Environment Analysis for Abbott Australia's Expansion in China

Running head: ENVIRONMENT ANALYSIS
Environment analysis
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1ENVIRONMENT ANALYSIS
Introduction and background information
The report analyses the four factors that can have an influence in the environment of
the business that operates. For this the company that has been taken into account is Abbott
Australia, which is a pharmaceutical company and that makes huge investment in expanding
the business in China. It made the investment in expanding the business in many places like
New Zealand and other places. Now it has taken the decision to expand the business in China.
In order to measure the factors that can affect the environment of the company can be
measured by doing a PEST analysis. The four factors are the Political factors, Environmental
factors, the Social factors and the technological factors. A company goes through huge
financial risk while making an investment to expand their business in some other place. The
report further consists of the solution of the environmental risks that have explained in the
earlier report. Abbott Australia is a leading company in the pharmaceutical market. The
company has focused the interest on earning profits from the FDI trade. The company chose
China as it has the highest capacity of grabbing maximum amount of customers and
capitalizing the benefits. FDI has developed the most in China as the company has developed
the most in developing FDI. The major reason for this is the huge competitiveness. The
company has maximum chain of customers and they have huge chain of productivity and
value chain. The competitive position of the country has strengthened from earlier. However
the company face lack in certain environmental factors. The political factors helps to access
the political factors that are responsible for creating a hindrance in the process of doing the
business. It involves the lack of support of the local government and other factors that will be
discussed in the report. The environmental factors involve the factors that can cause problem
in the environment in which every individual dwells in. the social factors involve the cultural
aspects as well as the acceptance of the product by the consumers and the technological
factors include the advancement that the company has made in the field of technology that

2ENVIRONMENT ANALYSIS
can be considered to be one of the most important factor of in developing a business in the
contemporary world (Fitzgerald, 2018). These are discussed in detail in the report.
Body of information and discussion of relevant topics
The four types of factors which can influence the environments in which Abbott
operates:
Abbott is a pharmaceutical company and it had decided to expand the business in
China. It has faced certain factors that has influenced the environment in which the company
operates. The first and foremost is the political factor. They have significant role in
determining the factors that can impact Abbott in their long-term profitability in China
(Yabuki, 2018). The company can face the risk of military influence in China. The legal
framework for contract enforcement can affect the company. The company needs to maintain
the safety regulations for the employees as well as for the management. The other influencing
factor is the regulations of the price for the healthcare sector. The taxation of the company is
also an influencing factor. China has a huge chain of trading partners, therefore this is an
influencing factor for the company. The factor of anti-trust laws that are related to medical
appliances and equipment are related to these factors (Connolly, 2016).
The other factor is the economic factor. These factor include the inflation rate, the
savings rate, the interest rate, the foreign exchange rate and the economic cycle. In this case
the economic system of China is a factor that should be considered. The stability of the
economy of China is highly dependent on this (Till, 2017). The factor of the intervention of
the government of China in the free market and the related Healthcare can have huge effect
on the business. The other factor that affects the environment of the business is the decision
of the company whether they should invest on the local market. It depends on the fact
whether the company should raise their capital. The economic infrastructure quality is