Discuss about the PESTLE Analysis for Environmental Factors.
Reliance Jio is a mobile network stationed in India. It is owned by Reliance group of industries and has its headquarters located right in the heart of Mumbai. The company operates a local network LTE that has a coverage of over 20 telecom circles does not provide 2G or 3Gservice rather it specializes on voice over LTE in availing voice network on its networks. In 2010, Reliance group of industries purchased more than 90% majority shares in Infotel Broadband for an estimated figure of $700 million. Though Infotel Broadband was unlisted, it was the only company that had been awarded the broadband spectrum that encompassed the 22 circles in India following the 4G auction that happened earlier that year. Later on, Reliance Industries Limited was rebranded as Reliance Jio Infocom Limited in 2013. It is in 2015 that Reliance Jio declared that it would start its activities across the country by the end of the year.
The 4G services were initially established internally to partners of Reliance Jio, its employees and members of their family. The company launched its services commercially in 2016, and within the first month, the company announced that it had attracted more than 15 million subscribers. This was termed as the fastest growth that any mobile operator could achieve in any global location as it surpassed the 50 million subscribers target in less than 80 days since it was launched and by February 2017, it had crossed the 100 million subscribers and as of October of the same year the company had more than 130 million.
As of July 2017, Jio launched its very first 4G phone that is powered by KaiOS that is branded as JioPhone.The Phone could be acquired after payment of a small deposit in any of the Jio stores. This phone was established for beta users.
The company also went further and launched its 4G broadband services in the whole of India in 2016. Jio provides fourth generation (4G) data and voice services. The company has a network of more than 200000 km fiber optic cables in India.
Australia is a country that is located in the Southern Hemisphere and is composed of the mainland of Australia continent, the Tasmanian Island and the multiple islands of Indian and Pacific oceans. Some of the neighboring nations include Indonesia, Papua New Guinea and New Zealand to the South East. Australia was home to the indigenous Australians for more than 40,000 years. It was following the British conquest that saw Eastern Australia become one of the British colonies.
Business in Australia has a great extent of certainty
Australia is ranked as the among the largest growing economies, and this has been because Australia has become a developed nation. Australia is rated highly with regards to international performance in areas such as human development, public education, and protection of civil rights. Australia is a member of international organizations such as United Nations and Commonwealth among others.
Many elements are encompassing the macro environment that impact the decisions of managers in any particular institution. For instance, the case of changes in tax laws, barriers to trade, changes in demographic aspects and government policy are illustrations of the macro changes.
Political elements entail government policies such as the extent of intervention in the economy (Agee, 2018). For instance, it is important to understand what goods the government may want to be provided. Political decisions may affect many crucial areas of business such as education of employees, the nation’s health and the quality of infrastructure which entails road and rail networks. The federal government has three distinct branches. One is the legislature that is composed of bicameral parliament that is led by the Queen, the house of Senate and the house of representatives (UK Essays, 2015). The executive, on the other hand, has the federal executive council, and in principle, the Governor-general advises the Prime Minister. The judiciary, on the other hand, has the High court, and other federal courts and the judges are appointed by the Governor-General.
Australia is considered as a safe hub for investment. Australia’s political and regulatory framework provides a stable and transparent environment giving investors a high level of confidence. Australia’s potential as an investment hub originates from having a political system that has been evaluated as being effective in addressing economic hurdles and revealing the direction to be followed by policymakers (UK Essays, 2015). The flexibility associated with state policy in Australia with regards to changes prevailing in the economy has made the country to be ranked as the top among the nations in the region. Also, levels of openness and effectiveness of the state have been rated highly.
Australia is said to have a transparent, efficient judicial system. The levels of corruption are judged lower compared to those in the U.S. and the United Kingdom. Such outcomes are linked to a strong system characterized by a system of checks and balances and a judicial system that is highly respected.
Companies benefit from having a political climate that is stable that flow from the top to the bottom. Australia has been considered as one of the most primary markets for multinational corporations in the region of Asia Pacific. Australia is home to a growing economy, political stability, and an enabling environment. The country also has a competitive marketplace that has a population that is well skilled and educated. Such elements develop a complicated market with the right environment that facilitates the functioning of multiple MNCs in ushering in innovation and technology.
Property Prices and Exchange Rates
The rate of property regarding prices is generally high with regards to income levels in countries such as Australia generating a high demand for rental houses and residential. It has been reported that in some cities the demand is too high in first cities such that rental prices are speculated to rise. This has led to the market of buy to let property lucrative and potential. With a growing population and increase in disposable income, the demand for housing has now surpassed supply making the prices to continue rising.
Australia has been said to have favorable exchange rates of its currency against other currencies such as the dollar and the sterling. As of today, making the property investment in Australia is seen as an attractive idea to foreign investors who are risk-averse as they fear to lose lumpsum of money in foreign exchange transactions against the Australian dollar. Also, foreign purchasers can purchase more with their money than in their local markets.
The robust economy as exhibited by high growth rates in Australia is higher than in most OECD nations such as the US and the UK. Currently, Australia’s GDP is higher compared to countries such as the United Kingdom and France (UK Essays, 2015). The degree associated with risk in the Australian economy is low, and Australia takes pride in its strong GDP growth, interest rates that are stable and relatively low levels of unemployment coupled with low inflation rates.
In the principal cities, unemployment is reported to be relatively low, and on average, Australia’s unemployment figures are estimated to be 5% (UK Essays, 2015). Australia has been said to be one of the countries that receive a high number of applications of people wishing to immigrate there and have a taste of standards of living and Australia offers numerous opportunities.
Classes and castes. Australia has three distinct social categories that are the working, middle and upper class, though the boundaries between such groups remain debatable. The category that is considered wealthiest accounts for only 5 percent, and it is this class that is regarded as the upper class. The growing middle caste is composed of individuals with occupations that are nonmanual. The non-manual than higher wages compared to the manual workers.
Higher education is regarded to offer the best job opportunities. Tertiary education has been widely accepted and available and is taken by an increasingly large population. Universities lure substantial numbers of international students. The state is responsible for funding universities, and institutions and students make contributions in the form of fees and tax payments that are related to postgraduate.
Robust Economy and Employment Opportunities
It is the use of new technologies that has led to the development of new products and processes. Technology has been associated with reducing costs while improving the quality of products being produced (UK Essays, 2015). It is through product innovation and growth that consumers benefit as well as the organizations manufacturing such products. Several matters dictate the field of science and technology by developing policies through focusing on research and development in research centers in Australia. The increasing demand for having the industry to support research and development is evident. Technology exports have risen in the past and have totaled to $1.5 million in Australia (UK Essays, 2015). The state funds for more than 50% of all projects that entail research and development and the industry on the other hand accounts for more than 40%.
Exporting is associated with creating numerous opportunities for both the large and small firms to reap the fruits of international trade (Aliyachandra, 2013). Exporting provides excellent packages such as providing substantial revenue and profits in global markets for most companies in various industries. The Australian market is large enough and has multiple niches that can provide a ready demand for Reliance Jio products such as the 4G and its phones. Due to development of Australia regarding economic growth which has led to the establishment of many firms, a company such as Reliance Jio can benefit from such a market due to large economies of scale thus enabling Reliance Jio to produce its products at lower costs per unit thus having huge profits.
Also due to the Indian market becoming saturated, it becomes viable for Reliance Jio to have some of its businesses located in a country such as Australia which will offer another market for Reliance Jio making it have a regular stream of markets from diversified markets. Such a strategy is essential in ensuring that Reliance Jio leverages on various markets as demand for telecommunication products varies based on the nature of the country. However, one of the impediments to exporting is lack of knowledge about existing opportunities in a particular country. The different culture exhibited by different countries makes the export opportunities sophisticated more so in a country such as Australia that has many different cultures. Thus, Re Jio has to conduct heightened research to ensure that it understands the needs, tastes, and preferences of the Australian diversity.
Reliance Jio can collect information from government agencies such as the Australian Trade Commission which happens to be a government agency powered by Foreign Affairs and is tasked with the responsibility of promoting exports (Buckley, 2009). As such Reliance Jio can gather all material facts about the goods market in Australia.
Social Classes and Education
Reliance Jio can also collect substantial information from Export agencies. For instance, Australia has all its state and local governments equipped with organizations that promote and encourage international trade. It is such government departments in Australia that can provide vital information for Reliance Jio.
The practices of human resource managementq become more sophisticated in international business due to huge disparities that exist in countries’ culture, legal frameworks and labor markets (C, C, & Udayasankar, 2016). It will be the role Reliance Jio to handle and deal with issues in Australia that are associated with expatriate managers. The prosperity of global business entails having Human resource policies that are congruent with the strategy that is adopted by the firm.
With this approach of ethnocentrism, expatriates are all nationals of the home country who are transferred to work abroad (Christensen Hughes & Rog, 2008). Expatriates are viewed as agents who represent interests of the domestic office thus ensure that there is an alignment of operations that take place between the international offices and the headquarters in the domestic country. The ethnocentric approach of staffing has been associated with some benefits such as ensuring that the interests and objectives as per the home offices are streamlined with those in foreign offices. Thus, Indians from Reliance Jio being transferred to Australia have numerous opportunities to upgrade their career and personal living standards based on the fact that Australia is among the list of developed nations.
Based on this approach, a company employs nationals of the host nations from low ranked positions to high ranking positions such as those of executives (Czinkota, Ronkainen, & Moffet, 2011). An Australian employee understands better the variations that exist between the Indian and the Australian culture such employees from Australia will be better placed to examine components such as indulgence and power distance among other factors. The recruitment and hiring of Australians by Reliance Jio will send a positive signal to Australia and its citizens that the company is committed to Australia and its citizens. Hiring local people have also been associated with cheaper costs since it avoids costs that are linked to relocation and the premium compensation that is mandatory for people working abroad.
However, with the geocentric approach, expatriates here do not have to be nationals of the home country, and the company does not regard transfer decisions on nationality. The technique of egocentricity is used when there is diversity among people, and this is particularly ideal in a country such as Australia that has a rich diversity. Hiring in this context by Reliance Jio is based on the skill set presented by people from various nations in Australia now that Australia is home to other nations.
The production here entails activities lead to the creation of goods and services. On the other hand, logistics involves procurement and transmission of inputs that are tangible which follow the supply chain from primary suppliers to the potential consumers. A close connection between production and logistics exists. The ability of an enterprise to manage activities related to production depend on a timely supply of raw materials that are of high quality and this is the primary role of logistics. Some objectives and goals of production and logistics are achieved internationally so that the company can have the costs reduced, costs that are concerning value creation.
It is important Reliance Jio to consider some factors before moving to Australia. Such elements include but are not limited to country, product and technological factors.
With regards to country factors, Reliance Jio should locate its manufacturing premises in Australia as it has a conducive environment with regards to economic, political and cultural situations. Australian government promotes and advocates for the open trade and liberalization policies, and this will make it possible for Reliance Jio to establish its premises comfortably in a country such as Australia.
The type of technology that a firm uses in its manufacturing utilities can affect decisions concerning location. Some of the characteristics associated with manufacturing techniques that are important. One is the number of fixed costs and efficient scale levels that are considered to be minimal. As such Reliance Jio products entail firmware and software and as such Reliance Jio will experience minimum efficient scale in Australia based on the fact that Australia is a fully industrialized economy.
Two major elements affect location decision. One is the relationship between product value to weight ratio. It is argued that if the value to weight ratio is high, then it is prudent to have the product produced from one location and then exported to the international markets. However, based on Reliance Jio, its products weight volume ratio; thus, there will be no need to export but rather the firm can establish plants right in Australia.
Different companies have different reasons for wanting to operate in foreign markets. One of the reasons is that such companies face intense competition from overseas companies in the domestic markets (D'Alimonte, 2014). Also, it is due to having a market that is highly saturated in home markets. Thus, such companies strive to benefit from large economies of scale associated with operating in foreign markets. The appropriate entry mode strategy depends on the firm’s level of experience in venturing global markets, features exhibited by foreign markets and the availability of disposable resources. There are several choices when it comes to venturing foreign markets, and these are FDI with joint ventures in the host nation with a company that is a fully owned subsidiary.
A joint venture involves establishing a firm that is partly owned by two or more independent companies (Kemp, 2011). Ownership in this context is grounded on special rations, and any combinations can be used whether both companies play a critical role of contributing managers while having an equal share of its operations. Reliance Jio, in this case, stands to benefit by having a joint venture with Australian firms as the company will help from a pool of talented employees from Australia due to unique skill sets that are considered important to the culture of the Reliance Jio as it operates in a foreign market.
The use of appropriate entry strategy is essential for ensuring that the company achieves its stipulated objectives with regards to production in foreign markets. Reliance Jio, an Indian based company, should use joint ventures in a market such as that of Australia based on the fact that Australia is highly industrialized thus there is intense competition. The level of technology in Australia is also high making it favorable for Reliance Jio to benefit from such developed techniques. Also, the aspect of international human resource management is crucial as different countries have different policies when it comes to labor laws. Thus, it is essential for Reliance Jio to consider the appropriate strategy when venturing the Australian market.
Agee, A. (2018, April 20). PESTLE Analysis. Retrieved from School of Management: https://libguides.sjsu.edu/SofManagement
Aliyachandra, T. R. (2013). Critical Success Factors in —Striving for Success. Information Systems Management.
Boylan, M. (2014). Business ethics. Chichester,U.K: Wiley Blackwell.
Buckley, P. (2009). Business history and international business. Business History, 51(3), 307-333.
Bush, T. (2017). PESTLE Analysis:Environmental Factors Affecting Business. Retrieved August 22, 2017, from pestlenalysis.com: https://pestleanalysis.com
C, H., C, W., & Udayasankar, K. (2016). International business. Singapore: McGraw Hill Education Asia.
Christensen Hughes, & Rog, E. (2008). Talent management. International Journal of Contemporary Hospitality Management, 743-757.
Czinkota, M., Ronkainen, I., & Moffet, M. (2011). International business. Hobonken(N.J): Wiley.
D'Alimonte, D. (2014, December 12). 6 Reasons for forming strategic global business alliances. Retrieved from Trade Ready: https://www.tradeready.ca/2014/fittskills-refresher/8-reasons-forming-strategic-global-business-alliances/
Gandolfo, G., & Trionfetti, F. (2014). International Trade theory and Policy. Heidelberg: Springer.
Gupta, A. (2013). Environment & PEST Analysis: An Approach to External. International Journal of Modern Social Sciences, 2(1), 34-43.
Hofstede, G. (2011). Dimensionalizing Cultures: The Hofstede Model in Context. . International Association for Cross-Cultural Psychology, 2(1), 23-25.
Kemp, M. (2011). International Trade Theory. London: Routledge.
UK Essays. (2015, March 23). Pestel analysis of Australia. Retrieved from UK Essays: https://www.ukessays.com/essays/economics/pestel-analysis-of-australia-economics-essay.php
To export a reference to this article please select a referencing stye below:
My Assignment Help. (2019). PESTLE Analysis For Environmental Factors: Reliance Jio And Australia. Retrieved from https://myassignmenthelp.com/free-samples/pestle-analysis-environmental-factors.
"PESTLE Analysis For Environmental Factors: Reliance Jio And Australia." My Assignment Help, 2019, https://myassignmenthelp.com/free-samples/pestle-analysis-environmental-factors.
My Assignment Help (2019) PESTLE Analysis For Environmental Factors: Reliance Jio And Australia [Online]. Available from: https://myassignmenthelp.com/free-samples/pestle-analysis-environmental-factors
[Accessed 06 December 2023].
My Assignment Help. 'PESTLE Analysis For Environmental Factors: Reliance Jio And Australia' (My Assignment Help, 2019) <https://myassignmenthelp.com/free-samples/pestle-analysis-environmental-factors> accessed 06 December 2023.
My Assignment Help. PESTLE Analysis For Environmental Factors: Reliance Jio And Australia [Internet]. My Assignment Help. 2019 [cited 06 December 2023]. Available from: https://myassignmenthelp.com/free-samples/pestle-analysis-environmental-factors.