Global Business Marketing: PEST Analysis of UK for Australian Ugg Boots
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The report provides a PEST analysis of the United Kingdom for Australian Ugg Boots to expand its business. The report covers political, economic, social, and technological factors affecting the footwear industry in the UK. The report concludes that the UK market is suitable for the expansion of Australian Ugg Boots.
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Running head: GLOBAL BUSINESS MARKETING GLOBAL BUSINESS MARKETING Name of the Student Name of the University Author Note
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1GLOBAL BUSINESS MARKETING Executive Summary The given report throws light on the strategic management and expansion of any business to an international country. Australian Ugg Boots wants to expand its business to the external international market outside of Australia and hence, the marketing manager is required to conduct an external analysis for the same. The report follows a systematic format whereby it introduces the topic followed by a brief on the company. The main body of the report concentrates on the PEST Analysis of the chosen country, the United Kingdom which is then followed by recommendations and conclusion for the same.
2GLOBAL BUSINESS MARKETING Table of Contents Introduction......................................................................................................................................3 About the Product............................................................................................................................3 About the country............................................................................................................................3 External Environment Analysis.......................................................................................................4 Political Factors...........................................................................................................................4 Economic Factors........................................................................................................................4 Socialfactors...............................................................................................................................5 Technologicalfactors...................................................................................................................6 Recommendations and Conclusion..................................................................................................6 References........................................................................................................................................8
3GLOBAL BUSINESS MARKETING Introduction External environment analysis forms an integral part of any business organization. The primary reason behind this is that the business organization has various factors related to the dynamic environment and it is essential for them to conduct an external environment analysis on various dimensions like Political, Economical, Socio-cultural and Technological (Barney, 2014). The given report states the external environmental analysis in the chosen country. The country chosen by Australian Egg Boots is the United Kingdom. The PEST Analysis will used. About the Product The Australian UGG boots are handcrafter shoes made in Australia. The shoes have been made for individuals conscious about their well being as well as about fashion. The shoes are available in various categories and for all age groups (Australian Ugg Boots Pty Ltd., 2018). They are used for all age groups and can be worn to protect oneself from cold. The stylish design and good quality material used to make the product is the primary selling point. The product is priced on the upper hand with a shoe for women priced at 110 AUD on an average. The boot for men is priced at 150 AUD and the kid`s products are priced at AUD 80.It can be stated that the given product is priced at a rather high range and is meant for the premium segment of the market. About the country The United Kingdom comprises of the England, Scotland, Wales and Northern Ireland and is situated in the northwestern part of Europe. The capital of the United Kingdom is London and the city is an influential centre of finance and culture. The consumer market in the United Kingdom is very large and according toBettis et al. (2014), consumers have spent roughly $100 bn on footwear n 2016.This figure is the largest outlay in the globe with respect to the given products. However the share of consumer spending has been declining and the figure has been 5.8% in 2016 as compared to 6.4 in 2010.
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4GLOBAL BUSINESS MARKETING External Environment Analysis When a business decides to expand its operations in other countries for the purpose of international trade and sales, the business needs to scrutinize the external environment of the business in order to make sure that their investment decision is correct. The given section will strategically analyze the business environment of the footwear industry in United Kingdom. The tool used for the analysis is the PEST Analysis (Eden & Ackermann, 2013).The PEST Analysis is a strategic tool which assists in identification of the various components of the external environment. The PEST is an acronym for the factors of Political, Economic, Social and Technological Factors. The PEST Analysis of the UK footwear industry is as follows: Political Factors The political factors are based on the government intervention of a particular economy. Political factors primarily comprise of arenas like taxation, labor laws, environmental laws, trade tariff and restrictions along with the stability of the political government (Ginter, Duncan & Swayne, 2018).The given factors might also include the services and goods which the government at large wants to provide and those goods which it does not want to provide. The political factors tend to have an impact on the purchasing power of the customers in the industry and on health, education, infrastructure of a particular nation. The footwear industry in the United Kingdom was considered to be the most attractive industry due to the number of jobs which it was capable of creating. UK has ancient history of getting imports from various counties and this has taken a downturn recently (Martinsuo, 2013). This means that the country is not being able to produce as cheap products as that of the low cost manufacturers based in other countries (Peng & Nunes, (2017).The current political scenario of Brexit will also have an impact on the given business scenario of the booth company. The various considering legislations related to this are laws covering minimum wages, working times and the imports made. Economic Factors The economic factors consist of factors like economic growth, interest rates, inflation and exchange rates (Hill, Jones & Schilling, 2014). The economic factors are primary determinants
5GLOBAL BUSINESS MARKETING of the flow of operations and decision making in the given business enterprise. For instance, the inflation rate affect the purchasing factor of the people in the economy and the interest rates determine by the economic decision makers affects the capital cost and the growth of the business (Stead & Stead, 2013).The exchange rates often tend to affect the internal imports and exports of goods and services. The economy of United Kingdom has been supported by Gross Domestic Product growth which generally tilts towards the various service industries, retailers, financial sectors and sunrise industries (Slack, 2015). Although the traditional industries have continued to decline, industries such as footwear and clothing have undergone a huge rise (Morschett, Schramm-Klein & Zentes, 2015). The lifestyle and fashion statement of people has changed considerably and therefore this could have an impact on any country entering the market. The job instability due to the Brexit scenario may have impacts. Socialfactors The social factors comprise of the cultural aspects of the population in the given economy. These factors are health consciousness, growth rate of the population, age factors, attitude towards the career and the emphasis of the people in the economy on well being. The particular factor which determine the social factors have a huge impact on the demand for a product in the given market.For example, if the younger generation in the given market grows then it is quite expected that the rise of fashionable products and technologically advanced products will be expected.In the same manner if poor the population of the older generation rises then the cost of labor shall increase (Wheelenet al.,2017). Depending upon this, various companies then change their strategies according to the needs of the target market. The dress and fashion sense of the society s a huge indicator of the demand placed by the consumers on the given economy (Ho, 2014).The United Kingdom has always been on top when it comes to fashion. Hence, any new style goes unmissed in the given country. The fashion industry has undergone a huge boost due to the e-commerce industry growth. Furthermore, the given temperature in the given country causes people to stock winter clothes and this causes Australian Boots the perfect opportunity to market their products in the given country.
6GLOBAL BUSINESS MARKETING Furthermore, due to the high income level and standard of living, the nationals in UK often prefer branded and good quality products. Although sportswear dominates the industry primarily in the given sector however, winter collection is very popular as well. Technologicalfactors These factors comprise of factors which relate to Research and development activities, automation, incentives and rate of change with respect to technology (Lasserre, 2017).The technological aspect of any industry relates to the barriers to entry production efficiency and costs quality related to innovation as well. The demand for clothing and footwear has increased with the rise in fashion notion of the people an as the winter collection has always been particular about quality of the goods, technological advancement goes a long way in determining the production and facilitation of goods and services (Gupta, 2013).The winter collection has certain requirements which it needs to follow in case it is producing the good in the given industry and in case it is so, the given scenario in the United Kingdom would be perfect for the company as the given country is quite technologically advanced. Furthermore, if the company plans to enter the given market through online portal then the exposure of the United Kingdom market to the various e-commerce websites would go a long way in abiding by the company`s policy and it will become extremely easy for the firm to reach out to the potential customers through the online portal (Rothaermel, 2015).This would make the business environment very suitable for the given firm. Hence from the given PEST Analysis it can be stated that the business environment of United Kingdom is quite suitable for expansion of the Australian Ugg Boots and the company should look out for the various legislative laws and rules in order to make its entrance easier and achieve success. Recommendations and Conclusion Therefore, from the given analysis it can be stated that scanning the international business environment is essential before selling or marketing the product to any other country. This is
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7GLOBAL BUSINESS MARKETING because there is a presence of various factors in the market which then tend to form a barrier or hindrance on the different factors which exist in the given country. If the factors analyzed from the external environment are taken care of then it becomes very easy for the firm to achieve a competitiveadvantageandsuccess.Thegivenreportdiscussedthevariousexternal environmental factors using PEST Analysis and it could be seen that the environment of United Kingdom is suitable for the expansion of Australian Ugg Boots.
8GLOBAL BUSINESS MARKETING References Australian Ugg Boots Pty Ltd. (2018).Australianuggboots.com.au. Retrieved 17 April 2018, from https://www.australianuggboots.com.au Barney, J.B. (2014).Gaining and sustaining competitive advantage. Pearson higher ed. Bettis, R., Gambardella, A., Helfat, C. & Mitchell, W. (2014). Quantitative empirical analysis in strategic management.Strategic Management Journal,35(7), pp.949-953. Eden, C. & Ackermann, F. (2013).Making strategy: The journey of strategic management. Sage. Ginter, P.M., Duncan, J. & Swayne, L.E. (2018).The Strategic Management of Healthcare Organizations. John Wiley & Sons. Gupta,A.(2013).Environmentalandpestanalysis:Anapproachtoexternalbusiness environment.Merit Research Journal of Art, Social Science and Humanities,1(2), 13-17. Hill, C.W., Jones, G.R. & Schilling, M.A. (2014).Strategic management: theory: an integrated approach. Cengage Learning. Ho, J. K. K. (2014). Formulation of a systemic PEST analysis for strategic analysis.European academic research,2(5), 6478-6492. Lasserre, P. (2017).Global strategic management. Palgrave. Martinsuo, M. (2013). Project portfolio management in practice and in context.International Journal of Project Management,31(6), pp.794-803. Morschett, D., Schramm-Klein, H. & Zentes, J. (2015).Strategic international management(pp. 978-3658078836). Springer. Peng, G. C., & Nunes, M. (2017). Using PEST analysis as a tool for refining and focusing contexts for information systems research. Rothaermel, F.T. (2015).Strategic management. McGraw-Hill Education. Slack, N. (2015).Operations strategy. John Wiley & Sons, Ltd.
9GLOBAL BUSINESS MARKETING Stead, J.G. & Stead, W.E. (2013).Sustainable strategic management. ME Sharpe. Wheelen, T.L., Hunger, J.D., Hoffman, A.N. & Bamford, C.E. (2017).Strategic management and business policy. pearson.