Global Business Development: Economic and PESTEL Analysis Report

This report provides a detailed analysis of global business development, focusing on economic aspects of Australia, China, and the USA, and a PESTEL analysis of TATA Motors. The report begins with an introduction to the topic, followed by a task-based approach. Task 1 examines the strengths, weaknesses, opportunities, and threats (SWOT) of the economies of Australia, China, and the USA. Task 2 applies a PESTEL analysis to TATA Motors, evaluating the political, economic, social-cultural, technological, environmental, and legal factors impacting the company. The report considers political stability, economic growth, social trends, technological advancements, environmental concerns, and legal regulations. The conclusion summarizes the key findings and the references are provided to support the analysis.

Running head: GLOBAL BUSINESS DEVELOPMENT 1
Global business development
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GLOBAL BUSINESS DEVELOPMENT 2
Table of Contents
Introduction......................................................................................................................................3
Task 1...............................................................................................................................................3
Task 2...............................................................................................................................................7
Task 3.............................................................................................................................................10
Task 4.............................................................................................................................................14
Conclusion.....................................................................................................................................16
References......................................................................................................................................17

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Introduction
In this research, the subject is on global business development. There are four task which have
been developed to provide insight on this subject (Charter, 2017). These tasks focuses on the rise
of the globalization, analysis of the case study and the PESTEL analysis of TATA Motors
company which is in the Automobile manufacturing sector.
Task 1
In this section I will highlight the economic aspects of three major countries; Australia, China
and USA. In this analysis I intend to identify the strengths, weaknesses, opportunities as well as
threats.
a) Australia
Australia has been an unbiased western democracy with a populace of greater than twenty two
million individuals. It is one of the world’s most urbanized countries that has greater than
seventy percent of the people who are residing in the ten biggest cities. Many of the population
continent (Dunfee & Nagayasu, 2013). The lifestyle in Australia reflects primarily the western
origins. The country is also a multicultural society in which there are supplemented by over 6
million settlers from nearly two hundred nations. In the country 4 out of 10 Australian are
migrants or perhaps the first-generation children of the migrant.
Strengths of the country
 The country has a lot of resources in terms of the physical assets as well as the right
culture of various immigrant who bring various skills sets.
 The country has experienced and skilled workforce which has resulted to the urbanization
of the country.
 The country has financial strength and likely return which can be exhibited from the
export and import they have made.
Weaknesses
 One of the weakness exhibited in this country in terms of the output is that in 2016, there
was a negative 15.61% decrease in the potential GDP that indicates that the Australian
economy was underperforming by managing on the actual output (Crawford, 2016).

GLOBAL BUSINESS DEVELOPMENT 4
 In year 2016, the revenue of Australia was less than the expenditure. The revenue stood
at AUD 586.17 billion whereas the expenditure was at AUD 63.07 billion. This was as a
result off the government net lending/ borrowing negative which shows there were
enough resources which were necessary to be able to boost the economic growth.
Opportunities
 The country has a global influences: This has been shown from the overseas merchandise
trade where they have been able to lead in some of the market (Crawford, 2016).
 The country exhibit social and the life style trends: Majority of the individuals in
Australia live in the city, thus they know the current trend which are dominating the
lifestyle trend.
 There is technological development and innovation in Australia. When it comes to the
development the countries has utilized the current technology in the construction of their
roads, railways and other sectors (Crawford, 2016).
 The country has participated in the regional and the international trade. According to the
information released by STATS it shows how the country are trading various
merchandise to the other dominating countries.
Threats
 There are strong strategies which are focused by the other countries which they trade with
such as China, and USA.
 There is weakening of the Australian dollar against the US dollar hence creating a
decrease in the economic growth of the country.
 The changes in the regulations could impact on the business trade of the merchandise
which could increase on the price inputs which could cause upward pricing.
b) China
China has been an emerging economy which offers lots of the market options to the foreign
investment. The country has an enormous possibility of the economic growth that provides
access to the large market as well as considerable savings when it comes to the cost of labor
(Conconi, Sapir & Zanardi, 2016). The country has experienced a spectacular economic take off,

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which has enabled them to multiply on their global weights and become the second largest power
in relation to the nominal GDP and first when it comes to the exports.
Strengths
 The country is leading in terms of the exports (Dunfee & Nagayasu, 2013). According to
the merchandise trade report China increase their export up to 9.1 percent which signifies
240 million dollars.
 The country has been able to set up internationally oriented industrial firms and they are
increasing on their investment both abroad and in the new technologies back at home.
 The country joined the world trade organization and they have been able to become
competitive in the global market (Crawford, 2016).
 The country has domestic investment in the new technologies, such as the renewable
energies and the services.
Weakness
 The country suffers from the economic model which is dependent on the exports. What
has been then strength of China over the last few years needs to be readjusted towards the
domestic consumption.
 There are issues on the social and geographical inequality. There is a gulf which exists in
some regions which are developed and under-developed in spite of the achieved progress
in regards to their GDP growth and the development.
Opportunities
 The country has global influences in regards to the merchandise trade.
 The country has technology development and innovation trends. In terms of development
China is among the nations which are rising in terms of the development and innovation
especially on their product (Gao & Low, 2014).
 The country has opportunities in venturing in new market especially to product such as
the milk powder, butter and the cheese.
Threats

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 There is a challenge of technological innovation as well as re-balancing on the economic
structure which calls for the strengthening of the creativity and fostering of the new
drivers for growth.
 There is the threat of the social inequality. In China is one of the most unequal society in
the world, as measured by the Gini coefficient (Gao & Low, 2014).
 There is also the challenge of the demographic especially to the china population which is
aging. This would lead to reduction in the economic growth rate in the country.
c) USA
The United States is the largest as well as the most technologically advanced, with diverse
economy in the economy. The GDP of the country is 26 % of the world’s overall economic
production (Kasemsap, 2016). The USA economy is the free marketplace, private business
system which has merely restricted intervention of the government.
Strengths
 USA economy is the world largest and the most influential GDP.
 There is a large market size and increase growth rate. In the last decade, industries have
experienced significant growth rate.
 The country has significantly developed because of the technology and innovation aspect
which have boosted the economy.
 They have a wide market share especially in the merchandise trade with other countries.
The exports have significantly increased.
Weakness
 There are gaps in the capabilities in the country.
 There are challenges of social and geographical inequalities which are observed in the
country.
Opportunities
 There is favorable trends or even the traits of the external environment which would be
beneficial to the organizations in the country; such as economic trends.

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 There is market developments in the country which has been exhibited for few years
now.
 The country has loosen in the regulations hence allowing the rise of the development of
different business niche.
Threats
 There are issues of the environmental effects such as weather effects for example
hurricanes which leave losses of many business.
 There is the issue of the market demand where the consumers taste has shifted.
 There are new obstacles which are observed such as the increase in the trade barriers, and
emergence of substitute products such as those from China for less price (Gao & Low,
2014).
Task 2
The PESTEL analysis is the standard way of analyzing on the macro-economic forces that affect
the TATA Motors Corporation. Moreover, the PESTEL analysis would help to infer whether a
particular element is helping the organization in attaining goals or perhaps acting as an
impediments in their path to results.
Political analysis
The TATA Motors they already have expanded their operations all through Africa , Asia ,
Middle East , and Europe ; consequently , they should monitor the changing political situations
and the legal laws in foreign nations which they have expanded their company. Furthermore,
they should satisfy the regulatory bodies that are regulating those regions. It is because the
success in trade in the local region generally, rely on the governing system in place at the time
(Madsen & Walker, 2015). After acquiring Land Rover and the Jaguar in 2008 from Ford, TATA
ought to build sturdy regulating system in addition to company laws which regulate and control
trade and commerce in all their global markets where they have extended their operations (Lang
& Heasman, 2015). The company needs to watch the government stability and the likely changes
in the countries which they have expanded. Additionally, the country needs to globally abide by
laws of the host countries that they operate and should have deep understanding of the needs
international clients, they also need to develop the product accordingly (Deshpande, 2016). This
will enable this organization to operate more efficiently in the global market and gain

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competitive advantage over their rival organization both domestically and internationally.
Additionally, the organization needs to look at the factors such as trade controls, import
restriction that govern other countries so that to enable them develop their products based on the
requirements of those countries.
Economic factor
The growth of economy of India has slowed down from the previous percent of 5.7 to 5.3 and is
expected to continue to slow down for the next few years (Kübler & Kriesi, 2017). According to
the RBI governor by the name Radhuram Rajan he clearly believes that for India to have a
sustainable growth inflation rate needs to be below 4%.
The rate of inflation has decreased at the increasing rate. RBI has reached at the six percent
inflation target a year before the schedule. The fall of the rate of inflation has been also due to
the fall in the prices of the oil. The OPEC did not cut production, which in effect has driven the
prices of the oil downwards.
As a result of the rapid growth in the automobile sector, TATA Motors has relied on the global
approach which has made them to adapt as well as learn from the various ventures in the
automobile industry (Deshpande, 2016). The organization has been paying much of the attention
when it comes to the currency fluctuations which compare much lower or even higher demands
in the market which has impacted the day to day gain of the profits (Deshpande, 2016). The
organization has been trying to grow at the rapid rate internationally through expanding
themselves or even through collaboration with the other automotive organization in the host
country.
Social-cultural
The demand for the electric cars has been expected to grow within the next few years. It is
expected that the use of the public means would increase by the year 2020 as a result of the
Indian government JnNURM II. As a result of the lifestyle change the buying of cars in India is
the fundamental concern. An example, this is a state in which people are prone to buying of the
hybrid vehicles which will automatically enhanced on the various opportunities for this
organization. The interest of individuals in India society in the cars particularly the electric cars
would open new avenues for the TATA Motors organization. The possible eminent threat in this

GLOBAL BUSINESS DEVELOPMENT 9
realm has been the gap which exists between the wealth of various class in India society. This
form of gap has been found to widen on the economic disparities which has existed between the
social classes and this has become a threat to the business and it has affected the trade as a
whole.
Technological
The consumer demand as well as the new regulations would impact on the development as well
as the marketability of the innovations in the automotive industry. Aspects such as the safety as
well as infotainment are significant factors for the consumer considerations. The approaches to
the technology aspect would differ between the developed and the emerging markets. The
technology level in the automobile has always been an opportunity for companies such as TATA
Motors (Peng, 2016). The rise in the trend of the E-commerce has been an opportunity to this
organization. It has been able to promote the trade of the organization. The advancement of the
technology has offered great opportunities when it comes to this organization and has enabled
them to expand on their business and be able to operate in the smart and the productive ways.
The new market trends usually pertains to the technology which has made them to expand
quickly and helped in the development of the culture of acquiring the latest products in the
market. Moreover, the organization signed an agreement with the EngageNext iSourcing in order
to shift on the delivery based model from the workers accumulation one. This organization will
help TATA Motors to delivery on their goods against the set standards as well as measure which
would prevent any deviation from this standard.
Environmental
Taking care of the surrounding environment has been the key agenda of TATA Motors. They
have been manufacturing on the vehicles based on the norms of the standards of the emissions
that is within the various countries in which they operate. The organization has invested a lot of
money for the eco-cars and in making them eco-friendly to the customers. Moreover, the
organization is observing the laws which regulate the environment pollution especially in the
countries in which they thrive. Additionally, they have attributed towards the support for the
renewable energy in which they have started manufacturing the hybrid vehicles which are
friendlier to the environment. With these cars they have a low consumption and they have a low
emission level of the gases.

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Legal
The laws and the regulations in the automobile market they have impacted on the operations of
the TATA Motors to the global and the local stages. When it comes to the employment laws they
have seen a number of workers in the organization grow hence they have increased on their
productivity and helped achieve higher revenue in the company (Usman, 2016). When it comes
to the production, TATA Motors they have been producing products which are based on the
stated laws and are able to sustain positive image when it comes to the Motor market (Kaynak,
Fulmer & Keys, 2013). The clients of the products made by this organization they have always
found contented to the legal issues.
Task 3
In this part I will undertake an analysis of the national differences in the political economy for
three companies which export their product to the global market. The analysis will be based on
the similarities as well as the differences in regards to the political system, economic policy as
well as the legal structure of the destination country.
a) Tiwai Point aluminum smelter
Tiwai Point aluminum smelter. This company is the biggest aluminum smelter and New Zealand
largest single site export industry. The company export most of their products of aluminum to
Japan (Kelsey, 2015). In this analysis therefore, I will identify the similarities and differences in
regards to the political, economic and the legal structure between Japan and New Zealand that
are helpful or challenging issues to Tiwai Point aluminum smelter.
Political structure
When it comes to the political aspect in Japan they have implemented trade restrictions which
govern them in the way they carry business with other countries. The relationship between Japan
and NZ is good therefore there is mutual agreement on the way they will trade (Duffield, 2014).
However, in NZ due to the risk of the legal regulation there has been increase in the labor force
which has become expensive which has rendered their product expensive (Duffield, 2014).
Therefore, Japan has to encounter high cost of purchasing on the product the country is
exporting. Moreover, due to the high lending rate in NZ the company has to be paid more
interest and this would reduce on the profit of the organization.

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Economic structure
In both of these countries they have embraced on the concept of the free market economy and
they have been able to adopt the British form of the free enterprise capitalism. This has
significantly helped on the way Tiwai Point aluminum smelter is trading with Japan since there
are no trade restrictions aspects.
Legal structures
The modernization of NZ and Japan they have been based on European legal system. Some of
the laws are on the labor as well as the corporate laws (Johnson, 2014). Based on these laws
these two countries have advantage in regards to the legal policy. In both the legal policy is
favorable to trade together (Johnson, 2014). This is significant to the Tiwai Point aluminum
smelter company since the regulating laws are much similar to the country where they are
exporting the products (Doh, Luthans & Slocum, 2016). The legal rule and the regulations which
are enacted are the liberal to carry out the business. In the legal aspect Japan has favorable laws
which has enabled the company to trade without any shortcoming. The corporate laws governs
the entity on how they would carry out their business.
b) New Zealand pharmaceuticals Company
This is another company discussed in the case study and it based in the Manawatu country side at
Linton that is near Palmerston North (Colbert, 2016). This organization has been extracting and
purifying the biochemical and then exporting them worldwide. This is amongst a science in
addition to technology adding Significance Company to the conventional byproduct of NZ land
dependent sectors. One of the major export destination of their product is in the USA.
Political structure
One of the significant factor for any given country that impact on their trade policy is their legal
rule, regulation as well as their government (Holslag, 2017). In both of these countries their
government are stable and there is less chance of risk since the legal rule as well as regulation
would not change in the short time (Doh, Luthans & Slocum, 2016). However, on the difference
in NZ in that there might be higher risk since after every three years there is a new government
and they may apply new rules as well as regulation that could be good for an organization

GLOBAL BUSINESS DEVELOPMENT 12
(Holslag, 2017). With the stable political aspect in USA New Zealand pharmaceuticals would
likely not experience any restriction when selling their products.
Economic structure
In both of the countries they registered a remarkable growth especially in the last decade. They
have been classified as the high economy. The growth rate in these two countries has majorly
been driven by the domestic as well as external demand, along with the private consumption
expenditure and the investment (Armstrong, Kotler, Harker & Brennan, 2015). Due to these
aspect in place New Zealand pharmaceuticals would thrive in the global market especially to the
export of their product to the USA. The products which are sold in the USA they have been able
to boost the economy of NZ in the last decade. NZ economy is dependent on the trade with USA.
Nonetheless, the changes in external demand could affect the economic situation of the country
(Rodrigues, Torabikalaki & Faria, 2016). In NZ they have a lower spending in R & D activities
which have resulted from the dependency of the new technology and this could greatly affect the
products produced by New Zealand Pharmaceuticals Company.
Legal structure
In the USA there is a change in the government after every four years whereas in NZ they take
three years for the new government to make their own rules as well as regulations. This could
greatly affect the trade especially when a new government come into power and changes the way
they have been trading. Moreover, the current government regime in the USA may not agree on
some issues with the new NZ government since they had a previous agreement of the last
government that was in place. New Zealand pharmaceuticals company exported products could
be in the process becomes affected due to the new trade regulations implemented.
c) Pacific Helmets Company
Pacific Helmets company that exports mainly to Australia. This company is the leading supplier
to the emergency services helmets to more than ninety countries. One of their major supplier of
these services is in Australia.
Political structure