Comprehensive Macro-Environmental Analysis: Australia

This report provides a comprehensive macro-environmental analysis of Australia, focusing on the fashion industry. It utilizes the PESTEL framework (Political, Economic, Social, Technological, Environmental, and Legal) to assess the country's business environment. The political section highlights stability and regulations, while the economic analysis examines GDP, foreign direct investment, and consumer purchasing power. Social factors include consumer behavior, online shopping trends, and changing demographics. Technological advancements, environmental regulations, and legal frameworks are also evaluated. The report further allocates factors to global, regional, national, and local levels, assessing their impact, attractiveness, and probability. It identifies key drivers of change, including technological advancements, growing environmental awareness, and the shift to online shopping. The report concludes with problems, opportunities, and justifications for businesses operating in Australia. This analysis is valuable for understanding the complex business landscape and making informed strategic decisions, and is contributed by a student to be published on the website Desklib, a platform which provides all the necessary AI based study tools for students.

Running head: MACRO-ENVIRONMENTAL ANALYSIS IN AUSTRALIA
MACRO-ENVIRONMENTAL ANALYSIS IN AUSTRALIA
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Author note

1MACRO-ENVIRONMENTAL ANALYSIS IN AUSTRALIA
PESTEL Analysis of Australia with respect to Top Shop
Political
Factors
Economic
Factors
Social
Factors
Technologic
al Factors
Environment
al Factors
Legal
Factors
1.Political
stability is
one of the
important
political
factors
influencing
the
operations
of the
fashion
industry in
Australia. In
this regard,
Australia
has a
politically
stable and
transparent
system of
regulations
2.Australia
1.The GDP
of Australia
as recorded
in the year
2020 is 1.3
trillion
dollars
indicating
high
economic
developmen
t in the
country
suitable for
smooth
business
operations
(Heritage.or
g 2020).
2.The
Inflow of
Foreign
1.Consumer
buying
behavior is an
important
social factors
affecting the
operations of
Top Shop in
Australia.
Fashion
continues to
be the main
category
purchased
online,
accounting for
27% of
purchases
(Auspost.com.
au 2020).
2.Australia
has a reported
1.Australia
ranks 27th
among 141
nations in
terms of
number of
internet
users
(Weforum.or
g 2020).
2.The
country
ranks 24th
among 141
nations in
terms of
digital skills
of the active
population
thereby
indicating
high
1.Australia
ranks 7th
among 141
nations in
terms of
energy
efficiency
regulations
(Weforum.or
g 2020).
2.The country
ranks 36th
among 141
nations in
terms of
environment
related
treaties in
action in the
country
(Weforum.or
g 2020).
1.Australia
has one of
the world’s
most
transparent
and efficient
regulatory
environment
s
(Heritage.or
g 2020).
2.
Australia’s
stable
political
environment
supports a
strong
judicial
system,
which
operates

2MACRO-ENVIRONMENTAL ANALYSIS IN AUSTRALIA
has a
moderate
burden of
government
al
regulations
thereby
allowing the
business
organization
s to operate
in a free
manner. It
ranks 80th
among 141
nations in
this aspect
(Weforum.o
rg 2020)
3.The
fashion
industry is
heavily
dependent
on digital
Direct
Investment
in the
country is
60.4 billion
dollars
indicating a
positive
environment
for the
operations
of global
business
organization
s like Top
Shop
(Heritage.or
g 2020).
3.In terms
of
availability
of skilled
employees,
the country
ranks 43rd
trend of
changing
preferences
among the
consumers
towards online
shopping
options
indicating a
potential
growth in the
ecommerce
sector
(Auspost.com.
au 2020).
3.Australia’s
population is
fuelled by
immigrants,
adding 29% of
total
population,
the change
will shift the
cultural norms
awareness
about
development
s in
technology
(Weforum.or
g 2020).
3.The
country
ranks 20th
among 141
nations in
terms of
percentage
of
investment
for research
and
development
and
innovation
capability
(Weforum.or
g 2020).
4.80.8%
3.Trends of
consumption
among the
customers in
terms of
environmenta
l awareness
affects the
operations of
Top Shop.
Younger
generations
are pushing
more
transparency
in ecological
footprint and
life cycle of a
product, 73%
of Millennials
would pay
more for
sustainable
products.
4.The country
independent
ly and
impartially.
The judicial
effectivenes
s of the
country is
scored 86.1
(Heritage.or
g 2020).
3.The
efficiency
of legal
framework
in
challenging
regulations
in the
country is
ranked at
38th among
141 nations
(Weforum.o
rg 2020).
4. “The top

3MACRO-ENVIRONMENTAL ANALYSIS IN AUSTRALIA
business. In
this regard,
the
adaptability
of the legal
framework
to digital
models of
business in
Australia is
high as the
country
ranks 30th
among 141
nations
(Weforum.o
rg 2020)
4.Trade is
also
important
for the
operations
of Top Shop
in the
fashion
among 141
nations,
indicating a
moderate to
high
availability
of efficient
employees
(Weforum.o
rg 2020)
4.Being one
of the most
developed
economies
in the
world, with
a high GDP,
the
individuals
of the
country
have high
purchasing
power and
disposable
and social
trend within
the country,
including
diversity
trend.
4.The growth
of awareness
of the
consumers
towards the
environment
and climate
changes
requires the
organizations
operating in
the country to
operate in a
sustainable
manner so as
to foster
positive
consumer
sentiment.
Australian
shops online
in 2019
which will
soon be
projected
into only 1
out of 10
consumer
buying from
physical
retail store.
5.Recent
development
s in
technology
in terms of
enhancing
sustainabilit
y of business
operations
will affect
the
operations of
Top Shop as
has several
climatic
zones varying
in accordance
with the
geographical
features of
the country
(Weatheronli
ne
co.uk 2020).
Thus, Top
Shop must
keep into
consideration
the clothing
preferences
and needs of
the customers
residing in
the different
climatic
regions.
income tax
rate is 45
percent, and
the flat
corporate
tax rate is
30 percent.
Other taxes
include
value-added
and capital
gains taxes.
The overall
tax burden
equals 27.8
percent of
total
domestic
income”
(Heritage.or
g 2020).
5.The
workers’
rights
provided by

4MACRO-ENVIRONMENTAL ANALYSIS IN AUSTRALIA
industry of
Australia.
The
complexity
of tariffs in
the country
is quite low
thereby
allowing the
proper
functioning
of the
business
organization
s. In 2019,
Australia
holds Free
Trade
Agreement
with 16
countries,
increasing
job
opportunitie
s within
income that
is suitable
for the
fashion
industry.
5.The
country has
declining
wages
growth due
to rapid
replacement
of manual
labor with
advanced
technology
thereby
fostering
negative
consumer
sentiment.
6. As most
apparel
products are
imported,
5.Women’s
employment is
growing
rapidly, 9x
faster than
men, reaching
47.4% in 2020
(Abs.gov.au
2020).
6.Australia
ranks 34th
among 141
nations in
terms of buyer
sophistication
thereby
indicating
high standards
of quality
preferences
(Weforum.org
2020).
they will be
required to
make
investments
in such
development
s.
the country
is ranked at
34th among
141 nations
indicating a
general
trend of fair
and just
business
practices
(Weforum.o
rg 2020).

5MACRO-ENVIRONMENTAL ANALYSIS IN AUSTRALIA
countries
resulting in
higher
disposable
income.
China is the
largest
trading
partner with
Australia
thereby
affecting the
economic
growth in
Australia.
changes in
the value of
AUD
affects
purchases
cost of fast
fashion
retailers,
affecting
selling price
and
demand,
Australian
dollar is
forecasted
to
depreciate
in 2018-
2019.
Allocation of Factors
Global Factors Regional Factors National Factors Local Factors
1.Enhancement in 1.Rapid 1.Political stability 1.Different climatic

6MACRO-ENVIRONMENTAL ANALYSIS IN AUSTRALIA
environment
awareness of the
consumers
2.Tendency of
replacement of
manual labor with
advanced technology
(Sun and Zhao 2018)
3.Shifting
dependence of
consumers on online
shopping (Bahl and
Kesharwan 2018)
4.Growth in
women’s
employment
development of the
fashion industry due
to globalization
2.Emergence of
suitable trade
opportunities among
countries
in the country
2.Strong economy
depicted through
high GDP (Bell and
Hindmoor 2019)
3.Transparent and
efficient regulatory
system
4.Investments in
research and
development
regions in different
regions of the
country, thereby
changes in
preferences of local
customers
2.Availability of
internet services and
number of internet
users
3.Availability of
skilled employees
4.Disposable income
of consumers
Impact Attractiveness and Probability
Factors Impact/Attractiveness Probability Time frames
Growing
environmental
awareness of
consumers
4/5 4/5 Long-term

7MACRO-ENVIRONMENTAL ANALYSIS IN AUSTRALIA
Preference towards
online shopping
3/5 4/5 Long-term
Replacement of
manual labor with
technology causing
negative consumer
sentiment
4/5 3/5 Mid-term
Growing women’s
employment
4/5 4/5 Long-term
Provision of
workers’ rights
5/5 4/5 Long-term
Research and
development for
innovation
5/5 4/5 Long-term
Energy efficient
regulations
5/5 4/5 Long-term
Problems, Opportunities and Justifications
Factors Problems/Opportunities Justifications
Political Stability Opportunity Ensures smooth functioning
of the internal and external
stakeholders
Research and development
for innovation
Opportunity Will provide the business
with resource and cost
efficiency

8MACRO-ENVIRONMENTAL ANALYSIS IN AUSTRALIA
Shift to online consumption Opportunity Help the company increase
their scope of operations
and expand their target
market
Negative customer
sentiment due to
replacement of manual labor
Problem May cause negative brand
perception
Increasing environmental
consciousness
Problem Increased investments for
innovations to ensure
sustainable business
practices
Economic growth Opportunity Ensuring efficiency in cash
flow
High foreign direct
investment
Problem May cause significant
increase in competition in
the industry from
multinational organizations
3 Drivers of Change
 Technological advancements – Increased investment in research and development
for innovation in business and technological advancement will benefit the company in
a significant manner as it will help in the increase of resource and cost efficiency.
Furthermore, such technological advancements are directly associated with the legal
framework of the country supporting digital models of business. Innovation will also

9MACRO-ENVIRONMENTAL ANALYSIS IN AUSTRALIA
help the company satisfy the transforming needs and preferences of the consumers
and be at par with the recent trends in the fashion industry.
 Growing environmental awareness – In the age of rapid climate change, the global
consumers are becoming increasingly aware of the significant and pertinent
environmental issues. This is an important driver of change for the organization, who
is required to conduct their business activities in a sustainable and resource efficient
manner so as to perform their corporate responsibility towards the local and global
community. Sustainability in business practices will also ensure a positive brand
image and identity of Top Shop among its customers.
 Tendency of customers to resort to online shopping – The tendency of the
customers to online shopping provides an important opportunity for the organization
as expanding their business through digital platforms will help them to increase the
scope of their business and expand their target market. Furthermore, online presence
would create a greater brand awareness among the customer not only on a local but
also a global basis.

10MACRO-ENVIRONMENTAL ANALYSIS IN AUSTRALIA
References
Abs.gov.au, 2020. 6202.0 - Labour Force, Australia, Mar 2020. [online] Abs.gov.au.
Available at: <https://www.abs.gov.au/ausstats/abs@.nsf/mf/6202.0> [Accessed 16 April
2020].
Auspost.com.au, 2020. [online] Auspost.com.au. Available at:
<https://auspost.com.au/content/dam/auspost_corp/media/documents/inside-australian-
online-shopping-ecommerce-report.pdf> [Accessed 16 April 2020].
Bahl, R. and Kesharwani, S., 2018. Factors Affecting Online Shopping Behaviour. Global
Journal of Enterprise Information System, 10(2).
Bell, S. and Hindmoor, A., 2019. Avoiding the Global Financial Crisis in Australia: A policy
success?. Successful Public Policy, p.279.
Heritage.org, 2020. Australia Economy: Population, GDP, Inflation, Business, Trade, FDI,
Corruption. [online] Heritage.org. Available at:
<https://www.heritage.org/index/country/australia> [Accessed 16 April 2020].
Sun, L. and Zhao, L., 2018. Technology disruptions: exploring the changing roles of
designers, makers, and users in the fashion industry. International Journal of Fashion
Design, Technology and Education, 11(3), pp.362-374.
Weatheronline.co.uk, 2020. Climate Of The World: Australia | Weatheronline.Co.Uk.
[online] Weatheronline.co.uk. Available at:
<https://www.weatheronline.co.uk/reports/climate/Australia.htm> [Accessed 16 April 2020].
Weforum.org, 2020. [online] Www3.weforum.org. Available at:
<http://www3.weforum.org/docs/WEF_TheGlobalCompetitivenessReport2019.pdf>
[Accessed 16 April 2020].

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