PESTEL Analysis Report: Royal Selangor's Hungary Market Entry Strategy

This report presents a PESTEL analysis of Royal Selangor's potential market expansion into Hungary, examining the political, economic, social, technological, environmental, and legal factors influencing the company's strategic decisions. The analysis considers Hungary's political stability, corruption levels, and export-oriented economy, along with social aspects like the aging population's interest in pewter products. Technological advancements and environmental concerns, including EU regulations, are also evaluated. The report suggests that Royal Selangor should leverage Hungary's technological advancements and limited competition in the pewter market while considering economic factors like the weak Hungarian Forint. Furthermore, the report recommends maintaining current marketing strategies and developing new ones, including branding and advertising, to enhance brand value and sales. The analysis draws on various sources, including governmental publications, statistical data, and industry reports, to provide a comprehensive overview of the Hungarian market and its suitability for Royal Selangor's expansion.

PESTEL ANALYSIS
A PESTEL analysis is a strategic framework that is often used to examine a
company's business climate. Originally, the paradigm was known as a PEST analysis, which
stood for Political, Economic, Social, and Technological elements; however, in even more
modern years, the paradigm was expanded to incorporate Environmental and Legal factors
too. Managements and committees use the paradigm in strategy development and corporate
governance plans. PESTEL research is also a common method among management
consultants to assist their customers in developing creative product and market efforts, and
among financial analysts to identify aspects that may affect parameter estimates and
budgeting process.
Political factors, in general, are those that are influenced by governmental decisions
and acts. Concerns included, but aren't really restricted to, corporation taxes, various
expansionary fiscal efforts, trade liberalization conflicts, infringement, and other anti-
competition problems. Contrasting positions on important policy positions among left and
right sides also could create the roll to votes extremely difficult for a firm's leadership team,
as even the potential variety of consequences might fluctuate wildly dependent on vote totals.
Economic considerations are related to the overall industry and are typically pecuniary in
aspect. Rate of interest, labour supply, macroeconomic variables, and exchange rates are
among them. Most banking and finance experts favour economic elements in their analyses
because they can be easier to quantify and modelled compared to the other variables in this
paradigm, which are more subjective in character.
Social elements are harder to measure than economical aspects. They relate to
changes in how investors perceive lifestyle and time off, that might have an effect on
corporate activity. Typical examples of social influences include population concerns,
cultural influences, consumer perceptions, sentiments to work conditions. In comparison to
more concrete considerations such as lending rates or business taxes, social issues may
appear to be minor. Nonetheless, they may have a startlingly huge effect on multiple areas as
we understand them. Technology is prevalent in today's industrial scene, and it is evolving at
a furious speed. Administration and researchers must both grasp how technology issues can
affect a business or a sector. They comprise, but aren't really restricted to, robotics, the effect
of research & innovation (R&D) on both expenses and strategic edge, technical resources
(such as 5G, IoT, and so on), and online information assurance. The pace and extent of

technology changes in today's economic climate are unparalleled, and they have had a
damaging effect on many established organisations and industries.
As the corporate sector started to appreciate that alterations in our external
surroundings can bring material dangers and possibilities for firms, lifestyle factors arose as a
natural component of the initial PEST structure. Carbon emissions is an example of an
external issue. Climate change's effects encompassing physiological and transitional
concerns. Severe climate occurrences are becoming more common. Oil and natural gas
management (like fresh water). Legal variables are those that originate from adapting to a
changing framework and have an effect on the economies, entire sectors, or even particular
enterprises within a field. They contain, but are not\ restricted to, industrial regulation,
operating licences and permissions, labour and customer rights regulations and IP security
(Intellectual Property)
According to Google (2022), Hungarians are interested in Pewter products especially
household products such as mug, teapot, plate, fork and spoon, wall light and so on. Not only
that, but they will also make pewter products as collection too. However, pewter is mostly a
valuation customer's impulsive choice. This means that consumers do not distinguish
between pewter items if they don't have foreknowledge. Royal Selangor should keep its
current marketing techniques, such as high artistic quality and items as presents for birthdays,
marriages, and anniversaries. Royal Selangor is also advised to develop a new marketing
strategy that includes advertisements, elegant branding, and the enhancement of an elevated
brand.
We may learn from PESTEL research which factors influence Royal Selangor's
decision to expand their operations to Hungary. Hungary's current state of affairs was stable,
and the importance of the pewter sector in the country's economy was average when
compared to other countries. The amount of corruption in Hungary's government is normal,
with the country ranking 64 out of 180 in terms of corruption today. In terms of economic
considerations, Hungary has an export-oriented economy with a strong emphasis on overseas
commerce, ranking the country 35th in the world. Hungary is likewise classified as a high-
developed economy by the UN. The IMF, on the other hand, does not agree with this
designation. Despite having one of the largest exports, the Hungarian Forint (HUF) remains
one of the world's weakest currencies, fluctuating due to rising inflation, a stronger dollar,
and investor risk sensitivity.

In terms of social characteristics, Hungary currently has a population of 9.7 million
people as of January 2022. People aged 15 to 64 years old made-up 65 percent of the
population, with Hungarians over the age of 65 accounting for the remaining 21 percent. This
is a positive statistic because the elderly enjoys collecting antique pewter items and giving
them to one another. Concerning technological factors, science and technology are among the
most developed sectors in Hungary. As per the annual Bloomberg Innovation Index, the
country will rank 27th for most inventive countries in 2021. This is a crucial aspect in
evaluating which countries in the world are the most technically savvy. However, because
there are fewer pewter product competitors in Hungary, Royal Selangor will have the best
opportunity to extend their market to Hungary.
In terms of the environment, practically every day in Hungary is below 5 degrees
Celsius. Hungary's environmental concerns today include meeting European Union
regulations for waste disposal, energy consumption, and atmospheric, land, and water
contamination. Last but not least, there is the legal consideration. The Hungarian Competition
Act includes every one of the statutory provisions of Hungarian competition law, including
antitrust issues as well as unjustifiable fair work highlight the value; it also includes
regulations applicable to the compliance institution (GVH) and pertinent statutory provisions
applying by the GVH and the courts.

REFERENCES
1. Introduction of PESTEL Analysis, K.Peterdy (2022), reached at 30th November 2022,
at https://corporatefinanceinstitute.com/resources/management/pestel-analysis/
2. Law and Documentation about Importing to Hungary, published at November 2021,
reached at 30th November 2022, at https://www.trade.gov/country-commercial-
guides/hungary-import-requirements-and-documentation
3. Statistic of elderly in Hungary, Medve (2022), published at July 28, reached at 1st
December 2022, at https://www.statista.com/statistics/1261302/hungary-share-of-
population-by-age group/#:~:text=In%202022%2C%20people%20aged
%20between,up%20a%20further%2021%20percent.
4.