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Strategic Analysis of the Environmental Variables

Australian Ugg Boots Pty Ltd is a firm that is situated in Australia and specializes in the manufacture of bona fide boots made of pure sheepskin. The company was established over a decade ago, and is situated in Braeside in Melbourne’s Suburbs of South East ("About Us | Australian Ugg Boots Pty Ltd," n.d.). At these location, the firm has got its manufacturing process taking place, the administration of the company, distribution of products, and outlet of the factory all maintained in the same building. Australian Ugg Boot Pty Ltd is observed to be members with both Australian Made Campaign and the Australian Sheepskin Inc ("Australian Ugg Boots Pty Ltd," n.d.). The organization participates in the activities of the community whereby they support the less fortunate by giving generously to the needy through different organizations which include the Australian Red Cross and Royal Institute for the deaf (Boots, 2010). The company has been very innovative when it comes to the industry of making boots from sheepskin, with their global brand, Ozitude, being a major example of their innovation aimed at creating a unique product for the market.

 Ugg Australia should target marketing its product to Canada due to the following reasons. The country is the second largest with a population that exceeds 33 million. Ugg Australia would benefit conducting business in the country due to the low-interest rates, possibilities of getting credit, and an economy that keeps on expanding. The business environment of Canada is attractive; the country has a strong record in its growth rate. Also, Ugg Australia is likely to have access to incredible markets such as NAFTA and EU once the Comprehensive Economic and Trade Agreement Comes into effect, reduce tax rates, and the financial stability of the country.

Usually, no business operates in a vacuum, including the businesses with virtually no competition. Hence, there is need to focus on the external factors which are outside the organization and which are beyond the control of the firm (Lee, & Carter, 2012). These environmental factors affect the setting of a business differently which calls for the management to have an understanding of the factors.

Economic considerations of Canada can have an enormous impact on Ugg Australia since it has a direct effect on patterns of demand and supply. Such factors include income, inflation, recession, interest rates, and exchange rates. The country has the 11th largest world economy, based on their nominal Gross Domestic Product (Keegan, & Green, 2015). It is viewed as one of the nation’s having the most stable economy in the globe. In 2016, Canada had a growth rate in its Gross Domestic Product of 1.2%, with its standard of living baing $46,200 as measured by their Per Capita GDP. With the high living standards, people opt for an expensive lifestyle and luxuries, which translates to a more senior demand for products. These in return would benefit Ugg Australia as they would have a ready market for their Ugg boots (Parkin, & Bade, 2016). The competitiveness in the economy of Canada has been maintained by the firm foundation of institutions which facilitate an open-market system. The Canadian Judiciary as well provides substantial protection to the property rights of firms, while at the same upholding the rule of law (Jobber, & Ellis-Chadwick, 2012). The economy of this nation is open to international commerce, which is backed by a high degree of efficiency in regulations. Thus, these factors make Canada to be the right place to market the products of Ugg Australia.

Economic Environment

Most sources consider Canada as having the most stable democracy. To market its products in Canada, Ugg Australia needs to understand the laws that govern business in Canada so that they do not become less innovative by fearing to infringe the laws of the land (Yeshin, 2012). The rules and the regulations that are enacted by the Canadian politicians determine the cost of running a business and the manner in which the company can manufacture its products and service. For instance, in Canada, there are strict measures put in place regarding the advertisement of alcohol and tobacco. Its financial environment is excellent, with a banking system that is stable and a currency that is competitive (De Mooij, 2013). The information on banking in Canada is exchanged among domestic banks multiple of times on a daily basis. These creates a high level of efficiency since there are no floats that are assigned to money deposited, for example, when firm deposits by use of a check, the company instantly receives the worth of the deposit (Pomfret, 2013). With the decline in the value of the Canadian dollar against the US dollar by 21.6% since 2014, the costs of carrying out investment in Canada have become affordable. 

Social/cultural factors have an influence on the products bought by people, the costs that they expect of a commodity, and the frequency with which individuals purchase a product. However, societies keep on gradually changing, and some of the changes may be imperceptible if not watched keenly. They include values of the people, their lifestyles, and the changing family structures (Czinkota, & Ronkainen, 2013). In Canada, there is an obvious division of classes based on educational rates of participation, with individuals from the low-class are less likely to be involved beyond, or in some instances, to complete secondary education. Both the small and large urban centers are divided into neighborhoods by basis of class. Thus, a class division exists in Canada where urban centers are divided into micro-regions which are defined by the wealth status of residents. The cultural policies in the country make it possess one of the most open markets for foreign cultural goods across the globe. The factor in the culture of Canada of having an open market gives Ugg Australia the advantage of investing their boots into the country since the boots are considered to be a cultural aspect of Australia. With the firm having a large market, it can benefit by providing the products at affordable prices (Coase, 2012). Additionally, the high-income class of Canada demands luxury and expensive life. Thus, a huge market exists for the Ugg Australia products. The firm would benefit a lot if it shifted part of its market to Canada, whereby they would attract a large market for its boots.

Political/Financial Stability

New technologies are considered very effective when countering inflation and recession. Additionally, new machines lower the costs of production (Schreyer, 2012). Advances in information technology have necessitated supply chains globally, thus assisting firms to produce more of their products at lower costs and be in a position to disburse them economically. In the transport sector, Canada has one of the fast-growing transportation system, representing 4.7% of the country’s Gross Domestic Product. The system facilitates the economy to be strong and competitive and improves on the Canadians’ quality of life (Boone, & Kurtz, 2013). To the industrial sector, growth in the road, rail, air, and transport system facilitates trade and timely distribution of their products to the marketplace. As a result, Ugg Australia would benefit from this technological development of Canada, and be in a position to distribute its Ugg boots at reduced costs and promptly, which is essential in gaining competitive advantage.

The marketplace is usually affected by the current variables of the environment in which they are operating in, either positively or negatively. The variables can either be controllable-variables that are easily monitored by a firm such as products-or uncontrollable variables which the marketplace has got little or no control of at all (Baker, 2014). The demography of Canada is made up of a large population hence creating huge potential markets for the goods and services. Also, the continuing growth of technology in Canada is essential as it facilitates huge output capacity and allows for direct marketing of products through the use of internet and e-commerce. The political stability of Canada as well facilitates the growth of companies because the activities of the marketers are boosted, hence they are free to penetrate markets and serve a wider number of customers (Andrews, & Shimp, 2017). Additionally, Canada has a booming economy which facilitates firms to establish and grow since the purchasing power of its citizens is high. As a result, all these contemporary variables would have a positive influence on Ugg Australia, whereby they would favor its growth, enabling it to widen its market and serve many customers.

Conclusion

Canada is among the countries having a high population globally thus availability of customers is guaranteed. The country’s economy is booming with the citizens having a high purchasing power.  The technology in the nation regarding to transportation and communication is excellent thus facilitating quicker delivery of goods. The country experiences political stability which is conducive for any business to thrive. Additionally, the country is made up of a large number of citizen belonging to a high-income society, whereby the demand for luxury life is high. Thus, considering these factors, Canada best suits Ugg Australia in marketing its products.

References

About Us | Australian Ugg Boots Pty Ltd. (n.d.). Retrieved from https://www.australianuggboots.com.au/en/company/about-us

Andrews, J. C., & Shimp, T. A. (2017). Advertising, promotion, and other aspects of integrated marketing communications. Nelson Education.

Australian Ugg Boots Pty Ltd. (n.d.). Retrieved from https://www.australianuggboots.com.au/en

Baker, M. J. (2014). Marketing strategy and management. Palgrave Macmillan.

Boone, L. E., & Kurtz, D. L. (2013). Contemporary marketing. Cengage learning.

Boots, T. U. (2010). UGGs® Boots outlet. Meta, 2010.

Coase, R. H. (2012). The firm, the market, and the law. University of Chicago press.

Czinkota, M. R., & Ronkainen, I. A. (2013). International marketing. Cengage Learning.

De Mooij, M. (2013). Global marketing and advertising: Understanding cultural paradoxes. Sage Publications.

Jobber, D., & Ellis-Chadwick, F. (2012). Principles and practice of marketing (No. 7th). McGraw-Hill Higher Education.

Keegan, W. J., & Green, M. C. (2015). Global marketing. Upper Saddle River, NJ: Pearson.

Lee, K., & Carter, S. (2012). Global marketing management. Oxford University Press.

Parkin, M., & Bade, R. (2016). Macroeconomics: Canada in the Global Environment. Pearson.

Pomfret, R. (2013). The economic development of Canada. Routledge.

Schreyer, P. (2012). Comment on Estimating Capital Input for Measuring Business Sector Multifactor Productivity Growth in Canada. International Productivity Monitor, 24, 73-75.

Yeshin, T. (2012). Integrated marketing communications. Routledge.

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[Accessed 25 February 2024].

My Assignment Help. 'Marketing Ugg Australia Boots In Canada' (My Assignment Help, 2022) <https://myassignmenthelp.com/free-samples/marketng7104-marketing-management/business-marketing-strategy-file-A9A18B.html> accessed 25 February 2024.

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