Introduction

International business refers to the trade of goods, service, technology, capital, or knowledge across international borders or territories at an international level. In the scope of international business, export and import are two of the most frequently used terminologies. Export means the sending of domestic produced goods or services to another country, in reverse, import means purchasing goods or service produced from foreign nations to the home country. This international business plan aims at planning for the Canadian energy enterprise Nalcor Energy to achieve its international expanding to Ethiopia.

Executive Summary

This plan aims to help Nalcor Energy, a crown corporate of Canada, expand its business to Ethiopia. Nalcor Energy will establish a subsidiary in Ethiopia, exporting mining technology and service to Ethiopia, while importing energy resources to Canada. Nalcor Energy has comparative advantages of having multiple business lines and advanced mining technology. The massive oil and gas resources in Ethiopia, combining with Nalcor Energy’s advanced technology, are conducive to enhancing both parts’ competitiveness.

Description of the Business and Company

Energy is the largest industry in Canada and energy companies dominate Canadian stock market. Founded in 2007, Nalcor Energy is a provincial energy corporation headquartered in Newfoundland and Labrador operating to manage the province’s energy resources.

The strategic plan for Nalcor Engery is to improve energy security and reliability, maximize value, and enhance oil and gas industry development (Nalcor Engery [a], 2017). In the short-run, Nalcor will increase investment in and carry out activities in all areas of the energy sector in the province and elsewhere (Nalcor Energy [b], 2017). Nalcor Engery’s vision is to build a strong economic future for successive generations of Newfoundlanders and Labradorians (Nalcor Engery[c], n.d.). Naclor has six lines of business at the end of 2016, including Newfoundland and Labrador Hydro, Churchill Falls, Lower Churchill Project, Oil and Gas, Bull Arm Fabrication, and Energy Marketing (Nalcor Energy [b], 2017). Naclor could mainly expand its oil and gas business through this international expanding.

When it comes to Nalcor’s organizational structure, besides the leadership team, there are staffs responsible for corporate communications & shareholder relationship, electrical engineering, energy market analyzing, treasury and risk management, and the like (Nalcor Energy [d], n.d.). Many employees reflected that working in Nalcor is a kind of happiness. Currently, Nalcor has limited international trade and business with Ethiopia, as its largest international business partner is the United Sates.

Present Situation

Ethiopia is a nation with adequate oil and gas resources. After Naclor successfully expanding its business to Ethiopia, Naclor can take advantage of Ethiopia’s oil and gas resources, while exporting its technology to recover more oil and gas from the earth.

Business climate of Ethiopia is inspiring though with many difficulties. Ethiopia and Canada established diplomatic relations in 1956, and Canada has been a significant donor of foreign aid to Ethiopia (Panetta, 2009), the relatively peaceful diplomatic relationship is conducive to the cooperation between the two nations.

With the increasing process of globalization, more companies are engaged in international business. It is high time that Naclor to expand its business overseas and make benefits from the cross-national cooperation. As for the detailed plan, Naclor will first establish a subsidiary in Ethiopia and seek cooperation with local government or local oil/gas companies, importing oils and gas to Canada and exporting technologies or services to Ethiopia to better recover oil and gas from the earth. Naclor can also help Ethiopia improve the nations’ energy infrastructure so as to enable local people better make use of existing energy.

Risk Assessment

Political affairs might be the top concern in this international expanding. Not only the relationship between Canada and Ethiopia, but Canada-US relations and overall international situation would have impact on Naclor’s business in Ethiopia.

Ethiopia is now among the fastest growing economies in the world averaging about 10% growth in the last decade. However, a key constraint facing cooperators and investors is the high inflation rate in Ethiopia, in 2018, the Ethiopia’s inflation rate was 15.2% (GOV. UK, 2018), which led many uncertainties to Ethiopia’s economy, especially its currency.

Culture difference is of significance for this expanding. As Canadian culture and social regulations are different form that of Ethiopian, such difference might hinder the cooperation between Canadian employees and Ethiopian employees in Naclor.

Furthermore, technical and commercial risks, and natural risks should also be taken into consideration, since the energy industry relies heavily on natural resources and production technology.

Marketing Activities

As a market waiting to be explored, Ethiopia could provide enormous opportunities for Naclor. However, in the meantime, very likely Naclor will face fierce competition from Chinese companies in Ethiopia, because China is the largest economic partner of Ethiopia currently. In order to make profits from the business expanding, Naclor should manage to lower the costs of oil production and enhance the coefficient of mining. In addition, services export to Ethiopia should focus on technologies and other energy that can help Ethiopia improve its energy structure.

Cultural factors have limited influence on the exporting or importing of energy resources and mining technologies, but it would be conducive if taken into consideration culture elements. For instance, Naclor can design product packages and advertisement in Ethiopian manner, and take into account price, promotion, and distribution into consideration. Target customers are mainly Ethiopian government and Ethiopians using energy. Naclor will also establish an effective after-service channel to receive feedback from consumers.

Conclusion

The purpose of this business plan is to make Naclor Energy to establish international business with Ethiopia. Nalcor Energy’s target is to improve energy security and reliability, maximize value, and enhance oil and gas industry development. Ethiopia would offer opportunities to Naclor Energy, but there are also many competitors waiting for the company. In order to make the international business smoother and more profitable, Naclor will make efforts to establish close relationship with local government and large oil companies, and take into consideration of culture difference, price, distribution, and after-service channel as marketing strategies.