PEST analysis stands for political, economic, social and technological factors which are used to analyse a macro environment ,market decline or growth, potential before setting up a firm in that particular environment .
The output of the PEST gives a clear idea of environmental conditions so that firm can change its mission and vision accordingly. A positive result of PEST analysis gives a firm strong hold for doing business as it includes investment opportunities, strategic options, local business, markets etcâ€¦which ends in efficient run of business.
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PEST analysis for Acer in India and Germany:
Acer is one of the largest manufactures of computers, laptops, hand held’s, storage disks n displays. The head quarter of Acer is in Taiwan and it posted a net revenue of 19.9 billion US dollars in 2010. it has subsidiaries all over the world like Acer India, Acer corporation America, Acer computer Australia, pack bell,e-machine and gateway inc. In this pest analysis of Acer it shows all the factors in India and Germany for the business opportunities. India is one of the fastest emerging economics in the world with developing IT infra structure so extension n investing more in India will provide Acer a greater value and demand for the products. Germany is a developed country and biggest economics in euro zone and 70% of GDP is contributed by service providers. So investing more in Germany makes more sensible.
Political factor which affect the business can be the rules and regulations by the government towards the environment of business which is done by the computer manufacturing company Acer. Indian government and German government have positive attitude towards the Acer group. Because for the development of two countries IT sector has a big role. not only , this acer groups all products are very affordable for the people in two countries, and two government get more revenue through this IT sector, so this is the political advantage of Acer group.
POLITICAL STABILITY OF INDIA AND GERMANY
When analyzing the political stability of two countries we can see some instability in Indian government. This is because of changing of government in regular interval. But it will not affect the foreign investors because Indian government haven’t gone through a big change in foreign investment policies over this 20 years. German government is always stable, Because proportional representation from different parties (from small and large parties). Because of these reasons Acer groups are more likely to invest more and more money than which they had invested in this two countries.
WAR AND CONFLICTS
War and conflict is another political factor which affect the business. some times this war may cause break up in relation between the countries. Suppose if acer is from china and they had large amount of investment in india and germany,Because of the war between india and china. They will lose the whole amount of monet which they had invested. and vice versa in case of Germanys war and conflict sometimes will cause big lose for multinational business group like acer.
INTER-RELATIONS BETWEEN COUNTRIES
Inter relation between countries is also a political factor.if country like india and germany have good relation with taiwa (home country of acer)they will get good market in these two countries and because of the investment of Acer government get more revenue.inter relationship will be in different types,like interrelation between armed force and natural resources. two countries will get more benefit from this
HOME MARKET LOBBYING AND PRESSURE GROUP
Every countries have its on home market for every products. When analyzing the home market of Germany and India they have market lobbies in their countries like APPLE in germany and HCL in India’s these two countries will resist the new comers in the market .so they will give pressure to government to resist the other new companies from abroad by giving bribe for ministers and political leaders.So ACER will cross all this bridges to become more success full in every country.
Economic factors are the major concerns of Acer because demand, price levels, cost and profits depends on it. Factors like economy, GDP growth, taxation, interest and exchange rate, inflation etc… Plays a vital role for the growth of a firm. These factors are important to achieve short and long term goals in international environment of Acer.
GDP growth of India is increasing at the rate of 8-9% per year, in Germany it is under .50% which is lower when compared to India. As India is emerging market it provide a big business opportunity.
Interest and Inflation rate:
In India Interest and inflation rate is 5.50% and 9%, whereas in Germany it is 1% and 2%. These rates in India are major concerns for company like Acer.
Tax rate for firms in India and Germany remains the same 30-33% but VAT in India is 12.5% but in Germany it is 19%.so there is a slight advantage for Acer in India over Germany in taxation.
Business and consumer confidence:
Business and consumer confidence levels of a country helps in development of firm. In India business confidence level is 159 and consumer confidence level is 73. But in Germany it is 111 and 18 respectively.
Government spending is the spending of money to that country related to GDP. In
both these countries government spends more money than it getting in. Budget deficit equivalent to 5.10% of GDP in India, whereas in Germany it is 3%.
Jobless rate in India and Germany are moreover same. It is 8% in India and 7.5% in Germany.
Currency and exchange rate:
The currency of India is rupees but in Germany it is euro. So operating cost of India is lower for firms.
Per capita income:
Per capita income of Germany is 25473 US dollars. In India it is just 718 US dollars which is very low when compared to Germany.
Social factors mainly include soci-cultural factors of different countries. Each country has its own socio-cultural factors. The main social factors that includes in a country are consumer attitudes, education (literary rate), population, cultural aspects, living standard and demographics
Marketing Strategy of Acer
As India and Germany exhibit more or less same level of target group, the number of difference in the marketing strategy it take into account is through
Online shopping through companies authorize website, other networks like e-bay
Through companies authorize outlets, shops
Festive season the products are sold for discounts, some vouchers & after sales service
For a company like Acer they value their consumer very much. The consumption pattern of a country mainly depend upon their liberalisation, buying behavior of youngsters, rapid increase of nuclear families. so the company has a good growth in India and they will get lot of consumer. In India and Germany the new generation doesn’t mind in spending money for better facilities and new products.
So Acer has a got a good number of consumers in India and Germany
Germany is standing 21st country in literary rate and India is standing 149th rate. India literary rate is 66% and Germany it is 99%.If the consumers in a country has good literate rate they may use modern gadgets. They may use the update versions. Most products of Acer is depending upon the adults and youngsters.
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Population of India is 1,027,015,247 persons and India stands second in the world after China. Although India occupies only 24% of the total world’s area; it supports over 15% of the world’s population. Germany population is 8,154,500 persons it stands 10th rank in the world. If the population is more there is good for the company Acer they may get lots of consumer. So Acer can concentrate more on India as they may get a large number of consumers.
Every country has got their own culture .The cultural factors include geographical area, demographic ,economy,religion.The Indian economy is the world’s 11th largest economy by nominal GDP and the 4th largest by purchasing power. Germany is the most popular European country and 82.4 million inhabitants including 7.3 million foreigners. So it is good for Acer Company to concentrate their sale in both Germany and India. Both the countries have good purchasing power.
India living standard is not good as Germany. The standard of living of India is very low about 35% of people live on less than US $1 a day. But know the growth of various sectors like IT, Real Estate, ITES, has led to the improvement of living standard. Germany living standard is high when compared to other western countries. When living standard improves people will prefer more electronic good that is good for Acer.
India is the 2nd populated country in the world. India has more 50% of its population below the age of 25 and more than 65% below the age of 35.In Germany 16 million people are of foreign/immigrant .so it is good for the company Acer to concentrate their sales on the youngsters
COMPETING TECHNOLOGY DEVELOPMENT
Technological developments are one of the formulas which is essential for the success of any industry and the country. In this case Acer companies technological aspects is excellent than its competitors in the market. Technological developments not only means renewal of technology but also innovations of new technology.
Research funding means granting money for the research works, it may be by government or company itself. Acer is a multinational company and they don’t want government money for the research. In Germany, government gives money for the company for the research if it is helpful for the public. Acer invested millions of money for research works in different countries.
Technologies are not stable always it will change time to time. This replacement technologies are more in bi-medicals,mechanicals,electronics etc.In case of Acer manufactures, they will always change the technologies and research for good one then only they can stand stable in the field market.
INFORMATIONS AND COMMUNICATIONS
Now the world is going through the golden age, because earlier this type of communication is not in the world. New technologies paved the way for this situation. These communication facilities are very helpful for the countries to develop in very large way. By use of internet and 3G system we can see and communicate with other people living in other country this is the success of new technology and
communication system. In communication base Germany is far better than India
Innovation is the process behind the success of every industry and every nation. Everyone in the industry have the potential to find something .but the top management will not give opportunity to prove that ability. but the things are now changed, every business firm like Acer now give opportunity to workers to prove the ability of them, and for that they uses brain storming method.
From the above report we can conclude that Acer products are continuing to grip up with the competition from the rivals and making strategic analysis for making subtle business strategies to make it more enriched with top technological boost in its product in both the countries India and Germany. The Acer company has got the stability in political,economical,social and technological factors that prevails in the business environment of the country .By producing innovative products they got to survive in the market efficiently.