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PESTEL Analysis of Finland

Question:

Discuss about the Marketing Campaign of ugg Australia brand in Finland.

Environmental analysis is the process of identifying all the internal and external elements that affects the performance of an organization. Ugg Australia is a leading registered company that deals in boots made from sheepskins and fleece are attached to them. The company was established over a decades ago is located in the East Suburbs of Melbourne. Australian Ugg Boots Company is the most innovative in the boots industry specializing in sheepskin boots (Australianuggboots.com.au, 2017). “Ugg” is a generic term used for sheepskin boots and is ugg is generally not trademarked in Australia. The company is owned by Decker Outdoor Corporation, an US firm that acquired it in 1995 (Cormack, 2017). The ugg brand is currently high–end luxury footwear and is used by most of the celebrity.

Furthermore, the report aims in highlighting the marketing campaign of ugg Australia brand in Finland. Finland is a political based country with a parliamentary republic government. The PESTEL analysis of the environmental variables of the country will help in evaluating the level of opportunity or threats for ugg Australia. Business is greatly influenced by the environment condition in which it trades so it is important to constantly review and analyze the market beforehand to avoid any unfavorable circumstances in future (ABC News., 2017)

PESTEL analysis is the framework that is used to analyze various macro environmental factors that can affect the business strategy of an organization besides the nation’s stability. This analysis will help in getting the bird’s eye view of the business conduct in the country. PESTEL is known for its six different factors Political, Economic, Social, Technological, Environmental and legal factors (Kukkonen, 2017). Through the analysis the potential risks, threats and challenges of Finland can be ascertained which may affect the market campaign of ugg Australia.

Political Factors:

Political factors describes the countries existing political situation that includes important factors like government policies, stability of government, taxes laws, tariff and entry mode regulations. Finland is an extremely industrialized country and over 40% of the country’s GDP comes from the contribution of exporting goods and services (Eden & Ackermann, 2013).  In the recent scenario, the competitive and modern economy of Finland is leading in the world. With sound and prudent banking practices in the country the financial sector has able to cope with global financial turbulence relatively well. Finland trade policy includes manufacturing and agricultural subsidies, bans and import restrictions for certain goods and services. The complete freedom to operate or shutdown a business is highly safeguarded by the Finland’s regulatory environment.

Political Factors

Finland has relatively higher level of the overall taxation but the tax rates are moderate.  The political risk in Finland is relatively low as compared to other countries as the interest rates have been lowered by the European Central Bank (Morden, 2016). The political condition generates more economic activities by raising demand in the country besides conducting fiscal policy at the same time. It would be favorable for ugg Australia to campaign in such positive environment

Economical Factors:

Economic factors are the determinants of economy and the factors that affect the business are inflation rates, interest, foreign exchange and unemployment rates. Finland has high technological knowledge and produces lots of innovative and advanced products. Finland is open to all foreign direct investment. There are no restrictions and exchange control on current transfers (Hill, Jones & Schilling, 2014). The economic condition would be beneficial enough for ugg Australia to start its marketing in Finland. The residents as well as non-residents are free to hold foreign exchange accounts.

Furthermore, banking is open to foreign competition and about 60% of overall assets are foreign- owned. The taxation system present in Finland is also very different as compared to the other countries. The primary sector is the service sector that contributes overall 65.7% of income in the economy (Kukkonen, 2017). The market situation would be highly beneficial for ugg Australia. The government directly or indirectly control the banking and financial institution. After the merger of Insurance Supervisory Authority and Financial Supervision Authority, the impact of financial turmoil on the banking sector has been relatively decreased (Jenkins & Williamson, 2015). Economic risks are assessed by evaluating the weaknesses in the economy of the country. The economic condition, international transaction, government finances and prospects for stability and growth may affect the economical condition of the country.

Social Factors:

Social factors are the cultural implications, social lifestyles, domestic structures and educational levels of the country. These factors have an impact on the organization by affecting the sale of the products and services. The social condition of Finland is well-known all over the world. It is one of the modern countries with literacy rate above than 100% and a unique lifestyle and trends (Fleisher & Bensoussan, 2015). The standard of living of the people in Finland is very high with the world’s extensive welfare system. The healthcare system of Finland is highly decentralized and with highest level of quality in the world. The government and public sector generally provides the health care services and it is further financed by the general taxation (Hubbard, Rice & Galvin, 2014). Therefore, the residents of Finland do not have to worry about the financial problem related to the health services. To increase the competitiveness of the country in the world, the education system is well defined and upgraded. The government also allows free education to its people as the government believes that investing in people is the best investment. Free meals are also provided to the students

Economic Factors

Technological Factors:

Technology is gradually advancing all over the world and is highly influencing the businesses. Among all the countries present in Europe, Finland is the technological leader. Recently the government of Finland is preparing for developing clean technology and has spent around 3.5% from their gross domestic product for the Research and Development of the country (Ireland, 2015). Finland always maintains better relationship between private and public funding. Majority of its fund is generated from the private sector and the rest comes from the government sector.

Finland has a well-defined management of the development fund and uses it in developing the technology of the country and thus becoming more forward and competitive. Innovation and technology policy measures contribute in enhancing the competition level of Finnish Industries thus attracting foreign investors (Kolios & Read, 2013). The main aim is to make the country capable of providing top organization highly specialized in innovation and environment sustainable internationally.

Environmental Factors:

The location and changes in the climatic condition can influence the business condition. The temperature of Finland is cold and potentially subarctic. The moderating influence of Baltic Sea and North Atlantic Current makes the climatic condition comparatively mild. As well as the air pollution from power plants and manufacturing has contributed to acid rains and habitat loss threatening wildlife populations.

Recently various initiatives are taken to promote the environmental technologies and development of renewable services in Europe that includes Cleantech programme (Hubbard, Rice & Galvin, 2014). The programme will highlight and address the major issues like efficient energy use, recycling, distributed energy systems, smart grids, sustainable fuels and waste management. Finland has made major strides by developing energy efficient technology and system. In the next few years, it would be one of the highest growing renewable energy consuming markets in Europe (Wheelen & Hunger, 2017). High technological skills and detail environment information of Finland is the vital reason of Finland success in promoting and protecting their natural environment

Legal Factors:

 Legislative changes take place at times in the economy affecting the business environment. Finland has an efficient welfare system that offers equal opportunities for balanced and active life. Good governance, societal stability, effective quality of judicial system and adequate legal safeguards is a crucial factor in every integrated and global market (Armstrong et al., 2015). Laws in Finland are generally does not imposes restrictions on foreign investments. Crimes are prevented as more stress is given on the development of cooperation to promote functional democracy. The constitution of Finland has provided the right to the people to be heard by the authority or the court without any delay. The constitution has further promoted the enforcement of rights in the country within the European Union (NewsComAu, 2017). Finland has imposed certain laws and regulation to control the business market condition of the economy which is as:

  • Employment Regulations
  • Safety and Health Regulations, and
  • Trade and Regulation Standards

Conclusion:

Thus, it can be concluded that Finland is one of the best countries to trade with. It would be easier and beneficial for ugg Australia to trade and manage the international campaign if held in Finland. The inflation rate is low in the country while the unemployment rate is quite higher wealth is equally distributed among the citizen. They can easily afford the ugg boots and its various other products. Moreover, Finland has adapt free market economy, which result in free fluctuation of demand and supply that would prove advantageous to campaign ugg Australia as the entry barrier to country is low.

References:

ABC News. (2017). Ugg boot-makers take trademark battle to court. ABC News. Retrieved 20 December 2017, from https://www.abc.net.au/news/2016-08-27/sydney-ugg-boot-maker-suing-us-footwear-giant/7786578

Armstrong, G., Kotler, P., Harker, M., & Brennan, R. (2015). Marketing: an introduction. Pearson Education.

Australianuggboots.com.au. (2017). Australian Ugg Boots Pty Ltd. Australianuggboots.com.au. Retrieved 20 December 2017, from https://www.australianuggboots.com.au/en-au

Barney, J. B. (2014). Gaining and sustaining competitive advantage. Pearson Higher Ed.

 Cormack, L. (2017). David and Goliath battle as Sydney boot manufacturer fights to use the word 'ugg'. The Sydney Morning Herald. Retrieved 20 December 2017, from https://www.smh.com.au/business/consumer-affairs/australian-ugg-boot-manufacturers-fighting-to-use-the-word-ugg-20160523-gp1pwt.html

Eden, C., & Ackermann, F. (2013). Making strategy: The journey of strategic management. Sage.

Fleisher, C. S., & Bensoussan, B. E. (2015). Business and competitive analysis: effective application of new and classic methods. FT Press.

Grünig, R., & Kühn, R. (2015). Global Environmental Analysis. In The Strategy Planning Process (pp. 89-96). Springer Berlin Heidelberg.

Hill, C. W., Jones, G. R., & Schilling, M. A. (2014). Strategic management: theory: an integrated approach. Cengage Learning.

Hollensen, S. (2015). Marketing management: A relationship approach. Pearson Education.

Hubbard, G., Rice, J., & Galvin, P. (2014). Strategic management. Pearson Australia.

Ireland, V. (2015, May). Research directions in SoSE. In System of Systems Engineering Conference (SoSE), 2015 10th (pp. 445-450). IEEE.

Jenkins, W., & Williamson, D. (2015). Strategic management and business analysis. Routledge.

Kolios, A., & Read, G. (2013). A political, economic, social, technology, legal and environmental (PESTLE) approach for risk identification of the tidal industry in the United Kingdom. Energies, 6(10), 5023-5045.

Kukkonen, J. (2017). Internationalization plan for Finpeda Ltd: Utilizing Finpeda Ltd products for exporting Finnish educational system abroad.

Morden, T. (2016). Principles of strategic management. Routledge.

NewsComAu. (2017). Aussie bootmaker kicked over ugg battle. NewsComAu. Retrieved 20 December 2017, from https://www.news.com.au/finance/business/retail/australian-company-fights-to-keep-producing-ugg-boots/news-story/9f164df7907b1e71d23a85bef1ad7971

Wheelen, T. L., & Hunger, J. D. (2017). Strategic management and business policy. pearson.

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