BYPRIYANKA RAICHARUTA JAGTAPSANJOT NIKAMEKTA SRIVASTAVA

*PESTLE ANALYSIS

*ASIAN SUBCONTINENT

*POLITICAL

*Political systems in Asia can vary from democratic to totalitarian. * Examples of democratic systems in the Asia region:

India, Indonesia (a new democracy).*China is a mixture of capitalism and socialism, whilst

Vietnam is a socialist state. *High political instability in most countries affect

foreign investments.*Differences in political opinions and strained

relationships between countries affect business at times.

*ECONOMIC

*Each Asian country has its own currency. The convertibility of a currency determines how difficult it is to convert one currency to another*Full convertibility means that both residents and

non-residents can purchase any amount of foreign currency*Hard currencies are usually fully convertible, e.g.

US$*Soft currencies are non convertible, e.g. Kyat

(Burmese) and Dong (Vietnamese) currencies*Governments impose various exchange restrictions

to control their limited supplies of foreign exchange.

*Currency exchange rates can be greatly affected by political changes e.g. the Indonesian rupiah changes substantially with each major political development.*Regional economic groupings (AFTA,EAEC, etc.) will

impact economies of both member and non-member countries.*China’s entry into WTO has a profound effect on the

other SE Asian economies.

*SOCIAL

*Asians, generally speaking, have certain similarities when compared with Westerners, but within each Asian nation there are differences. *The main elements of social/cultural factors affecting

this subcontinent are: Religion, Values and attitudes, Language (both verbal and non-verbal), Customs and Manners.*They all have varying cultures and festivals. Their

manner of working too varies greatly. *The major population of Asian countries is younger

and hence provides for a formidable work force.*There is a wide gap among the social classes in

major countries of the subcontinent.

*TECHNOLOGICAL

*Expansion of infrastructure in low, middle as well as high-income economies of Asia in recent decades for both rural and urban areas. *The World Bank estimates that the Asian economies

will need to acquire infrastructure equalling the existing infrastructure of the United States and of Europe over the next twenty years. *Only the infrastructure markets of Japan, South Korea,

Taiwan, and Singapore can be said to have achieved significant maturity.*While country like Vietnam still needs to invest heavily

in the areas of water supplies, roads, and electricity.

*LEGAL

While most Asian governments encourage Foreign Direct Investments (FDI’s), there are often rules and regulations governing foreign investments, such as:*Investment granted only on a joint venture basis (as

in many construction companies).*Local content requirement may be must.*Export/import requirement *Transfer pricing controls.

Marketing of products may be subjected to the following controls:

*Safety standards, registration, labeling requirements*Price controls (especially for essential products like

cooking oil, rice)*Advertising content (scantily clad Caucasian

models are not allowed in Malaysia), sales promotion techniques*Exclusive dealerships (e.g. it is very difficult to

change a dealer in South Korea, once the appointment is made)

*ENVIRONMENTAL

Throughout the Asia-Pacific region, rapid economic and population growth creates serious social consequences from environmental problems of:

*Urban excess*Deforestation*Overfishing*Global warming*Air pollution*Limited safe water supplies

*SOUTH AFRICAN SUBCONTINENT

*POLITICAL

*Governance reforms in Africa are slow and easily reversible. *Some African countries are politically stable,

recording positive progress in terms of governance and combating corruption, others have significantly deteriorated.*While some African countries have made advances

in eradicating corruption and improving accountability and transparency through citizen participation in government as well as advances in the realm of press freedom, governance still faces tremendous challenges.

*ECONOMIC

*African countries are not quite as strongly exposed to the risks of the global economic crisis, as is Asia, there will, however, be significant indirect effects if Official Development Assistance (ODA) is curtailed and exports, foreign direct investment and Diaspora remittances are reduced.*There is a need to develop and stabilize the

financial markets in Africa With the world economy faltering, and global institutions under immense stress and change the importance of regional blocs or groupings is strikingly clear.*Progress towards regional integration has been

hampered by poor transport , interconnectivity and communication.

*SOCIAL

*In much of the Continent, a third of the people are underfed and more than 40 per cent live in conditions of poverty.*High mortality rates due to deaths among children

and mothers resulting from HIV/AIDS, drug and alcohol abuse, crime and violence, among others.*Africans are burdened by lack of basic infrastructure

and access to health services, low levels of education and illiteracy and by gender inequalities. *Thirty-four (34) African countries feature among the

50 least-developed countries on the United Nations’ list; and African countries occupy the bottom 20 spots on the UN index for quality of life.

*TECHNOLOGICAL

* In the past decade, growth in Africa’s manufacturing sector was very low and, in some cases, negative. *Africa's technological gap could be the source of its

increasing economic deterioration.*Firms in African countries often lack the expertise

to determine which new skills, technical knowledge and organizational techniques are required to make newly imported technologies function at optimal levels.

*LEGAL

*Faced with various opportunities and challenges in the international arena, Africa needs to speak with one voice. *Africa needs to harmonize the rules and regulations

that facilitate intra-African trade and investments and promote market access for African products.*To this end, the AU will provide the necessary

platform for adoption of relevant legal instruments that support regional and continental integration, and for promotion of ratification and entry into force of all outstanding legal instruments adopted by the Assembly of the Union.

*ENVIRONMENTAL

* To achieve continent-wide sustainable development, Africa must preserve its natural environment.*Climate change is at the root of floods, droughts,

desertification and global warming, and poses a major threat to rising prosperity in Africa. *The GHGs emission rates observed in African

countries remains negligible due to their low level of industrialization. *To mitigate the effects of climate change on the

Continent, Africa must gain access to sufficient global resources including access to innovative forms of carbon financing, payment for environmental services and new areas for avoidance of deforestation and reduction of land degradation.

*EUROPEAN SUBCONTINENT

*POLITICAL & LEGAL

*In Europe, companies are affected by legislation at EU and national levels. * The EU is similar to a confederation, where many

policy areas are federalised into common institutions capable of making law.*However the EU does not, unlike most states,

control foreign policy, defence policy or the majority of direct taxation policies.*These areas are primarily under the control of

the EU's member states although a certain amount of structured co-operation and coordination takes place in these areas.

*The constitutional basis and organisation of the European Union is based on its treaties.

*The EU itself as a legal personality and a set of governing institutions empowered by the treaties. However sovereignty is not invested in those institutions, it is pooled with ultimate sovereignty resting with the national governments.

*EU laws exist at two levels: (i) regulations that are binding on member states and (ii) directives that are binding only through enactment of a law within the member state in line with the directive.

*The role of competition policy, then, is to encourage competition in the EU by removing restrictive practices and other anti-competitive activities.

*ECONOMIC

*The EU has established a single market across the territory of all its members.* 17 member states have also joined a monetary

union known as the Eurozone, which uses the Euro as a single currency.*Structural Funds and Cohesion Funds are

supporting the development of underdeveloped regions of the EU.

Economic motives of the EU:

* Internal market* Competition* Monetary union* Financial supervision* Energy* Infrastructure* Agriculture* Environment

*SOCIAL

*A major demographic change that will continue to affect the demand for products is the rising proportion of people over the age of 45 in the EU, and the decline in the younger age group. *The rise in one-person households, households with

no children and the growth in dual-income families. *More people are living alone by choice, through

divorce or bereavement. *The proportion of couples who have no children has

also increased.*The free movement of workers around the EU has

also encouraged the growth of subcultures.

*TECHNOLOGICAL

*The policy priorities in new EU members have been increasingly devoted to research and development (R&D) and innovation as the key drivers of productivity growth.*Imitation and innovation are used as modes of

technological development in many instances.*Most of the countries in EU are developed and have

access to latest technology.*An increase in the size of the science-based

manufacturing industries leads to higher intra-industrial trade between the countries.*Some of the worlds best technical institutes are present

in European continent.

*ENVIRONMENTAL

Five environmental issues are of particular concern:

*Combating global warming*Pollution control*Conservation of energy and other scarce

resources*Use of environmentally friendly ingredients and

components*Use of recyclable and non-wasteful packaging

*AUSTRALIAN SUBCONTINENT

*POLITICAL

*Australia is a federal parliamentary democracy. *The head of state is the Queen of Australia

(Elizabeth II, since 1952) and the head of the government is the prime minister. *Political and governmental power is highly

decentralized in Australia, with authority being distinctly divided between the states.*The desire to be a republic is slowly growing in

the nation, as the Australian Republican Movement slowly gains national importance.

*ECONOMICAL

*Australia recorded a healthy annual average GDP growth rate of around 3.3% during 2002–07. *The economy has been experiencing a downturn since

2008, however, with a lower GDP growth rate of 1.5%. *The government has continued with its policy of

monetary easing along with fiscal stimulus. *The state has funded various projects supporting

telecommunication and IT infrastructure, broadband services for local and rural areas, the development of green telecommunications, and carbon trading. *The tourism sector provides employment opportunities

and accounting for more than 3.5% of GDP for fiscal yr. 2007-08.*The minerals industry in Australia is of considerable

economic and social importance, helping its nationals both directly and indirectly.

*SOCIAL

*Australia has an impressive healthcare network. The country has also entered into several healthcare partnerships in Asia Pacific.*The country is challenged with a weak social security

system and professional work pressure leading to high stress levels.*Another problem that is now becoming a worry is the

aging population and the corresponding reduction in the labour force. *As the large Australian baby boomer generation

progressively moves into older age brackets, maintaining high per capita income growth will become harder to achieve

*TECHNOLOGICAL

*On the R&D front, the country has entered into scientific pacts with many countries, including India, China and the US. *However, low levels of productivity and high wage

costs have dampened its activity in this regard. Also, the number of patents being awarded is on a declining trend.*The telecommunications sector has been one of

the fastest-growing industries in Australia. *The country has also entered into scientific

bilateral collaborations with the US, Canada, South Korea and Japan.

*LEGAL

*The Australian judicial system includes a supreme court for each state, the High Court for the whole country and many district level courts within a state. *The nation has specific anti-terrorism laws and

supports many countries to fight terrorists. *Australia is also listed as one of the most open

economies in the world by the OECD.*The country follows market friendly policies and has

a very liberal legal regime.*Despite a number of liberalization measures, a few

restrictions with respect to investment in particular sectors still exist in Australia. Namely: media, transport and communication etc.

*ENVIRONMENTAL

*The Australian government has comprehensive policies in place to protect the environment. *One of the most severe effects of rising pollution levels

has been the decreasing area of the Great Barrier Reef. *Australia is also facing pollution due to forest fires in

South America that produced excessive amounts of carbon monoxide.*Australia has entered into several international

agreements, enabling the country and others to fight pollution with collective strength. *Australia has environmental pacts with Association of

Southeast Asian Nations (ASEAN) members, the US and also several neighbouring countries.

*THANK YOU