying external influences that can affect an organization’s performance. Based on the findings of the external environmental research detailed in this document, U Drive Transport will be forced to explore expanding their operations to Kisumu City. This is one of Kenya’s three capital cities; the country is located in East Africa (U.S. Department of State, 2014).

Social Lifestyle

The first social external environmental component to evaluate is social lifestyle. Kisumu is Kenya’s sole city where the majority of the population is known to support a flashy and refined lifestyle defined by expensive cars and palatial residences. Car sharing can add more to their flossing lifestyle since being seen with a different and expensive car is the definition of life in the lakeside city.

Lake Victoria

Lake Victoria is fresh water lake found within the central business district of the city. Fishing is one of the main cultural practices for the population earning them millions of money capable of sustaining their flashy lifestyle. The city is a home to the most intellectual personalities in the region hence endorses high educational levels which earn them huge salaries in the employment sectors.

Demographic Factors

The Demographic external environmental factors to be considered in the city is age bracket which is composed of working class between the age of 24 and 39 who have moved to the town to seek employment leaving the old and young in the villages. Most of its population is made of married couples with young families who will constantly need a car to move around. The majority of the habitants of this city are considered to be working class characterized by high employment opportunities in the region with those not in employments controlling businesses and fishing in the city. These factors promise a better market opportunity for the U Drive Transport.

Economic Level

The economic level of the city is evident by high employment rate with the majority leaving below a dollar a day. The favorable fiscal policies regulated by the county government alongside the credit accessibility which has been made more easier by the availability of national and international banks within the region availing more monetary resources circulation. The region is currently experiencing the highest economic growth rates in the country enhancing better foreign exchange rates for the international currencies. Low inflation rates have aided in the availability of low-interest rates for the borrowers encouraging more borrowing from the financial institutions.

Transport Sector

With no railway line and terminals, car sharing companies have the best opportunities in the transport sector in Kisumu. Public transport is regulated and not allowed within the business district and the passengers have to walk some distance or use taxis to get to their work stations. This is kinder hectic to some individuals who are capable of spending some dimes to get to their stations within stipulated time and without hustle. Low technological advancement, especially in the transport sector, is a disadvantage to the population that the U Drive Transport should take an advantage of to enhance its marketing in the region.

Political Stability

Political stability in the city has for many years encouraged many international investors to contemplate on investing the lakeside city and this is attributed to the better leadership of its county government that has put in place few and favorable modes of entry making its market environment open for opportunities from all over the globe. Law tax rates and the country tariff is one aspect that continues to bring more investors to the city and with some tax exemptions on companies that offer more job opportunities to its population and because of this, U Drive Transport may get exempted from taxation on hiring its population.

Competition

According to the registrar of companies in the county of Kisumu, there is no any other car sharing company in the region. Considering venturing into its market will make U Drive Transport the first car sharing company and can earn great profits due to this. Public transport is the only competitor in the region though strict rules and regulations posted on them will make car sharing an option to many. Though not in Kisumu, Uber transport recently made its way into the Kenyan market and only operates in the capital city, Nairobi. Its operation has highly been condemned by the public due to its expensive nature and this will probably result in its slow advancement in the country.

Reference

Steinberg, Stephanie; Vlasic, Bill (25 January 2013). “Car-Sharing Services Grow, and Expand Options”. The New York Times. Retrieved 6 February 2016. U.S. Department of State (2014).Regions.