Global EconomicsDecember 18th, 2012

FINAL PROJECTCan Cup Noodles, a brand made well know by Nissin Foods, be brought into Niger, a country filled with people suffering from hunger and poverty?

INTRODUCTION

Imagine that you just arrived at college. Freshman orientation is all fun and

you start to meet new friends and get acquainted with your new surroundings. As

life as a college student begins, you realize that you are on an extremely constrained

budget. You also find that the cafeteria’s lines are too long and you just don’t have

the time. So what do you do? You turn to America’s most popular meal replacement

and buy yourself a container of Cup Noodles. With the advantage of being so easy to

prepare, the alternative to a real meal seems almost too good to pass up. But could

this cheap, easy, filling snack be introduced in a country when certain necessities for

food preparation might be limited, such as Niger?

CUP NOODLES

History

In 1948, Taiwanese-Japanese businessman, Momofuku Ando established

Nissin Food Products Co., Ltd. 10 years later, in 1958, Nissin introduced the first

instant ramen noodle, Chikin Ramen, to Japan. The instant ramen noodle was

originally designed to be a quick, easy, alternative to more conventional noodles

that took much longer to prepare. In 1970, The Top Ramen brand was imported to

the US from Japan and Nissin Foods established an office in Gardena, California. Top

Ramen first started becoming produced in the United States in 1972 and in 1973,

the Cup O’ Noodles product was introduced and started to take off.

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Description

Since then, the Cup O’ Noodle product has expanded to all over the world,

with varying flavors based on the region. For example, in Brazil they have a smoked

sausage flavor, while in Japan they have a seafood flavor. However, today in the

United States,

they have 11

different flavors

ranging from

Beef to Shrimp

to Spicy Chile

Chicken to Cheddar Cheese. To accommodate the demand from around the world,

Nissin Foods has grown to have offices in Brazil, Hong Kong, India, Germany,

Thailand, China, and Mexico. In 1993 the brand name Cup O’ Noodles was changed

to Cup Noodles. In 2010, 3.9 billion instant ramen products sold by Nissin were

consumed in the US. At Costco, a 24 pack of

Chicken Cup Noodles can be purchased for the

incredibly reasonable price of just $7.71. Each

Cup Noodle contains a block of precooked noodles with an

added flavoring. The only external thing needed is some

boiling water. Nissin focused on making their product easy and simple to enjoy.

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NIGER

History

Who would of guessed that a country that is mostly dominated by the largest

desert in the world contained mostly fertile grasslands no more that 5,000 years

ago? Niger’s history dates back to the beginning of the 15th century, when the

Songhai Empire expanded into to the section of the Sahara. First contact with the

west began in the 19th Century occurred when European explorers, Mungo Park

(British) and Heinrich Barth (German), were exploring the area in search of the

Niger River.

In 1898, the French lead the Voulet-Chanoîne expedition, which resulted in

the destruction of most of southern Niger. In 1917, after the siege of Agadez, Niger’s

most enthralling city, the French gained complete control of Niger. Still under

French influence, Niger elected its first president, Hamani Diori, who enforced an

authoritarian one-party state. After many failed coup attempts, he was finally

overthrown by Lieutenant Colonel Seyni Kountché. After collapsing the tyrannical

one-party government, Kountché created a new and effective military ruling council.

In 1968, Kountché struck (metaphorical) gold! Outside Arlit, a small city in

Niger, miners discovered uranium. This discovery was an economic jackpot. Miners

would have steady work for years to come. Contractors and industrial workers were

being hired to help complete ambitious projects such as the building of the ‘uranium

highway’, which connected Agadez and Arlit, but not everyone was happy. Do to the

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massive influx of money into Niger, inflation rose steeply and became a massive

problem for the poor Nigerians. In the 80’s Nigerians faced massive problems that

included the drop in Uranium prices, the great drought of 1983, and a one-party

democracy that was stalled and making no progress.

In 1999, after 4 years of striking and economic inactivity, the current

president, Ibrahim Baré Maïnassara, was

assassinated. Because he had been the

Coup leader that had overthrown the last

democracy, democracy was re-established

after his death. After Maïnassara’s death in 1999, Lieutenant Colonel Mamadou

Tandja was elected by the people of Niger after due process and fair democratic

elections.

Population

The target groups that Nissin Foods is trying to sell Cup Noodles to consist of

people who are on a tight budget, lack real cooking experience, and don’t have a lot

of time to spare.

Population :

16,344,687 (July 2012 est.)

Urbanization:

17% of total population (2012)

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Age Structure :

0-14 years: 50.1% (male 4,134,198/ female 4,056,350)

15-64 years: 47.3% (male 3,847,984/ female 3,874,984)

65 years and over: 2.6% (male 219,011/ female 212,160) (2012 est.)

Median Age :

Total: 15.2 years

Male: 15 years

Female: 15.4 years (2012 est.)

Population Growth Rate :

3.36% (2012 est.)

Major Infectious Diseases :

Degree of risk: very high

Food or waterborne diseases: bacterial and protozoal diarrhea, hepatitis A, and

Typhoid fever

Water contact disease: schistosomiasis

Children under the age of 5 years underweight :

39.9% (2006)

Unemployment, youth ages 15-24 :

Total: 3.2%

Male: 4%

Female: 1.7% (2001)

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Economy

Niger is one of the poorest countries in the world. Most of Niger’s economy

centers around crops, livestock, and the vast supply of uranium. Another large factor

of Niger’s economy comes from the large supply of oil and oil production. This

production of oil is predicted to grow significantly between now and 2016. Niger

uses the CFA franc, which is used among seven other West African states. A main

problem in Niger is the security of food, which is threatened by the returning Libyan

migrants.

GDP (Purchasing Power Parity)

$11.63 Billion (2011 est.)

$11.37 Billion (2010 est.)

$10.53 Billion (2009 est.)

GDP (Official Exchange Rate) :

$5.926 Billion (2011 est.)

GDP - Real Growth Rate :

2.3% (2011 est.)

8% (2010 est.)

-0.9% (2009 est.)

GDP - Per Capita (PPP) :

$800 (2011 est.)

$800 (2010 est.)

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$700 (2009 est.)

GDP - Composition By Sector :

Agriculture: 42.1%

Industry: 16.3%

Services: 41.6% (2011 est.)

Population Below Poverty Line :

63% (1993 est.)

Distribution of Family Income - Gini Index :

34 (2007)

50.5 (1995)

Taxes and Other Revenues :

23.4% of GDP (2011 est.)

Inflation Rate (Consumer Prices) :

2.9% (2011 est.)

0.8% (2010 est.)

Agricultural Products :

Cowpeas, cotton, peanuts, millet, sorghum, cassava (manioc), rice; cattle, sheep,

goats, camels, donkeys, horses, and poultry

Industries :

Uranium mining, cement, brick, soap, textiles, food processing, chemicals, and

slaughterhouses

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Industrial Production Growth Rate :

5.1% (2003 est.)

Current Account Balance :

-$1.697 Billion (2011 est.)

-$1.256 Billion (2010 est.)

Exports :

$1.249 Billion (2011 est.)

$1.027 Billion (2010 est.)

Commodities: Uranium ore, livestock, cowpeas, and onions

Partners: US 49.2%, Nigeria 29.4%, Russia 10.3%, and Ghana 4.1% (2011)

Imports :

$2.217 Billion (2011 est.)

$1.792 Billion (2010 est.)

Commodities: Foodstuffs, machinery, vehicles and parts, petroleum, and cereals

Partners: France 15.6%, China 9.7%, Nigeria 8.9%, French Polynesia 8.5%,

Belgium 6.9%, India 6.1%, and Togo 4.7% (2011)

Exchange rates :

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Communaute Financiere Africaine Francs (XOF) per US Dollar

471.87 (2011)

495.28 (2010)

472.19 (2009)

447.81 (2008)

Society

Niger social structure is organized in a class and caste system. Intermarriage

between different towns ensure the spread of wealth amongst the various villages.

Despite the government’s encouragement of economic development, not all the

cultural and ethnic groups benefit from it. Many Tuaregs were given positions in the

army as well as being admitted to universities after the separatist rebellion came to

an end. In 2003, Niger criminalized slavery, although it is believed that nearly

43,000 slaves are still being kept captive. 2 years later, in 2005, Niger faced a

massive disaster that would continuously affect the country for years to come.

During a severe drought, Niger was also invaded by the largest Locust infestation

they had ever seen.

Food in Daily Life

The major food crops in Niger are millet, sorghum, and beans. Peanuts and

cotton also function as Niger’s major cash crops. Because of the agricultural benefits

that a river provides, rice is largely grown along it. Millet is the standard food

substance that can be eaten by people of all religions and is usually followed by an

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array of other dishes including corn, macaroni, beans, and wheat dishes. Meanwhile,

rice is served on special occasions such as holidays or rites of passage. Besides the

specific food restrictions observed by different groups, Niger has a national

avoidance of pork.

Legal Structure

The military of Niger is responsible for upholding all law enforcement.

Despite being improved drastically since 1999 after the creating of the fifth republic,

Nigerian law enforcers are still considered generally corrupt and ineffective. Under

the ineffective judicial structure of Niger, the rule of law is extremely fragile.

Because the courts are weak, they are often time susceptible to political

intervention. The government lacks the ability to administer intellectual property

rights laws, which is a major problem in the underdeveloped countries. Finally,

because of the poorly trained law enforcers, a large amount of corruption exists in

the executive and legislative branches of government.

Transportation

Fortunately Niger has a couple airports. The main international one is Diori

Hamani International Airport in Niamey. An international airport would be

necessary because the Cup Noodles would most likely becoming from either the US

or China.

However,

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of the 10,100 kilometers of roads in Niger, only 798 of them are paved. While vast,

long highways connect the large cities, no paved roads actually go into any of the

villages or small towns throughout Niger.

MARKET ENTRY ANALYSIS

The possibility of bringing Cup Noodles to Niger presents many

opportunities. For starters, most of the population, including many of the children,

suffer from malnutrition. Providing Cup Noodles at a reasonable price would allow

families to get a filling supply of food and it would provide them with energy to

carry out their daily tasks. Another positive possibility would be that the only thing

required is heated water. In a desert, getting heated water would not be the most

challenging thing and would be a lot easier to obtain than something else. While this

may be positive, it also is a potential threat. In Niger, many of the common diseases

come from the large amount of waterborne viruses. Because of this, getting clean

water to use in the Cup Noodles would be somewhat of a challenge.

CONCLUSION

Although bringing Cup Noodles to Niger would provide an affordable, easy,

solution to many starving families, I think that at this time, it would not be a

practical solution. First, because many of the roads are unpaved, the large transport

trucks that would be transporting the large supplies of Cup Noodles would be

unable to travel on them and not be able to reach towns or even small cities. The

second problem is that because there is not a readily available supply of clean water,

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the noodles would not be able to be prepared. While many college students in the

US will enjoy their cheap Cup Noodles, I think for now, an expansion into Niger

would not be the smartest decision.

WORKS CITED

"Cup Noodles - Wikipedia, the free encyclopedia." Wikipedia, the free encyclopedia.

N.p., n.d. Web. 16 Dec. 2012. <http://en.wikipedia.org/wiki/Cup_Noodles>.

"History of Niger - Lonely Planet Travel Information." Lonely Planet Travel Guides

and Travel Information. N.p., n.d. Web. 16 Dec. 2012.

<http://www.lonelyplanet.com/niger/history>.

"Law enforcement in Niger - Wikipedia, the free encyclopedia." Wikipedia, the free

encyclopedia. N.p., n.d. Web. 16 Dec. 2012.

<http://en.wikipedia.org/wiki/Law_enforcement_in_Niger>.

"Niger." U.S. Department of State. N.p., n.d. Web. 16 Dec. 2012.

<http://www.state.gov/r/pa/ei/bgn/5474.htm>.

"Niger." THe World Factbook. N.p., n.d. Web. 15 Dec. 2012.

<https://www.cia.gov/library/publications/the-world-factbook/geos/

ng.html>.

"Niger - Wikipedia, the free encyclopedia." Wikipedia, the free encyclopedia. N.p., n.d.

Web. 16 Dec. 2012. <http://en.wikipedia.org/wiki/Niger>.

"Niger Economy: Facts, Data, & Analysis on Economic Freedom." Conservative Policy

Research and Analysis. N.p., n.d. Web. 16 Dec. 2012.

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<http://www.heritage.org/index/country/niger>.

"Nissin Foods - Our History." Nissin Foods. N.p., n.d. Web. 16 Dec. 2012.

<http://www.nissinfoods.com/company/history.php>.

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