a. From the given scenario:

i. Elements that can shape the external environment of ZetaTech are:

a) Political: This is made up of factors such as stability of the political system, war, terrorism threats, insecurity and other political factors that can influence the performance of organisations.

From the scenario, heightened insecurity in parts of the country has increased the operating costs of tech companies in the country.

b) Economic: This includes economic factors that are capable of influencing the current or future performance of the organisation. Examples include macroeconomic variables such as Gross Domestic Product (GDP) and its derivatives (per capita income, disposable income, etc.), inflation, interest rates, tax rate, exchange rates, etc.

The given scenario shows that the inflation rate has risen to 18%, and the Naira depreciated significantly against major foreign currencies. Additionally, Small and Medium-sized Enterprises (SMEs), ZetaTech’s primary clientele, are struggling, leading to delays in payments and a decline in the number of new contracts.

c) Social: This refers to the customs and attitudes of countries where organisations operate. Examples include ethnic structures of the society, religion and religious attitudes, age distribution of people in the society and their product preferences, etc.

The scenario indicates a growing adoption of digital tools among young entrepreneurs, creating opportunities for ZetaTech. However, traditional SMEs remain hesitant to adopt digital solutions.

d) Technological: This explains the science and technology at the disposal of

organisations and how they affect their performances and competitiveness.

The rapid advancement of AI and machine learning is reshaping the industry. Competitors have started integrating these technologies into their offerings, while ZetaTech is still playing catch-up.

e) Environmental/ecological: This describes environmental factors which can influence organisational performance.

From the scenario, there is increasing pressure from stakeholders for companies to adopt sustainable practices, including energy-efficient software development.

f) Legal: This is made up of existing and potential laws and regulations that could affect an organisation.

As shown in the scenario, a recent lawsuit against a rival firm for intellectual property infringement has raised awareness of the need for stronger legal frameworks in the industry.

The recently introduced regulations aimed at improving data privacy and cyber-security have led to a significant increase in the operating costs of tech companies in the country.

ii. The top two elements of the environment that will likely affect the success of

ZetaTech’s strategies are:

a) Technological factor: The rapid advancement of AI and machine learning

is a critical factor. Competitors have already integrated these technologies, creating a competitive disadvantage for ZetaTech. If ZetaTech fails to invest in these technologies, it risks losing relevance in the industry. For example, lagging behind in AI could lead to reduced market share as SMEs may choose more innovative substitutes.

b) Economic factor: The rising inflation and currency depreciation are

significantly impacting on ZetaTech’s client base. SMEs are struggling with reduced financial capacity, leading to delayed payments and fewer contracts for ZetaTech. This challenge directly threatens the company’s revenue and cash flow, thereby limiting its ability to invest in critical technologies, such as artificial intelligence (AI).

b.

i. Porter proposed five forces that determine the level of competition in an industry: They are:

a) Threat of new entrant: The ease of entry into an industry by firms determines

the degree of competition in such a market. Industries with low entry barriers will attract more firms, thus making such a market more competitive. Barriers to entry may include economies of scale, capital investment requirement, access to distribution channels, time to become established, expertise, switching cost, and government regulations.

From the given scenario, the tech industry has low barriers to entry, leading to an influx of start-ups offering cheaper alternatives. However, ZetaTech’s established reputation provides some insulation to this threat.

b) Threat from substitute products: The level of competition in an industry where consumers can switch easily to other substitutes will be higher than those with fewer substitutes and those where switching is costlier and/or more difficult.

The scenario shows that open-source software and do-it-yourself platforms are gaining popularity, posing a threat to ZetaTech’s offerings.

c) Bargaining power of suppliers: Where suppliers exert significant bargaining power, it becomes possible for such suppliers to have substantial influence over the price and quality of critical inputs used by firms in the industry. This influence means that they can raise prices at will, thus squeezing out profit from firms in the industry.

The scenario shows that ZetaTech relies heavily on cloud service providers and software development tools, giving suppliers considerable leverage.

Bargaining power of customers: Buyers can also exert significant influence on the industry’s profitability by demanding lower prices and requesting improved product specifications and quality. This is possible where the volumes of their purchases are high relative to the size of the suppliers, where the level of product differentiation among rival firms in the industry is low, where the profit of the buyer is low, etc.

The given scenario indicates that SMEs possess significant bargaining power due to the availability of multiple market alternatives.

d) Competitive rivalry: The intensity of competition among rival firms also determines the degree of competition in an industry.

From the scenario, competition is intense, with both local start-ups and international firms vying for market shares.

ii. The following are ways that ZetaTech can mitigate each of the five forces:

a) Threat of potential entrants: This can be mitigated through any of the

following:

 Economies of scale: The mass rollout of ZetaTech’s products would lead to reduced costs. It will also enable the company to develop and deploy new production capabilities that will be difficult for new entrants to replicate; and

 ZetaTech can lock in customers through enhanced customer support services, making it difficult for new entrants to establish themselves in the industry.

b) Threat of substitutes:

 Value-added services: ZetaTech can offer unique value through enhanced customer support, personalised solutions, and training for SMEs to effectively adopt its software.

 Product differentiation: Integrating AI and machine learning into its solutions will differentiate ZetaTech’s offerings from open-source or do-it- yourself (DIY) platforms. For instance, predictive analytics could help SMEs make informed decisions, providing a clear advantage over substitutes.

c) Threat from suppliers

 Backward integration: This is when an entity enters the product market of its suppliers.

 Alliances with suppliers through contractual agreements and memorandum of understanding.

d) Threat from customers

Differentiating products: Like the threat of substitutes, customer threats can also be mitigated through product differentiation. This may be achieved by offering value-adding solutions.

e) Competitive rivalry

Strategic alliances: Partnering with other tech firms or financial institutions could expand ZetaTech’s reach and thus sharing resources for innovation and reducing direct competitive pressure.

Market diversification: Expanding into West African markets reduces dependence on the Nigerian SME sector and spreads risk. By tapping into newer markets, ZetaTech can stabilise revenue streams.

c. The Chief Executive Officer, Adebanjo Oke, can address the challenges with

middle-level management by providing transformational leadership. Transformational leadership is a leadership style in which the leader inspires and motivates followers to achieve a shared vision, while helping them to develop their full potentials.

The CEO can do this through the following steps:

i. Envisioning an inspiring picture of the future: Adebanjo should hold regular meetings with employees to clearly articulate the strategic vision and explain how all departments’ efforts contribute to the company’s goals. By fostering a transparent culture, employees will feel more connected to the mission and be motivated to contribute towards its accomplishment. Such meetings will further enable middle-level managers to buy into the vision. ii. Coaching and training middle-level managers: Resistance from middle management could stem from inadequate skills or lack of ownership. Adebanjo can implement targeted leadership training programmes to empower middle managers with the tools to lead change. Additionally, involving them in the strategy development process fosters accountability and reduces resistance.

iii. Manage the process of realising the vision and achieving the strategic objective.

iv. Inspire the middle-level managers to deploy needed skills for the achievement of the implementation of the strategies.