Macro Environmental Analysis Of Europe And China In An Essay. (70 Characters)

The Briefing here under Announcements specifies that the two markets to compare are Europe (EEC countries) and China (including Hong Kong and Macau). Macro environmental analysis of both is a central feature of the assignment, with a particular focus on four of the elements in PESTEL.

China, Hong Kong and Macau are different places, and the macro environmental drivers are not necessarily the same. The same applies to Europe (making a thorough macro environmental analysis somewhat difficult).

Accordingly it is suggested that with the former you focus on China only, while with the latter focus on just one of the four major European markets. Select either France, Germany, Italy or Spain. Exclude the United Kingdom, since it is leaving the European Community.  

R.M. Williams Company is a stylish leather boot manufacturing company for both men and women. It is one of the best leather boot manufacturing company in the Australia. The company has taken its decision to explain its international market but it is not sure about the zone. From exploration the company has come up with two regions one is Europe and other is China. The company will go through macro environment analysis of both these countries which will also include Hong Kong and Macau. After comparing both these region conditions, the company management will try to find out which region will be better for their business expansion.

R.M. Williams Company was founded by Reginald Murray Williams in back 1932. Reginald dedicated his years of experience to formulate new technique to form high quality boots for both men and women. The company had gone much deeper to understand the materials which can reshape the craftsmanship (Williams, 2018). In April 2013, R.M. Williams Company had sold equity share to LVMH group which is a French multinational luxury goods having headquarter in Paris. This group is currently in various product lines wine and spirits, specialist retailing, fashion & leather goods, watches & jewelry and perfumes (Stafford, 2013). The group has created own design pattern to get recognized all over the world. Presently R.M. Williams deals with clothing, leather goods and horse-riding apparatus at almost 50 retail stores in Australia. It deals footwear, counting boots, shoes, and footwear fittings for males and females; shirts, pants, T-shirts and polos, shorts, woolens, coverings and tops, and reliable for males; and fittings, counting belts and clasps, bags and folders, caps and lids, books and handouts, and gift cards .They have almost made their presence in cities like New Yoke and London (Issa, 2016). It deals merchandises through its numerous stores in Australia and intercontinentally, as well as online. 

Europe region is actually known for its democratic style of thinking and all the political parties are truly in favor of that. European Union is made of many countries like France, Germany, Italy, Sweden, Poland, Spain etc. It is also one of the strongest economic unions in the world due to combined efforts of these countries (Bargain, Dolls, Fuest, Neumann, Peichl, Pestel & Siegloch, 2013). Among them Germany act as democratic republic and their political system is mainly governed by legislature, the judiciary and the executives. While France is known as politically stable country and has always shown great respect towards leather industry. But BREXIT has disturbed the stable condition of the EU with Britain leaving this pact.

As Europe consists of almost 740 million people in their combined region, their GDP has truly made remarkable presence in the world business platform. In many cases it has been found that there are some countries in this union whose GDP is greater than average economy of the world. In economic forum Germany is the country which has largest national economy in whole Europe (Bivolaru, Andrei & Purcaroiu, 2009). It has also been seen that Germany recorded highest trade share of $ 310 billion in the world. While France in economy presence is behind Germany but still occupies sixth position in the world and in Europe it stands at third number. France is known for its diverse economy and chemical industry forms the key sector of its economy by providing support in manufacturing.

European Macro environmental conditions

Most of the countries in the European Union follows social model as common vision. Europe union mission is to provide high living standards and working conditions for their citizen. Under this model the focus is mainly made on welfare of the society in which they all are partners (Decoster, Loughrey, O'Donoghue & Verwerft, 2010). In case of social responsibility countries like Germany and France are very society and it is a general believe that social responsibility is not only duty of government but it is also the duty of the citizen which is a part of this system. They believe that all humans are equal and hence must be treated equally.

In technology Europe Union stands one of the most advanced groups of countries in the world who are known for their technical specialists. Expect few countries all the countries in the European Union are known for their innovations mainly Germany and France. These two countries have actually show the right meaning of quality and innovations to the world in almost all the industries it may be fashion, manufacturing or service. These country brands are not only demanded in only Europe but also have a vast market in the world.

Presently European countries are now on the path of green economy which is mainly related to nature protection and secure a healthy and safe environment for their citizens. EU is in a believer of carrying both environment protection and global business market hand in hand by imposing strict policy related to environment.

EU ensures that all the imported products in the European Union must be sold at a fair and stable price and it does not matter from where they are being imported. They use trade defense instrument according to which they protects the welfare of the local trader of European Union. Germany operates its trade through FEP under which the government regulates and subsidizes its policies with in the international competition (Woll, 2009). While France mainly focuses on reshaping it’s by forming a huge protectionist but it also believes in free trade policy because they feel that business is one of the basic requirements for development.

China is one of the greatest influential nations in the world. This nation is mainly governed by communist party of China. This nation is politically stable but also lacks of political freedom as compared to other countries in the world. Macau is having a political framework which is handled by people republic of China. This involves legislatures, government, judiciary and citizen of the country (Shilei & Yong, 2009). Macau shares special administrative status which helps in executing one country, two system policies. It also handles the foreign affairs and helps the zone the high degree of authority. While Hong Kong forms part of this political framework by its quasi-constitutional document. Hong-Kong operates its basic law, legislature and chief executive as head of the government.

China is known as the second largest economy of the world with a GDP of almost $ 13 trillion. China is also known as the manufacturing hub of the world and it has made its presence in almost every home present in the world by becoming home to goods exporter. China has a very key role in international trade and is also involved in world trade organization. Macau one of the cities of china is also known as business place (Song, Sun & Jin, 2017). The economy of Macau is totally based on the export and gambling related tourism. Macau is presently serving a GDP of $51.8 billion but it still dependent on china for its food, water and energy and also it is linked with the Hong Kong for exchange of raw materials. Macau is also a partner in world trade organization and it is service its citizen with free education program (Bao, Zhao & Zhu, 2012). While economy of Hong Kong is in very must better state as compared to Macau because it has become the place for various companies headquarter. Hong Kong is in total believed of business as the only key for the growth of any state. Economy of Hong Kong usually expands by the percentage of 3.5 year after year.

Political

China is very much concern to the social aspect of the nation because its previous situation was good with the society which has given rise to various issues. Hence china has truly altered its focus from only profit making to solving social cause. China has introduced a system which will help their citizen to live a health and secure life with high standards. Unlike other European countries the china has a huge income differences between their citizens, hence they are right now focusing on health aspect. Both Macau and Hong Kong are on the same path of social responsibility.

China has really generated drastic change in their technology in both the field of informational technology as well as manufacturing technology. China lacks behind from many countries in information technology but it has positioned itself strong in manufacturing segment (Zheng, Li, Tian, Zhu,  Li,  & Zhu, 2012). In china Shenzhen act as the technology hub and is far better than Macau and Hong Kong which are known for only export and tourism.

As China is known as the manufacturing hub of the world so it will naturally add on negative impact on the world environment. In many case it has been notified that China and India are the two main countries for promoting pollution. To change this image the China government has imposed strict rules related to environment and are taking all necessary action to safe guard the environment. Same vision is now being followed by all the cities of the china including Macau and Hong Kong.

The china has reformed its trade policy from the experience of previous years and now in the believer of free trade policy (Lichtenberg & Ding, 2008). Both Macau and Hong Kong share the free trade policy with many of the neighbor countries which they believe as a trade partner.

As per study it has been found that Asia is the highest importer of Leather shoes as compared to Europe which lacks behind in second position. Around $ 55.3 billion international sale has been generated by Asia countries, especially china. Although China has a huge population but their income difference is truly as turn off indicator for the company. It has been noted that average GDP of some of the EU countries are almost near to the GDP of world business while China has second largest GDP but not in the terms of business prospect. European Union political situation is stable and also favors democratic growth while the political situation of china is little bit disturbed due to its communist thinking or close thinking and no freedom in political view. May be China is known for its manufacturing technology but they cannot compare the quality and design aspect of European countries. As the product is of leather which means cost will be more, at that time only those people can afford which have a better income and are living high standard life. In terms of trade policy the EU provides full support to free trading conditions which will help the company to connect themselves with every part of the European Union. Culture of France and other European countries are also connecting with these leather boots so they will feel some kind of connection with this product. Europe countries are self-sustained in terms of food, water and energy source as compared to china.

After exploring the macro environment condition of two regions, it can be concluded that R.M. Williams Company should choose European Union as a better opportunity for expanding their business because Europe income capital is much better than china and they also operate on high living standards as compared to China population. There is an equal distribution of income generation in most countries of the EU while in China only 30% of the population are living a high standard life while rest of the people sustain normal live which means they will be move inclined to those product which are cheaper and will compromise with the quality of the product. As R.M. Williams Company is known for their quality and design so entering in China market will impact the image of the company and people will no longer see it as a luxury item and will try to switch on other company.

References

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Bargain, O., Dolls, M., Fuest, C., Neumann, D., Peichl, A., Pestel, N., & Siegloch, S. (2013). Fiscal union in Europe? Redistributive and stabilizing effects of a European tax-benefit system and fiscal equalization mechanism. Economic Policy, 28(75), 375-422.

Bivolaru, E., Andrei, R., & Purcaroiu, G. V. (2009). Branding romania: a pestel framework based on a comparative analysis of two country brand indexes. Management & Marketing, 4(4).

Decoster, A., Loughrey, J., O'Donoghue, C., & Verwerft, D. (2010). How regressive are indirect taxes? A microsimulation analysis for five European countries. Journal of Policy analysis and Management, 29(2), 326-350.

 Issa, C. (2016). R.M. Williams: the Australian brand perfecting English boots [online]. Retrieved from: https://www.telegraph.co.uk/luxury/womens-style/rm-williams-australian-brand-perfecting-english-boots/

Lichtenberg, E., & Ding, C. (2008). Assessing farmland protection policy in China. Land use policy, 25(1), 59-68.

Shilei, L., & Yong, W. (2009). Target-oriented obstacle analysis by PESTEL modeling of energy efficiency retrofit for existing residential buildings in China's northern heating region. Energy Policy, 37(6), 2098-2101.

Song, J., Sun, Y., & Jin, L. (2017). PESTEL analysis of the development of the waste-to-energy incineration industry in China. Renewable and Sustainable Energy Reviews, 80, 276-289.

Stafford, P. (2013). RM Williams sold to Louis Vuitton: Five things you didn’t know about the iconic company [online]. Retrieved from: https://www.smartcompany.com.au/finance/economy/rm-williams-sold-to-louis-vuitton-five-things-you-didn-t-know-about-the-iconic-company/

Williams, R.M. (2018). A lifes work [online]. Retrieved from: https://intl.rmwilliams.com/r.m.w.-the-company/Footer_company-information.html

Woll, C. (2009). Trade policy lobbying in the European Union: Who captures whom?. Lobbying the European Union: institutions, actors, and issues, 1(2) 277-97.

Zheng, G., Li, F., Tian, Z., Zhu, N., Li, Q., & Zhu, H. (2012). Operation strategy analysis of a geothermal step utilization heating system. Energy, 44(1), 458-468.