PESTLE Analysis - Doing Business in Australia

8/11/2019 PESTLE Analysis - Doing Business in Australia

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Group Members

Swapnil Baikerikar - 04

Avanti Darade12

Sayali Phatak44

Tushar Sadhye47

Nikita Watve - 55


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What does PESTLE Analysis mean?

Its Framework used to scan the organization's

external macroenvironment.

Letters PESTLE stands for-

I. PoliticalII. Economical

III. SocioCultural

IV. Technological

V. Legal

VI. Ecological


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Political Environment

Meaning- Political environment refers to the stability ofthe political environment & the attitudes of political

parties/movements.

This manifest in government influence on tax policies, orgovernment involvement in trading agreements.

In case of Australia, it is a liberal-capitalistic democracy.Here, the state keeps interfering substantially in theeconomy through various roles; for instance parliament

might decide to set up importation taxes aimed to protectthe national economy or environmental protection lawsaimed to protect the natural heritage of the country.


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How does Government intervene in International

Business? (Home country i.e. India)

Tariffs

Subsidies

Import quotas & VER(voluntary export restraints)

Currency controls

Local content requirements

Anti-dumping rules

Export financing Free- trade zone

Administrative policies


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Why businesses choose Australia (Sydney &

New South Wales)- Host Country

Sydneybusiness & financial capital

Strength , Stability & open Government

Time zone advantage

Favorable tax system

Competitive business costs

World class infrastructure & communications


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Economical Environment

Meaning :It refers to economic conditions, systems,

policies of respective country.

Economic factors that commonly affect businesses

include consumer confidence, employment, interestrates and inflation.

In case of Australia, it is one of the largest capitalist

economies in the world. It is dominated by service

sector. Economic growth is dependent on mining and

agriculture sectors.


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How does economic factors ( of home country

i.e. India) determines business conditions)

Economic condition

Economic system

Government Policies

Industrial policies Import export policies

Demographic factors:-

I. Population

II. Income levelIII. Age

IV. Demand etc.


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Why to do business in Australia? (host country)

Ease of doing business index: 10th rank

Continuous economic growth

Low unemployment

Contained inflation

Very low public debt

Strong and stable financial system

Open market with minimal restrictions


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SOCIO CULTURAL ENVIRONMENT

MEANING:

A set of beliefs, customs, practices and behavior that

exists within a population.

International companies often include an examination ofthe socio-cultural environment prior to entering their

target market.

Social environment has a great influence on the

international business environment.

Culture is a sum total of mans knowledge, beliefs, art,

morals, laws, customs and any other capabilities and

habits acquired by man as a member of society.


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Social environment

Collection of diverse people: Australia is a collectivity of

diverse peoples living in a relatively young society.

No official Religion: Anglicon 26.1%, Roman Catholic

26%, Other Christian 24.3%, Non-Christian 11%, Other

12.6%

Increase in level of Education: Today, Australians are

more highly educated than ever before.

British Australian Tradition: There has been a focus on

assimilating different cultural groups into the dominant

British Australian traditions.


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Cultural Environment

Factors that have shaped the national culture include the early small

female population relative to that of men, which is said to have laid

the foundations for a widespread ideology of mateship.

The involvement of Australian and New Zealand troops in World

War I has been characterized as the symbolic birth of the nation.

Australia is a Multi-Cultural Society.

English is the primary language used in Australia.

Within the framework of Australias laws, all Australians have the

right to express their culture and beliefs and to participate freely in

Australias national life.


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Technological Environment

Technological factors include technological aspects suchas R&Dactivity, automation, technology incentives and the rate oftechnological change. They can determinebarriers to entry, minimum efficient

production level and influence outsourcingdecisions. Furthermore,technological shifts can affect costs, quality, and lead to innovation.

Research funding :- Gross Expenditure on R&D was $30 billion in 2010-2011.There are a number of government grants and funding programs availableto assist Australian businesses develop and commercialize their IP, such as;

Export Market Development Grant

Innovation Investment Fund (IIF) R&D Tax Incentive, etc
http://en.wikipedia.org/wiki/R%26Dhttp://en.wikipedia.org/wiki/Automationhttp://en.wikipedia.org/wiki/Technological_changehttp://en.wikipedia.org/wiki/Barrier_to_entryhttp://en.wikipedia.org/wiki/Outsourcinghttp://en.wikipedia.org/wiki/Innovationhttp://en.wikipedia.org/wiki/Innovationhttp://en.wikipedia.org/wiki/Outsourcinghttp://en.wikipedia.org/wiki/Barrier_to_entryhttp://en.wikipedia.org/wiki/Technological_changehttp://en.wikipedia.org/wiki/Automationhttp://en.wikipedia.org/wiki/R%26D


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New Discoveries and Inventions

Here are some of the highlights of Australias GreatestTechnological Achievements.

Refrigerator

Electric Drill

Black box Flight Recorder Bionic Ear

Xerox Photocopying

Wifi

Lawn Movers Anti Hacking Software Kernel, etc


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Transport

There are many differing forms of transport operating in Australiafor carriage of passengers and goods. There is a general reliance onroad transport and the country is networked with about 900,000 kmof roads. Private road haulage contractors compete to some extentwith railway freight systems within and between states, particularly

for agricultural products and minerals transport to ports. The railnetwork consists of over 40,000 km of track in total. Publictransport is not as well developed in Australia as many other firstworld nations, for example none of the capital cities boast fullyfledged metro rail systems and while the capital cities are connectedto each other by rail services, they are not high speed services.

Passengers and freight are also transported extensively by airbetween the 450 or so airports and airstrips around the country,particularly for business travel.


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STEPS BEFORE SETTING UP OF

BUSSINESS

Registering as a foreign company

Obtaining business premises in Australia

Source of Finance

Exchange control


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Australian Business Taxes

CORPORATE TAX

Goods and Services Tax (GST)

Capital Gains Tax

Other business taxes


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Import and Export Regulations

Australia is a member of the world trade organization and has

undertaken not to raise tariff above level agreed in trade

discussions.

Businesses considering importing should be aware of

government regulations, duty taxes, permits that apply to

imported goods. Imports that do not meet these requirements

can be seized by the Australian Customs and Border Protection

Service.

Exports are rarely subject to any form of tax in Australia.


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Intellectual Property Rights

Patent protection

Trade mark protection

Copyright protection

Government Incentives and Grants:-

The Australian government offers a wide range of grant schemesand incentives to promote and develop foreign investment inAustralia.

The Australian Trade Commission (Austrade) is a dedicatedgovernment agency that seeks to promote and support productiveforeign investment into Australia. The incentives offered take a widevariety of forms including taxable grants, tax relief or the provision

of infrastructure services at discounted rates. Laws relating to competition and unfair trade practices


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Ecological Environment

Ecological environment refers to all living and non-living thing around uswithin which we live and work. People have a two way relationship withthe ecological environment. An individual lives and work is affected by theecological environment he or she lives in. At the same time ecologicalenvironment gets affected by the people in it.

Managers must take into account the ecological factors in their decision-making. By ecology one can understand the relationship of people andother living things with their environment, such as soil, water, and air.

Land, water, and air pollution is of great concern to all people. Land maybe polluted by industrial waste such as packaging. Water pollution may becaused, e.g., by hazardous waste and sewage. Air pollution can be caused

by a variety of sources, such as acid rain, vehicle exhaust fumes, andcarcinogens from manufacturing processes.


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Water: It's hardly surprising that on the world's driest

inhabited continent, experts are concerned about how

Australia looks after its water.

Climate change: It may be a global issue, but when

scientists across the world are asked what the effects of

climatic change will look like, they quickly point to

Australia.

Energy:Australians are replacing fossil fuels by

renewable powers like solar, wind, marine, etc.


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thank you

Documents

PESTLE Analysis - Doing Business in Australia