Assessment Task
Winegold Pty Ltd is an Australian-owned multinational wine manufacturing company that has major operations across Australia. The company was founded in 2010 in New South Wales and has since rapidly gained market share in Australia to become one of the country’s largest wine producing companies with exports to many parts of Asia and Americas. Consequently, the company is now exploring the feasibility of expanding their operations to Sweden.
Given that this is a new venture into unchartered territory, Winegold Pty Ltd is seeking your assistance as a management consultant to advise them on the political, economic, socio-cultural, technological and legal environment (PESTL) of Sweden. You are required to:
- Write a concise, clear and well edited report of no more than 1,500 words outlining the external environment (PESTL) of Sweden
- Conduct a SWOT analysis of the external environment (PESTL)
- Present recommendations based on the SWOT analysis
You are strongly encouraged to access the documents that are uploaded under the ‘Assignment – Individual Report Folder of the FUNM1100 Moodle unit page specifically ‘Individual Report Structure’.
Submission Requirements
A significant focus of this assessment is about finding and using information (information literacy skills); therefore you are required to consult and fully reference at least SIX sources of information (Any combination of books, edited books, www, journal articles from the full-text databases, current affairs magazines, newspapers etc.). Although you can use www references, you should be discerning about the validity of those sources and how robust the information is.
You must use the Curtin Chicago 17th B Author-Date Referencing Guide to acknowledge your sources of information (both in-text and as a reference list at the end).
The report must include the following sections:
- Title page
- Table of contents
- Executive summary
- Introduction,
- PESTL Analysis
Political Environment,
Economic Environment,
Socio-cultural Environment,
Technological Environment,
Legal Environment,
- SWOT Analysis
- Conclusion
- Recommendations
- Reference list
Word count over the limit will not be marked. This will be strictly enforced.
The assessment must be submitted in electronic format. Electronic submission of the assessment needs to be made to the submission point on the Unit Moodle page. The submission time is indicated by the date and time that electronic submission is recorded in Moodle.
Must read: Enterprise Risk Management Techniques
PESTL Analysis Example
2.0 Political Environment
2.1 Government Stability Ask the following questions for relevancy for every component you analyse.
- Is the information relevant to Winegold?
- If yes, then is it positive or negative?
- If no, then redo your research i.e. your information is irrelevant Irrelevant information is usually descriptive .
2.2 Government Relations
2.3 Analysis
3.0 Legal Environment
3.1 Business Laws
3.2 Labour Laws
3.3 Analysis
4.0 Economic Environment
4.1 Currency Exchange Rate
4.2 Economic trends/forecast
4.3 Analysis
6.0 Technological Environment
6.1 Technological Infrastructure
6.2 Communication Networks
6.3 Analysis
5.0 Socio-cultural Environment
2.1, 3.1, 4.1, 6.1 Components of political, legal, economic, technological environments
2.2, 3.2, 4.2, 6.2 Components of political, legal, economic, technological environments
2.3, 3.3, 4.3, 6.3 Analysis Opportunity “O” or Threat “T”
Sweden political environment
Sweden legal environment
Etc.
Analysing the components of that environment
Research/search: key words
2.0 Political environment
Sweden government stability (2.1) +
Sweden government relations with Australia (2.2) +
Analysis (2.3) O
1,500 word 1,350 < x < 1,650 50% – 750 words
3.0 Legal Environment
Sweden Business Laws (3.1) +
Sweden Labour Laws Australia (3.2) +
Analysis (3.3) O
4.0 Economic Environment
Sweden currency exchange rate Australia (4.1) + Swedish krona
Sweden economic trends/forecasts (4.2) –
Find a third component to analyse
Sweden inflation rate –
Analysis (4.4) T
6.0 Technological Environment
Sweden technological infrastructure (6.1) +
Sweden communication networks (6.2) +
Analysis (6.3) O
2.3, 3.3, 4.3, 6.3 Opportunity (O) or Threat (T)
Socio-cultural environment O
4Os 1T – Yes or
3Os 2Ts – Yes or
2Os 3Ts – No or
4Ts 1O – No
SWOT – Strengths, Weaknesses, Opportunities, Threats
Conclusion
Yes – yes, invest
No – no, don’t invest
Wait – yes invest, but not now, maybe 2 years later when Covid situation is over & when economy becomes better
Relevant information
Any information that’ll lead you to a conclusion or recommendation (yes, no or wait)
Research: Capture INFORMATION & SOURCE (IS)
Recommendations Examples
Recommendations
Assuming the following are the outcome of your PESTL analysis & SWOT analysis:
S (5) – enhance
W (3) – minimise
O (4) – exploit
T (1) – reduce
Above as examples:
(number): number of SWOT e.g. number of strengths is 5 i.e. S (5), weaknesses is 3 i.e. W (3), etc.
Recommendations
Since the proposal or recommendation is for Winegold to invest in Swedenin 2 years’ time, it is recommended that the organisation takes the following actions to prepare itself for investing in the country (this paragraph (yellow) is applicable only if the proposal is yes, invest in Sweden at the Conclusion section. The words in blue has been included for the entire paragraph (blue + yellow) only if the proposal is “Wait” at the Conclusion section)
Should Winegold Pty Ltd decides to invest in Sweden at some future date, it can adopt the following recommendations to make inroads into the Swedish market (this paragraph (green) is applicable only if the proposal is no, do not invest in Swede at the Conclusion section)
- Invest in more advertisings & promotions of its high quality products & services in Sweden
- Improve its plans of supply chain processes to make them more efficient so as to reach out to customers more effectively
- Take advantage of the good working relationship between Sweden & Australia by requesting for more favourable or preferential tax rates on its exports
- Conduct cross-cultural training for both Australian managers/workers, as well as Swedish managers/workers so as to enable them to understand each other better.
Note:
The above examples are for illustration only. Please use your own words to phrase or rephrase as far as possible the recommendations you are going to provide.
.Also read: Business Intelligence & Data Mining
Individual Business Report Sample
Individual Business
Report FUNM 1100
Student Name:
Student ID:
Class:
Lecturer’s Name:
Executive Summary
The objective of this report is to explore the viability of Puawei Pty Ltd of extending their operations to Canada. The results of the report indicate that opportunities exist in political, economic, socio-cultural, technological and legal environment while the economic and technological environment presents as threats. According to the findings, the opportunities outweigh the threats. Therefore, it is recommended that Puawei Pty Ltd expand to Canada by outsourcing from other Canadian company as the company has no experience in expanding overseas.
Table of Contents
1.0 Introduction 4
2.0 Political Environment 5
2.1 Government Stability
2.2 Government Relations
2.3 Analysis
3.0 Legal Environment 7
3.1 Business Laws
3.2 Labour Laws
3.3 Analysis
4.0 Economic Environment 9
4.1 Current Exchange Rate
4.2 Economic Trends / Forecasts
4.3 Analysis
5.0 Socio-cultural Environment 12
5.1 Hofstede’s Cultural Dimensions
5.2 Analysis
6.0 Technological Environment 14
6.1 Technological Infrastructure
6.2 Communication Networks
6.3 Analysis
7.0 SWOT Analysis 17
8.0 Conclusion 18
9.0 Recommendations 19
References 20
1.0 Introduction
An Australian-owned electronics manufacturer company named Puawei Ptd Ltd is considering to expand their business operations into Canada. Resources required for manufacturing are divided into three categories – raw materials, technology and skills. The objective of the report is to investigate the political, legal, economic, socio-cultural and technological environments (PESTL) of Canada. This report covers the strengths and weaknesses of the company, opportunities and threats of expanding business into Canada and recommendations on expansion. The suggested expansion strategy is outsourcing form Canadian supplier as the company has no experience in expanding overseas.
2.0 Political Environment
2.1 Government stability
Canada is a politically stable country which is governed by a parliamentary system which spans 4 years per election (Ferris and Olmstead 2017). Canada is ranked the 84th percent for Political Stability and Absence of Violence and Terrorism and also 97th percent for Government Effectiveness as stated by The Worldwide Governance Indicators (WGI) project (Edunova 2019).
Figure 1: Political risk index of Canada
Source: Figure reproduced from The Global Economy (2019).
Based on the graph above, he political risk index of Canada has been increasing over the last few years but drops slightly in 2017. This could be due to the influx of refugees that they have accepted into their country. Overall, Canada is still a safe and stable place for businesses to hold their operations at.
2.2 Government relations
The Australian and Canadian governments have a very good trade relationship with one another and both countries are members of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (Austrade 2019). Canada is also a member of the Group of Seven (G7) which has Free Trade Agreements with huge nations such as US and Mexico which indicates their friendliness toward foreign investments (Edunova 2019).
The positive political relations may facilitate the company with regards to obtaining resources for their manufacturing plant.
2.3 Analysis
Political stability in Canada and the positive government relations with other large countries exhibit as an opportunity for Puawei Pty Ltd as these conditions point to a suitable environment for conducting operations.
3.0 Legal Environment
3.1 Business laws
Figure 2: Canada Corruption Rank
Source: Figure reproduced from Trading Economics (2019).
The ease of doing business in Canada has dropped throughout the years with Canada ranking in the 22nd worldwide (Trading Economics 2019). On the brighter side, Canada has an extremely low level of corruption, ranking 9th in a least corrupt nation study (Trading Economics 2019).
Both Australian and the Canadian legal systems are based on the English common law which makes it easy for Australian businesses to adapt to since both countries have similar laws. The only exception in Canada is the State of Quebec which based their laws on the French Civil Code (Bullock, 2016).
The high similarity of legal systems for both countries makes it convenient to conduct business in Canada.
3.2 Labour laws
Labour laws in both countries are slightly different, with the maximum number of working hours for a week being 48 hours in Canada (Government of Canada 2017) and 38 hours in Australia (Fair Work 2019). However, both countries have relatively high minimum wages – ranging from $11.00 to $15.00 depending on the province in Canada (RCC 2019), which is comparable to the $18.93 of Australia (Fair Work 2019).
Both countries signed an agreement also known as ‘’the 1957 agreement’’ to avoid double taxation and use similar systems like dividend imputation to do so (IBFB 2008).
https://tradingeconomics.com/canada/corruption-rank
3.3 Analysis
The legal environment poses as an opportunity since both countries have similar laws, it makes it convenient for Puawei Pty Ltd to do business in Canada as they do not have to adapt too much, making it easier to conduct business in Canada.
4.0 Economic Environment
4.1 Currency exchange rate ($)
Figure 3: AUD to CAD Chart
Source: Figure reproduced from XE (2019).
As of 31th March, the currency conversion rate of 1 AUD equals to 0.95 CAD (XE 2019). Based on the graph above, the currency rate for both countries can be considered stable. Currency stability is very important because it will affect the financial status of companies.
Figure 4: USD to CAD Chart
Source: Figure reproduced from XE (2019).
The exchange rate for 1 USD is 1.34CAD (XE 2019). According to the graph above, the highest and lowest points of the graph fluctuate within 0.4. Thus, indicates that Canada’s currency is stable even when pitted against the strong US dollar.
4.2 Economic forecasts
Table 1: Canada Economic Forecasts
Overview Actual Q2 Q3 Q4 Q1 2020
GDP Growth Rate (%) 0.1 0.5 0.6 0.2 0.5 0.6
Unemployment Rate (%) 5.8 5.8 5.8 5.8 6.3 6.7
Inflation Rate (%) 1.5 1.4 1.7 1.9 2.1 2.2
Source: Table reproduced from Trading Economics (2019).
Canada has a low GDP growth rate which indicates that the economic situation of Canada is weak. Increasing unemployment rate may be great for the company as the new operation needs labor. The inflation rate will then affect the purchasing power of the Canadian dollar (Trading Economics 2019). These negative indicators indicate that Canada’s economy is experiencing recession.
https://tradingeconomics.com/canada/forecast
4.3 Analysis
Overall, even though the currency exchange rates are stable, the indicators in the economic forecasts shows negative impacts on business. Thus, the economic environment can be concluded as a threat to future business operations.
5.0 Socio-cultural Environment
5.1 Hofstede’s Cultural Dimensions
Figure 5: Hoftstede’s Dimension Comparison
Source: Figure reproduced from Hofstede Insights (2019).
Hofstede’s Cultural Dimensions
Australia Canada Implications
Collectivism vs Individualism
Individualism Individualism Canadians answer only to themselves and have a high sense of self- reliance.
Power Distance Low PD Low PD Canadians are less formal with regards to workplace hierarchy and communicate openly
Uncertainty Avoidance Moderate uncertainty avoidance
Moderate uncertainty avoidance
Canadians embrace the unknown and are willing to try something different
Time Orientation Short time orientation
Short time orientation
Canadians focus on instant gratification rather than deferred gratification.
Femininity vs Masculinity Moderate Masculinity
Moderate Masculinity
Canadians prefer a balance between work and life
90
36
51
21
61
80
39
48
36
52
0
10
20
30
40
50
60
70
80
90
100
Individualism Power Distance Uncertainty Avoidance
Time Orientation Masculinity
Australia
Canada
5.2 Analysis
According to the chart above, there are many similarities between Australia and Canada with regards to the Hofstede’s dimensions. Socio-cultural environment poses as an opportunity as Puawei does not need to make much changes with it managerial style and functions as what works in Australia should work in Canada.
6.0 Technological Environment
6.1 Technological infrastructure
In terms of technology and innovation, Canada has slipped from 9th to 12th placing in recent years. Countries like Australia and Japan are continuing to improve while Canada lacks behind (The Conference Board of Canada 2018). In spite of the Canada’s efforts to enhance its unenlightened commercial innovation performance, the situation continues to exasperate (Toronto 2015). This may affect labour productivity and cause manufacturing processes not to operate at their maximum potential due to the lack of technological infrastructure.
In Puawei’s situation, being a smartphone company means that it needs a high level of innovation because the smartphone technology moves at a very fast pace. Setting up a business in Canada may be detrimental to the company’s R&D sector.
6.2 Communication networks
Figure 6: Smartphone Penetration Rate in Canada 2014-2013
Source: Figure reproduced from Statista (2019).
Since Puawei is in the smartphone business, it is also important to look at Canada’s smartphone user penetration. According to the chart above, Canada has a high percentage of smartphone penetration and this already high figure is expected to increase in the next few years.
Figure 7: Number of internet users 2000-2016
Source: Figure reproduced from Statista (2019).
Smartphones are complemented with internet service and in 2016, online services reached 81.19% of the entire population (Statista 2019). The graph above shows that the time Canadians spent online are increasing gradually every year. This shows that the online service market is huge and will grow bigger.
Figure 8: Fixed broadbrand Internet prices
Source: Figure reproduced from Dobby (2016).
The chart above shows that the prices of internet services in Canada are approximately the top of numerous developed countries.
6.3 Analysis
Even though the high-level penetration of internet users present itself as an opportunity, the low level of innovation and high prices for internet services in Canada presents as a threat to the business. Therefore, we conclude that Canada’s lack of innovation with regards to it technological infrastructure will affect Puawei which relies on innovation in the smartphone industry to keep a competitive age will suffer.
7.0 SWOT Analysis
Strengths Puawei Pty Ltd has:
Profuse financial capitals·
Long history in manufacturing business·
Striking smartphone design·
Good company image·
Weaknesses Puawei Pty Ltd has:
No experience in expanding overseas·
Deficient knowledge about international business·
Weak marketing capability·
Insufficient manpower resources·
Opportunities Canada has: Political Environment
Stable and safe environment·
Friendly relationships with neighbouring countries Legal Environment·
Low level of corruption·
Similar legal systems with home country Economic Environment·
Stable currency Socio-cultural Environment·
Similar cultures with home country Technological Environment·
High number of internet users·
High numbe·r of smartphone users
Threats Canada has: Economic Environment
Higher currency·
Bad economic forecast Technological Environment·
Low level of innovation·
High prices of internet services·
8.0 Conclusion
According to the results of the research, the external environment which includes political, legal, and socio-cultural environment presents itself as opportunities while economic and technological environment presents itself as threats. Overall, the strengths and opportunities outweigh the weaknesses and threats. It can be concluded that a promising future presents positive business prospects for Puawei Pty Ltd.
9.0 Recommendations
According to the results od the report, it is advisable that Puawei Pty Ltd expand their operations into Canada by following recommendations:
Expand only manufacturing department to Canada·
Retain Research and Development departments in Australia·
Train a Canadian manger to oversee the process due to similar cultures·
Invest in a manufacturing plant that has lower minimum wage·
Reference List
Bullock, Lara. 2016. “Northern Exposure.” Lawyers Weekly.
Canada – Economic Forecasts – 2019-2021 Outlook. n.d. Trading Economics. 01/04/2019.
https://tradingeconomics.com/canada/forecast
Canada Corruption Rank. n.d. Trading Economics, 01/04/2019
https://tradingeconomics.com/canada/corruption-rank
Canada Corruption Rank. n.d. Trading Economics, 31/03/2019.
https://tradingeconomics.com/canada/corruption-rank
Canada Falls in Conference Board’s Innovation Rankings, As Weaknesses Persist. n.d. The
Conference Board of Canada, 01/04/2019.
conference-board-s-innovation-rankings-as-weaknesses-persist
Canadian Economy and Political Stability. 2019. Edunova, 01/04/2019.
Country Comparison. n.d. Hofstede Insights, 28/03/2019.
insights.com/country-comparison/australia,canada/
Dobby, Christine. 2019. “How Canada’s Internet, wireless rates compare with international
prices.”
wireless-rates-compare-with-international-prices/article31379589/
Ease of Doing Business in Canada. n.d. Trading Economics, 03/04/2019.
https://tradingeconomics.com/canada/ease-of-doing-business
Export Markets – Canada. n.d. Austrade, 31/03/2019/
markets/Countries/Canada/Doing-business
Ferris, J Stephen and Derek E. H. Olmstead. 2017. “Fixed versus flexible election terms:
explaining innovation in the timing of Canada’s election cycle.” Constitutional Political
Economy 28 (4): 117-141. https://search-proquest-
com.dbgw.lis.curtin.edu.au/docview/1879494603/718D073B810D43CAPQ/6?accoun
tid=1038
Hours of Work. n.d. Government of Canada, 28/03/2019.
IBFD. 2008. “Convention Between Canada and Australia for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to taxes on income.” Australia – Canada Income Treaty.
download&gid=1990
Statista. 2019. Smartphone Penetration Rate as Share of the population 2014-2023.
XE Currency Charts: AUD to CAD. n.d. XE, 31/03/2019.