Business Environment in Greece

BUSINESS REPORT Contents INTRODUCTION 1 Background Information on PayPal 1 Background Information on the Business Environment in Greece 2 Analysis of the Business Scenario 4 CONCLUSION 7 REFERENCES 9 INTRODUCTION Business environment can be said to the accumulation of external and internal factors that have a massive impact upon the operations of a company. Within the globalised era, a number of factors prevail within the business environment that influence the way a business conducts its course of actions and plans in order to attain a competitive edge in market place

BUSINESS REPORT

Contents
INTRODUCTION...........................................................................................................................1
Background Information on PayPal.................................................................................................1
Background Information on the Business Environment in Greece.................................................2
Analysis of the Business Scenario...................................................................................................4
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................9

INTRODUCTION
Business environment can be said to the accumulation of external and internal factors that
have a massive impact upon the operations of a company. In the modern and hyper competitive
era, it has become very easy and feasible for an entity to move to a new territory. Within the
globalised era, a number of factors prevail within the business environment that influence the
way a business conducts its course of actions and plans in order to attain a competitive edge in
market place over rival firms. The following report us conducted upon PayPal which is a global
corporation operating its own online payment system which assists money transfer and acts as
electronic substitute of traditional documentation ways such as money orders and cheques. The
company is making a decision regarding whether or not to avail the opportunities of FDI and
relocate itself to Greece. This report contains background information on company and macro
environmental analysis of country with PESTLE and Porter Five Force analysis. Also, it consists
of issues that would be faced by entity at relocation along with recommendations.
Background Information on PayPal
PayPal is an American company operating worldwide; it supports online payment method
and online money transfer. This entity serves as electronic alternative to traditional method like
checks and money orders. They provide services for online vendors, commercial users for which
they charge money. The organisation also provides one click transaction service and password
memory. PayPal was established in 1988 and become public in 2002 and became owned
subsidiary of eBay. By 2018 entity ranked 222 in fortune 500 with total revenue of 15.45 billion
US dollars. In March 2000 X.com, an online banking company founded by Elon Musk was
merged with Confinity. Company X.com was renamed as PayPal in 2001 and since then it has
expand rapidly in years. PayPal has known for its partnership with different companies and
recently has partnership with Instagram and create a feature ''checkout on Instagram'' turning the
popular social media sites into e-commerce platform. PayPal also acquired Chicago -based
Braintree Payments for 800 million dollars, Braintree has helped PayPal to become leader in
payment processing service.
While there are lots of online payment system nowadays and many manufacturer of
digital wallets like Paytm, google pay, phone-pay and free charge, PayPal offers other beneficial
features that others might not. PayPal is secure than others payment services because it offer
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additional layer of security to any kind of payment. As individual have not enter any card details
or CVV number each time, just individual PayPal login ID and password is needed. In certain
scenario, person can use one touch payment system, where PayPal have all the information
individual need not to enter the detail each time while purchasing something, no matter which
store or shopping mall. The biggest advantage of PayPal is totally free of cost, but in some cases
like if a person is having a business account can have different fees according to the company’s
policies.
Background Information on the Business Environment in Greece
PayPal is making a decision regarding whether or not to carry out relocation within the
Greek territory. This entity would be making use of Foreign Direct Investment (FDI) in the
respective nation in order to facilitate its operations there. The top management of PayPal
comprehends that Greece is a strategic location that can be used by entity to enhance its market
positioning across the globe. This place has a powerful tourism stake, technological
infrastructure and sound environmental regulations which gains the attention of potential
investors towards it. To gain a comprehensive knowledge about the environment of Greece,
PayPal has conducted a macro environmental analysis of the nation.
PESTLE ANALYIS
This is a framework that can be used by an entity to attain information about the
influence of external factors of country upon the operations of company. The PESTLE analysis
of PayPal in Greece is presented as follows:-
Political Factors: The political state of Greece is ascertained to be unstable owing to a
large number of administrative shake-ups that have taken place across the governmental areas. In
last some years, the role of Prime Minister has changed hands at least seven times, with the
ruling party changing with every new PM. This is an illustration of the extensive political
disagreement prevailing within the confines of nation. Further, Greece has huge extent of
corruption pertaining to the location which has led to economic recession. Tax evasion is a form
of corruption that largely persists in Greece reflecting the adverse political state of country. This
implies that the political state of Greece is not appropriate for PayPal to carry out its relocation.
Economic Factors: Influenced by global financial crisis of 2007-08, Greece underwent
an economic recession beginning from the year 2009. The biggest reason behind this was the
major spending deficits of the nation that were largely found to be underreported by officials.
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The abrupt rise in governmental debt along with Greek population losing faith within the
government caused investors as well as citizens to lose trust in the nation. As a result of this, a
large number of people pulled out their money out of banks and also sold investments, thus
implying a decline in ability of Greece to cover up its deficit with loans. Consequently, the
respective had to accept a number of bailouts. The nation has still not been able to recover totally
and owing to this, unemployment prevails to the extent of 18%. Tourism industry gives a push to
the economy of country with 10-20% employment being caused as a result of this business
sector. This reflects that in case PayPal decides to execute relocation in Greece, it may have to
have a number of economic adversities.
Social Factors: Greece has a dependency ratio of almost 57% which implies the inability
of country to recover from the economic crisis, since this is a state whereby a small quantum of
population gives its contribution to Gross Domestic Product of country. The major belief of
people prevailing within Greece is to carry out face-to-face business rather than conducting trade
and commerce over telephone or via online channels. This implies risk for PayPal as it is an
online payment company which gives users the options to carry out financial transactions over
online channels while ensuring security at all times.
Technological Factors: The technological infrastructure of Greece is sound irrespective
of the economic setback. The nation is equipped with ample number of cell towers for
facilitation of communication to reliable power network. The digital connectivity pertaining to
Greece is appropriate to gain the attention of potential investors and businesses. This tends to
generate opportunities for PayPal to carry out its relocation while making use of the facilities and
technologies that are accessible within the confines of this location. With the aid of FDI, PayPal
can easily carry out its operations in the new country and provide effective services to people so
that they can place trust in the payment system introduce by entity.
Environmental Factors: Being a part of EU, Greece has signed a number of international
agreements to ensure the conservation of environment. These include environmental concerns
like ozone layer damage, air pollution and disposal of hazardous wastes. Overall, this means that
Greece actually stands within international expectations for environmental policy. In this regard,
PayPal is an e-payment entity which has caused a huge reduction in usage of paper with its
system, thus contributing its part to the preservation of nature.
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Legal Factors: There are a number of laws that pertain to this factor and these include
health and safety, employment, taxation, custom, trade barriers, tariffs etc. To facilitate
relocation within Greece with FDI, it becomes important for PayPal to abide by all kinds of laws
and regulations prescribed for online payment companies. Further, the company should ensure
that security of personal details of clients is maintained at all times.
Analysis of the Business Scenario
PayPal has been pondering upon the option of relocating to Greece by gaining advantage
of Foreign Direct Investment. Organisations are captivated by Greece owing to its tourism charm
and high tourist visit on a daily basis which inflates the demand for online payments due to
issues related with currency exchange. Greece is equipped with excellent infrastructural
facilities, diverse workforce and transportation channels owing to which a potential investor
intends to put money in this nation.
There are several positive as well as negative aspects associated with the relocation of
PayPal in new country. Both of these, need to be taken into due consideration by the
management of the respective entity, in order to ensure that the corporation can sustain in market
for long term. Greece offers a number of opportunities as it is found to be an active part of
international institutions such as the Organisation for Economic Co-operation and Development
(OECD), North Atlantic Treaty Organisation (NATO), World Trade Organization(WTO),
Organization for Security and Co-operation in Europe (OSCE), Council of Europe and the
Organisation internationale de la Francophonie (OIF). This reflects the active participation of the
country in a number of social welfare, economic welfare and other kind of activities. This gives a
push to businesses operating within the national territory to also adopt the same approach and
thereby gain the attention of customers to make them stay connected with the entity for long
period of time.
However, there are certain negative aspects also associated with this beautiful tourism
and investment location. Drug abuse in this country is found to be on rise. Also, the after effects
of debt crisis of Greece are still found to be surrounding Greece and the business organisations
carrying out their operations within the confines of this nation. As a result of this crisis,
unemployment within the nation is on rise demonstrating the low potential and growth rate of
Greece’s economy. The level of corruption prevailing within the domestic territory is large. This
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dampens the manner in which companies should carry out their business in order to sustain in
market place for a long duration of time.
Thus, both the sides of the location should be considered by top management of the
respective company before making a final decision regarding carrying out the relocation of entity
within Greece or not. The acknowledgement of negative sides would provide enterprise with the
opportunity to gain knowledge about the areas when it needs to be careful while carrying out its
operations in new country after the relocation.
Even after studying the macro environmental impact with the help of PESTLE analysis
and gaining knowledge about the positives as well as negatives of the nation, the top
management of PayPal is apprehensive of the decision to carry out relocation within Greece.
Thus, to have clarity over the thought, the manager of company has carried out an industry
analysis of e-payment sector of Greece in order to attain holistic knowledge of the main rival
firms as well as their strategies. This will provide aid to PayPal in devising an effective strategy
that can enhance the market positioning of entity within the new location and also assist it in
staying ahead of competitors present in industry. To facilitate this, the industrial analysis of
PayPal in Greece is as follows:-
PORTER FIVE FORCES
This is an analytical model used by a company to obtain information about present trends
and top market leaders of the particular business sector. This helps in identification of influence
of industrial factors upon the operations of an organisation in market place. The five forces of
this model in context of the respective entity operating within e-payment sector are analysed as
follows:-
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Figure 1: Industrial analysis of e-payment industry
(Source: Industrial analysis of e-payment industry, 2019)
Threat of New Entrants - Moderate
The magnitude of this factor within the e-payment industry is found to be moderate for
PayPal in Greece. This is because there is high brand equity and large number of security
concerns prevailing within this business sector which makes it difficult for the new entrants to
accomplish and survive in market for long period of time. Further, another big reason behind the
threat of this factor being moderate for the respective company is the requirement of supplier
agreement without which the core operation of entities operating within this sector cannot take
place. A number of new firms may gain access to this attractive market yet the possibility for
them to deliver services while taking into account the security concerns and ease for people is
rare.
Threat of Substitutes - High
The influence of this aspect within the e-payment sector of Greece is found to be high for
PayPal because the brand loyalty that the customers maintain in this industry is relatively less
which makes the company vulnerable to being substituted by people with any other hi-tech and
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modern e-payment system. Further, owing to the ease of connecting to a number of shopping
carts, substitution becomes easy for people to execute. Also, the lock-in period in this sector is
found to be quite low which makes it easier and feasible for people to switch to other websites
and apps for online payment.
Bargaining Power of Buyers - Low
The extent of this factor is ascertained to be low within e-payment sector of Greece.
Almost all of the online payment applications or websites provide same type of guidelines which
must be accepted by users across the globe to make use of the system made by the company.
Further, there are many people who are not open to usage of online payment system due to
security concerns and other constraints. This shows that the bargaining power of buyers is low as
they have to agree upon the terms and conditions placed by online payment merchants in front of
them.
Bargaining Power of Suppliers - High
The magnitude of this factor is acknowledged to be high for e-payment sector within
Greece. There are a number of suppliers in relation to this industry are Telco services, credit card
companies, banks holding savings accounts and cheques. This inflates the bargaining power of
suppliers who have the responsibility to provide materials through which a safe and secure online
payment system can be developed for the ease and convenience of people. When the system of e-
payment provides fast transaction facility to customers, they are attracted to it in the first time.
Competitive rivalry - High
E-payment sector is constantly evolving and growing which presents opportunities for the
entities operating in this industrial market of Greece to enhance their profits and sales by
rendering ease, speed and convenience to customers. There are various competitors of PayPal
which are looking upon the market niches in order to gain a high share within the e-payment
industry. This industry is growingly at a rapid pace due to the technological advancements.
These advancements can be taken into use by any online payment entity to attract a large number
of people towards it. PayPal can make use of robust marketing to gain the attention of people and
retain them for a longer period of time.
CONCLUSION
On the basis of above discussion, it can be stated that PayPal should not carry out its
relocation within the territory of Greece as it is prone to political and economic adversities.
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Further, the belief and trust of people within online channels and businesses is relatively lesser
than any other nation across the globe. Also, the debt crisis of country may have impending
consequences for the respective company post its arrival in the new location. Irrespective of the
huge tourism prevailing in the country which presents opportunity for enterprise, the rising level
of corrupt activities such as tax evasion within Greece causes risk for PayPal. An instance
whereby this organisation intends to evade tax may result in bad name for the company causing a
serious risk to its sustainability. Thus, it can be concluded that it is not feasible and advisable for
the corporation to carry out relocation within this nation.
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REFERENCES
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Online
PESTLE Analysis of Greece. 2019. [Online]. Available
Through:<https://pestleanalysis.com/pestle-analysis-of-greece/>.
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