Kenya

There is a growing demand in the world market for oil seeds and the available capacity to expand production, has found Ethiopia as a possible area for setting up a Bidco oil manufacturing plant. (Wijnands, Bruinsma, Biersteker, 2007, p. 22)

This section covers the academic sources used in supporting the specific objectives and the feasibility for Bidco setting up a plant in Ethiopia.

2.0.1 Market environment

Production of goods across boundaries can bring many problems to the firm with prospects to enter a new market. Firms are encouraged to measure a market using the PESTEL analysis tool. The tool is useful for understanding market growth or decline, the position, potential and direction for a business. PESTEL is a short form for Political, Economic, Social and Technological factors, which is a tool used to assess the market for a business.

2.0.2 Political Factors:

A political risk assessment should be done in order to identify Ethiopia’s high political risk so that BIDCO can protect itself by minimizing its exposure.

• Political Stability

The Central Intelligence Agency CIA the World Fact book web resource would identify:

1. Ethiopia’s government.

2. Stability of government

3. Quality of host government’s economic management

4. Closeness with government and people.

5. Host country’s attitude toward foreign investment.

6. Host country’s relationship with the rest of the world.

7. Trade laws

This source is right for the needs of this study as it will reveal whether the Ethiopian government is keen on economic growth and foreign investments. The online Fact book information is provided by various government departments and is updated on a weekly basis and may not offer up to minute information as other Web sources do however, this source will provide the Ethiopia’s national-level of Information on the role of government and its political stature. This information will assist BIDCO decide whether Ethiopia’s political environment is...