MGMT 10: Skycart's Strategic Marketing and PESTEL Analysis in Canada

This report provides a PESTEL analysis of the Canadian market for Skycart, a drone manufacturing company planning a joint venture with Drone Delivery Canada Corp. The analysis examines the political, economic, social, technological, legal, and environmental factors influencing Skycart's entry into the Canadian drone industry. It highlights the stable political climate and economic benefits of foreign direct investment in Canada, while also addressing potential challenges such as legal compliance and data protection. The report discusses the importance of technological advancements, like RFID, for drone manufacturing and recommends strategies to optimize operations and navigate the Canadian market effectively. The report also analyzes the legal and political challenges that Skycart may face in Canada and provides recommendations for the company to improve its use of drones and manufacturing in the country. The report concludes that PESTEL analysis is an effective method of strategic planning for foreign investors in Canada.

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Strategic Marketing Management
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Executive Summary
This report deals with the PESTEL analysis in the context of Canada. However, Skycart wants to
develop a joint manufacturing with Drone Delivery Canada Corp. However, it has been received
that stable political condition of Canada will be beneficial for Skycart however; inconsistency of
the policy may hamper the business process of Skycart. On the other hand, the economy of
Canada is good for developing a foreign direct investment in this country. Therefore, breach of
the confidentially may occur in the context of Skycart while using internet for their business. It is
important to use specific persons to access all information as it will maintain the security of the
information. On the other hand, reduction of high operation cost and legal compliance will be
effective for Skycart to carry out a problem free business operation in Canada market.

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Table of Contents
1.0 Introduction................................................................................................................................4
1.1 Literature Review......................................................................................................................4
1.2 Theoretical and conceptual perspectives of PESTEL................................................................4
1.3 PESTEL as the strategic marketing tool....................................................................................5
1.4 Discussion of the PESTEL factors that Skycart needs to be considered while entering into
Canadian drone industry..................................................................................................................7
1.5 Recommendations......................................................................................................................9
1.6 Conclusion...............................................................................................................................10
References......................................................................................................................................11

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1.0 Introduction
Drones are the examples of emerging technology. This is called Unmanned aerial vehicle
technology or UAV. This is used to increase maneuverability and reduce weight. In the recent
year's application of drones has been increasing rapidly (Kim et al. 2018). This technology is
applied to rescue people from any dangerous condition. Apart from this drones are used for
research, aerial photography, and inspection and keeping security. Skycart is a drone
manufacturing company and going to establish a joint venture business with Drone Delivery
Canada Corp, which is a Canada based drone manufacturing organization. This study deals with
the PESTEL analysis in the context of Canada where Skycart is going to start drone
manufacturing business.
1.1 Literature Review
1.2 Theoretical and conceptual perspectives of PESTEL
PESTEL refers to political, economic, social, technological, legal and environmental
factors in the context of any business. PESTEL analysis highlights the external environment of a
business. In order to get an entry in a new market or in a new country, it is crucial for any
business organization to make an analysis of each external factor. However, in any country, there
is a regulatory restriction, specific economic condition, social condition and technological
advancement. Those external factors have a great impact on a business while going to introduce
a business in a specific country (Moss et al. 2016). Hence, PESTEL analysis is helpful for an
organization to measure the political, social, economic and technological condition of a country
that may affect their business. Every business organization looks for a country that is not probed

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yet. By using PESTEL analysis an organization is able to identify whether the specific country
has any potential or not for a profitable business. Effectiveness of a specific market in a
particular country can be determined by PESTEL analysis. This analysis enables an organization
to take strategic planning and get necessary data that will be favorable for their business.
PESTLE analysis is a strategic planning and it is a very cost-effective process. In the context of
Skycart PESTLE analysis will be helpful to exploit opportunities in Canadian drone industry by
acquiring in-depth information about the market. There are many debates over the PESTEL
analysis. As argued by Nevitte (2017), PESTEL analysis has certain limitations as the external
factors are changed over the time. On the other hand, PESTEL analysis is carried out based on
the assumption. Despite these limitations, PESTEL analysis is a useful strategic approach to
identify the current market in a new country.
1.3 PESTEL as the strategic marketing tool
Marketers use the PESTEL as the strategic marketing tool to reveal the external
environment of a country. In order to carry out a foreign investment in a country PESTEL is
required to follow (Li and Li 2016). This also helps the marketers to monitor the positive and
negative aspect of the political, economic, social, legal and environmental factors. PESTEL is an
essential tool of strategic management (Lans 2016). By following this technique the marketers
are able to focus on the planning of a business as well as the corporate objectives. By following
the PESTEL analysis the marketers are able to understand the way through which they can use
their resources in foreign country. In order to assess the core objective of an organization it is
crucial for all business to reveal the strategies that are used in an organization. Therefore, it is
important to reveal the technological opportunities and the legal situation of a country. By using
the PESTEL tool an organization is able to identify what technologies are available in a country.

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Apart from the technology, which resources are significant for a new business in a foreign
country can be analyzed by PESTEL. In order to carry out a business in a foreign country it is
crucial for the foreign investors to reveal the impact of external factors on their business.
However, the legal obstacle is a big barrier for the foreign investors. They need to understand the
rules and regulations of a country while penetrating in this market.
Critical external factors have a great impact on corporate strategy. For this reason, it is
vital for every business to have a clear idea about the external factors of an organization.
PESTEL analysis is not just a tool for measurement it also leads an organization to get
competitive advantage in new country as well as in the global market (Kim et al. 2018). PESTEL
analysis is considered as the major aspect of strategic management. However, the entire process
should be completed within the time by gathering proper data of external market. This tool
allows an organization to understand how the political, legal, social, technological and
environmental factors impact on a business in a foreign country. However, all these factors do
not leave equal effect on a business. It is based on the nature of country. Businesses those are
technology-oriented are influenced by technological factors in a country (Arku 2014). Analysis
of PESTEL shows an overall impact on the business of an organization. In order to address a
new market PESTEL analysis is effective. For foreign investors if the external factors leave a
negative impact on their business then it is difficult for them to survive in this market. Hence,
PESTEL analysis helps the foreign investors to identify whether their investment in a new
market is a smart decision or not. For the drone manufacturers PESTEL analysis is important as
it will allow them to reveal the availability of the technological factors in a country as technology
has a great impact on drone manufacturing process.

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1.4 Discussion of the PESTEL factors that Skycart needs to be considered while entering
into Canadian drone industry
Drone manufacturing is a technological innovation. Skycart is going to establish a joint
venture with Drone Delivery Canada Corp. In order to start this business, they need to consider
political, economic and technological factor during PESTLE analysis of Canada.
Political factor
Political condition of Canada is stable and it is a democratic country. Canada is ruled by
parliament government. Canada government has taken democratic principles in the context of
foreign investment (Export.gov 2018). The foreign investors need to follow Investment Canada
Act while going for a joint venture or invest in Canada. Canada is considered as the fifth largest
sector of foreign direct investment in North America. Therefore, leaders in Canada stay almost
for 10 years. This ensures the political stability in Canada. Such stable political condition in
Canada will give a good opportunity to Skycart to invest in drone manufacturing in this country.
On the other hand, Drone Delivery Canada Corp is a popular drone manufacture in this country
(Dronedeliverycanada.com 2018). Thus, by making a joint venture with this organization Skycart
will be able to accelerate their business in this country. As argued by Rutty et al. (2017), Canada
government has some restriction on foreign investment as the foreign investors need to make a
joint venture with the licensed organization otherwise they may face the legal issue. As
commented by Moss et al. (2016), Canada government offers low taxes for the foreign
investors. This will bring a good scope for Skycart to invest in Canda. Apart from this Canada
government has given more opportunities to the drone manufacturer to in invest in this country
as the government believes that drone will give a strong protection to this country from terrorist.
This will be a great opportunity of Skycart to invest in this country.

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Legal factors
Legal factors play an important role in influencing the foreign business in a country.
However, Skycart needs to follow the Data Protection Law in Canada 2017 while applying drone
for any purpose. This is a major need, which is required to fulfill by drone manufacturer.
Incompliance with this Act may lead Skycart to face legal issue.
Foreign investors in Canada need to follow AIEE or Agreement to Implement
Employment Equity while going to start a joint venture business in this country. According to
AIEE Act, the organizations who are involved in a joint venture program needs to pay $1M to
the government as per the contract (canada.ca 2018). However, according to this policy, it does
not matter how much each member of this joint venture contributes and how much profit is
gained from this business. This policy may create an issue for Skycart while developing a joint
venture business with Drone Delivery Canada Corp as they have to pay huge tax despite facing
loss in their business. Hence, it can be said that Canada government offers low tax and the stable
political environment are beneficial for Skycart to invest in this country. On the other hand,
AIEE policy will bring some challenges for this organization.
Technological factor
Canada is considered as the most developing countries in terms of science and
technology. Canadian people have much addiction towards the internet and most of the people
use internet for their business purpose and education in this country (Jenkins 2017). As per the
statistical data approx 28 million people in Canada focus on internet for their business and
education purpose. This data ensures that Skycart will get a chance to use technology in their

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drone manufacturing process. However, drone is a technological innovation thus; to manufacture
this product technological assistance is mandatory for Skycart.
RFID technology or radio-frequency technology is popular in Canada. This Technology
is used in warehouse drone (Tyler and Ingelson 2018). This will be a good opportunity for
Skycart to improve the use of drone in manufacturing by utilizing RFID technology. Such
technology is incorporated in drone for industrial use. In smart factory such latest technology is
used in drone to carry out the industrial operation. By using such technology in drone Skycart
will be able to improve the plant safety in many manufacturing organizations in Canada. RFID
technology is used widely and most popular in U.S and Europe. In order to improve the
efficiency of transport this technology is used in U.S and Europe. The development of RFID
technology is occurred in U.S. Britain uses this technology in aircraft to improve the
transportation process. However, Skycart will use this technology in their drone manufacturing
in terms of inventory management. They will provide drone with RFID technology to the
manufacturers to improve their tracking system in warehouse.
1.5 Recommendations
In order to improve the use of drone and manufacturing of drone in Canada a five step
recommendations is provided in the context of Skycart.
Canada government has given facility to the foreign investors to increase the drone
manufacturing process in this country as drone helps to rescue the people and protect the
country. However, drone is used to take picture of anyplace to measure the safety of a country.
Hence, dissemination of the information is a big challenge of drone use. This may lead Skycart
to face legal issue while entering Canada market. In order to deal with this issue Skycart needs to

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follow the Data Protection Act policy and rules of AIEE Act. This will help this organization to
remove issues regarding the breach of confidentiality and the joint venture business.
Implementation of this recommendation may face problem if sudden changes in government
policy take place. This will alter the operation process of Skycart. This issue can be reduced by
measuring the government stability in Canada. If the government is stable longer then the policy
will not change. As a result, Skycart will carry out their drone manufacturing business in this
country without any legal obstacle. Finally from the above recommendation it has been found
that by following this policy Skycart will be able to carry out their drone manufacturing business
in Canada without any legal obligation.
Drone is used to capture picture to ensure the safety of a location. However, often
changing weather affects the work of drone technology. In order to reduce this issue Skaycart
can introduce matternet one, which is a new type of drone. This drone is adjustable with weather
condition and capture the picture easily. Drone often crashes, which is a major drawbacks of the
implementation of new type of drone. This obstacle can be reduced by using obstacle avoidance
strategy. By incorporating such obstacle avoidance feature in drone Skycary will be able to
protect their new drone technology from crashing. Application of matternet drone will be an
innovative approach for Skycart in Canada, which will beneficial for them to get high response
in Canada market.
1.6 Conclusion
The above study focuses on the establishment of joint manufacturing in the context of
Skycart. However, Skycart is going to start a partnership business with Drone Delivery Canada
Corp. It has been received that Canada’s political, economic and technological factors have a

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great impact on this foreign direct investment. Canada’s stable political environment is good for
Skycart to get easy entry in this country while inconsistency of the government policy will be a
great challenge for this organization. Therefore, high GDP of Canada and technological
innovation will be beneficial for Skycart to introduce their drone manufacturing business in this
country.

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References
Arku, G., 2014. Competition and cooperation in economic development: Examining the
perceptions of practitioners in Ontario, Canada. Journal of Urban Affairs, 36(1), pp.99-118.
canada.ca. 2018. Federal Contractors Program – Joint Venture Suppliers – IPG-086. [online]
Available at: https://www.canada.ca/en/employment-social-development/programs/laws-
regulations/labour/interpretations-policies/joint-venture.html [Accessed 23 Mar. 2018].
Dronedeliverycanada.com. 2018. Dronedeliverycanada.com. [online] Available at:
http://www.dronedeliverycanada.com/innovation/ [Accessed 24 Mar. 2018].
Export.gov. 2018. Canada - 1-Openness to, and Restriction on Foreign Investment. [online]
Available at: https://www.export.gov/article?id=Canada-Openness-to-Foreign-Investment
[Accessed 23 Mar. 2018].
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