4.0 PESTEL Analysis POLITICAL - The political environment in a country affects its business environment which in turn, affects the performance of a business organization. (Asdullah, M. et al, 2015). A lack of political stability in a country causes negative effects on business operations. Therefore, businesses strive to enter countries that are relatively politically stable. The Beri Index is a tool that measures the risk to a business by rating a country’s political stability inter alia. The United Kingdom’s (UK) political stability was rated at an index of 3, which is above average, making it an ideal country to operate in (Online.uwl.ac.uk, n.d.). The recent “Brexit” move, i.e. Britain’s exit from the European Union (EU), is another factor that has impacted Mc Donald’s operations in the UK. They no longer benefit from tax exemptions which automatically drove up prices of imported raw materials (Krasniqi, F. 2017). They have responded to this change by collaborating with designer Julian Mac Donald to …show more content…
Mc Donald’s adopted an e-business strategy to respond to such demands by launching a digital ordering platform - upgrading its restaurants with its “experience of the future” (Kim, T. 2017). This experience includes touch screen self-serve kiosks, tablets installed at tables, so customers can play the latest games or check their emails freely as well as charging ports for mobile phones (Wright, J. 2015). They have also partnered with UberEats to provide moped and bicycle delivery services between 7am to 2am for a fee of £2.50 (Titcomb, J. 2017). Such strategy has reduced their cost of traditional advertising and created an additional revenue stream with delivery fees and tips accounting for 10% of sales (Gerrard, B. 2017).
4.1.3 How can an E-Business strategy help The Broadway Café attract customers and increase sales?
Compare and contrast macro political risk with micro political risk. Discuss policies to combat their impacts on international business activities.
The partners of Beyond the Bean want to combine a traditional coffee shop with table/ board game rentals, where customers can socialize, in a relaxing environment. Our case analysis will demonstrate the appropriate decisions Beyond the Bean should apply to their business plan in order to achieve their goals. The report clearly identifies the problems within the case, and what choices the business should make to in order to be successful in the given area during a time of rescission. We explore the strengths, weaknesses, opportunities, and threats of Beyond the Bean’s business structure, identifying vital decisions that the business should
More and more people like to eat outside in a restaurant. Restaurant services can help people establish the satisfaction of ingredients, provide considerate services, and save customers’ time. The restaurant industry occupies an important place in the service industry, and because the demand of customers is increasing, the demand on the level of service is becoming greater. The stages of the industry’s life cycle are typically separated into three stages: beginning, maturity, and recession. The restaurant industry is clearly in the maturity stage. For now, people usually can find what they want by using some Apps, and find the restaurants near them. It is convenient for people to eat in a restaurant. The trend of restaurant will be continued in next five years. The charts(4) below showed the restaurant industry sales have been increasing since 1970, and the restaurant sales was $709.2 billion dollars, the sales of restaurant industry included commercial restaurant services, eating places, bars and taverns, managed services, lodging places and retail, vending, recreation, mobile. Commercial restaurant services occupied the most sales from restaurant industry. The major emerging trend in restaurant industry is the way we manage restaurant, more and more technological products were used in restaurant, we use tablet to order food. Restaurant were using advanced technique to have a better dining experience, like the
However, the investment was not without risks. There are four types of risks in international business called cross-culture risk, country risk, currency risk and commercial risk. Cross-cultural risk refers to a situation or event where a cultural miscommunication puts some human value at stake. Country risk describes the potentially adverse effects on company operations and profitability holes by developments in the political, legal, and economic environment in a foreign country. Currency risk is the risk of adverse unexpected fluctuations in exchange rates. Commercial risk refers to potential loss or failure from poorly developed or executed business strategies, tactics, or procedures (Boter & Wincent, 2010). Investment in Rulmenti Grei, Timken might face the salient risks of political and economic instability. Romania’s economic growth was slower, inflation was higher, and the labor force was more volatile. Furthermore, there might be a risk of re-nationalization. It is said that economic risk analysis tells corporate leaders the ability of a particular country to pay its debt while political risk analysis tells them whether that country will pay its debt. Political risk measures the stability of individual countries through the
This would in turn effect Famous Brands negativley as Famous Brands will now have to pay a higher tax on sugary products in order to buy them forcing them to raise the costs of their end products sold to consumers meaning that the end products that consumers are now buying are going to be more expensive and taking away a competitive advantage from Famous Brands as they now have higher product prices making it easier for competitors to compete against
All countries in the world have various political environment and regimes. Political systems differ in terms of the governance, power and the rule of law. A political regime can be defined as structures, activities and processes by which given countries in the world govern themselves. Political systems can be based on either collectivism or individualism. It is essential for business to look at a country’s political environment as a vital criterion in venturing or expanding the business or company to that country. This is because political systems differ and each has its own form of governance that impacts a business in terms of its growth. International companies carry out international manufacture and activity in that they
The PESTLE analysis can be used to assess the strategic relevance of the six principal components of the macro-environmental: political, economic, social, technological, environmental, and legal forces. It can be used as a tool by companies to better understand of the macro- environment they are operating in.
Starbucks provide a large in store seating with free wi fi and a take-out service which only a few retail shops offer. The main target customers for Starbucks are office workers, with enough income, whom are able to afford the high prices of their products (Gaudio, 2003). The company has worked hard to establish itself as the brand leader with its branding as the most frequently drank coffee and noticeable brand logo. Introduction of promotions like the Starbucks Card, allows a more convenient way for a person to pay for your drinks and earn rewards for your purchase (Starbucks Coffee Company, 2011). Furthermore, in‐store promotions accompanied by new products and amenities like free internet use are all strategies that Starbucks use to maintain their position in the market (Vasudha, 2011).
The level of internationalisation around the globe has grown throughout the years, with advanced technologies the ease and ability to work with foreign countries has also grown. However, firms do not simply interact with each other with no outside party involvement; the government can be seen to play a large role in conducting international business. Governments continuously have the responsibility to act in the manner that they believe is best for their nation; this includes decisions regarding protectionism, which may serve to aid domestic industries but simultaneously hinder international business. It can be seen that governments do not always act in their nation’s best interest and are corrupt which can serve to increase the risks and costs of entering an international business environment. While these are examples in which the government makes international business difficult it can also be seen that the presence of a government is instrumental in creating international business effectiveness, whether this be through their legal system or from trade agreements. This makes the role the government plays paradoxical; as their involvement generally increases the risks and costs of firms seeking to internationalise, whilst simultaneously playing a significant role in creating international business effectiveness.
We as a whole know how quickly the mechanical scene changes and how this effects the way we advertise our items. Innovative components influence advertising and the administration thereof in three unmistakable ways:
Evans and Richardson (2007), contend that globalized economic environment is complex and changes from time to time and this places a heavy responsibility on multinationals and other business enterprises. They are forced to adapt in order to deal with these factors for the benefit of their organizations. A company cannot ignore political issues when assessing the business environment in which it operates because it affects government policies such as licensing, regulation and taxation, which have a direct consequence on the activities of a business enterprise (Evans, & Richardson, 2007).
International business today has exceeded more than any person has ever thought it would, countries are doing more trading and importing now than ever. International business can affect everyone, from small business owners to big companies all over the world. A country that comes to mind that does a lot of international business is the United Kingdom (UK). This paper will include the following: the background of the country, economic environment, government policies, international economic integration and business environment, and current events. By the end of this paper you will be able to know everything about the UK and if you want to construct business or take business out of this country.
Political environment is significant to do business in other countries. There are different factors of political environment. These factors can influence the government decision making and other activities. For foreign investors every country set some rules and regulations. Investor need to maintain these rules and regulation to do business on certain country. Political factors can influence the government to change these regulations. So investors need to know the regulations and get the proper knowledge about political environment.
THE POLITICAL ENVIRONMENT: The critical concern Political environment has a very important impact on every business operation no matter what its size, its area of operation. Whether the company is domestic, national, international, large or small political factors of the country it is located in will have an impact on it. And the most crucial & unavoidable realities of international business are that both host and home governments are integral partners. Reflected in its policies and attitudes toward business are a governments idea of how best to promote the national interest, considering its own resources and political philosophy. A government control's and restricts a company's