Global Business Environment

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Table of Contents

Background information on the company
PEST Analysis of the country’s environment
Political factors
Economic factors
Socio-cultural factors
Technological factors
Recommendations
References

Background information on the company

The tang dynasty is a chain of restaurants that specializes in the provision of Chinese desserts. They have branches in many parts of the world. Some of the dishes that can be found in the various restaurants include Ja Leung, Glutinous rice wrapped maltersers, carrot cake, steamed custard bun, mushroom Chee Cheong fun, and fried crispy chicken.

The company is currently involved in an expansion. The expansion will involve the setting up of more restaurants in potential cities and regions in Europe. Although the expansion is not limited to one continent, the current focus of the company has been set on Europe. The company is looking to open a number of restaurants in the cities that will stand out as being the most financially viable.

The level of financially viability of a given city will dictate the number of restaurants to be established. The more financially viable a city is, the higher the chances of increased investment by the Tang Dynasty (Steinberg 1996, p. 96).

The expansion will also present the company with a chance to work on its weaknesses. The company will look to increase its viability through strengthening the weak areas. The company is also set to conduct a market analysis on the proposed region and the candidate cities.

This will ensure that the company has a detailed overview of what the market holds with respect to its expansion. It is vital for the company to know what it is getting itself into with regards to investment. The market study on the European region will also help the market to understand the level of viability that exists in each region that stands out as a potential candidate for expansion.

PEST Analysis of the country’s environment

Before any organization invents in a certain market, conducting an analysis is very vital. The business environment is a vital factor to take into consideration in an examination. The marketing environment of a business is made up of the macro-environment, the internal environment, and the micro-environment. PEST analysis is an scrutiny on the various factors that influence the setting up and running of any business organization.

The factors analyzed by in the PEST analysis include political factors, economic factors, socio-cultural factors, and technological factors. The pest analysis is imperative as it looks at all the factors that are imperative to take into consideration in the establishment and running of business. (Steves 2009, p.23)

In the analysis of the political factors there are imperative considerations that are analyzed in details when conducting a PEST analysis. It is imperative to note that the political arena has a great influence on the behavior and spending power of the consumers. Political factors also influence other businesses both in the short and long term.

Due to the interplay presented to the market by the relationship between various businesses, analyzing the political environment is essential so as to assess the influence it has on the market.

In conducting an assessment on the political factors, an analysis should be made on the stability if the political environment, the nature of government involvement in business, the extent of government involvement in business, the governmental policies and how they affect business, the government’s take on religion and culture, the governments involvement in the trade unions and other trade organizations, and the extent of government involvement in domestic and foreign trade.

In the analysis of economic factors, there are essential factors to take into consideration. The economic factors are directly related to the level of profitability of investment in a certain market or investment region in the world.

Through the economic policies formulated for a given market or trade region, it is possible to deduce the level of profitability of investment in that particular region. In the economic analysis, the assessment of inflation is also essential. The level and nature of inflation is one of the primary determinants of profitability.

Through assessing the inflation, organizations and business are equipped with relevant information about investing in a given region. An economic analysis through PEST also looks at essential factors such as the GDP, the nature of the per capita of the potential regions, the import trade, and the export trade of the particular region.

Through this information, the potential investor is equipped with the relevant knowledge about the domestic and international marketing condition. The business or organization is also able to plan on both the short and long term prospects with regards to the economy. (Alice and Gourvish 2003, p.15)

The socio-cultural factors are also essential in the analysis of the business environment. Through the socio-cultural factors, investors are able to analyze and determine the level of profitability and financial viability of investing in a certain region. In depth analysis on socio-cultural factors also looks at the different changes occurring in the social and cultural fronts and what these hold for business.

Through such details, the analysis is able to formulate the long term goals as well as the short term goals in business. In analyzing the socio-cultural factors affecting business, the PEST analysis looks at the dominant religion, the attitude of the consumers on the different domestic and foreign commodities, the roles of the different genders in the society, the impact of language on the effective diffusion of the different commodities in the market, the impact of green issues to business, the social take on the green issues, the relevant details about the population, the leisure trends of the different citizens, and the distribution of income in the population. (Bensoussan and Fleisher 2008, p. 60)

The technological factors also form an essential section of the PEST analysis. For the purpose of investment, it is essential to understand the role played by technology on the market. The influence of technology on any market is great. To understand the details contained in the technological trend is essential because it provides the investor with a background through which they can formulate the short term and long term goals.

In analyzing the technological factors, it is essential to look at the part played by technology in production. Does the technology in the given area reduce or increase the cost of producing the different goods and services? Does the technology in the area increase or decrease the effectiveness level of the different goods and services? These are essential questions that are presented in scrutiny of the impact of technology on production and quality. (Rook and Jardine 1995, p. 25)

Technology should also be analyzed with regards to the supply in the market? What role does technology play in the overall distribution of the goods and services that are produced in the market? The role played by technology on the innovation level is also essential under the overall study of the technological factors.

In analyzing innovation, the scrutiny should look at the commodities that are being offered to consumers and other businesses and the level of innovation in these commodities. The study of technological factors should also look at the role played by technology with respect to technology.

What has technology done with regards to communication? Has technology in the area advanced communication? Has communication been made less effective by technology? What are the specific changes that have been introduced into the market as a result of technology? What is the impact of technology on the communication that exists between the consumer and the business organization? (OECD 2006, p. 24)

Political factors

In the study, a research was conducted so as to establish the most political stable area. Europe is generally a politically stable continent but there are areas which are more prone to political disturbances than others. The research established that there was a variance that existed between the different regions in Europe with regards to political stability. There were areas that exhibited increased political stability as compared to others.

The country that displayed the highest levels of political stability was Switzerland. The political environment is one of the most stable not only in the region but also in the entire world. The government of Switzerland has never experienced any civil wars or cases of coup on the government. The changes that take place in the government are conducted in a democratic fashion with the people’s say being the determinant of these changes.

The government of the land is involved in the investment processes and trade relations both domestically and on the foreign front. The government is responsible for the formulation of policies that ensure trade within the boundaries of the country and outside the boundaries is conducted in a free and fair fashion.

Through the involvement of trade unions and the representatives of the common people, the government is able to assess the different factors that contribute to the best practices in trade. Through this, the government is able to look into the trade through the eyes and opinions set forth by the trade organizations and the common citizens. (Kobrak and Hansen 2004, p. 15)

The government of Switzerland is very strict with regards to business and marketing ethics. The policies that are formulated to govern the market ensure that all businesses are in accordance with the stipulated laws of ethics. These laws ensure that the practice of business is free and fair.

In the event a business goes against these rules, there is a set procedure that ensures the business law takes its effective course in administering justice. The government plays a key role in ensuring that the market ethics govern the course of domestic and foreign trade. (Hunt and Murray 1999, p. 10)

The government has also set policies on the economy. The government is concerned about the trends and overall health of the economy. In the event the economy is growing, the government takes a back seat role but ensures that it keeps a keen eye on the manner in which the economy progresses.

In the event the economy is going through a rough patch, the government increases its involvement in business and investment. It sets aside funds which are directly injected into the economy through the various sectors in the economy. The government is also involved in the provision of the relevant training and information that help in strengthening the economy. (Bensoussan and Fleisher 2008, p. 45)

The government is supportive of the different religions and culture within the composition of its population. The government does this in the bid to ensure calm throughout the country and also in a bid to attract different types of investors. The government also takes up the role of ensuring that the interaction between people from different cultures and religion is maintained at peaceful levels.

This is done through the formulation of rules, regulations and policies that ensure the interaction between the interaction different people is maintained at the required levels.

This is very essential to the overall welfare of business. For business to be effective, it is essential to ensure that people from different walks of life and religions are always in a good relationship. It is this relationship that determines the level of efficiency of intercultural business and the trade that exists between people of different religions. (Henry 2008, p.40)

The government of Switzerland is involved in different trade agreements and is also a member to different regional and international trade organizations. Switzerland’s membership to the Joint Economic Commission ensures that the government is in a good relationship with the United States and its trade partners.

This opens the markets in Switzerland to the United States and other potential investors as well. The relationship that exists between Switzerland and the People’s Republic of China as well as India makes the place a heaven to invest. The two counties have the highest potential with regards to market potential as well as market sustainability. Any business looking to invest in Switzerland is practically exposing itself to the best market conditions. (Grant 2005, p. 121)

Economic factors

Although the natural resources in Switzerland are failing, investing in the country is very viable. With regards to economics, the country is considered to be the most prosperous and advanced nations. It has a Per capita income that other countries in the world strive to achieve.

Their Per capita income is ranked among the top nations in the world. With regards to these, the company is set to expand more in the event it establishes business in the country. The business will thrive mainly because of the market condition and the number of tourists visiting the country.

The country has been cited as being one of the best places to establish the hotel and hospitality business. In the event the company should be established here, it will be venturing into business in an area that has already been proven to be viable for the specific business the company engages in.

One of the economic trends that make Switzerland stand out is evident from the import and export market. The country makes most of its profits from the exports and this is matched to the level of dependency on the imports. The country is a major importer in the world market and most of the imports are directed towards the expansion of the domestic economic sectors. (Henry 2008, p.20)

The commercial laws in the country are well defined and the government has a special focus on agricultural produces and products. The company will be presenting itself to a market where the raw materials are readily available and in the best condition. The country has also established laws and policies that govern investors.

These laws ensure that the investors are protected and their business is taken care of by the government. The economy of the country stands out with regards to banking, tourism, insurance, and engineering. These are essential factors for the company in the bid to set up business in the country. The country is an active member of the EU and a leading exporter in the region. (Alice and Gourvish2003, p.45)

Socio-cultural factors

There are three main groups that make up the cultural environment of Switzerland. These three communities are the French Swiss, the Italian Swiss, and the German Swiss. The majority of the people are German Swiss while the Italian Swiss form the minority group in the country. The main languages that are spoken throughout the country include French, Italian, German, and Romansch.

The official languages that are used in Switzerland are German, French, and Italian. Although Romansch is classified as an official language, it is not used as much as German, Italian, or French. The origin of Romansch is Latin. It is spoken by less that 3% of the total population.

With regards to religion, there are two main religions in Switzerland. These religions are Roman Catholic and Protestants. Some of the most essential traits among the people of Swiss include precision, excellence, and time consciousness. These traits are essential to take into consideration because of the nature of Tang Dynasty. (Greenwood 1995, p.185)

The Swiss are very cautious when it comes to foreign investors. They look forward to foreign investors who bring quality commodities into the market. This presents the company with a challenge as the bar has already been set high by the lifestyle of the common people. The Swiss people have a lot of time at their disposal for leisure. Although they are hard working people, they find time to attend to their leisure lives.

This is beneficial for the company as business is dependent on the leisure time of the consumers. There is no disparity in the roles that have been assigned to men and those that have been assigned to women. The society believes that what a man can do, a woman can also do. Understanding the socio-cultural environment is essential for the business. This understanding is also essential in determining the level of success of the business. (Greenwood 1995, p.152)

Technological factors

Technology in Switzerland has improved the process of production as well as the standard of commodities. Through improved technologies, the different products being manufactured are brought to the market and sold cheaply. This is mainly due to the fact that the process of production has been improved and made cheap by the improved technology. The quality of production is also maintained at high levels through the improved technology.

The technology in Switzerland also provides the businesses with innovative products and services. For instance, the ordering process has been made easier and more convenient by technology. Majority of the businesses in Switzerland have made access of their commodities to customers more efficient. Consumers are now able to access products through online option provided for by the different businesses.

Technology has also changed the manner in which different commodities are delivered to the consumers. Through improved technology, the gap between the consumer and the product has been bridged to make the process more efficient. The process of communication between the consumer and the company has been made more efficient. This translates to more efficient customer care options and an improved customer relationship between the business and the customer. (Grant 2005, p. 91)

Recommendations

The Tang Dynasty should establish its operations in Europe. Since Switzerland has proven to be viable in more than one aspect. The market is Switzerland is viable with regards to political factors, economic factors, socio-cultural factors, and technological factors. The company should also look into collaborating with other companies in the Switzerland market. This is essential because the company will receive a number of advantages.

Collaboration will ensure that the company experiences the cushioning effect with regards to market knowledge. This will ensure that the company comes into the market and assume the level of companies that have been on the market for a long period of time. Collaboration with another organization will also ensure that the company receives added knowledge about the market and learn from the experiences of the other partner.

References

Alice, T. and Gourvish, T.R (2003) Business and politics in Europe, 1900-1970: essays in honor of Alice Teichova. New York: Cambridge University Press. p 15 – p.35

Bensoussan, B.E. and Fleisher, C.S. (2008) Analysis without paralysis: 10 tools to make better strategic decisions. Albany: FT Press. p.45 – p. 60

Grant, R.M (2005) Contemporary strategy analysis. 5th ed. USA: Blackwell Publishers. p.91 -p.121

Greenwood, J. (1995) European casebook on business alliances. Alexandria: Prentice Hall. p. 152 – p.185

Henry, A. (2008) Understanding Strategic Management. London: Oxford University Press. p. 20 – p. 40

Hunt, E.S. and Murray, J.M. (1999) A history of business in medieval Europe, 1200-1550. London: Cambridge University Press.

Kobrak, C. and Hansen, P.H. (2004) European business, dictatorship, and political risk, 1920-1945. Providence, Oxford: Berghahn Books.

Organization for Economic Co-operation and Development (OECD) (2006) Switzerland: seizing the opportunities for growth. Berne: Organization for Economic Co-operation and Development.

Rook, C. and Jardine, E. (1995) European casebook on business alliances. Alexandria: Prentice Hall.

Steinberg, J. (1996) Why Switzerland? 2nd Ed. New York: Cambridge University Press.

Steves, R. (2009) Travel as a Political Act. New York: Nation Books.

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