Afghan Sun Threats

Afghan Sun Threats

1. The products are aimed at poor families (lines 17-18)

   • they might not be able to affort solar power systems or have other spending priorities (lines 58-59)

2. Distribution will be a problem (line 60)

   • since customers are likely to live in remote locations (line 60) with poor infrastructure (lines 60-61)

3. Threats of locating the main production facility in Country A (Table 1) include:

   • AS Table 1
   • rising unemployment despite the rate being low at the moment
   • limited government assistance
   • high local wages
   • high rents
   • new facilities would be required
   • complex transportation links to Afghanistan
   • the potential change in government, which can be destabilizing

4. Threats of locating the main production facility in Country B (Table 1) include:

   • AS Table 1
   • developing country, so the national income is low
   • high unemployment -> shortage of skills
   • falling exchange rate (which makes buying raw materials and components from overseas more expensive for locally based firms, including AS if it chooses to locate in Country B
   • the one-party state (there is no opposition political party, which can be politically destabilizing)
   • does not have any major trading agreements so doing business in Country B may be more problematic than in Country A

5. the cash outflow of $200,000 for capital expenditure (Table 2) increases the risks of the project

   • AS Table 2

6. Afghanistan is emerging from a long and damaging war

   • some parts of the country remain politically unstable (lines 69-70), making it more difficult for AS to conduct its business

7. not all areas of Afghanistan are peaceful (lines 70-71)

8. possible changes in the external environment (line 75) can create uncertainties (line 77)

9. Afghanistan is classified as a low income country

   • GDP per capita less than $2,000
   • ~30% of the population live below the poverty line ($1.25 per day)

10. according to the World Bank's Doing Business 2018 rankings, Afghanistan is ranked 183 out of 190 countries