Czech Republic Business Environment Analysis

The assignment involves analyzing the business environment of the Czech Republic using PESTLE (Political, Economic, Social, Technological, Legal, and Environmental) analysis. It also requires applying Porter's Five Forces model to understand the competitive dynamics within the country's industries. The task is to examine the political and economic stability, social factors, technological advancements, legal framework, and environmental concerns that impact businesses in the Czech Republic. Additionally, it involves using a Porter Five Force Model to determine the level of competition among businesses in the country.

Business Organizations
and Environments in a
Global Context

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Information on selected business organisation.......................................................................3
Discussion of an allocated business environment..................................................................4
Application of an appropriate analytical approach.................................................................7
CONCLUSION................................................................................................................................9
REFERNCES.................................................................................................................................10
Books and Journals........................................................................................................................10

INTRODUCTION
Business organisation is defined as an entity of which the main aim is to carry on
commercial enterprises by rendering products and services so as to meet the needs of the
customers. Whereas when business is being carried out at global level an organisation get
surrounded by environment which effect in positive and negative way to the business and such
environment includes the external factors such as political, social , economical etc. The
organisation which is being chosen to carry out this report is Walgreens boot alliances which is a
American holding company with its headquarter in Deerfield Illinois (Bathelt, Malmberg and
Maskell, 2004). Apart from this it owns Walgreens boots and number of pharmaceutical
manufacturing, distribution and wholesale companies and was formed in 31dec, 2014. This
company is planning to expand their business operation which involves foreign direct investment
in the Czech Republic country in Europe which is known for its ornate castles, native bears etc.
Therefore this report explains about the information of selected business organisation and
discussion of the allocated business environment. Apart from this application of an appropriate
analytical approach is also being explained in this file.
MAIN BODY
Information on selected business organisation
The selected business organisation is Walgreens boot alliances which is a American
holding company with its headquarter in Deerfield Illinois. Apart from this it owns Walgreens
boots and number of pharmaceutical manufacturing, distribution and wholesale companies and
was formed in 31dec, 2014 (Boyacigiller and Adler, 2017). It produces a large number of
brandswhich includes Soltan, Botanics, Boots Laboratories. In addition to this it is a company
which is a largest retail pharmacy, health and daily living destination in all across the Europe and
U.S. Moreover this organisation and the companies in which it has has its equity method
investment together carry out their presence in more than 25 nations as well as employ more
than 415,000 individuals. Additionally, it has more than 18,500 stores in 11 countries as well as
term to be the largest global pharmaceutical distribution and wholesale network which caries out
its is distribution in more than 390 centres and render delivery to more than 230,000 pharmacies,
doctors, health centres etc. in each year (Walgreens Boots Alliance, Inc, 2019). Furthermore,
Walgreens Boots Alliance is considered to be one of the world largest prescription drugs

purchaser as well as it has unmatched pharmaceutical supply chain and procurement expertise
which render customers with optimal efficiencies and innovative solutions. Along with this it
also has a portfolio of business and retail brands which includes Walgreens, Duane Reade as well
as increasingly global health and beauty brand products (Gupta and Govindarajan, 2004). In
Fortune magazine's 2019 this organisation was considered to be one of the world largest and
most admired companies which has ranked first in the drug store and food category. Moreover it
possess unique platforms for growth in emerging and developed markets. So Walgreens Boots
Alliance is planning to expand its expand their business operation which involves foreign direct
investment in the Czech Republic country in Europe which is known for its ornate castles,
native bears etc.
Discussion of an allocated business environment
Walgreen Boot Alliance company is planning to expand its business in Czech Republic
country in Europe but, there are certain business environment factors which greatly impact upon
organisation both in positive and negative way (Karpik, 2014).
Business environment refers to the surrounding which consist of several factors such as
political, economical, technological etc. all these factor will greatly impact upon Walgreen
Boot Alliance while expanding business in other nation name Czech Republic country in Europe.
So it is very much essential for the manager of an organisation to analyse the factors affecting
the business environment and which can be done with the help of PESTLE analysis technique.
PESTLE analysis

(Source: PESTLE Analysis, 2018)
Political factor:
This factors refers to the those factors which are being framed by the government of the
country and it mainly includes regulation and deregulation, tax policy, government stability and
changes, government involvement in trade unions and agreements etc. Changes in all these
government rules and regulation greatly impact upon business when an organisation expand their
business operation in other nation (Li and Tsui, 2002). As the political stability of Czech
Republic country is stable which will help Walgreen Boot Alliance in creating a pool of
opportunities so as to result in the growth and development of business like it can formulate
long term goals and objectives and the stability will contribute towards its sustainable survival
and growth of the company. Whereas on the other hand the threat to the company is about data
protection rules and regulation of a Czech Republic is weak which will impact negatively on the
image of a business.
Illustration 1: PESTLE Analysis

(Source: Stable Political and Economic Environment, 2019)
Brexit is the platform through which UK gets withdraw from European Union as per
majority of 51.9% out of total population. As Walgreens boot alliances is an organisation which
wants to expand their business in Czech Republic. So there are more scope of growth because of
proper export and import of business. There are proper rules and regulations with which business
expansion is done with legal aspects. Sop this gives positive impact on Walgreens boot alliances
as there is more scope of growth. So Brexit has impact on commercial industry of Czech
republic. As there is stable policies in Czech Republic, so it is easy to expand business with
collecting proper information about political policies.
Economical factor:
These factors are the certain determinants of certain economy's performance and it
mainly includes exchange rate, economic growth, interest rate, inflation rate, disposable income
of customers etc. Changes in all these factors greatly impact on an organisation specially when
the firm plan to expand business in other nation as it affects the purchasing power of consumers
and also result in changes in demand and supply models in the economy (Mohrman and Von
Glinow, 2015). As the GDP of Czech Republic is being forecasted to reach $279.8 billion in
Illustration 2: Stable Political and Economic Environment

2017 which states that Walgreen Boot Alliances have the open investment opportunity to expand
their business in this country which will also result in sustaining economic growth as well.
From the above graph it is clear that as compared to 2010 there is a severe increase in the
GDP of the Czech Republic which reflect that country is in a development stage, so it is great
opportunity for Walgreen Boot Alliances to expand their business in this country and to capture
a larger part of market share (Czech Republic GDP per capita PPP, 2019).
Social factor:
These refers to those general environment factors within which an organisation operates
and it mainly represent demographic characteristics, customs, norms, values and beliefs of the
population. Apart from this it also include population trends such as age distribution, career
attitudes, growth rate, income distribution etc. It is an opportunity for Walgreen Boot Alliances
to expand their business in Czech Republic which will help in reducing the unemployment rate
by generating more of employment opportunity (Moore, 2004). Moreover if the company will
expand their distribution services then it will help customers in rendering with optimal
efficiencies and innovative solutions.

(Source: Social Factor in Czech Republic, 2018)
Social factor in Czech Republic after Brexit is dynamic. People are migrating at different
places in search of job and employment. This affects social factor of this country and there are
possibilities that country growth affects because people do not want to invest there. This affects
expansion of Walgreens boot alliances in negative manner. But as government of Czech
Republic wants to boost economy, so they provide different benefits such as tax deduction,
foreign investment, etc.
Technological factor:
These factors are the one which pertain to innovation in technology and which effect the
operation of business and the market both favourably and unfavourably. Apart from this it
mainly refers to technology incentives, level of innovation, technological changes, research and
development activity etc. As in Czech Republic large number of people prefer to use and get
online services rather than visiting personalty to medical stores (Negandhi, 2018). So it is a great
opportunity for Walgreen Boot Alliances to expand their business in this country by taking
online service technology into consideration which will help sin boosting up the revenue and
helps in increasing the market share. Beside this there exist three technology trends which the
pharmacy business can make use in practices and they are like electronic prior authorization,
Illustration 3: Social Factor in Czech Republic

medication therapy management is used to describe the range of services that are being rendered
by the pharmacists as it include comprehensive medication reviews, drug use reviews drug dose
adjustment etc. other one is real time pharmacy benefit which helps in improving health care by
increasing medication adherence. Further more if the Walgreens Boot Alliances will adopt the
modern IT practices while expanding business in Czech Republic then it will help the business in
storing of structured patients records, automatically handle of medicine in the supply chain, will
also facilitate electronic prescribing. Most important of all IT will help in the patient safety
improvement, enable professional to render high quality care and services.
Legal factor:
These factors refers to the legal laws which are being framed by the government of a
country and it mainly include discrimination laws, employment laws. Consumer protection law,
health and safety law, patent and copyright laws etc. It is very much essential for business to
know about what is and what is not legal while treading ethically and successfully in other
country (Noe and et. al., 2017). European Union data protection reforms is a great opportunity
which helps in fostering the Walgreen Boot Alliance to expand their business in Czech
Republic country as it will help firm to publish accessible and transparent data protection
policies. Thus, it will help business in gaining and stimulating trust among users which will
result in increasing the profitability ratio of an organisation. Therefore it can be said that
company should expand their business in Czech republic as the legal aspects of the country will
help business to achieve its target gaols and increase in profitability margin.
Environmental factor:
These factors refers to the laws which the business must consider while carrying out its
operation activity as it involves that company should make less use of those harmful chemicals
which impact upon an environment (Scott, 2013). Apart from this it also include the
environmental and ecological aspects such as climate, environmental offsets, weather etc. As
safety of environment law has been imposed by the government of Czech Republic so while
expanding business in this country it is very much essential for Walgreen Boot Alliance to
ensure that the medicine they distribute doesn't harm an environment. So taking this law into
consideration management of an organisation dispose of the expired medicine so that such
medicine doesn't harm an environment. If the company will adopt the disposing practice of

expired medicine then to a great extent it will render a contribution to the overall development of
an economy.
Application of an appropriate analytical approach
Before expanding its business in Czech Republic country in Europe it is essential for the
Walgreens Boots Alliances to analyse the competitiveness of an business environment. Thus, in
order to identify and analyse the competitors factors which can affect the working of business
environment Porter's five force model is being taken into consideration which is explained below
(Teece, 2014):
Porter's Five Force model:
It is a simple and powerful tool which is used by an organisation so as to understand the
competitiveness of business environment and for identifying the business strategy's potential
profitability.
(Source: Porter Five Force Model, 2018)
Competitive rivalry:
Competition level for Walgreens Boots Alliances will be high in Czech Republic this is
just because there exist large number of competitors in this country and they are namely
Illustration 4: Porter Five Force Model

Novartis, Sanofi, Pfizer etc. Thus, in order to exist in the market of Czech republic management
of an organisation have to develop new strategies and policies so that the company can capture
larger part of market share as compared to its competitors.
From the above graph it can be said that as due to large number of competitors in the
market the overall growth of Pharma industry is declining as in 1993 it is being seen that growth
rate of pharma industry is hight as earlier there use to exist less number of pharma industry
(Yaeger and Sorensen, 2017). But as the time passed large number of competitors existed which
leads in slowing down the growth rate of pharm sector.
Supplier power:
Supplier bargaining power of Walgreens Boots Alliances is low this is because the
organisation is highly depends on several organic chemical and the chemical industry is gain a
fragmented and competitive. So it can be said that companies can easily switch from their
potential suppliers without incurring a very high cost. Thus, it will be beneficial for the an
organisation to expand business in Czech Republic as there will exist large of of suppliers who
render several organic chemicals which will result in achieving maximum profitability for
business.
Buyer power:
Bargaining power refers to the power of buyer in which the the buyers easily influence
the suppliers to render product as per the price said by customers. So in medical sector
bargaining power of buyer is low as buyer cannot bargain for the price of the medicine, they
have to pay for the medicine as much as asked by the suppliers. As the unique features of
pharma industry is that the customers of the products are term to be different from the

influencers as the consumers have no choice but to make purchase of the products. Apart from
this buyers of Walgreens Boots Alliances is scattered which specifies that there doesn't lies wield
much power in the pricing of the product. Thus, it will be beneficial for a firm to expand their
business in Czech Republic as the buyer cannot bargain for the medicine they will supply which
will help business to achieve its maximum growth by achieving its competitive advantage.
Threats of substitute:
Threat of substitute for the medicine of Walgreens Boots Alliances is low because there
exist no substitute of medicine, but biotechnology is term to be a threat to the synthetic pharma
products. Apart from this it can be said that whatever happens demand for the pharma products
continues to thrive as it has an infinite future.
Threats of new entry:
Threat of new entrant for Walgreens Boots Alliances is high because the capital
requirement for this type of business is huge as well as intervention of government is also high.
Apart from this it also require licensing from the government which is a time consuming process
as well as expensive one also.
CONCLUSION
From the above report overall it can be concluded that there exist a business name
Walgreens Boots Alliances which is planning to expand their business in Czech Republic which
is situated in Europe. Apart from this before expanding the business the firm has carried out an
PESTLE analysis so as to examine what all are the external factors exist which can impact in
positive and negative way to an business environment and the factors analysed were political,
social, technological. Legal. Environmental. Social etc. Apart from this Porter's five force model
were also used in the above report so as to understand the competitors business environment.

REFERNCES
Books and Journals
Bathelt, H., Malmberg, A. and Maskell, P., 2004. Clusters and knowledge: local buzz, global
pipelines and the process of knowledge creation. Progress in human geography. 28(1).
pp.31-56.
Boyacigiller, N. A. and Adler, N. J., 2017. The parochial dinosaur: Organizational science in a
global context. Academy of management Review. 16(2). pp.262-290.
Gupta, A. K. and Govindarajan, V., 2004. Global strategy and organization. J. Wiley.
Karpik, L. ed., 2014. Organization and environment: Theory, issues and reality (pp. 15-68).
London: Sage.
Li, J. and Tsui, A. S., 2002. A citation analysis of management and organization research in the
Chinese context: 1984–1999. Asia Pacific Journal of Management. 19(1). pp.87-107.
Mohrman, S. A. and Von Glinow, M. A., 2015. High technology organizations: Context,
organization and people. Journal of Engineering and Technology Management. 6(3-4).
pp.261-280.
Moore, F., 2004. Symbols of organization: Informal ways of negotiating the global and the local
in MNCs. Global Networks. 4(2). pp.181-198.
Negandhi, A. R., 2018. Comparative management and organization theory: A marriage needed.
Academy of Management journal. 18(2). pp.334-344.
Noe, R. A., and et. al., 2017. Human resource management: Gaining a competitive advantage.
New York, NY: McGraw-Hill Education.
Scott, A. J., 2013. Cultural-products industries and urban economic development: prospects for
growth and market contestation in global context. Urban affairs review. 39(4). pp.461-
490.
Teece, D. J., 2014. Strategies for managing knowledge assets: the role of firm structure and
industrial context. Long range planning. 33(1). pp.35-54.
Yaeger, T. F. and Sorensen, P. F. Eds., 2017. Strategic organization development: Managing
change for success. IAP.
Online
Walgreens Boots Alliance, Inc. 2019. [Online]. Available Through:
<https://www.walgreensbootsalliance.com/about/>.
Czech Republic GDP per capita PPP. 2019. [Online]. Available Through:
<https://tradingeconomics.com/czech-republic/gdp-per-capita-ppp>.
Stable Political and Economic Environment. 2019. [Online]. Available Through:
<https://www.czechinvest.org/en/Reasons-to-invest/Stable-Political-and-Economic-
Environment>.