Strategic Analysis Environmental Variables-myassignmenthelp.Com

Question: Discuss About The Strategic Analysis Environmental Variables? Answer: Introduction The Pinatex is a revolutionary textile product, developed by Ananas Anam based on sustainable and natural product. The plant fibres are used to create the natural textile and the research took over seven years to produce an effective and innovative product. Originally developed in Philippines and now the business is based out of United Kingdom and Spain (Ananas-anam.com, 2017). Ananas Anam is trying to expand their business internationally in many other countries. This report tries to explore the environmental variables in New Zealand so that the company identifies the positive and negative aspects of the market before starting the business. Background Pinatex is manufactured and developed by the new material manufacturing company Ananas Anam (Ananas-anam.com, 2017). The idea was developed by Dr Carmen Hijosa. The pineapple fibres provide the raw material for producing the product (Boateng, Aidoo-Taylor Archer, 2016). The company aims to develop a unique textile industry that promotes the ecological, social and cultural development. The company also desires to make the local farmers gain economic profit by engaging in the production. The company has been searching for its potential international markets in other countries. The management has come up with few suggestions however the research department has engaged in effective market analysis of the environmental factors (Eva et al., 2014) The Variables Political Factors Amongst the macro-environmental factors, one of the most significant factors is the political factor which has the higher chances of affecting the trade policies, legal rules and regulation and the other government legislation. If the country has a stable government, there are fewer chances of risks for any organization to do business in the country as the legal rules and regulations are not expected to be changes within a short span of time (Holder, Frew Van Hale, 2015). However in terms of New Zealand, the chances are higher in every three years, as the government changes the rules after the span of three years. Mostly the left leaned Labor Party and the conservative National Party has dominated the political scenario of New Zealand. Each of the parties have implemented a vast range of economic and social legislation, long scale work programs and social safety programs. Therefore, for the fashion industry, this change of rules and regulation can be effective for two primary reason s. When Piatex enters the market, it can be highly possible that the rules are regulations are not in the favor of the organization; however, the regulation can change to the favor of the organization within the span of three years. However, the labor costs in New Zealand is higher, therefore the organization can face issues with the cost of the production. The labor laws are strict as well (Meurk, Sullivan McWilliam, 2016). However there is another perspective regarding the labor law and the costs, as the productivity of the labor are higher in the country than any other country with lower labor costs. Therefore Piatex can have labors with more productivity even if they have to spend higher costs for them. Moreover, the organization requires having a huge amount of money before they start their business in the country. Along with that, the lending rates are higher in New Zealand, therefore Piatex has to pay more interest, and therefore it reduces their profit to a great extent. Ac cording to Smith and Finn (2015) the trade freedom in New Zealand is 84.6%, whereas the business freedom is 99.9%, so these figures also indicate that the country has a better environment for doing trading and business. Economic factors Economic factors New Zealand have great economic growth. The per capita income is better than a lot other companies in comparison (OECD, 2017). There is always a demand for new products among the citizens. The consumer behavior of the citizens is quite favorable for a new product in the market (Nielsen.com, 2015). Most people can afford products of various price ranges. The money circulation is in continuous flow as the purchasing of necessary or luxurious products is continuous. The unemployment rate of New Zealand is low which represents the countrys positive economic growth in present and in the future (Stats.govt.nz, 2017). The inflation rate is also low which can be helpful for Pinatexs entry in the country. The company can find labor, iron and other necessary resources from the country easily. So if Pinatex opens up a business in New Zealand, there are high chances that the company will generate high revenue. The economic growth of the company is based on the external internal demand, investment and consumption expenditure that are acting positively for the countrys economy. The countrys economy is extremely dependent on trading with other countries, so the business for Pinatex has a good potential market in the country. The external demand by other companies can affect the companys economic condition so Pinatex has to do the necessary market research on other external business organizations and implement effective strategies for the competitors. New Zealand does not invest much on the research and development so that it makes it dependent on other countries for acquiring newer technologies (Jaffe Le, 2015). The company can utilize this opportunity to makes its strong presence in the countrys market. The favorable political and business climate influences large foreign direct investment in the country. Environmental factors New Zealand is famous for its ecological system. The average population educated and they value the environment. The pineapple harvesting in New Zealand is getting popular every day. Though majority of the pineapple are still exported from Fiji, but Pinatex manufacturing can help significantly for improving the pineapple harvesting in the country (Gilbert, 2013). As the citizens are environmentally aware, there is a high chance for the vegan lather to have great demand in the local market (Cowart, 2016). The population and the government have implemented advanced technologies in order to recycle the garbage and take extreme precautions to protect the environment from the pollution. The government act actively in taking fresh and new initiatives to improve the environmental condition of the country. Social Factors The economy of New Zealand is highly dependent on the tourism and trade with other countries. The external demand is higher in the country; therefore the economical situation of the country is highly influenced by such demands. The social classification of New Zealand is wonderful and the country has an open mind set in terms of trading with other countries. Within the fashion industry, there is a consistent demand which can be very much helpful for Piatex while setting up a new and innovative business in the country. The banking system in the country is stable and strong therefore it also welcomes the FDI or the foreign direct investment within the country. The 100% literacy rate and higher life expectancy rate which is 81, indicate that the people have good health and they are fashionable to accept an innovative business in New Zealand. As the government put higher emphasis on tourism, it provides more facilities for the tourists; therefore it would be beneficial for Piatex if they set up their business in the country, as they can also get hold of the global market. Technological factors The students in New Zealand are performing really well by actively engaging themselves in effective science or mathematics programs (Oecd.org, 2014). The country has been making great technological advancements in various sectors. The use of internet in urban and rural area of the country is really high. The new company can access the internet for data collection even in remote areas. As the manufacturing of vegan leather is related to harvesting, it is possible the company will start business in remote areas, but it does not have to suffer for lack of internet accessibility. Various phone companies are investing a lot of money for improving the business. They offer a lot of services in affordable rates to the local people and companies. The local people are provided various technological supports by the government. Legal The government has taken various legal actions in order to protect the company and the individual well being. They implement new rules and regulations to lower the crime. The law is in favor of the international business as they welcome the businesses actively. However the international organizations have to pay high lending charges to the government for starting a new business (Asb.co.nz, 2017). So the companies may lack in gaining much profit but company must invest there as the good relationship with the government will ensure a profitable business for the company in the longer run. Conclusion The Pinatex is a revolutionary new product in the market, so it has high potential to profit significantly. By examining such environmental factors like political, technological, economic, social and legal it has been experienced that the country proves to be a great potential market for the company. However, there are few challenges that the new company might face related to legal fees or harvesting cost, but if the company invests enough money in the initial phase, the company has good future to gain huge financial profit. Reference Boateng, K. B., Aidoo-Taylor, B., Archer, S. (2016). Experimenting the Feasibility of Banana Stalk for Practical Textile.Chinese Business Review,15(8), 388-399. Cowart, K. (2016).Vegan Leather is Now a Thing, And You Wont Believe What it is Made Out Of!.The Mind Unleashed. Retrieved 27 August 2017, from https://themindunleashed.com/2016/03/vegan-leather-is-now-a-thing-and-you-wont-believe-what-it-is-made-out-of.html Education at a Glance: OECD. (2014).Oecd.org. 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