Nippon Paint Singapore Co Pte Ltd was founded in 1955 by Mr Goh Cheng Liang who set up his first paint shop in Singapore & became the main local distributor of Nippon Paint. Nippon Paint Singapore has a competitive edge over its core competitors in terms of quality, customer trust and service, and diversity in product ranges. It has proved its success as Mr Goh Cheng Liang, the founder of Nippon Paint was announced as one of Singapore’s richest man with a US$8.2 billion (S$10.8 billion) fortune, according to a Bloomberg report on January 19 2015.
This report will focus in making a PESTEL & Porter’s 5 Forces of Nippon Paint & finally provide some recommendations.
2.0 PESTEL Analysis 2.1 Political Factor
When operating in a global environment, Political factors are an important aspect of the PESTLE analysis that a company has to put into consideration when conducting an analysis. The significant political factors affecting Nippon Paint Singapore include the stability of a government & the likely changes that could happen. For example, its business environment may be affected by tax policies that the government collects at the end of each year. As Nippon Paint Singapore is one of the top leading paint brands not only in the world, but also in Singapore, high tax rates may occur.
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The core elements of economic factors that companies have to put into consideration include the economic growth, inflation rate and interest rates. Each factor determines the extent of business growth and expansion. For instance, said Charlie Ong, the general manager of the Nippon Paint mentioned that the sales of paint tend to increase more during holidays, and on occasions like Hari Raya Puasa and the Lunar New Year. (Charlie Ong,
The use of PEST analysis can be seen effective for business such as their strategic planning, marketing, and product development. Furthermore, PEST ensures that company`s performance is aligned positively with the powerful forces of change that are affecting business environment (Porter, 1985). PEST have four factors which are Political, Economic, Social, and Technological. However, we use these factors to check how they interplay to the business or the activity of an organization.Using PEST analysis is important when a company decided to enter its business operation into new markets and new countries. In this case, using PEST will help to adapt effectively to the realities of the new environment and to make contingency plans for threats by preparing business and strategic plans (Byars, 1991; Cooper, 2000).
Political factor takes a significant role in identifying the reasons that can impact the growth of a company in the industry. Restrictions and political governance are in position to maintain a transparent trading and fair competition environment for the participants, such as the protection of Intellectual property and trading regulations.
Social and economic factors are something that will arise in all businesses no matter how its organization might be structured. While some social and economic factors might be able to be evaded, depending on the business, there are some that are unavoidable. It is imperative that you make the effort to get familiar as possible with social factors as well as economic factors because these are key aspects that will affect a business. In order to identify what social and economic factors directly affect Burberry it is beneficial to briefly take the time to explore what these factors are, how they differ, then provide a few examples. Economic factors are defined in the business world as the set of fundamental information that affects a business
Economic factors – which include interest rates, economic growth, exchange rates, inflation and taxation changes (Nieman, G; 1998). The change the economy can have a major impact on the behaviour of the business. For example: inflation may cause a higher wage demand from employees (Herrigton, Kew & Kew; 2009).
| Opp 1- Changing foreign trade policies can provide incentives to change manufacturing facilities to different countries.
Netherlands’s companies and industries should understand and study the political-legal environment since it is a critical concern of a successful global organization. As stated, Netherlands is a developing country so its government is one of those that exercise control of the businesses and trading by implementing laws and regulations (e.g. tax breaks and tariffs privileges). This could affect the products to be exported in other country/ies. To have a better and fair competition, government established antitrust laws and regulations. One of the factors that could affect the country’s industry, company and trading products are the political risks. These risks could affect the company’s capacity to do productively and profitably. This will lead
Economic factors , are issues to do with the economy. They influence businesses and people who take part in the economy , it includes things like interest rates ,unemployment rates , taxes , inflation, periods of growth and recession.
1. Political: “issues affecting our international vendors could materially adversely affect our business and financial performance.”(Page 8.)
Political factors relate to way in which changes in the government and government policies can influence the business.
When it comes to political factors, the government stability, taxation policy, social welfare policies and trae regulations shoule be considered.
So, inner-city Paint Corporation has much effect on high interest rates. Changes in the technological part of the societal environment can also have a great impact on inner-city Paint Corporation. In fact, in the inner-city paint the production of paint is a simple process, just mixing of powders with water, then tapping off containers. So, in the technological factor, there is no preponderance and innovation of other company. Trends in the political part of the societal environment have a significant impact on business firms. Stability of government can affect inner-city paint corporation growth strategy. Lifestyle changes are part of the sociocultural aspect of the societal environment. To inner-city Paint Corporation, lifestyle changes will influence its output directly.
Political Factors – “Are there any other political factors that are likely to change?” Walmart considers political factors in the retail and employment markets, usually pertaining to government policies and employment law. In the PEST analysis model, politically active interest groups are also significant in how Walmart reacts to this aspect. For the most part, politics that would
Vietnam is world’s 13th most populous country, majorly consisting of Viet and Kinh ethnic groups. Vietnam has Vietnamese as official language and some other languages exist in minority groups. Vietnam adopted “seclusion” policy which made the country isolated and faced a deep crisis which led them on brink of bankruptcy. After 1995, started globalizing and established relation with United States and Vietnam also became member of WTO in 2006. There are many aspects that helped Vietnam to grow faster. PESTLE (Political, Economic, Social, Technical, Legal and Environmental) analysis helps in analyzing overall business opportunities and ease of doing business in country. Vietnam PESTLE analysis is as follows:-
Factors that happen in the external environment are known as external factors or influences. These will affect the main internal functions of the business and possibly the objectives of the business and its strategies. The main factor that affects most business is the degree of competition - how fiercely other businesses compete with the products that another business makes. The other factors that can affect the business are:
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