? This brochure gives an in-depth description of
how National Express can expand its market to
the road transport industry in Ghana. It covers
key areas such as macro and micro environmental
analysis of Ghana’s road transport industry,
international competitor’s strategy (global and
local), market entry strategies and
recommendations for National Express to succeed
in the Ghanaian market.
ROAD TRANSPORT INDUSTRY IN
KORANTEMAA OFEI -AGYEKUM
QUICK FACTS ABOUT GHANA
? Population size: 29,629,338
? Location: West Africa
? Region: Sub-Saharan Africa
? Targeted region: Accra
? Currency: Cedi (GHS)
? Ghana’s natural resources:
oil, gold, diamond among
? 95% of bus transport in Accra is provided by the informal
sector: a mix of buses, minibuses (trotro) and taxis.
? The only formal bus transport being provided in Ghana is
by the Metro Mass Transit (MMT) Limited.
? National Express Group is a leading
public transport operator with bus,
coach and rail services in the UK,
Continental Europe, North Africa,
North America and the Middle East.
? Passengers in 2017, according to
National Express, made 882 million
journeys on their services.
? National Express’ vision is “to earn the lifetime
loyalty of their customers by consistently delivering
frequent, high performing public transport services
which offer excellent value”. (Nationalexpressgroup.com,2018)
? Political stability : Ghana’s political stability is
nd in Africa and 26 thglobally in Africa in
the 2016 World Press Freedom Index. The index
measures pluralism, independence of media,
quality of legislative framework and safety of
journalist in African countries (Gipcghana.com,
2018) .One key indicator investors look out for
before entering a new market is the country’s
political stability. Foreign investors are attracted
to Ghana because they can freely operate
without any political interference in the form of
political coups among others.
? Democratic political system : Ghana attracts
foreign investors because of its impressive
democratic achievements over the years. There
has been five free and fair elections in the past
20 years and two peaceful transfers of power
with the absence of political coups. This makes
Ghana attractive to foreign investors.
? UK -Ghana sign a £20m ($35.5m) trade and
investment deal: The UK and Ghana on the
28.08.2018 signed a £20m trade and investment
agreement to create jobs and promote
economic development in Ghana. Britain’s
Minister of State for Africa, Harriet Baldwin, in
her speech indicated that the newly signed deal
is to focus on some key areas such as policy
suggestions to make it easier to do business in
Ghana, promoting of opportunities for inward
investment into Ghana and creation of jobs for
Ghanaians. ( Kwafo, 2018)
MACRO ENVIRONMENTAL: PEST ANALYSIS
ABOUT NATIONAL EXPRESS
POLITICAL ANALYSIS CONTINUED…
? Lengthy and complex business registration process.
(explained at Porter’s 5 Forces)
? Ghana’s legal system is a mixed system of English
common law and customary law.
? GDP from transport sector: GHS 2198.14m.
? According to the World Bank, Ghana is the fastest
growing economy in 2018. (McDonnell, 2018)
? Ghana’s urbanisation rate is steadily increasing and is
expected to reach 72% by 2035, according to the African
Development Fund which makes it a suitable market
target for National Express. (Oxford Business Group,
? Ghana’s economic stability: Ghana gains a significant
revenue from oil production: $191.32m in revenue in the
first half of 2017. (Modern Ghana, 2018)
? Cheap available labour: Ghana’s minimum wage which is
GHS 10.65 makes employing locals cost effective .
? Buses account for 60% of passenger movement in
Accra with taxis accounting for only 14.5% and the
remaining accounted for by private cars. SOCIAL ANALYSIS CONTINUED…
? English as a common language in Accra
? Strong sense of national identity and unity: Ghanaians
have a strong sense of national identity and unity that
supersedes other affiliations such as ethnicity and tribe,
arising out of an educational system in which people from
different backgrounds tend to mix. (Gipcghana.com, 2018)
? Openness to innovation: An increase in literacy rate in
Ghana has made Ghanaians open to innovation since
technology and innovation have proven to make life easy
and convenient for the populace at large.
? Social movement of already existing drivers in Accra make
it difficult for new entrants to operate differently. This can
be a potential treat to National Express’ operation.
? ICT for accelerated development(ICT4AD) policy: The
vision of the policy “to improve the quality of life of
the people of Ghana by significantly enriching their
social, economic and cultural well -being through the
rapid development and modernization of the economy
and society using information and communication
technologies as the main engine for accelerated and
sustainable economic and social development”
? Presence of digital address
system in Accra to facilitate
? New buses adopting e -ticketing
system E.g. Aayalolo buses
MICRO-ENVIRONMENTAL ANALYSIS (PORTER’S 5
Threat of new entrants -High (7/10)
? High entry barriers such as financial (significant capital
requirements) and legal barriers: Registering a business in
Ghana is relatively an easy procedure. However, the
process involved in establishing a business is described as
complex, lengthy and requires compliance with regulations
and procedures of at least five different government
agencies which includes Ghana Investment Promotion
Centre(GIPC), Registrar General Department, Ghana
Revenue Authority (GRA), Ghana Immigration Service, and
Social Security and National Insurance Trust (SSNIT).
Foreign investments are also subjected to follow a
minimum capital requirements which is capped at
$200,000 for joint ventures with a Ghanaian partner.
? Expected retaliatory actions is high: Existing driver
associations. The Committed Drivers Association of Ghana
for example makes it difficult for new entrants to operate
? Power of incumbents is medium to high.
Threat of Substitute –Medium (5/10)
? Low service differentiation: Service differentiation in the
Accra’s road transport industry is only visible can only be
seen in price and comfort between available substitutes.
Passengers have no unique value proposition which makes
it easy for them to switch at any time. MICRO ENVIRONEMTAL ANALYSIS CONTINUED…
? Low price
-performance comparison. Accra passengers
rarely undertake a price -performance comparison before
making a choice between substitute. This makes
switching to substitutes easy for passengers since value
for money has low recognition in the transport industry
? There is a relatively large number of alternatives for road
transport in Accra: – Direct substitutes for buses in Accra will include
minivans (trotro), Uber, taxis, metro mass and car sharing. -Indirect substitute includes WhatsApp call and Facetime
as a means of passengers satisfying need to meet.
Purpose of travel mini- bus use .
Bargaining Power of Buyers (Passengers) -Low (4/10)
? Low or no buyer information availability: Accra
passengers do not have enough information to make
good cost -benefit trade -offs. Lack of comparison and
review pages for various road transport industries erodes
their bargaining power.
? Absence of unique value proposition gives passengers
bargaining power since competition in the road transport
industry is mostly priced based.
? Increased fuel prices by government affects prices for
public transport but has zero or little effect on bargaining
power of passengers.
Bargaining Power of Suppliers – Medium(5/10)
? Barriers to entry for the supply side in Ghana is medium
to high as it is difficult to get a contract from government
to expand roads or create dedicated bus lanes for a
? Low cost of labourerodes suppliers bargaining power.
This makes employing localscosteffective fornew
? In terms of fuel supply, bargaining power of the supply
side is medium to l o w.
Rivalry Among Existing Competitors -High (7/10)
? Significantly high number of existing rivals: Metro Mass,
State Transport Company(STC), Scania Company.
? Increasing number of ride -hailing services in the road
transport industry in Ghana, Accra.
? Different market entry strategies amongst new entrants
heightens competition in the industry. COMPETITOR’S INTERNATIONAL STRATEGY
? There is currently no foreign company operating a Bus
Rapid Transit (BRT) system in Accra. However, Scania Group
is the only foreign bus company in Ghana that operates as
connecting routes between Accra and other parts outside
? Scania buses are popularly know as ‘Aayalolo’ buses.
? Scania has 245 connected
buses. These buses have their
own driving lanes. This means
little or no traffic onbus
? Employs local drivers: Scania
tackles its liability to newness
in the Ghanaian market by
employing local drivers who
are already conversant with
Ghana’s traffic rules and
? Operates an electronic cash –
free ticketing system.
? The buses are also adapted to
suit passengers with
? Scania offers high value.
proposition for passengers:
USD port to charge phones,
small dustbin behind seats and
has a lot room space.
? Working hours: 5am to 10pm
SUBSTITUTE’S INTERNATIONAL STRATEGY (UBER & TAXIFY
? Technological innovation:
Both ride -hailing companies
use phone applications
which makes ride requesting
convenient for both for
passengers and drivers.
? Both use promo codes for
? Both employs local drivers as
a way of tackling the
company’s issue of liability of
newness. However, these
drivers must have their own
vehicles to work with and
these vehicles must comply
with Uber or Taxify’s vehicle
? High commissions which is
attractive for drivers.
MARKET ENTRY STRATEGY AND RECOMMENDATIONS
? A joint venture (JV) is a business
arrangement in which two or
more parties agree to pool their
resources for the purpose of
accomplishing a specific task.
( Investopedia, 2018)
? Sharing of risks and costs with a local partner: The
environment is said to be turbulent, ever changing and
difficult to predict. It is therefore prudent that National
Express in penetrating the Accra’s road transport industry
for the first time partner with an existing company.
? JV will also allow easy access to new markets and market
knowledge which will be advantageous for National
? JV contracts are usually temporary and as a result National
Express will be able to compete as an independent
organization or entity in the market in future. It will no
longer have to share its profits nor loses.
? An effective market entry strategy by National Express
would reduce the threat of early failure which is also
known “liability of newness “. This term was coined by
A .L. Stinchcombe , who laid the theoretical framework
for organizational mortality. ( ShangPharma
? National Express’ “liabilities of newness” in the Accra
market can however be reduced through a Joint-
Venture or by Acquisition asamarket entrys t rat e g y. JOINT
? Ghana’s economy is fast growing and urbanisation
rate is increasing hence, first -mover advantage is
recommended . This would enable National Express
establish strong a brand recognition as well as
customer loyalty before other local or global
competitors enter the road transport industry.
? Nationalexpressgroup.com. (2018).Our Vision and
Va l u es -National Express Group PLC . online
way/our -vision -and -values/ Accessed 24 Oct.
? McDonnell, T. (2018). What’s the World’s Fastest-
Growing Economy? Ghana Contends for the Crown.
online Nytimes.com. Available at:
a/ghana- worlds-fastest -growing -economy.html
Accessed 23 Oct. 2018.
? Gipcghana.com. (2018). Political Stability -Ghana
Investment Promotion Centre (GIPC) . online
Available at: http://www.gipcghana.com/invest- in-
ghana/why- ghana/political -stability.html Accessed
22 Oct. 2018.
? Kwafo , E. (2018). Ghana Signs New Trade Deal With
The UK. online Modern Ghana. Available at:
na -signs -new -trade -deal -with -the -uk.html
Accessed 25 Oct. 2018.
? Gipcghana.com. (2018). ICT Infrastructure -Ghana
Investment Promotion Centre (GIPC) . online
Available at: http://www.gipcghana.com/invest- in-
ghana/why- ghana/infrastructure/ict –
infrastructure.html Accessed 31 Oct. 2018.
? Export.gov. (2018). Ghana -1-Openness to and
Restriction on Foreign Investment | export.gov .
online Available at:
openness -to -foreign -investment Accessed 28 Oct.
? Sharing intellectual property can be detrimental for
National Express in the near future.
? Difficulty in finding a partner who shares similar or the
same vision as National Express. Finding a company who
shares in National Express’ interest is crucial for the
success of both the business and establishing a healthy
relationship among the two parties.
? Different cultures and management styles can result in
poor integration and co -operation which can affect
? Acquiring an already existing company in the road
transport industry reduces barriers to enter the Ghanaian
? It also reduces training cost as acquiring a company also
means acquiring its already existing staff.
? There is easy access to market knowledge and existing
? Creates a clash of different cultures which could affect
productivity . The culture and values that the other
company established may clash with the culture and
values of your existing business .
? Investopedia. (2018). Joint Venture – JV. online
p Accessed 28 Oct. 2018. REFERENCES