Perigord Bakery’s Global Marketing Environment

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Table of Contents

Introduction
Cultural Factors
Demographic Factors
Economic Factors
Political and Legal Factors
Technological Factors
Geographic Factors
Conclusion
References

Introduction

This report aims to perform a comprehensive environmental analysis to understand the threats and opportunities to the expansion of Perigord Bakery. Precisely, the purpose of the analysis is to evaluate global interconnectedness as it applies to marketing. Companies focused on pursuing global markets need to consider the nature and forces controlling the external environments. The points of concern consist of diverse threats and opportunities that can significantly affect the failure or success of a product, brand, or company. According to Lamb et al. (2021), several similar environmental forces associated with local or domestic markets also affect global markets. The paper is structured into sections with cultural, demographic, fiscal, political, and legal factors, technological factors, and geographic factors affecting businesses desiring to enter the Belgium food market.

Cultural Factors

By desiring to expand to Belgium from the United States, several cultural factors will affect Perigord Bakery, including, among others, the lifestyle of the people, time aspects, and behavioral patterns. Specific to Belgium, cultural elements include languages, society, family values, appearance, tipping, and etiquette. The culture and society of the country are unique because Belgium is not renowned as a homogeneous nation with no specific identity (CIA, 2021). As a result, the workers and proprietors of Perigord Bakery will experience difficulties trying to have a general overview of Belgians. The predominant cultures in Belgium have been classified into three units: the German-influenced northeast, the French-influenced Wallonia in the south, and the Dutch-influenced Flanders in the north. Considering the predominant cultures, Perigord Bakery has an opportunity to expand because it is not limited to cultural practices.

Demographic Factors

As other international markets globally, the demographic factors affecting businesses desiring to enter new needs include the age of the population, population density, growth, education, and population size of Belgium’s multifaceted demographics. The demographic overview of the country as of 2021 indicates the population as 11,778,842. The annual growth rate is 0.59%, density per square kilometer is 389.0, the fertility rate is 1.77, life expectancy is 81.7, and mortality under five years is 4.0 (CIA, 2021). The specific demographics outlined above, particularly the increasing size of the country’s population, present expansion opportunities by offering the company customers past the US market. A declining annual growth pattern observed from 1980 is a threat to Perigord Bakery in the long term because it is estimated to decrease steadily in the future. Overall, the company expects to benefit from the increasing and steady trend of population growth.

Economic Factors

Belgium’s GDP per capita, unemployment rate, and GDP growth rate are opportunities for Perigord Bakery’s expansion goals for new markets. According to the CIA (2021) statistics, the country’s GDP increased by 1.7 percent by the end of the 2017 financial year, with the budget deficit being 1.5 percent of GDP. The rate of unemployment was valued at 7.3 percent. The GDP per capita for the year ending 2020 was valued at $44,529.39 (CIA 2021).

Opportunity #1: Belgium’s growing economy – The high GDP value per capita is a strong indicator that Belgium’s economy is growing.
Opportunity #2: Belgium’s economic stability – With a strong economy, Perigord Bakery can consider the Belgian market an excellent opportunity for expansion.
Opportunity #3: Low labor charges in Belgium – The considerably high level of unemployment indicates that Perigord Bakery will easily find workers at low compensation rates.
Opportunity #4: Belgium’s increasing GDP – The positive value of GDP is another indication of a stable economy to accommodate organizational sustainability goals.

Political and Legal Factors

Belgium ranks moderately poor in aspects such as “Ease of Doing Business,” “Ease of Starting a Business,” “Dealing with Construction Permits,” and “Getting credit” (CIA, 2021). Regarding “Political and Regulatory Environment,” Belgium is ranked 20^th, with the ranking value being 5.2 points. This highlights that the country has a moderately good regulatory and political environment for doing business. The rankings are outlined as follows: Ease of doing business = 46, Starting a business = 48, Registering property = 45, and Political and regulatory environment = 5.1. The elements listed above are potential threats to operations and profitability when the company expands to Belgium. Specifically, the details mean that the company will need significant capital amounts to operate continuously and be successful in this new market.

Technological Factors

Belgium’s technology ranking is 5.4, with the actual rank being 24 out of 143 countries (CIA 2021). The considerably moderate scale of networked readiness is an opportunity that the company can exhaust when expanding. Networked readiness means that the business will have the required technologies to address new challenges created by modern market dynamics. Technology is one element that will continue to control the ability to serve customers globally. As a result, Belgium is an avenue with expansion opportunities.

Geographic Factors

Belgium’s geography offers innumerable opportunities for Perigord Bakery. Firstly, the country’s strategic location between the Netherlands, France, and Western Europe means that it has visitors from other countries. Often, these visitors will bring new businesses, primarily because of the likelihood of relying on fast foods when conducting businesses across the cities. It is accurate to contend that the country’s strategic positioning exceeds some of the opportunities offered by its neighbors, such as France and the Netherlands.

Conclusion

Based on the analysis presented in this report, it is feasible for Perigord Bakery to pursue its expansion plans into Belgium. Perhaps, the country’s geography offers the best opportunity despite some of the difficulties of starting a business and getting a permit. With the objective being an expansion, franchising offers the best expansion opportunity for the company (Lamb et al., 2021). One of the advantages of the franchise approach is the low failure rate even when the startup or expansion environment is complex. On the other hand, the disadvantage of franchising is the total loss of brand value because of the possibility of conflict.

References

CIA. (2021). The world factbook: Belgium.

Lamb, C. A., Hair, J. F., & McDaniel, C. (2021). Marketing (13^th ed.). Cengage Learning.

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