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PESTEL Analysis of India and Chile

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Published: Thu, 10 Aug 2017

Assignment No: B

“India”

India is the 7th largest country by area and second largest country by population having more than 1.2 billion population. India is also known for its diverse culture and after independency 1947 India is among world’s leading democratic countries with a continues GDP growth. Country is also prompting its economic growth by attracting investors from foreign and promoting its FDI.

Following factors will depicts the better picture regarding business environment in India.

Political:

India is one of the largest democratic country in the world and run the parliamentarian political system which is influenced by the mainly politicians’ interest, policies of political parties. That is the reason behind the business environment in the India affect by different type of political factors. India has developed taxation system anyhow India promote business activities by different schemes tax rebate schemes. As far as Nazca is concerned India political environment is suitable for it according to aforementioned political factors.

Economic Factors:

There are some important and mainly indicators to indicate the economy of any country like GDP growth, rate of inflation, exchange rate, employment rate etc. As far as the economy of India is concerned it seems stable especially after the industrial policies reforms in 1991. Average Inflation India 2016 is 4.97%, GDP growth rate of 7% in 2016-17. With these numbers for Nazca for promoting their products in India.

Social Factors

It includes all those factors in which changes can impact on environment of business. India has population above 1.2 billion in which about 70% population is between the ages of 15 to 65. According to these statistics there is a structure in their activities like education, distribution of income and more over. Within these range of ages Nazca has a great opportunity to capture new market with new potential customers.

Cultural Factors

India has a strong caste based system in the country and due to that they are having restriction on free mobility with people having other’s caste. In modern India, according to the business context, big companies, international companies where cast systems are not norm anymore. In the last few decades India has passed different resolutions to promote the modern look of India and for promoting social welfare activities. People having very strong traditional family values. Mostly businesses are family owned and they employ with the maximum of their efforts to their relatives in their business. In rural areas woman and man usually wear traditional clothes, men mostly wear dhoti kurta, shalwar kameez and woman mostly wear sari. In urban areas people both male and female try to adopt western culture and wear jeans shirts, more suit with tie. India has officially two language Hindi and English. As modern India is shifting towards western phenomena so fashion is becoming emerging in the people. So, desire to become modern and having glamorous skin Nazca can be play an important role and capture a good attention of new customers.

Legal Environmental Factors:

Recently, certain legal changes have been incorporated in India like wage rate has been increasing, discrimination regarding disability etc. due to which business activities have been effected. Due to these certain changes in the legal factors Nazca business activities is secured and quality of good business is lightened.

“Chile”

Chile is located in South America and officially known as Republic of Chile. Chile has a population of around 17.46 million (2012) and GDP of $240.80 billion (2015).  Net disposable income for the top 20% of population is round about $31,040 per year, bottom 20% around about $2,392 earning per year.

Political environment:

In case of policies regarding Tax, there are international regulation along with restrictions regarding trade. First presidential election was held in Chile on 2009, Dec 13. No one from the four presidential candidates was able to get more than 50% votes. Therefor top two presidential candidates among four again competed in run-off election on 2010, Jan 17. After the independence, Chile has a very active involvement in his foreign affairs. So, as political ground disses settling in Chile but as compared to India is far behind for Nazca.

Economic Environment

There are some important and mainly indicators to indicate the economy of any country like GDP growth, rate of inflation, exchange rate, employment rate etc. GDP was $240.80 billion by 2015. 0.39% of the world economy is representing by Chile GDP. Inflation Rate in Chile is around expected 2.80 % by this quarter end, according to Trading Economics global macro models and analysts’ expectations. Looking forward, we estimate Inflation Rate in Chile to stand at 3.00 in 12 months’ time. By 2020 inflation rate is expected to be 3%. Chile has less inflation rate but lower GDP growth rate as compared to India. As far Nazca is concerned so India seems better economic environment than Chile.

Social Environment

According to the World Bank, Chile economy is considered as upper-middle economy also ranked one the stable nation in Latin America as per capital income, low corruption, globalization, development, economic freedom etc. Chile’s economy belongs to market oriented due to high foreign trade, strong financial institute and strong sovereignty rating in South America. Exports account for one third of the economy. Chile has stable upper-middle class economy as compared to other South American countries and could be a good option in social case for cosmetics industry like Nazca to introduce its products here.

Cultural Environment

Chile reflects a homogeneous population. In the colonial era, Chile had the mixture of Spanish and Roman Catholic elements. Mapudungun, Aymara are the two indigenous languages. By the end of 2004 divorce was considered illegal in the country. Chilean has the strong family culture and mostly occasions have been celebrated mutually together. Mostly business is family owned and will give favor to their beloved ones in the jobs. More financial stable class the same family owned business class. New middle class has been emerging. Now stability depends upon the income level of Chileans. As Chilean are emerging to a new class but as compared to India Chile has long way to cover so as per cultural environment India seems better option for the Nazca.

Justification for Choosing India for NAZCA:

According to the Dun & Bradstreet a research firm, India is going to be become the economy of $5.6 trillion by 2020. The firm has also forecasted a three-fold jump in the country’s GDP, from $1.7 trillion previous fiscal, on back of fast investment and increasing customer expenditure. So, according to sale perspective there are rich chances of higher sale than Chile.

India has control over its inflation rate. A falling inflation rate combined with a relatively high growth rate is the type of environment that external investors and entrepreneurs should delight. Due to control over inflation rate investment by NAZCA will give them a chance to earn a handsome less inflated return.

People living standard is raising so people are spending more on their health and beauty products to look pretty and younger and also have trend to use foreigner products of cosmetics. Therefore, it could be a good step for Nazca to introduce itself in this scenario.

Supporting foreign investment in India. Lawmakers have started to show symbols of life: Parliament approved the contentious Banking Amendment laws, which permits corporations to build banks, creating capital further eagerly available. The government has occupied productive action by letting foreign companies to take possession stakes in definite Indian retailers. Due to aforementioned regulation, Indian banking also promoted investment and providing funds to foreigner’s investors too. So, it will be easy for Nazca to get loan and raise their capital to invest in India.

India has stable political environment that is also good sign for Nazca to come to India for broaden its market.

Most emerging economy in the world especially in Asia as compared to Chile so good for Nazca to come to India rather than Chile.

Highly dynamic and emerging Bollywood industry where trends are high for cosmetics rather than in Chile. So, for Nazca cosmetics India could be a larger customer’s market rather than Chie due to India’s high film making trend and cosmetics usage.

Most of the generation is between 25 to 30 years of age and can become prospect customer for Nazca.

India’s GDP buyer spending stands at 57%, paralleled to 72% for the United States. That proposes that there is about $1.2 trillion substance of opportunity in India’s emerging consumer sector so a positive sign for higher sale volume for Nazca in India.

This year may be seen the first steps on the road to that trend. If Nazca is entering India this year, it could be getting in on the ground floor.


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