It is important to note that, the company operates under the influence of some laws to guide their operations in the countries where they operate. International business laws affect the operations of the company as they dictate the way that it does its businesses as well as determining the operations of the company’s supply chain. The distribution of the products made by the company also affect the organization greatly during its operations as different countries have different taxation mechanisms that are developed for purposes of guiding the amount of tax that the company pays to different governments in perfecting their
The latter, mostly happens when the investments are made in underdeveloped and developing nations, in which the taxation costs coming from an arbitral award resulting from ISDS mechanism may generate social and economic chaos. Companies are also the principal contributor to global problems; such as global warming and social inequality. On view of this, it is clear that companies are playing a big and important role on creating global problems, and should be included on the global decision making
It is a part of the external analysis when conducting a strategic analysis or doing market research and gives a certain overview of the different macro environmental factors that the company has to take into consideration. Political factors: how and to what degree a government intervenes in the economy. Specifically, political factors include areas such as tax policy, labour law, environmental law, trade restrictions, tariffs, and political stability. The political factors in the United Kingdom have a great influence on the performance of Sainsbury. Currently in UK, the government debts and the consumer debts are very high.
Starting with one of the very popular tools the PESTLE analysis. This analysis can be used as a strategic analysis to measure the factors of Ikea’s external environment. The theory concentrates on measuring firstly the political factors which are related to the government policies, tax, employment regulations, trade regulations and the political stability of the country and its effects on the performance of a business (Cadle, Paul & Turner, 2010). Secondly, economic factors analysis supports understanding the changes in exchange rates, taxes, inflation status and the interest rates that again could affect the financials of Ikea. Moreover, the social factors assist in understanding the demographics of the population, lifestyle preferences and ethics.
Furthermore, Szlajfer & Chmielewska-Szlajfer (2012) adds that another method of economic nationalism to keep its own factories active consisted of interrupting competitive imports making use of the old standby of protective tariffs. However, these tariffs were not always sufficient and in many countries, quotas or quantitative restrictions were adopted. Therefore, governments stated that not only items that entered the country had to pay a high customs tax, but also a certain quantity limit had to be imposed (Szlajfer & Chmielewska-Szlajfer, 2012). Essentially, anything above this quantity limit could not be introduced in the country. Martinez-Diaz (2009) adds that both importers and exporters worked, at an increasing rate, with government licenses to make sure the foreign trade of a country was centrally planned and managed.
Macro indicators provide a gauge of the consumer’s “spending power”. Consumer spending is dependent on a wide range of factors that include actual and perceived economic condition that affects disposable income, business landscape, tax rates, government regulations, availability of credit, demographics and markets where the products are sold. If the country’s general economic condition is in the red or changes in consumer spending, tax, interest rates, political instability locally or within the region will undoubtedly affect sales of AFJ products. The macro indicators are classified into 5 key areas. Though all of them are important in evaluating overall attractiveness, some have more relevance to AFJ and the industry as compared to the rest.
The PESTEL analysis needs to help in determining the external environment prevalent in the geographical area. This reveals about the political scenario prevalent and the policies, regulations and motive that it has to promote the particular type of business and organization. The economic factors determine whether the area will be able to sustain the product and will portray the usefulness of the strategy in this regard. The social factors are also important factors in evaluating suitability of the strategy. Technological and environmental factors also require to be estimated while determining suitability of the strategies.
Thus, it is necessary capital, skills, experience and resources make Tesco 's problem (the Ministry of finance of the brand, 2014). The influence of urban planning and consumers are less tolerant of outside stores the small shop livelihood and concerns, but also harm Tesco 's expansion plans
The existence of asymmetric information also suggest that consumers may not have enough information to protect themselves fully. Moreover, in an unregulated market, investors will not have enough information to guide their investments, which should not be based on rumor and hearsay. Companies have incentives not to share information, such as bad news about themselves or information about others that is not already known in the marketplace. Therefore, financial market need to be regulated to control and avoid problems. For example in UK, consumer protection regulation has taken several forms.
The GEC is a major economic force that influences both the emotional and mental behaviour of consumers. Businesses should identify and understand how consumers will react to the difficult economic conditions within different cultures and economies. Economic literatures mentioned that the rational consumer use disposable income to maximize the benefit of goods and services consumption and the consumer behaviour is affected by two factors: the prices of goods and services, and disposable income. If there is any change in these factors, the consumer change his behaviour and try to re-allocate of income and expenditure to reach a balance and maximize the benefits. Consumers