Macro Environmental Analysis of Europe and China for R.M. Williams Company

R.M. Williams Company is exploring international markets and has come up with two regions, Europe and China. This report provides a macro environmental analysis of both regions and recommends Europe as a better opportunity for expanding their business. The report covers political, economic, social, technological, environmental, and legal conditions of both regions.

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R.M. Williams
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Introduction
R.M. Williams Company is a stylish leather boot manufacturing company for both men and
women. It is one of the best leather boot manufacturing company in the Australia. The company
has taken its decision to explain its international market but it is not sure about the zone. From
exploration the company has come up with two regions one is Europe and other is China. The
company will go through macro environment analysis of both these countries which will also
include Hong Kong and Macau. After comparing both these region conditions, the company
management will try to find out which region will be better for their business expansion.
Overview of company
R.M. Williams Company was founded by Reginald Murray Williams in back 1932. Reginald
dedicated his years of experience to formulate new technique to form high quality boots for both
men and women. The company had gone much deeper to understand the materials which can
reshape the craftsmanship (Williams, 2018). In April 2013, R.M. Williams Company had sold
equity share to LVMH group which is a French multinational luxury goods having headquarter
in Paris. This group is currently in various product lines wine and spirits, specialist retailing,
fashion & leather goods, watches & jewelry and perfumes (Stafford, 2013). The group has
created own design pattern to get recognized all over the world. Presently R.M. Williams deals
with clothing, leather goods and horse-riding apparatus at almost 50 retail stores in Australia. It
deals footwear, counting boots, shoes, and footwear fittings for males and females; shirts, pants,
T-shirts and polos, shorts, woolens, coverings and tops, and reliable for males; and fittings,
counting belts and clasps, bags and folders, caps and lids, books and handouts, and gift
cards .They have almost made their presence in cities like New Yoke and London (Issa, 2016). It
deals merchandises through its numerous stores in Australia and intercontinentally, as well as
online.

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European Macro environmental conditions
Political
Europe region is actually known for its democratic style of thinking and all the political parties
are truly in favor of that. European Union is made of many countries like France, Germany, Italy,
Sweden, Poland, Spain etc. It is also one of the strongest economic unions in the world due to
combined efforts of these countries (Bargain, Dolls, Fuest, Neumann, Peichl, Pestel & Siegloch,
2013). Among them Germany act as democratic republic and their political system is mainly
governed by legislature, the judiciary and the executives. While France is known as politically
stable country and has always shown great respect towards leather industry. But BREXIT has
disturbed the stable condition of the EU with Britain leaving this pact.
Economic
As Europe consists of almost 740 million people in their combined region, their GDP has truly
made remarkable presence in the world business platform. In many cases it has been found that
there are some countries in this union whose GDP is greater than average economy of the world.
In economic forum Germany is the country which has largest national economy in whole Europe
(Bivolaru, Andrei & Purcaroiu, 2009). It has also been seen that Germany recorded highest trade
share of $ 310 billion in the world. While France in economy presence is behind Germany but
still occupies sixth position in the world and in Europe it stands at third number. France is known
for its diverse economy and chemical industry forms the key sector of its economy by providing
support in manufacturing.
Social
Most of the countries in the European Union follows social model as common vision. Europe
union mission is to provide high living standards and working conditions for their citizen. Under
this model the focus is mainly made on welfare of the society in which they all are partners
(Decoster, Loughrey, O'Donoghue & Verwerft, 2010). In case of social responsibility countries
like Germany and France are very society and it is a general believe that social responsibility is
not only duty of government but it is also the duty of the citizen which is a part of this system.
They believe that all humans are equal and hence must be treated equally.

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Technological
In technology Europe Union stands one of the most advanced groups of countries in the world
who are known for their technical specialists. Expect few countries all the countries in the
European Union are known for their innovations mainly Germany and France. These two
countries have actually show the right meaning of quality and innovations to the world in almost
all the industries it may be fashion, manufacturing or service. These country brands are not only
demanded in only Europe but also have a vast market in the world.
Environmental
Presently European countries are now on the path of green economy which is mainly related to
nature protection and secure a healthy and safe environment for their citizens. EU is in a believer
of carrying both environment protection and global business market hand in hand by imposing
strict policy related to environment.
Legal
EU ensures that all the imported products in the European Union must be sold at a fair and
stable price and it does not matter from where they are being imported. They use trade defense
instrument according to which they protects the welfare of the local trader of European Union.
Germany operates its trade through FEP under which the government regulates and subsidizes its
policies with in the international competition (Woll, 2009). While France mainly focuses on
reshaping it’s by forming a huge protectionist but it also believes in free trade policy because
they feel that business is one of the basic requirements for development.
China Macro environmental conditions
Political
China is one of the greatest influential nations in the world. This nation is mainly governed by
communist party of China. This nation is politically stable but also lacks of political freedom as

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compared to other countries in the world. Macau is having a political framework which is
handled by people republic of China. This involves legislatures, government, judiciary and
citizen of the country (Shilei & Yong, 2009). Macau shares special administrative status which
helps in executing one country, two system policies. It also handles the foreign affairs and helps
the zone the high degree of authority. While Hong Kong forms part of this political framework
by its quasi-constitutional document. Hong-Kong operates its basic law, legislature and chief
executive as head of the government.
Economic
China is known as the second largest economy of the world with a GDP of almost $ 13 trillion.
China is also known as the manufacturing hub of the world and it has made its presence in
almost every home present in the world by becoming home to goods exporter. China has a very
key role in international trade and is also involved in world trade organization. Macau one of the
cities of china is also known as business place (Song, Sun & Jin, 2017). The economy of Macau
is totally based on the export and gambling related tourism. Macau is presently serving a GDP of
$51.8 billion but it still dependent on china for its food, water and energy and also it is linked
with the Hong Kong for exchange of raw materials. Macau is also a partner in world trade
organization and it is service its citizen with free education program (Bao, Zhao & Zhu, 2012).
While economy of Hong Kong is in very must better state as compared to Macau because it has
become the place for various companies headquarter. Hong Kong is in total believed of business
as the only key for the growth of any state. Economy of Hong Kong usually expands by the
percentage of 3.5 year after year.
Social
China is very much concern to the social aspect of the nation because its previous situation was
good with the society which has given rise to various issues. Hence china has truly altered its
focus from only profit making to solving social cause. China has introduced a system which will
help their citizen to live a health and secure life with high standards. Unlike other European
countries the china has a huge income differences between their citizens, hence they are right
now focusing on health aspect. Both Macau and Hong Kong are on the same path of social
responsibility.

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Technological
China has really generated drastic change in their technology in both the field of informational
technology as well as manufacturing technology. China lacks behind from many countries in
information technology but it has positioned itself strong in manufacturing segment (Zheng, Li,
Tian, Zhu, Li, & Zhu, 2012). In china Shenzhen act as the technology hub and is far better than
Macau and Hong Kong which are known for only export and tourism.
Environment
As China is known as the manufacturing hub of the world so it will naturally add on negative
impact on the world environment. In many case it has been notified that China and India are the
two main countries for promoting pollution. To change this image the China government has
imposed strict rules related to environment and are taking all necessary action to safe guard the
environment. Same vision is now being followed by all the cities of the china including Macau
and Hong Kong.
Legal
The china has reformed its trade policy from the experience of previous years and now in the
believer of free trade policy (Lichtenberg & Ding, 2008). Both Macau and Hong Kong share the
free trade policy with many of the neighbor countries which they believe as a trade partner.
Condition comparison
As per study it has been found that Asia is the highest importer of Leather shoes as compared to
Europe which lacks behind in second position. Around $ 55.3 billion international sale has been
generated by Asia countries, especially china. Although China has a huge population but their
income difference is truly as turn off indicator for the company. It has been noted that average
GDP of some of the EU countries are almost near to the GDP of world business while China has
second largest GDP but not in the terms of business prospect. European Union political situation
is stable and also favors democratic growth while the political situation of china is little bit
disturbed due to its communist thinking or close thinking and no freedom in political view. May
be China is known for its manufacturing technology but they cannot compare the quality and
design aspect of European countries. As the product is of leather which means cost will be more,

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at that time only those people can afford which have a better income and are living high standard
life. In terms of trade policy the EU provides full support to free trading conditions which will
help the company to connect themselves with every part of the European Union. Culture of
France and other European countries are also connecting with these leather boots so they will
feel some kind of connection with this product. Europe countries are self-sustained in terms of
food, water and energy source as compared to china.
Recommended Market & Reasons
After exploring the macro environment condition of two regions, it can be concluded that R.M.
Williams Company should choose European Union as a better opportunity for expanding their
business because Europe income capital is much better than china and they also operate on high
living standards as compared to China population. There is an equal distribution of income
generation in most countries of the EU while in China only 30% of the population are living a
high standard life while rest of the people sustain normal live which means they will be move
inclined to those product which are cheaper and will compromise with the quality of the product.
As R.M. Williams Company is known for their quality and design so entering in China market
will impact the image of the company and people will no longer see it as a luxury item and will
try to switch on other company.

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References
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Fiscal union in Europe? Redistributive and stabilizing effects of a European tax-benefit
system and fiscal equalization mechanism. Economic Policy, 28(75), 375-422.
Bivolaru, E., Andrei, R., & Purcaroiu, G. V. (2009). Branding romania: a pestel framework
based on a comparative analysis of two country brand indexes. Management &
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Decoster, A., Loughrey, J., O'Donoghue, C., & Verwerft, D. (2010). How regressive are indirect
taxes? A microsimulation analysis for five European countries. Journal of Policy analysis
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Issa, C. (2016). R.M. Williams: the Australian brand perfecting English boots [online].
Retrieved from: https://www.telegraph.co.uk/luxury/womens-style/rm-williams-
australian-brand-perfecting-english-boots/
Lichtenberg, E., & Ding, C. (2008). Assessing farmland protection policy in China. Land use
policy, 25(1), 59-68.
Shilei, L., & Yong, W. (2009). Target-oriented obstacle analysis by PESTEL modeling of energy
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Stafford, P. (2013). RM Williams sold to Louis Vuitton: Five things you didn’t know about the
iconic company [online]. Retrieved from:
https://www.smartcompany.com.au/finance/economy/rm-williams-sold-to-louis-vuitton-
five-things-you-didn-t-know-about-the-iconic-company/

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Williams, R.M. (2018). A lifes work [online]. Retrieved from:
https://intl.rmwilliams.com/r.m.w.-the-company/Footer_company-information.html
Woll, C. (2009). Trade policy lobbying in the European Union: Who captures whom?. Lobbying
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Zheng, G., Li, F., Tian, Z., Zhu, N., Li, Q., & Zhu, H. (2012). Operation strategy analysis of a
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