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Technological environment is an important element in the PESTEL analysis of the USA. The USA is the global leader in science and technology. Americans have a longstanding fascination for technology, and companies such as Apple, Microsoft, Google, Facebook, and many others have addressed the technological needs of the Americans and the people around the world. And in doing so, they have become the global leaders in their respective field.

The USA is home to some of the world’s most advanced mobile networks, as well as broadband networks. It is also home to some of the world’s most advanced satellites, which are used for communication, navigation, and weather forecasting.

The USA has been at the forefront for adapting and applying technologies in a wide variety of fields. Technologies have indeed changed the ways many things are done.

Many jobs have been transferred from the USA to other countries and production facilities have been relocated. While this has helped companies reduce their production costs, it has also made many Americans upset.

The rate of technological innovation and change is extremely rapid in the USA. However, the country faces strong challenges from a number of countries e.g. China, South Korea, and India.

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The USA is the third most populous country in the world with a total population of approximately 335 million (Worldometer, 2023). It sees one birth in every 8 seconds, and one death in every 11 seconds. It has a big aging population which can cause problems, particularly in the supply of labour. However, it is not in the top 20 list of aging population in the world.

The culture of the USA is also incredibly diverse, as it is influenced by its numerous ethnic and racial backgrounds. This diversity is reflected in the country’s music, literature, art, cuisine, and other forms of entertainment.

The USA is one of the most highly educated countries in the world. It is home to some of the world’s most prestigious universities, such as Harvard University, Stanford University, and the Massachusetts Institute of Technology.

It is also one of the most advanced countries in terms of healthcare. However, health care is not usually free and certainly not cheap for many people.

Likewise, police violence, crime, and infant mortality rate are some other issues of grave concerns.  Consequently, the country needs to do a lot more to improve the law and order conditions.

People are generally health conscious; however, fast food culture has contributed to obesity and other illnesses in the country. A majority of the population has a liberal mindset; however, the country witnessed racial tensions recently which reminded many of the troubled times the country went through by the end of the Second World War.

The USA is also famous for its cuisine, which is a unique blend of traditional American dishes and international flavors. From burgers and fries to tacos and burritos, it has something for everyone. It also has a vibrant entertainment scene, with a wide range of activities and events, from sporting events to concerts to amusement parks.

The USA is very well known for social mobility though a decline was noticed in the last ten years. Social mobility refers to the upward or downward movement of people from one social class or economic level to another. In other words, it is a change in a person’s socio-economic situation (OECD, 2023).

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An important element in the ‘PESTEL analysis of the USA’ is economy. The USA is the largest economy in the world in terms of nominal GDP. It is a country from where companies such as Coca Cola, McDonald’s, Subway, Microsoft, Apple, Facebook, Google, and many others are shaping and leading the socio-economic discussions of the world.

However, the global economic landscape is changing very rapidly which is a challenge for the USA. There is no doubt that it is an economic superpower and world leader. However, it may turn out to be the 3rd in the global ranking by 2050 in terms of gross domestic product by purchasing power parity.

The USA has a strong manufacturing sector, which is responsible for producing goods such as cars, electronics, and machinery. Its service sector is composed of industries such as finance, healthcare, and hospitality.

Some of the top exports of the USA are refined petroleum, crude petroleum, cars, integrated circuits, and vehicle parts that largely go to countries such as Canada Mexico, China, Japan, and Germany.

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The USA is the second largest democracy in the world. The president is the head of the country and is elected for a four-year term. Elections held in the USA are usually considered fair and transparent.

The USA is a multi-party system, with two major political parties: the Democratic Party and the Republican Party. The Democratic Party is generally considered to be more liberal, while the Republican Party is generally considered to be more conservative. There are also several minor political parties in the country.
The USA enjoys a stable political climate, even though there have been some challenges recently. It also has an enormous influence over the political dynamics of many countries around the world. However, the USA faces international criticism for some of its interventionist policies in some parts of the world.

The USA advocates and promotes democracy around the world. With a stable political environment, advanced infrastructure, and technology, it positions itself as a great destination for foreign direct investment.

Consequently, the country has been the first choice for many multinational companies for foreign direct investment for a long time. However, countries such as China, India, Brazil, Turkey, Nigeria, South Africa, and many others have come forward as contenders for foreign direct investment.

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The foundation of our American Government, its purpose, form and structure are found in the Constitution of the United States. The Constitution, written in 1787, is the "supreme law of the land" because no law may be passed that contradicts its principles. No person or government is exempt from following it.

The Constitution establishes a federal democratic republic form of government. That is, we have an indivisible union of 50 sovereign States. It is a democracy because people govern themselves. It is representative because people choose elected officials by free and secret ballot. It is a republic because the Government derives its power from the people.

The purpose of our Federal Government, as found in the Preamble of the Constitution, is to "establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our posterity." In order to achieve this purpose the Founding Fathers established three main principles on which our Government is based:

Inherent rights: Rights that anyone living in America has;

Self Government: Government by the people; and

Separation of Powers: Branches of government with different power

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In 2005, China’s population was 20.6% of the world’s population of 6.322 billion (Mirza 468). Despite government intervention to control population growth, China’s population has continued growing though at a slower rate. Currently, China remains the most populous nation in the world.

With this population comes an extensive market for international companies. As companies scramble for the Chinese market share, they soon realize the need to understand and embrace the culture of the Chinese to win their trust and make sales. The main cultural influences in China include Taoism, Confucianism, and Buddhism (Tang 65).

The business in China is mostly relationship driven. Therefore, doing business in China demands developing a good relationship with the people and understanding their culture. It is hard to make a sale by simply presenting a product to potential buyers without developing the relationship first.

This is contrary to western cultures where businesspersons make sales first and then develop relationship later. Understanding of Chinese culture and its influence on business operations require analysis of cultural elements such as ethnic language groups, social structure, religion, education, economic philosophy, and political philosophy.

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The political stability of China has greatly increased. Many villages have conducted elections thereby opening space that is more democratic. The reduction in the number of businesses witnessed after the Tiananmen Square massacre is now reversing (Malik 50). The massacre sent panic among foreign business owners making many reduce their operations or withdrawing completely from Chinese market. Despite the current assurances and the unlikelihood of such recurrences, business people must still watch out.

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According to Morrison, inflation is a“sustained increase in the prices of goods and services” (244). Increase in inflation results to a correspondent increase in wage of employees. This affects businesses as it cuts into their earnings, which may force investors to shy away from a region. According to Feyzioğlu & Willard, chinese inflation in 2006 was at 8.5% (24). However, the rate was last reported in October of 2011 at 5.5% (IMF 25). This reduction in inflation has created a favorable business environment.

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Economic aspects of doing business in china

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Economic aspects of doing business in china

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The Chinese government embarked on economic reform program in 1978. This program was to ease years of state control of major productive assets. The program aimed at liberalizing foreign trade activities and investment, relaxing of price control on products, encouraging and facilitating education of its work force, and investment on industrial production (Bramall 364).

This strategy seems to have worked considering China’s current economic growth. After the launch of the ambitious program, China’s real economic growth shot to an average of 9 percent as compared to the 6 percent before 1978. In most of the peak years after 1978, the growth actually reached 13 percent (Bramall 366). It is not only China’s economy that has greatly improved, but also her capita income, which has almost quadrupled.

The growth has thus seen improvements in infrastructure development and provision of social amenities, which has attracted many investors in the region. However, operations of many business establishments in the region face many economic challenges, which if not considered may throw them out of business. The economic factors that influence business operations are Foreign Direct Investment, Inflation Rates, Infrastructure, and Currency & Exchange Rate.

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Learning Aim C&D assignment 2 Unit 5 YR2

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Learning Aim C&D assignment 2 Unit 5 YR2

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where i got info for Learning A&B assignment 2 Unit 5 YR2

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1. better quality service
2.better infrastructure
3. overeas outsourcing is not always cheaper
4.Shared cultural Knowledge
5. less red tape

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Contract negotiations

The Bribery Act 2010 is the UK based law which strengthens bribery and corruption legislation, in response to the increasing rate of bribery offences. The act effectively updates the bribery offences which an individual or an organisation can be found guilty of. The Bribery Act covers transactions that take place in the UK or abroad, and both in the public or private sectors. Under section 7 of the Bribery Act 2010 a commercial organisation is guilty of an offence if an “associated person” bribes someone, with the intention of obtaining or retaining business, or an advantage in the conduct of business for that organisation.

Composition of the workforce

This impacts businesses, as businesses may choose to:

◦send workers to a different country to work

◦employ a local workforce

◦have some workers in one country and some in another

Management style

Workforce practices

Daily operating practices, such as health and safety have a major impact on the reputation of a business, why is this?

How does this link to the business’ management style? How does the country the business operate in affect workforce and management practices? Think of the overall culture of the country.

Organisational culture

“This is how we do things around here”

The organisational culture is impacted by the countries’ overall culture, why is this? Can an international business maintain their organisational culture in other countries?

LOCAL CULTURE

Local culture will also affect the way any international business operates in a country. This is because different cultures and people have different ideas and tastes.

Local culture also affects the days of the week, working hours and lunch.
FOR EXAMPLE: In Christian countries, it is common to have Saturday and Sunday as the weekend. But in Islamic countries, most people have their weekends on Friday and Saturday. Friday is a day of prayer and Saturday is the second day of the weekend.

Marketing strategies and brand name

Sometimes it is possible for businesses trading internationally to use the same advertising and brand names (McDonald’s) but not possible in some instances (Schwarzkopf Hair Care products translates as ‘Black Head’ Hair Care in English). You need to be aware of expressions/idioms that may cause confusion.
FOR EXAMPLE: ‘It’s raining cats and dogs’

Advertising

This varies from country to country.
FOR EXAMPLE: In Islamic countries, women who advertise are seen with their hair and shoulders covered but not in UK/USA.

Cultural differences such as views relating to the role of women, homosexuality and ageing play a major role on how advertising takes place.

Hand gestures are important.
FOR EXAMPLE: The ‘thumbs up’ sign in the UK/USA is a positive gesture but in the Middle East, it is an insult and would upset the local people.

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Factsheet to explain the 8 cultural Factors

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Factsheet to explain the 8 cultural Factors

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Factsheet to explain the 8 cultural Factors

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some countries are more open to change than others
The four most talent ready countries are:
Switzerland
Singapore
USA
Denmark
these countries seek change the most quickly often through tech

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In the UK a full time worker is entitled to 28 paid holiday s where as in France they are entitles to 38

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In japan everything is about respect and people are expected to work long hours out of respect for their collegues and businesses

In Norway business must be carried out on time , any interruptions are considered rude and men and women are equal

In Mexico lot of shouting , late is the usual and is a very lively environment and normally based on what you can do for them

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Bribery is accepted in some countries although shunned however it is illegal in the UK

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4000 religions worldwide
days of expectations for religious holidays etc so these may affect how a business is run in certain countries

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There were four social classes in ancient China including noble, farmers or peasants, artisans or craftsmen, and merchants. The four social classes were based on the teachings of Confucius. The four social classes were to allow people to live in harmony and balance

For centuries China had developed its system of social stratification based on the theoretical principles of Confucian philosophy.

The regional difference in class composition in China exceeds the commensurate differences between developed countries. The eastern region has a class structure similar to that of developed countries, with a middle class even larger than the developed countries' average.

large population of lower class so as a business would be best to target the middle class

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Culture Factors that affect international business 

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Culture Factors that affect international business 

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Culture (which is defined as a group of ordinary or accepted practices shared by a specific society)

Languages

Being able  to communicate with customers employees and clients would be important

Attitudes to business
Social structure
The class society , working class , middle class etc and their are 7 classes in total in the UK and it has a difference on how you run your business
Religion
Values
Attitude to work
Openness to change
Ethnic make up of populations

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Social external factors are certain aspects of a country’s cultural identity and makeup that impact its relationship with money and business.

Social influences vary from a country’s attitude to health & the environment, through to working hours and family life.

Social factor impact international business as they set a precedent for what is acceptable behaviour in a country by the values that they hold.

Examples of social influences are
•Education
The level of education in a country will impact whether there are the necessary skills available to work in the business. Tesla may need people to work on autonomous vehicles with advanced skill sets, which may rule out certain countries when establishing a headquarters as the right people with the right skills may not be available.

•Religion & beliefs
People of certain religions and beliefs may impact the types of goods or services a business provides. It may rule them out of trading in that country but may also mean that they have to adapt their product to enter that market. McDonald’s tends to adapt their menu to meet local tastes in order to trade successfully in different countries.

•Family structure

•Spending & Saving habits

•Income

•Consumer tastes/preferences

These will differ by country and have the potential to impact a business’s success in a particular country.

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Cash in advance:

This occurs when the payment for the products is made before they are delivered. This approach is risky since it depends on the provider sending the items that have been pre-paid for. A buyer can utilise cash in advance to negotiate a better price since the supplier will be more open to a contract because there is less risk involved.

Letters of credit:

A letter of credit assures the seller that they will be paid after a certain period of time has passed since receiving the goods. These payments are less hazardous for the vendor and the buyer since banks guarantee them.

Open account

Before getting paid, a supplier ships and delivers the goods. The buyer then has a certain window of time to make payment (often 30, 60, or 90 days). There is a significant chance that customers would underpay and provide suppliers cash flow issues. Because it is less dangerous for the seller, suppliers that are willing to export may see an increase in sales.
Consignment

Although it is an open account, money is not delivered until the buyer has purchased the products. Retail establishments that specialise in a certain category of consumer goods are frequently consignment firms. The company promises to accept products for sale in exchange for a portion of the sales price, should the goods really be purchased. The benefit to the company is that it may return any unsold items and doesn't have to pay for the things up front.

International credit cards

A variety of credit cards that are intended for usage abroad can be used by businesses. These cards sometimes include lower fees for dealing in various currencies, payment protection while making purchases abroad, and extra insurances. These cards could charge extra monthly fees in order to get these benefits.

International bank transfer
This is a safe way to send money from one nation to another. One significant benefit of using international bank transfers is that the company may avoid currency rate fluctuations, which can occasionally make it difficult for the company to prepare ahead.

Commercial payment systems

These are well-known payment systems that facilitate international payments. Sending money abroad to pay for products and services is becoming simpler and, in some cases, more secure thanks to services like PayPal, Apple Pay, Google Wallet, and cryptocurrencies.

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Gym shark - Marketing an international Brand 

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Gym shark - Marketing an international Brand 

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How has the internet influenced Gymshark?

One thing that has allowed them to be an international success is the internet and their ability to utilise social media to market globally

They did this via utilizing influencer marketing and leveraging popular influencers to promote their products online and in person events as they realised people like to buy items they see their favourite influencers with and aggressively promoted via social media platforms like you tube , Instagram etc  gym shark was one of the first major clothing brands to do this before it became common practice

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In Learning Outcome A we looked at methods used to finance international trade. Depending on the country you are dealing with and the type of business will have an impact on the method of payment used. Different methods have an influence on the way international business is conducted.

Methods include:

•Cash in advance

•Letters of credit

•Open account

•Consignment

•International credit cards

•International bank transfers

•Commercial payment systems

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A sole trader now has the resources to set up their own business online that can sell globally with sites such as Shopify.

The use of drop shipping where the seller does not even need to handle the merchandise being sold is also revolutionary or customers can purchase products and download them instantly to their mobile devices and computers.

Before the internet the common process would be to order goods and sell them locally in a store but thanks to the internet the world is getting smaller and customers can be reached worldwide.

Big brands have also benefitted from the internet by streamlining their process and also taking advantage of being able to sell their products online 24/7 rather than just physically in store.

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Social media has paved the way for people to communicate around the globe and due to its global reach it has become a way for businesses to communicate with customers and market their products and services.

•Email – speeds up communication

•Google translate and other translating services

•Whatsapp – allows collaboration and free!

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How the Internet helps international trade take place

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How the Internet helps international trade take place

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Product Development - Prior to the advent of the Internet, information travelled around the world via telephone, television or print. Large businesses that were working on advances in technology would have access to the newest information, but small businesses would have to hunt for the information on their own. The Internet has allowed small businesses instant access to any new product developments and technological advances that can help improve their products and compete with larger companies.

Information Exchange The way that small businesses exchange information has changed drastically since the Internet has become popular. Small businesses did not have the financial resources to arrange large meetings with suppliers or developers that would require air travel and accommodation expenses. Now, through email, online video conferencing and document-exchange websites, small businesses can collaborate with developers and vendors all over the world inexpensively and with a full exchange of necessary information

Marketing One of the more significant effects that the Internet has on global markets for small business is the ability for small businesses to reach an international audience for a very low cost. A corporate website can become a marketing resource for a company that can be accessed by anyone in the world. Social networking websites allow companies to interact with millions of potential clients worldwide at no cost.

Monitoring The Internet allows small business owners to be more mobile by making it easier to manage a business from anywhere. A small business owner on a business trip can stay in real-time contact with his office through an online chat function and exchange important documents with anyone from any location in the world. The Internet has allowed small business owners the freedom to pursue business opportunities while still maintaining control over their businesses.

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There is no doubt that the internet has meant that international business can be conducted much easier.

The internet has meant that communication is now easier and quicker but also it has made business processes much more efficient.

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International support systems are the things that help international business take place. The world is becoming more globally connected and systems have been put in place to make global trade much easier than it ever has been.

Two of the key reasons for such a rapid expansion in global trade is:

•The influence of the internet

•Having variety of international payment methods

Each of these have supported the increase in international business and made it simpler to trade internationally.

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Political

Economic

Social

Technological

Legal and regulatory

Environmental and ethical

Political

The political makeup of a country will impact a business’s ability to trade as communist countries such as China have stricter rules and regulations for foreign countries wishing to trade their country than democracies such as the USA and UK.

Political parties left and right will also impact a countries openness to international trade and the policies they put in place will either encourage or discourage international trade from happening.

A countries tax policy can impact the attractiveness of that country to businesses wanting to set up operations there. Tax is a legal factor but is impacted by politics.

Corporation tax rates 2021:

•UK – 19%

•Brazil – 34%

•Ireland – 12.5%

•Isle of Man – 0%

Economic

Economic factors greatly impact the success or failure of international business and again their choice of where to trade internationally.

Factors such as:

•Economic growth or decline

•Interest rates

•Exchange rates

•Inflation

•Employment/unemployment

All these can influence a business’s decision of where to trade or whether to trade internationally at all. These external economic factors can either make international trade

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Definition
Tariff engineering is the targeted design of a product's characteristics to reduce the tariff to be paid on imports. Unlike tax evasion, tariff engineering is legal.

Examples
interesting example of tariff engineering is in the case of Marvel’s Action Figures. In 1995, the team at Marvel fought to reclassify their action figures from dolls to toys because their action figures are non-human. This was very significant and was a huge win for Marvel and their customers because the tariff rates of dolls are at 12% while toys enjoy a tariff rate of only 6.8%.

Converse is one of the companies who executed tariff engineering perfectly. They designed their shoes in a way that they put layers of felt on the sole, covering more than 50%, in order to reclassify their product as slippers rather than shoes. they were able to generate duty savings because importation duty rates of shoes to the United States can be as high as 37.5% while the duty rates for slippers upon importation is only 3%. That’s a huge savings just by adding that extra layer of felt on the soles.