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BUSINESS PLAN FOR RUSSIA

   

Added on  2020-03-16

10 Pages2268 Words318 Views
BUSINESS PLAN

Table of ContentsOVERVIEW OF RUSSIAN MARKET ENVIRONMENT........................................................................1Economic Profile.....................................................................................................................................1Demographic Profile...............................................................................................................................2PRODUCTS AND SERVICES OF PROPOSED BUSINESS....................................................................2EXTERNAL ENVRIONMENT AND SWOT ANALYSIS........................................................................4REFERENCES............................................................................................................................................7

OVERVIEW OF RUSSIAN MARKET ENVIRONMENTEconomic ProfileAfter nearly two years of economic downturn, Russia has finally ventured on the path torecovery. With international trade and growth strengthening at the end of 2016, the country’seconomy demonstrated signs of overcoming the financial crisis caused by the economicsanctions and shock of low prices of oil. Its economy shrank in 2015 by 3.7% and the realdisposable income reduced by 10%. However, the economic outlook for 2017 has been brighter.The World Bank had indicated earlier this year that growing prices are driving the nation intopoverty. The number of poor people grew to 19.2 million in 2015 (World Bank Group, 2016). Itis estimated that the poverty rates are likely to go back to the 2007 levels, signalling “almost adecade’s worth of gains”.Real GDP fell by .9% year-on-year (y-o-y) in the first six months of 2016 and thedomestic demand also decreased by 2% y-o-y. Due to continued shrinking in real incomes,consumer demands remained depressed, and household consumption was the biggest negativedrag on the growth of GDP. The GDP per capita (USD) was 8,947 in 2016. Public consumptionalso deteriorated as the government followed expense consolidation in the new policy of low oilprice. In spite of the sustained economic stagnation, the country’s employment rates were atalmost maximum levels. Absolute figures of employed and economically active people werenearly unfazed in the initial eight months of 2016 as against the same time-frame in 2015(Kulikov & Porokhova, 2017). This is partially explained by the position of the country’s labourmarket, which reacts mostly via wages and not employment. Other reasons entail the outflowing1

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