Pestel Analysis on China

1481 Words Apr 24th, 2011 6 Pages
Political factor:
If Nike wants to open international market such as China, the company would get disadvantages because every country will protect and priority for its domestic products. So, the company must find out exactly these requirements that the country require in Nike to overcome these barriers.
International trade regulations The trade regulations in China are formulated in accordance with the "Foreign Trade Law of the People's Republic of China" in order to maintain foreign trade order and fair competition and to protect domestic industry. In 2011, Nike has difficulties to highlight the deep problems businesses face in manufacturing in China, particularly at a time of sharply rising costs and a stiffening legal environment.
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Employment laws Nike is also finally introducing minimum wage to all Nike employees as well as full health care benefits. China is ranked number 144 on the World Health Organization’s health system list. (America is number 37). Full health benefits would be an excellent advantage to many workers in China. It is within Nike’s best interest to maintain a favorable status within the Chinese government. They are moving further into the interior of China; away from the more wealthy coastal cities into the major industrial areas with large numbers of Chinese workers will be a perfect purchasing market.

Economic factor:
Nike's growth is not just affected by the local economy but also in the international economy. An Asian recession could mean weak sales for Nike. The overall results in the sales generated by Nike in athletic footwear, however, remained stable. The global market makes up for the variances in sales particularly between peak and lean seasons.
Economic growth
China’s economy will expand 8.7 percent in 2011, down from 10 percent last year, as the government tries to limit increases in asset prices, the World Bank said . In April 7, the Chinese investment and exports will probably grow mildly in 2011 and 2012 due to the inflation pressures and tightening of monetary policy. According to the Asia Development Outlook, the economic publication of the Asian Development Bank (ADB), released Wednesday the Chinese economy is expected to slow down. China's

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