On this paper we will study the case of an organization producing fridges referred to as Kool Kitchen. Because the director of worldwide advertising for Kool Kitchen, I’m evaluating a European nation – Cyprus, and an Asian nation – India with a purpose to broaden there. This will likely be achieved utilizing analysis instruments resembling PESTLE evaluation and in addition by recognizing and evaluating the Alternatives and Threats for Kool Kitchen in every nation.
Kool Kitchen was based in 1997 in London, U.Okay. by John Doe. Kool Kitchen is a producing firm for kitchen home equipment resembling fridges, freezers, ovens and dishwashers and washing machines, however is primarily identified for fridges. It’s at the moment one of many largest fridge manufacturing corporations and high quality pioneers within the U.Okay. with costs starting from medium to higher class. Other than the UK, the corporate has additionally expanded in Eire and France and is at the moment exploring alternatives in Asia and Europe (India and Cyprus respectively).
Tips on how to consider the 2 international locations
When corporations need to globally broaden their exercise, it’s essential they do some market analysis and environmental evaluation (Zekiri and Angelova, 2011). With a purpose to try this, they must comply with the PESTLE evaluation mannequin and a part of the SWOT evaluation (solely Alternatives and Threats).
PESTLE is an acronym for Political, Financial, Sociological, Technological, Authorized and Environmental and people phrases signify the elements that represent the analysis methodology. PESTLE evaluation is a helpful methodology for evaluating and understanding the setting inside which the group is working, the dangers that exist available in the market and the potential of the group (Morrison, 2010a).
SWOT evaluation is a instrument used to apprehend the Strengths, Weaknesses, Alternatives and Threats which can be concerned in a enterprise. The strengths and weaknesses are inner elements to the group, optimistic and adverse (or doubtlessly adverse) respectively, whereas the alternatives and strengths are exterior elements, past the organizations’ management (Morrison, 2010b). All 4 elements should be considered when a company needs to realize sure goals, with a purpose to make the suitable choices and pursue the right path. On this paper we are going to solely deal with Alternatives and Threats that every nation represents for Kool Kitchen since we’re evaluating the elements exterior to the group.
PESTLE evaluation for Cyprus
Cyprus has a sure political stability, though the island is split in half for the reason that Turkish invasion in 1974. The northern a part of Cyprus is at the moment occupied by the Turks. In 1983 the Turkish occupied space declared itself “Turkish Republic of Northern Cyprus” however it is just acknowledged by Turkey. The one widely known state is the Republic of Cyprus. (CIA Factbook, 2012). There may be nonetheless Turkish army presence within the occupied a part of the nation which accounts for a sure menace.
Regardless of its personal political stability, Cyprus is geographically positioned very near Egypt, Israel and Lebanon, which is a really unstable area, typically placing Cyprus in a compromised place as properly.
Cyprus has joined the European Union (EU) together with 9 (9) different international locations in 2004 as a part of the widening of the EU. Due to this fact, ever since, commerce with different international locations inside the European Union has been simpler.
Cyprus is at the moment deeply affected by the worldwide financial disaster largely due to the financial scenario in Greece. Cyprus has a direct relationship with Greece: two of the most important banks in Cyprus are among the many largest holders of Greek bonds in Europe and the primary nation Cyprus imports from and exports to is Greece. Additional to the world monetary disaster, an explosion in July 2011 at a naval base precipitated energy outages all around the nation, thus triggering a collapse within the coalition authorities and additional financial issues.
The CIA Factbook states that based on estimations in 2011, 10.2% of the nation’s exports and 9% of the nation’s imports are achieved with the UK, thus making the U.Okay. the 2nd largest export companion and the third largest import companion for Cyprus.
Though the Cypriot economic system is in recession and the customers’ shopping for habits has develop into considerably extra conservative, meals is important. Due to this fact, the cuts within the meals space usually are not so massive. What’s extra, when occasions are so troublesome within the economic system, there’s a tendency for individuals to eat much less out and eat extra in. That is good for a fridge firm.
Nevertheless, the development and improvement sectors are down. Fewer new homes and residences are constructed, thus the already current properties will typically not purchase a brand new fridge except they’ve issues with their outdated one.
Due to the financial disaster, an increasing number of single younger individuals don’t transfer out from their dad and mom’ home, therefore no new properties are created and no new fridges are wanted.
Cypriots have gotten extra vitality acutely aware since electrical energy charges have dramatically elevated because of the native Electrical energy Authority’s deficit after the explosion in 2011. Therefore Cypriot customers are searching for home equipment which can be extra vitality saving and environmentally pleasant.
The extensive use of Web sources has made it potential for Cypriot customers to seek for all of the obtainable merchandise available in the market, examine them and select what the patron feels fits his or her wants. There may be, due to this fact, fierce competitors with all of the obtainable fashions from completely different corporations.
Cyprus has a “combined authorized system of English frequent legislation and civil legislation with Greek Orthodox non secular legislation affect” (CIA Factbook, 2012). The truth that Cyprus partly follows the English frequent legislation makes it simpler for corporations from the UK to cope with Cyprus.
They’re at the moment attempting to change taxation legal guidelines in Cyprus, which may discourage international organizations from coming into the Cypriot market. However even that so, Cyprus nonetheless has one of many lowest company tax charges (10%) and VAT charges (17%) in Europe (Wikipedia).
Increasingly Cypriot customers are environmentally acutely aware and they’re searching for vitality saving, environmentally pleasant home equipment with a purpose to keep away from costly electrical energy payments; therefore, there’s a appreciable flip in the direction of new, revolutionary, cost-cutting fridges, dishwashers and washing machines.
PESTLE evaluation for India
India has signed the Local weather Change – Kyoto Protocol together with different environmental agreements and laws and is, due to this fact, topic to environmental management (CIA Factbook). This may very well be a great alternative for vitality saving fridges and different home equipment.
India has diminished management on international commerce and funding (CIA Factbook) which is sweet for international organizations that want to enter the Indian market both to commerce or to speculate.
In November 2008, terrorists from Pakistan organized a collection of assaults in Mumbai, India’s monetary capital.
Corruption scandals that befell in India have slowed the legislative work in 2011 and thus, little financial reform was made (CIA Factbook).
In keeping with the CIA Factbook on India, though India rebounded from the worldwide financial disaster in 2010, in 2011 the nation’s financial development slowed due to excessive inflation and rates of interest and there was little progress in financial reforms.
For imports and exports, India largely offers with China, the US, the United Arab Emirates, Hong Kong and Saudi Arabia (CIA Factbook).
In keeping with the CIA Factbook, India has a younger inhabitants. Thus there may be chance and potential for extra properties to be created, therefore extra new kitchen home equipment -and refrigerators- will likely be wanted.
CIA Factbook goes on to say that India has urgent issues of vital overpopulation, intensive poverty and widespread corruption.
There are over 60 million web customers in India who’ve the likelihood to go looking and find out about Kool Kitchen’s merchandise in case they need to discover out extra in regards to the high quality and the traits. Nevertheless, this isn’t sufficient individuals if we think about that the inhabitants of India in July 2012 was estimated to be 1,205,073,612 (CIA Factbook).
As a former British colony, India’s authorized system is the “frequent legislation system primarily based on the English mannequin” (CIA Factbook), thus making commerce with the UK simpler.
India has environmental degradation. In keeping with the CIA Factbook it’s the 4th highest nation on the planet for carbon dioxide emissions from consumption of vitality with 1.696 billion Mt.
Alternatives and Threats in Cyprus and India
Each of the international locations examined on this paper (India and Cyprus) are former British colonies and their authorized programs are partly following the English frequent legislation. Along with that, Cyprus can also be a member state of the European Union. Commerce amongst EU international locations is less complicated and Cyprus offers rather a lot with the UK when it comes to imports and exports. This case may work in favor of Kool Kitchen since it’s a UK firm and commerce with these international locations may very well be facilitated.
Moreover, the diminished management that India has on international commerce and funding may additionally current a possibility for Kool Kitchen there.
The worldwide financial disaster has affected the patron habits of Cypriots. Younger persons are an increasing number of reluctant to depart their dad and mom’ dwelling and reside on their very own; the development trade is down; therefore few new properties are constructed and this has impacted the gross sales of kitchen home equipment generally.
There may be fierce competitors within the fridges market in Cyprus in addition to in India. Kool Kitchen must compete with long-running high quality fridge producers which can be well-known in each international locations of curiosity, resembling Electrolux, Whirlpool, Samsung, LG, Sharp, Siemens and Bosch amongst others.
The political local weather in India may very well be characterised as unstable, since terrorist assaults occurred in November 2008 in Mumbai by terrorists from Pakistan. The political local weather in Cyprus is a little more secure, though there’s a Turkish army presence within the northern a part of the nation which poses a continuing menace regardless of the political efforts to reconcile the 2 components. What’s extra, Cyprus is geographically positioned in an space of additional political instability, since it is vitally near Egypt, Israel and Lebanon.
We’ve examined and assessed the exterior elements for the British fridge manufacturing firm referred to as Kool Kitchen with a purpose to entry the markets of Cyprus and India. This evaluation was achieved utilizing the PESTLE evaluation -looking on the Political, Financial, Sociological, Technological and Environmental elements that encompass the international locations in query, in addition to the Alternatives and Threats every of this nation represents for Kool Kitchen. The worldwide monetary disaster undoubtedly poses a giant menace throughout this time period for any firm that desires to make a brand new enterprise transfer, in addition to the fierce competitors, however there are additionally some alternatives and different environmental and technological elements that might work in favor of Kool Kitchen, ought to the corporate determine to pursue these new markets.