email

[solved] Week 3 individual assignment country analysis  - Two Countries (Vietnam and Indonesia)

Week 3 individual assignment country analysis  - Two Countries (Vietnam and Indonesia)

 Assignment Overview:

You have already identified industry opportunity (buyer size and growth trends) and industry threats for your client.  Now you will turn to country level analyses to find countries with positive opportunity and trends and threats that will need to be mitigated.

Each individual on a team will use the PESTEL framework to analyze the POLITICAL, ECONOMIC, SOCIAL, TECHNOLOGY, ENVIRONMENTAL AND LEGAL opportunity and threat factors and trends in the external environments of two countries agreed to and assigned by the team in its week 3 work plan.

The grading rubric is here and posted in the Grading Guidelines and Rubrics module in course content.

Resources:

·        PESTEL and SWOT articles  in Required Readings 
·         How to write an Executive Summary.
·         Research Databases listed in Required Readings:

Assignment Objectives:  Your objective is to compare PESTEL Opportunity and Threat in two country markets; specify trends in those Opportunity and Threat factors that are likely to affect the country's business and economic environment over the next 3-5 years; and recommend one country as the better new market for your client.

Notes on Data analysis:

  1. Be sure you compare the same Opportunity and Threat factors/trends for each of the countries and ensure that any ratings, rankings or aggregate measures you use are measuring the same underlying factors in both countries.    

    2. Whenever you use a country rating from a source, include a brief summary of the main country conditions (PESTEL factors) that contribute to the ratings. For example:


  2. . "Business Environment" may be rated more favorable in one country. But what specifically is being measured: the POLITICAL, ECONOMIC, SOCIAL, TECHNOLOGICAL, and/or LEGAL indicators are more informative and may be more relevant to your client than the summary measure would indicate. 


    Similarly, if you use a “Risk” Rating, a higher risk rating may not be as important as the types of risk that are being aggregated into a summary ranking.

For example, if "Business Environment" or "Risk" is rated better in one country primarily because of legal protections for IP (which shape the overall better rating), but your client has no IP to protect in its expansion, then the more favorable ranking in one country is not relevant to your client, and both countries might be considered equally attractive IN SPITE of the better overall ranking of one..



Assignment format and requirements:

The Introduction to this paper should consists of (a) your statement of purpose; and (b) a description of your Client Company and industry (from your team's W2 analyses). 

The body of the paper (approximately 10-15 pages double spaced) should be organized around Opportunity factors and trends first, and then Threat factors and trends:

I.        Opportunity factors and Trends.

       A.   Economic Market Opportunity and potential growth: ALWAYS START WITH THE $'S WORTH OF OPPORTUNITY!

As an initial comparison, you can start with macro level measures from Five Year Economic Forecast, including GDP and Personal Disposable Income (PDI) as indicators of ECONOMIC opportunity—the Buyers’ potential ability to purchase your company's product/service.   However, you should try to get as close as possible to indicators of opportunity for  your client's particular product/service;: For example, if you are selling software to hospitals, look for health care spending;  if your client is selling cybersecurity services, look for cybersecurity spending to compare across the two countries.  But remember that you must have the same information for both countries in order to compare them!

B.   Opportunity support factors are those PESTEL factors and trends that support the Economic market opportunity; e.g..,

1.       Political support may consist of existing or pending trade agreements or positive trade relations with the client’s home country; government policy that supports funding/advancement of your industry
2.       Economic support may consist of tax benefits, low or trending lower tariffs;
3.       Social support may consist of favorable attitudes towards U.S. companies or growing interest in your client's type of product (e.g., green technology)
4.       Etc…. for Technological, Environmental, and Legal support factors and trends

5.  Include the opportunity to support your client's operational needs (the needs that your team identified in your company profile)


II.     Threat factors and trends

Country PESTEL Threats and trends should be ranked  by degree of threat, along with  an explanation for your  assessment/ ranking; e.g., if you consider political instability  to be a greater threat in the country  than currency fluctuation (Economic threat),  explain why. 

III.    The Opportunity and Threat factors/trends can be shown in a summary table, but the text should explain how you weighted the factors/trends in order to compare Opportunity and Threat in the two countries.

  • Include under the appropriate PESTEL the Threats to your client's operational needs.  For example, if a technologically sophisticated workforce is required for your client to operate successfully in country, a country that lacks such social (education) support will be a significant risk for your client's operational success.

IV.     Conclude with a summary recommendation for one country as the better entry option. 

VI.   Write an Executive Summary for the entire paper (include company and industry description).  Aim for approximately 2 pages, double spaced.

VII. Include a Title Page (with your name!) and a Table of Contents placed just after the Executive Summary. Pages should be numbered, starting with page one as the Body of the paper (your statement of purpose), The Executive Summary can be unnumbered or numbered as i, ii...but it is not a part of the body of the paper.

VIII. Include a Reference list, using proper APA format for references and all in-text citations.

 



Need customized help? Order now
user img

Plus


15-06-22 | 03:09:51

INTRODUCTION
The PESTEL analysis involves the evaluation of political, economic, social,
technological, environmental as well as legal forces and their effect on the existence of an
organization. The framework is used to spot the treats and weakness which constitute in
the SWOT analysis. The paper will use the PESTEL model to examine factors within
Vietnam and Indonesia which can make a client to set up a firm in the region. The
countries are situated in the Asian, and therefore the analysis is based on same measures.
PESTEL model has an aim of finding out the real external factors distressing an
organization; analyzing them, as well as examining the opportunities and threats which
can be used by an investor.
The study will be aimed by steps which involve managers to find the best results
for the evaluation of PESTEL model. The process entails gathering relevant information
concerning the political, economic, social, technological and legal changes within a
particular country (Aithal, 2016). The process of collecting information might take time
as one needs to know what elements are to be observed in the society, politics as well as
economy. The paper will further examine the SWOT matrix which spots the strength,
weakness, opportunities and threats within a region.

PESTEL ANALYSIS
Political
Entails the degree in which a government gets involved in the matters of an
economy. The effects of the government intervention in the economy have effects in the

ANALYSIS OF MARKET ENVIRONMENT 3
running of industries. The political factors that need to be watched include; the stability
of a country, trade regulations, tax policies, corruption levels, competition regulation
among others. Indonesia is a republic country whose rules and regulations are laid on the
foundations of Roman-Dutch. Their company law states that an organisation should exist
as a separate legal entity under which the directors embody the company. Indonesia has a
positive attitude toward international trade making investors start a business in the region.
Vietnam has a committed government in matters concerning business (Sterling, 2006). It
has created a fair and conducive environment for foreign shareholders. Measures have
been implemented to improve the legal structure as well as organs that relate to business
formation and investments.
Consequently, Vietnam is a communist state but the allegations are denounced by
scholars. It is because of her attitude on the policies regarding international trade. The
country is concentrated more on civilising its own business rather than international
trade. A country that is more predominant in promoting international trade is likely to
develop more economically as industries will experience a global market leading to more
profit. Industries in Vietnam and Indonesia enjoy government support regarding
providing security, putting in place regulations to protect infant industries which have
attracted many investors.
Economic
The economic factors are the determinants of the performance of an economy.
The elements constituting to the economic factors include the growth rate, labour costs,
price fluctuations, inflation, unemployment trends, interest and exchange rates, monetary
policies among others (Soliman, et al 2014). These elements can be sub-categorised into

ANALYSIS OF MARKET ENVIRONMENT 4
macro and microeconomic factors. Macro-economical factors entail the control of
demand within an economy. The use of taxation, as well as interest rates, may be used.
Micro-economical, on the other hand, deals with how individuals within an economy
spend their incomes.
Indonesia is a developing nation and measures have been undertaken by the
government on national resources which have made the GDP to increase over the past
years. Consequently, the country being a centre of natural resources, it produces oil and
natural gas having been ranked 23 and on position eight respectively. The per capita
income of Indonesia was $3900 in 2009, and the increase has been noted over the years.
The Indonesian Rupiah has an inflation of 3.80 percent are compared to the Vietnamese
Dong having an inflation of 2.80 percent. The economy of Vietnam has held the third
position in the annual GDP growth following China in Asia. The per capita income of
Vietnam in 2009 was $1052 which was viewed as an increase from the previous of $220.
Furthermore, the wealth of Indonesia in 2010 was U$$ 3.015 which was higher
than that of Vietnam which was U$$ 1.174. It, therefore, means that the GPD of
Indonesia was increasing due to the favourable economic climate. Following a trend in
the inflation of Indonesia from 2010 to 2012 show that in 2010 it was 7.0 but later in
2012 it was 5.5. The downward trend in the figures shows that inflation has been
reducing over the years. In Vietnam, the inflation was 11.8, and in 2012 it reduced to
8.0. Both the countries display a downward trend, but Indonesia is more compliant. An
increase in the inflation rate shrinks the development of a country thus having a negative
effect on the development of industries.

ANALYSIS OF MARKET ENVIRONMENT 5
Furthermore, public debt which is a component of conservative forces determines
the treats and opportunities within an external environment. Public debt is the liability a
country owes to lenders. Having the analysis of public debt of Vietnam and Indonesia, it
can be noted that Indonesia has a debt of 26.4 percent in 2010 while Vietnam had 56.7
percent. Consequently, the effects of debts can be shifted to the performance of an
economy over an extended period. It should be noted that a higher foreign debt hinders
development as the tax on commodities would be raised with the aim of paying off the
debt. For that case, industries are likely to undergo a raised cost of production leading to
minimal profits.
Social-cultural
These factors scrutinise the people’s attitude towards a certain market. They are
also referred as demographic aspect which entails issues such as the level of education;
take of the community towards imported goods, purchasing habits, religion and beliefs,
population among others. Vietnam has a current population of 95 million displaying
decreased levels of unemployment from 2.11 to 2.09 percent. It, therefore, means that a
larger population is employed and can afford to sustain their families. Indonesia, on the
other hand, has a current population of 255.4 million having the rate of unemployment
reduced from5.61 to 5.33 percent. A larger population within an economy will always
provide the labour force to various firms as well as increase the purchasing power of the
commodities being produced.
Vietnam still experiences cultural influences of Confucianism teachings which
emphasise the role of the family (Eliot, 2016). The influence of westernisation has
increased the demand of people to use goods, enjoy leisure and even travel local and

ANALYSIS OF MARKET ENVIRONMENT 6
abroad. Education is regarded important in the society which results in the ideas of the
creation of the status quo within the nation. The illiterate are mainly female occupying
the remote areas as well as increasing the dependency ration within the country. The lack
of funding as well as the use outdated techniques in teaching is said to be the major
challenge facing Vietnam’s education.
Indonesia can be acknowledged for her quality education. The Indonesia’s
National Board of Higher Education claimed that it is on the move of streamlining the
education system of the country to produce quality skills for the country. The education
level of Indonesia is advanced than that of Vietnam which is a factor to consider before
setting up a firm.
Technological
It involves recognising the need to have a more efficient technology in the mode
of producing goods. Obsolete technology delay the development within an economy and
the need to identify the need of having technology can end up saving the day. The basis
of technological factors includes; the level of infrastructure, the need to have research on
development as well as introducing technology in industries. The level of technological
advancement in both Vietnam and Indonesia has improved since the commencement of
the 21st century. The market of IT software’s and hardware’s has increased from 18 to 21
percent in Vietnam and 19.3 to 23 percent in Indonesia.
The major ports found in Vietnam are relatively small having old facilities as well
as providing poor services. In 2011, Vietnam was relying on the shipment of Asia’s
largest port to obtain goods. The matter will always affect the development of industries

ANALYSIS OF MARKET ENVIRONMENT 7
within the country as investors will have a fear of losing their products. Despite the fact
that Indonesia has ports and airports, they do not measure international standards. The
incorporation of technology in the production of goods within these countries has largely
helped in the mass production of goods within a short time. Moreover, technology has
brought about specialization and division of labor within firms.
Environmental and geographical
The formation of industries should be done with no intention of polluting the
environment. It is, therefore, the obligation of the government to penalize those who have
an intention of polluting the environment. Measures such as waste dumping laws,
environmental protection as well as educating people on the needs to have a clean
surrounding should be emphasized. Vietnam is a country that lies within the tropical; it
takes the S shape. Its eastern border has more than 3000 km coastline adjoining East Sea
and the Pacific Ocean. Vietnam shares a border with China to the North while to the
West it borders Cambodia and Laos.
The location is characterized by the monsoon climate as well as experiencing
natural disasters such as typhoon. These climatic conditions at times may be discouraging
for setting up an industry in Vietnam. Indonesia is constituted with a larger percentage of
people living in islands. The geographical location of Indonesia makes it experience
natural catastrophes such as the December 26, 2004, earthquake which triggered a
tsunami in the Indian Ocean resulting in 155000 deaths. Possessing coastal areas,
Indonesia needs to develop ports which enhance the shipment of goods.
Legal

ANALYSIS OF MARKET ENVIRONMENT 8
The factor explains the need to understand laws and regulations within a specified
region. It helps investors to avoid preventable cost in the process of establishing an
organisation. The legal factors include; the advertisement standards, consumer rights,
favourable opportunities among others. These factors are essential to be understood by
industry before venturing into a particular region. Vietnam lacking an independent
judiciary affects their legislation to be poor and unsteady. No proper laws are stating the
consumer right as well as laws regarding foreign investors. Although the nation is trying
the best in passing laws that would encourage foreign shareholders to invest in their
economy, the government is still interfering with the agendas of industries.
Conducting business in Indonesia for a foreign investor is a bit complicated. Their
legal environment is complex as they lack ample and framework of the laws.
Consequently, the new laws introduced have not yet been implemented which has created
a gap between enactment and employment of laws. Despite these drawbacks, investment
licensing has been simplified hence reducing the bureaucratic of setting up a business.
The understanding of the PESTEL will thus be helpful in the identification of
strength, trends as well as threats that need to be taken account to set up an industry in
Vietnam and Indonesia.

SWOT analysis
The approach was developed by Albert Humphrey, and it has been assumed by
organisations when making decisions. The model examines four elements that are;
strength, weakness, opportunities and threats within a business .

ANALYSIS OF MARKET ENVIRONMENT 9
The SWOT analysis will examine the economic changes, political situations,
social instability, infrastructure as well as the ease of doing business in Vietnam and
Indonesia. The analysis will be done based on the diagrams below where the smaller the
portion of an element the better position of the country while a larger portion reflects a
dangerous situation.

Vietnam

Economic changes
political risks
Infrastructure
Ease of doing business

a) Economic changes
Changes were happening within an economy are determined by inflation, wealth,
balance of payments as well as public debts. The 2010 analysis of Vietnam and Indonesia
shows that the levels of inflation are lower and the market size is greater in Indonesia as

Indonesia

Economical changes
Political risks
Infrastructure
Ease of doing business

ANALYSIS OF MARKET ENVIRONMENT 10
compared to Vietnam which had an inflation of 8.0 percent while Indonesia has 5.5
percent. The increased trend of inflation in Vietnam is, therefore, a threat for setting up a
business in the region (Bull, et al 2016).
b) Infrastructure support
It entails components such as physical infrastructure, health, education and labour
within the internal region such as ports, airports and communication links. Vietnam has
an opportunity within its market as it is more developed than that of Indonesia. Vietnam
has a 7.38 percent lower than that of Indonesia which is 7.88 percent. The pollution rate
in Indonesia seems to be a threat for investors who want to set an industry in the region.
An example is Bali and Jakarta which is mostly affected by pollution.
c) Ease of doing business.
It involves things such as the protection of investors, starting a business,
registering a business as well as liquidating a business. In general, Vietnam has a 6.0
percent compared to a 7.0 percent of Indonesia. Indonesia has a weakness associated with
starting of business. Research indicated that out of 183 countries in the world, she
managed position 155 about the easiness of starting a business. Vietnam, on the other
hand, was position 100 which indicates to be strength of the country.
d) Political risks
Concerning the political risks, Indonesia has an opportunity for her jeopardy is
much lesser as compared to Vietnam. The political system of Indonesia is stable due to a
decentralised and a democratic government. Consequently, the Vietnam’s system is
relatively stable which can also support the growth of the industry.

ANALYSIS OF MARKET ENVIRONMENT 11

Vietnam’s Business atmosphere
Strength: Vietnam is experiencing a stable political climate whose leadership is
committed to promoting development. The fact that the economy is growing as an
exporter, the income has risen, opportunities within the market have increased as well as
tourism sector has improved (Molnár, et al 2016). Consequently, Vietnam has been able
to bring down her foreign debt as well as exploit the natural resources efficiently.
Weakness: Vietnam is experiencing a weak market and financial services. The
challenges in economic policies have caused inflation, trade deficit and lack of
confidence. Also, government and administration changes are one-dimensional and slow
to undertake.
Opportunities: Infrastructure of the country has made great efforts which are
attracting customers. The fact that attitude of consumers has increased has made private
use to develop thus increasing the demand of industries. Foreign organisations dealing
with financial sector tend to improve which will then improve the infrastructure.
Threats: Rapid growth in the economy will lead to the unstable use of natural
resources. Consequently, the weakening of her relation with China over a territory in
South China can disturb their economic relationship. Moreover, the over-dependent of
the economy towards the water of River Mekong could create chaos in case the river was
to be disrupted.

Indonesia’s Business atmosphere
Strength: The country is endowed with natural resources making development
possible. Strategically placed which gives her support from strong economic countries

ANALYSIS OF MARKET ENVIRONMENT 12
such as Japan and Australia. Consequently, the economy of the country is sustainable due
to the demand from internal consumers.
Weakness: having a weak local education which affects to poor government and
certain labour force. Corruption and inadequate infrastructure discourage setting up an
industry in Indonesia. Logistical drawbacks affect importation and exportation of goods.
Opportunities: the existence of a geothermal resource which is being expanded.
More importantly, the investment in infrastructure by the government will create job
opportunities as well as the creation of Companies.
Threats: corruption, security problems, weak infrastructure are on their rise and
have made foreign companies not to invest.

Recommendation
Based on the analysis of the PESTEL and SWOT model, it can be argued that in
case the trends discussed would be maintained in the next three years, then Vietnam
would end up being the best choice for setting up an industry. The total business score for
the two countries in 2011 was 5.80 and 6.18 percent respectively. It would, therefore, be
recommended to set up an industry in Vietnam than Indonesia having understood the
strength, weakness, opportunities as well as threats in each region.

Executive summary
The design-build firm is a providing organisation which has an aim of crafting
modern designs. The vision of the Company is to encourage economic growth within
various regions in the world. The goal of the firm is building a world which is

ANALYSIS OF MARKET ENVIRONMENT 13
comfortable which clients would appreciate. Consequently, the company will support
workers in enhancing their knowledge and their personal growth while they are working
together.
The firm is dealing with designing tenders to clients regardless of nature. The
company has a comparative advantage within the market as customers attitude has been
changing within years. The market of the firm has grown as individuals have seen the
advantage of designing their homes in a modern fashion.


Related Question