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1. Company Description, Products, and Services
Description
Smart Parking Lagos is an upcoming company based in Nigeria that will provide smart car parking spaces services all over the country in order to improve traffic management in the country. The company plans to set up its headquarters in the Nigerian capital, Lagos. The company has only one mission- to enable Nigeria to manage and reduce parking search traffic on the streets.
The technology that the company will focus on is parking safety and efficient management of on-street and off-street parking spaces. It will aim to make parking experience faster, more convenient, and hassle-free. Although it will be a new player in the industry, its vision is to emerge as a market leader in future.
Products
Smart Parking Lagos has a vision to emerge not only as a market leader but also wants to emerge as a leader in innovation. It wants to introduce innovative products such as automated valet robots, car parking lifts, robotic car parks, smart parking sensors, pay-by-plate payment methods for parking, etc. Smart Parking Lagos will fully integrate parking, guidance, payment, and analytics. It wants to become a provider of customizable solutions to all parking-related problems. Nigeria is a rapidly developing economy. Although the country is not fully developed yet, it possesses a promising market that is fueled by technological progress. Smart Parking Lagos will try to capture this market.
Services
The ultimate goal of Smart Parking Lagos is to improve the overall driving experience. It wants to revolutionize the Nigerian car parking industry through advanced technologies. Apart from providing innovative products, Smart Parking Lagos wants to provide world-class services by adopting intelligent frameworks.
One of its possible frameworks aims to combine Radio Frequency Identification (RFID) with automatic car parking management systems with integrated networked sensors, and actuators. This system will provide services like vehicle guidance, payment facilities, and security. According to reports, about 39% of Nigerians own a car, and a majority of them consist of people aged from 25-40 years. Smart Parking Lagos will try to make this demographic its target audience.
2. Industry and Competitive Analysis
Analysis of Trends and Industry Life Cycle
The Growth Stage
Globally, the smart parking industry is at its growth stage. Initially, the demand for smart parking solutions was not much as traditional parking systems played a dominant role in the market. However, rapid technological progress in technology in the early 2000s made this industry popular. People suddenly started warming up to smart driving solutions. Currently, around 11% of the world prefers smart parking spaces.
Rapid progress in the market had made this industry highly profitable. The global smart parking market was valued to be at $6.05 million dollars in 2019 and had reached a growth rate of 16.7% in 2021. The key factors behind this demand for smart parking solutions were mainly poor traffic management which led to problems like traffic congestion and further led to problems like air and noise pollution.
Smart driving solutions proved to be effective in these cases as they provided parking lots with real-time data checks. The challenge of urbanization across the world combined with increasing environmental concerns created multifarious opportunities for these market players. The rise in vehicles on the road also created a demand for parking spaces and solutions. Currently, the global smart car parking industry holds a total market share of $5.21 billion.
- From 2016 to 2021, the smart car parking industry was projected to grow at a CAGR of 17.94%.
- In 2019- 2022, the market share of the smart car industry was expected to reach a market share of 11.4 million, with a CAGR of 14.2%.
- Currently, the CAGR of this industry is expected to reach 19.8% with a target of hitting $16346.54 by the end of 2028.
Figure 1: Growth of Smart Car Parking Industry
(Source: Statista, 2022)
The future of the smart car parking industry seems very bright as it is slowly moving towards more digitalized and automated options that are not only sustainable but will also save a lot of parking space. This industry will be significantly influenced by automated and electric vehicles. Currently, this industry is also growing in developing countries like Nigeria.
SWOT Analysis
Strengths ● Smart Parking Lagos will utilize the latest available technology ● Its focus on innovation will help it to become a market leader ● Its focus on customer satisfaction will help it to gain customer loyalty ● Its innovative technologies will help it to gain more potential customers ● Nigeria’s resourceful population can help it to employ efficient employees | Weakness ● Smart Car Parking Lagos’ systems are almost entirely machine dependent ● Its car parking sensors will drain battery power ● Sensors can also prove to be inaccurate ● The existing competitors of Smart Parking Lagos are aggressive and highly competitive |
Opportunity ● As a developing country, Nigeria has a lot of business potential Current booming demand for automobiles have increased the demand for smart parking solutions and services Poor traffic management in the country has also led to the growth of smart parking services | Threats ● Rapidly decreasing battery life has affected the demand for these kinds of services ● Only about 39% of Nigeria have private cars ● Only a handful of the population can afford smart services |
Competitor Analysis
Currently the two main competitors of Smart Parking Lagos will be Complete Parking Services (CPS) and Lodige Industries.
Complete Parking Services (CPS) | Lodige Industries | |
Product | Smart car parking solutions | Smart car parking solutions, logistics, etc |
Revenue | $40 million (CPS, 2022) | $100 million |
Target Audience | Car Owners | Global audience |
Marketing Strategies | Website/Blog/ Events | Website/Blog/Email, etc |
Customer Satisfaction | Moderately satisfied customers | Highly satisfied customers |
Strengths | One of the first providers of smart parking solutions in Nigeria | Is a globally known German brand that provides highly advanced and innovative services |
Weaknesses | Faces numerous technological challenges | Is not so well known in Nigeria |
Key Advantage | Renowned smart parking service provider in Nigeria. | Has a huge global presence. |
Porter’s Five Forces Analysis
Bargaining power of Suppliers (low)- The number of suppliers is limited in the smart parking industry. Service providers can easily replace one supplier with another in no time.
Bargaining Power of Buyers (high)- Usually, buyers demand services at a lower price. Since most service providers aim toward customer satisfaction, often, they have to negotiate prices with them.
Threat of Substitutes (Low)- Currently there is no threat of substitutes in the smart car parking services.
Threat of New Entry (Low)- Currently there is no threat of substitutes as the smart car parking industry is growing rapidly day by day. Rapid technological progress and high demands for service have blocked the threat of new entries
3. Market Analysis and Marketing Plan
Analysis of Potential Market for Service through Market Segmentation
Demographic | The target market demographic of Smart Parking Lagos will be car owners. ● Age: 20 to 50 years ● Gender: Male and Female ● Income: 35k-40k ● Social Status: Middle to high class ● Occupation: Any |
Psychographic | ● Lifestyle: The target population of Smart Parking Lagos more or less lead a comfortable lifestyle ● Interest: Most of them are curious about the latest trends in technology ● Concerns: Most of them are concerned about the poor traffic management system in Nigeria. Hence, they will choose smart parking solutions for their cars ● Values: Most of them believe in modern values and try to adhere to them |
Behavioral | ● Purchasing Behavior: Electrical goods, products with advanced technology ● Benefits Sought Segmentation: Most of the customers want quality servicing and premium products ● Loyalty: Most of the target customers are loyal in nature |
Geographic | ● Country: Nigeria ● City: Lagos ● Density: 226 /km2 ● Language: Hausa, Yoruba, Igbo, Tiv ● Climate: tropical wet and dry ● Area: 1, 171km2 ● Population: 15,388,000 |
Customer Persona
Demographic Information · Name: Adaora Nwodo · Age: 27 · Occupation: Automobile Engineer · Education: University of Nigeria, Nsukka · Location: Lagos, Nigeria · Marital Status: Single
| Interests · Adaora is a voracious reader and loves to read whenever she gets the time · Loves to go fishing with family and friends on Sundays · Is interested in different kinds of arts and music · Is interested about the latest technological advancements around the world | Motivations · Recognition at workplace from both her seniors and her peers · Personal reward from successful projects · Opportunities for increments and promotions |
Needs and expectations · Seeks ways to make Nigeria’s traffic maintenance system better · Tries to find better solutions for the pollution problem in Nigeria. · Tries to seek out innovative solutions to the problems · Wants to become a smart user by incorporating smart and intelligent technologies at every possible aspect of life | Pain Points · Hates traffic jams · Is aware of the current state of the Nigerian traffic management system · Is late for work due to traffic jams · Hates the traffic congestion in Nigeria · Hates the level of pollution that is caused due to traffic congestion | Challenges · Almost half of the Nigerian traffic maintenance services are proved to be inefficient · Lack of parking space has led to more traffic congestion · Increase in the number of private cars in Nigeria has led to more pollution · High pollution levels are increasing the chances of air-borne diseases. |
Technology and social media · Has social media accounts on Facebook, Twitter, Instagram and Snapchat. · Is mostly active on Twitter and Instagram · Uses Twitter only to follow specific people · Has a LinkedIn account to stay in touch with colleagues · Runs a personal blog where she posts about her own personal thoughts · Has a personal YouTube channel with over 1.2k subscribers | Content type preferences · BBC News · Wall Street Journal · Forbes · Business Week · Bloomberg · TIME Magazine · The Guardian | Brands and Influences · Stack · Apple · Amazon · Microsoft · Linux |
4Ps of Marketing Plan
Product: Smart Parking Lagos aims to provide smart parking services in Nigeria with its main focus on the capital city of Lagos. The present condition of the Nigerian traffic management system is very bad. Recently, the demand for automobiles has reached an all-time high in Nigeria. The purchasing power of the middle-class population has also increased over the years. This has led to more cars on the road which has led to an increase in traffic congestion. The road development and management systems that currently exist in Nigeria are also maintained very poorly. This has led to an increase in the pollution level in the entire country.
Smart Parking Lagos will introduce car parking services that will help to reduce the level of traffic congestion in Nigeria. Its highly advanced products and state-of-the-art parking services will also help to maintain the traffic better. Its products like robot car parks, and automated valet parking robots will make car parking easier by making out more space for parking. Smart parking sensors can provide a vast amount of parking and traffic advantages. Pay by Plate method technology can help in managing payments in urban centers like Lagos. Other innovative products like 3D design and signaling, pollution-based parking fees and length based parking fees can help to reduce the level of pollution in the city.
Place: Smart Parking Lagos will open its first branch in Lagos, the capital city of Nigeria. This African capital is teeming with a lot of business opportunities. Opening a business in Lagos will be highly beneficial for it as currently, Lagos does not have a lot of smart car parking services. The existing service providers do not have enough financial means and face various technological challenges. The current traffic maintenance system of the region is also very poor. If Smart Parking Lagos can take advantage of these opportunities, it can certainly emerge as a market leader in the Nigerian Parking industry.
Price: Smart Parking Lagos will use an effective pricing strategy that will help it to penetrate the Nigerian parking market. Most of Nigeria’s population consists of lower, middle, and lower-middle-class people. Keeping this in mind, Smart Parking Lagos will formulate a pricing strategy that will enable the general Nigerian population to access its products and services.
Promotion: Smart Parking Lagos will utilize a lot of promotional mediums in order to promote its products and services in Lagos, Nigeria. Smart Parking Lagos will invest a lot in traditional promotional methods like advertising. It also has plans to promote itself in Lagos through social media. A huge chunk of Nigerians uses social media extensively. According to recent reports, more than 33.9 million Nigerians are using social media as of 2022. Smart Parking Lagos will put up several advertisements on social media websites.
Apart from that, it will also make use of traditional promotional methods like putting advertisements on hoardings and billboards. Smart Parking Lagos will also utilize several digital marketing solutions organic and social media campaigns and email marketing. Smart Parking Lagos will make use of several organic marketing methods like promotion through blog posts, case studies, guest posts, and several unpaid tweets. They will also make use of several other channels in order to increase brand awareness. They will also run various social media campaigns in order to stay relevant and maintain brand popularity. These campaigns will help them to attract customers and boost customer engagement.
Various forms of email marketing will help them to target specific groups of customers. This kind of promotional strategy can also help them to connect better with certain groups of customers. It can also help Smart Parking Lagos to increase their annual sales by connecting with their customers on a more personal level.
4. Financial Risks and Opportunities
Financial Costs for Starting a business in Nigeria would be between 100,000 to 300,000 US dollars considering, including land costs and employee costs, website costs, registration costs and other costs.
The expected revenue that this company could generate is between 100,000 to 200,000 US dollars in a financial year. Although Nigeria is a poor country Lagos is the capital city of this country and residence of many affluent people.
There are financial risks involved with starting up a business in a country like Nigeria as it is a poor and developing country and not many people use cars. As per government data, this country’s vehicle per population ratio is 0.06. Thus, the success of this business depends on location of parking. It should be in a relatively developed area or city where population includes rich people. As they will have cars and they will need parking. Parking place should be in a commercial area to attract many customers or else there will be a financial risk. This company might go into a financial loss. Nigeria’s growth rate is going in negative at present and the financial condition of people is poor. According to 2020 data, this country’s GDP was -0.8. Thus, there is great financial risk involved in starting a business in this country.
Opportunity
However, there are some opportunities for opening this business as well as this is a growing country. Nigeria has the largest economy in Africa and in 2021 its growth was 3.6 per cent. Besides, Nigeria has a large population that would rise economically in coming years and this would create opportunities for this company.
Risk Factor | Analysis | Contingency Cost | Impact |
Market Risk | This risk could arise due to improvement in technology and change in prices or demand. | 35,000 to 60,000 | High |
Credit Risk | This risk involves an inability to return money to creditors or borrowers | 12,000 to 30,000 | Low |
Operational Risk | This risk involves wrong decisions in management impacting business. | 35,000 to 50,000 | High |
Financial cost
Costing 1st year | (In millions) |
start-up cost | $ 2.10 |
Expected revenue | $ 0.45 |
Profitability | $ 0.25 |
Finance | |
Risks | Cost |
Marketing cost | $ 45,000.00 |
commodity cost | $ 1,200.00 |
Equity cost | $ 8,752.00 |
Interest rate | $ 2,300.00 |
Credit cost | $ 18,722.00 |
Operational cost | $ 6,210.00 |
Purchasing material | $ 1,420.00 |
hire and train cost | $ 5,100.00 |
Supply chain management cost | $ 8,900.00 |
Cost of total cost | $ 97,604.00 |
5. HR Management Concept
Joint venture is suitable entry mode for the company as it will decrease the financial risk and also developing business intelligence will be crucial. HR management includes two elements first is HR and second is management, HR implies human resources which refers to people that make up the workforce of a company. Management refers to coordination of all people to achieve an aim and objectives of a company. Flat organizational model will be followed by the organization.
They would be mostly from business and management backgrounds, people that hold MBA degrees. This is necessary as managing a business needs a person with MBA background has academic knowledge on how a business is managed and run. Therefore, HR manager will be able to manage this business well.
HR manager will take care of things like marketing, sales, operations and others. Besides, personnel will include people from commerce backgrounds who have knowledge of accounting and finance to look after finances of the company. HR manager will take care of financial risks that this company could face make a financial plan for this company and develop a financial strategy for this company. HR manager will ensure all legal rules and regulations relating to finance are followed in this company. Besides, this company’s personnel qualifications and background would include people from a marketing background.
6. Conclusion
After all analysis it is concluded that starting up a business in Nigeria, Lagos would be beneficial to this company as this is a growing country and there is much scope to expand business in this country. There is not much competition either in this industry and this makes this business profitable.
However, there are also associated risks with this start up business as this country’s GDP is very low and there are not many people with cars. This country’s majority of population lives in poverty and they do not possess such a luxury item like car. Therefore, it is recommended that this company must take all precautions before deciding location of parking place as these matters a lot in location matters a lot in this business. This company must open business in a commercial area where rich people reside.