Risk Assessment

Risk Assessment

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Risk Assessment

Strengths

Since the revolution, the government has become more open to international investment. There are few hurdles for people intending to do business in the country. The government is encouraging investment that will help people, and it will therefore support the idea of having a bottling desalination plant. The country provides a ready market for the products. Libya is a desert country with few freshwater supplies. The hot climate means that people get thirsty a lot. This means that the company does not have to worry about how it will market its product or the people it will target. Libya has abundant sources of energy, and this has reduced the prices of the commodity. Companies do not have to worry about incurring high fuel costs in their operations, and this will reduce the cost of their products. The country borders the Mediterranean Sea and this provides sufficient water for desalination (CIA, 2013).

Weaknesses

The country can improve on its security and its political stability. Since the people ousted the previous regime, the country has witnessed periodic violent attacks from armed rebels. The current government does not seem to represent the will of all the people, and those who are against it constantly oppose the regime. They have access to weapons, which they have used to attack government forces and their supporters. Such actions discourage investment in the country because people are concerned about their safety. The country can improve on its ease of doing business. Currently, people intending to do business in the country find it hard to navigate the system because of bureaucracy. The situation is worse for foreign investors who do not know the legalities to follow. The government needs to streamline operations and make every procedure and process clear to ensure that people find it easy to conduct business operations (Daragahi, 2012)

Opportunities

Libya offers an enabling environment in terms of encouraging companies to set up desalination plants. Since many companies have already done this, the process is streamlined, making it easy for companies to set up. Water is necessary for survival, and desalination is the main method of getting water to drink. Although the country usually imports the product, this is usually expensive. Many people prefer the cheap option of desalination. People will always need water for individual as well as industrial use, and the company will never lack a market. Many buildings and other infrastructure facilities were destroyed during the revolution. The country is encouraging investors to help in rebuilding the country. The tourism sector in the country has also increased, especially from international markets. This will increase the number of people in need of water in the country, and provide new markets for the bottling plants. .

Threats

The main threat that desalination plants would face is the Great Manmade River Water Project. After its completion and full implementation, the project will provide water for most people in the country, and this will reduce the number of people who need desalinized water. Thus, a company will lose a significant share of the market. The company will incur additional costs of production and operations. This is because of the increasing demand of desalination plants in Libya and in other countries seeking alternative sources of water, which has increased the costs. The country’s political instability could be a main threat for the company because it could disrupt the company’s operations.

References

CIA. (2013). Africa: Libya. Central Intelligence Agency. Retrieved from https://www.cia.gov/library/publications/the-world-factbook/geos/ly.html

Daragahi, B. (2012). Foreign investors face Libya hurdles. Retrieved from http://www.ft.com/cms/s/0/9fc04366-dfa6-11e1-9bb7-00144feab49a.html#axzz2gR1Pas4E