QuestionDiscuss the Environment for a ANY new product to be launched in Pakistan referring to the 1. Political-legal Environment 2. Social-Cultural Environment 3. Demographic-Economic Environment 4. Technological-Natural Environment
AnswerAn important and the most basic condition of entering in a new market is associated with an effective and detailed environmental scanning of the market. Johnson et al (2013) highlight that environmental analysis of a market plays a key role in how an organisation develops its market entry as well as long term strategy for the country. In the next two years Volkswagen, a leading auto manufacturer is aiming to launch its products (cars) in the consumer market within Pakistan. From a political-legal condition the local government recently passed a bill which encourages automobile manufacturers to establish their presence in Pakistan (Raza and Javed, 2015). However, the legal situation can be unstable in smaller cities across the country (World Justice Report, 2016). Government of Pakistan (2016) indicates that there is an overall shift in the market from a social and cultural perspective towards western brands, which would allow a firm such as VW to establish its position in the market. In terms of economical conditions, a recent study published by IMF (2016) indicates that Pakistan’s economy is on the rise and the income per capita is rising steadily, showing a positive trend for the car manufacturer. Finally, the technological aspect is challenging, although the major cities are well connected, there is a lack of infrastructure across the country which could be a major barrier to long term strategic growth for VW in Pakistan.
ReferencesGovernment of Pakistan (2016) Auto Policy, Available from: http://boi.gov.pk/userfiles1/file/AutoPolicy/AP.pdf (Accessed on 28th Oct 2016) IMF (2016) Report on Pakistan’s Economy, Available from: http://www.imf.org/external/country/pak/ (Accessed on 28th Oct 2016) Johnson, G., Scholes, K., and Whittington, R (2013) Exploring Corporate Strategy, 10th edn, New York: Prentice Hall. Raza, S. and Javed, S. (2015)"Is stock market sensitive to foreign capital inflows and economic growth?: Evidence from Pakistan", Journal of Chinese Economic and Foreign Trade Studies, Vol. 8 Iss: 3, pp.142 - 164 World Justice Report (2016) Available from: http://worldjusticeproject.org/rule-of-law-index (Accessed on 28th Oct 2016)
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