International strategy- Butlin’s
This report aims towards laying down the identified national strategies for Butlin’s with the help of which the organisation is trying to venture into the international market. Explanation about their national strategies and their way forward towards the international market has been provided in this report. Explanation of both internal as well as the external environment has been provided, SWOT and TOWS have been considered in respect of determining the internal environment and PESTEL has been taken to perform external environment situation. The USA has been considered as the international business market for Butlin’s where they diversify with the help of Blue View Resorts. SMART objectives have been laid down for Butlin’s where methods and resource planning for the organisation has been explained. KPI matrix along with the control system for the organisation has also been mentioned in this study. Finally, in the appendix section clear comparison between the three countries has been provided such as China, Spain, and the USA. BERI analysis has also been provided in order to identify the suitability of business operations in the country.
This report intends towards evaluate the national strategic plan that has been undertaken by Butlin’s where their success factor along with improvement areas will be discussed. As this report progress, it will discuss the key drivers that benefit the organisation in taking a leap forward towards venturing into international boundaries. Strategic tools will be considered in order to identify business opportunities for the organisation. Determining the internals investigation will help in resonating the strengths & limitations of Butlin’s.
Butlin’s was established in the year 1936 and is situated in Hertfordshire, United Kingdom. The establishment offers affordable holiday sea resorts to middle-class working families in Britain. Currently, the firm owns 3 hotels and a spa, the total number of staff working in the hotel is 3,571 and the revenue earned during the year 2019 is around £ 230 million (Butlins, 2020).
Figure: Revenue of Butlin’s 2008-2017
Source: (Statista, 2020)
Butlin’s is a well-known hotel and seaside resorts in the geographical location of the UK, popularly recognized for offering reasonable holidays to the people. In order to grow their business, the firm has undertaken a national strategic plan that includes offering various holiday packages to the people such as dining offers, hosting live events of football to crafts arts (Butlins, 2020). Moreover, the UK based business venture offers different portfolio of excellent indoor and outdoor activities. The success for Butlin also includes offering different and unique experiences to the people that range from open green spaces to incredible pool activities that build experiences among the customers (Butlins, 2020). Whereas, the areas to improve for Butlin’s include improving their pricing strategies that include maintaining competitive pricing in order to compete with other resorts operating within the UK geographic location. Furthermore, areas of improvement for Butlin’s also include improving their service provision which comprises offering valiant information to the customers along with providing them with discounts and extra credentials.
Butlin uses pull factors in order to take up the decision of venturing into the international business market. Family encouragement for Butlin’s act as the pull factor that includes offering different types of accommodation facilities that include proposing traditional seaside town of Bognor Regis that excite the thrill of the customers mainly because of the service provision of relaxation spa and indoor pool activities (Butlins, 2020). Besides, the hospitality business venture also offers open space green areas to the customers where people looking for peace and tranquility can relax and enjoy their daily outing. Furthermore, Blue View Resorts that is a sub-brand of Butlin’s also acts as a pull factor and helps the organisation in attracting a large set of people towards the venture mainly because of offering high-quality service at reasonably low prices (Theguardian, 2020). The differentiation strategy that the Blue View Resorts will use also benefits the enterprise in increasing its competitiveness while operating in the international business market.
National strategic plan for Butlin’s is to introduce a new sub-brand known as Blue View Resorts that is predominantly aimed towards catering totally new and diversified market. Considering the growing competition in the UK leisure industry the business venture has though to expand their roots. Blue View Resorts act as an international strategic plan for Butlin’s which seeks towards earning the high number of market share within the growing leisure and accommodation industry (Stenaline, 2020). The diversification strategy of Blue View Resorts has also identified that new trends have become popular among the people that include of staycations. The staycation acts as popular leisure activities where people prefer to enjoy activities at a driveway distance from their house without being thinking about the accommodations (Thesun, 2020). Moreover, Blue View Resorts are also looking forward to offering services such as relation vacation that is also becoming increasingly popular among the people that will significantly contribute towards the growth of Blue View resorts from being a national-level strategy to international level strategy.
Considering the decision of international strategy benefits the establishment in understanding the cultural beliefs and lifestyle of the people as a result of which it benefits in designing and introducing services and products on basis of the specific needs of the customers. The international strategic plan has been considered by Butlin’s as because it aids the establishment in generating new revenue sources as a result of which upturns the operating profit and opens up the door of opportunity for the business organisation (Butlins, 2020). Moreover, the strategic analysis of going international has also been taken into consideration because it accesses them to have exposure about the external business opportunities along with learning about the new cultural trends of the geographical location (Citmagazine, 2020). The decision of the hospitality business operation with respect of venturing into international market turns profitable mainly because of diversifying into new markets along with increasing the reputation for the business organisation. USA has been considered as the exposure towards the international business market by Butlin’s as because in recent years the country has shown positive growth along and a high rise of FDI investment within the country. Moreover, on the basis of the comparison of three countries such as China, Spain, and the USA, the risk identification factor for the United States as less when compared to the other two nations. Henceforth, the USA has been justified as the country of international exposure for Butlin’s.
Strategic analysis is considered to be the essence for the enterprise as because it benefits the establishment in undertaking research within their operating business environment so that they can originate strategy that earns them success. The process of strategic analysis for the company comprehends them to evaluate their data over the years in respect of identifying the growth patterns(Rothaermel, 2017). Analytical tools are also being used that includes of SWOT, PESTEL and Value Chain analysis in regards of resonating the internal as well as external business environment for the establishment. Hence, the process of strategic analysis plays an integral part within the overall operations of business administration.
220.127.116.11 Political environment
Evaluating the political system of USA it has been noticed that the country has one of the strongest parliamentary systems in the world which is controlled and regulated by The Federal Government of the USA. US government has imposed 35% of corporate tax for the business organisation opting to continue their business in US geographic location (Pwc, 2019). The taxation system of the USA is higher when it is compared to other developed nation which makes it difficult for Butlin’s to operate its business within the country. As the taxation system within the USA is growing significantly it will also make it harder for the hospitality organisation to procure their resources in order to carry out their business operations in US territory. Another, critical challenge that the USA government might face while establishing its business within the country is the rising inflation rate by 2.1% annually (Tradingeconomics, 2019). The increase in the inflation rate is growing the prices of the products that inevitably decreases the purchasing capability of the consumers, which will limit the growth opportunities for Butlin’s to operate within the country.
18.104.22.168 Economic environment
The economy of the USA is increasing at a rate of 2.3% yearly and has reached $ 21.439 trillion by the end of 2019 (Tradingeconomics, 2019). By far USA’s GDP is the most developed in the world and the major factor that has contributed towards its GDP growth is growing foreign exports of the USA which progressed by 11.9% and has created millions of jobs. 20% of growth has been recorded in the healthcare sector and has also contributed towards 3% of the nation’s GDP. Therefore, the growth in the GDP of the US will open up the sea of opportunities for Butlin’s to establish its business within the country and earn significant growth prospects. The FDI investment of US $ 86.5 billion has also contributed towards infrastructure development that will motivate the Butlin’s organisation in investing in its operational activities within the country to earn high brand status (Ceicdata, 2020).
22.214.171.124 Socio-cultural environment
USA society is one of the most diverse and multi-cultural in the world mainly because of the reason that different people from different background and ethnicity resides within the country. During the year 2019, the country noticed a growth of 14.4% towards their immigration which increased the total figure to 244 million by the end of 2019 (Nytimes, 2020). The growth of multiculturalism within the USA will benefit Butlin’s in designing new products and goods that cater to the needs of the diversified population. Furthermore, the social lifestyle and status of people within the USA is also rising, the average annual income of US people is round about $ 48.150 that resonates with the purchasing capability of US consumers (Census, 2019). The openness of US consumers towards accepting change and trying to innovate products will open up business opportunities for the consumer goods business entity in the US geographical location.
126.96.36.199 Technological environment
Advancement in the field of information technology by USA has also contributed towards the growth of the industries operating within the country. A considerable amount of growth and progress in the field of artificial intelligence and automation has been made by the US. Moreover, an investment of US $ 3.2 billion has been sanctioned for the R&D department that will carry out research towards developing technologies that uplift the infrastructure development of the country (Forbes, 2019). Based on the growth of technology the business establishment of Butlin’s will be taking up the decision of opting towards entering in US business market and earn success.
188.8.131.52 Environmental environment
Special attention and focus have been provided towards conserving the environment so that sustainability can be maintained. Special guidelines and rules have also been imposed by the US Federal Government in respect of eliminating the threat of carbon emission so that better living standards can be offered to the people. The National Environmental Policy Act 1970 guides all the organisation to follow the regulations (Epa, 2019). Therefore, complying with the environmental standards the UK business venture of hospitality business venture Butlin’s will need to design the products accordingly that will help in reducing pollution.
184.108.40.206 Legal environment
The business organisation operating in the US business environment is being directed and controlled by The Federal Trade Commission under which all the business enterprises need to comply with the act in order to maintain systematic business operation (Ftc, 2020). Failure to adhere to the guidelines and principles makes it difficult for the business firm in suffering from legal consequences. FTC has also imposed the Consumer Protection Act of 1914, under which the business establishment of Butlin’s needs to protect the personal information of the customers along with offering them standard goods and products free from any biasness (Hg, 2020). Complying with all the legal guidelines will also offer growth opportunities for the business organisation of Butlin’s while they establish their production facilities in the US business market.
Butlin’s operate within a highly competitive market where a large number of competitor exist and offers a similar type of services and entertainment facilities that excites the customers and keeps their satisfaction rate higher. The main competitors that have been identified for Butlin’s while operating their business in USA includes of Exodus travels, Contiki and Trek America(Butlins, 2020). It has been noticed that Trek America is a holiday and resort firm that offers high-quality and highly-priced accommodation facilities that includes of adventure campaigns in Grand Canyons and Alaska. Whereas, Exodus and Contiki has focused on offering different varieties of accommodation providers that include the campaign where people get to resides in glamping sites near beaches and likes to enjoy party night lifestyle and different live events(Butlins, 2020). The young and enthusiastic traveler also offered the adventure campaign in caravans. The growing number of competition has made it tough for Butlin’s to grow their business and increase their customer base.
Evaluation of Internal analysis for Butlin’s it has been noticed that the firm is good at offering a diversified range of services that do not limit to accommodation and resorts but it also host a range of different events that enthrall the satisfaction rate of the customers along with helping them towards building their brand reputation within the customers. Moreover, the business organisation while venturing into the international business context of the USA it also offers family adventure and entertainment facilities at reasonably affordable prices that gains the attention of the customers (Butlins, 2020). Diversifying into a different service provider that includes both internal and external service providers such as the unique experience of indoor activities and outdoor adventure of caravans and pool activities (Butlins, 2020). In respect of gaining international exposure, the establishment has also focused on introducing The Electric Circus in the US as leisure activities that are different from that of their competitors. The Electric Circus in the USA will host the most exciting glow-shows, props, and acrobats that will help the business venture in cementing their place in the international business market and gain higher customer turnover and profit.
Figure: Family Vacations & Travel growth in USA
Source: (Ustravel, 2020)
Evaluating the data that has been gathered from US travel portal it has been noticed that the concept of family vacation in USA is growing exponentially. The growing vacation trends that has been identified is growing number of cheap family vacations, vacation in beaches and growing likeliness of family members and travelers towards beach resorts. Hence, considering this growing trend in US hospitality industry, Butlin’s has significant growth opportunities during their international exposure towards USA business market. Butlin’s offers both low-price ranged and high-priced beach resorts to both family, young and couple travelers. The accommodation service facilities of Butlin’s including staycations, relation vacation and children theme parks attracts them towards the hospitality business venture and book their holidays based on their preferences and travel budgets. Moreover, Butlin’s also host live events and lights and sound show that also attracts travelers residing in USA towards the establishment. Therefore, considering the growth of family vacation and leisure activities in USA tourism industry it increases the growth opportunities and profit generating capabilities for Butlin’s.
220.127.116.11 Resources & core competencies
Butlin’s resources comprise of their physical factors where the firm has 3 resorts that are situated near the seaside, the venture offers spa and different forms of wide ranges of facilities that include gyms, pools and tennis courts. Whereas, the key competencies for the business organisation mainly include their large occupancy rates and popular sea resorts in premium locations that attract most of the people towards the business venture. The financial resources for the establishment are also strong because it has earned revenue of £ 230 million, the net profit earned by the organisation is around £ 16.2 million(Statista, 2020). The core competencies for the organisation also comprise maintaining a healthy profit margin within a competitive market. With more than 3,866 employees working within the organisation is the key resource for the establishment, whereas, the competencies for the management lies within providing training to the staffs along with varieties of jobs that mostly include full-time and flexible job opportunities(Owler, 2020).
18.104.22.168 Organisational performance
Evaluating the overall performance of the Butlin’s it has been identified that the business organisation has earned a good brand reputation mainly because of the service facilities and events that the organisation offers to its customers. Because of its low-priced service provision, the firm has been successful in earning a higher occupancy rate. Due to their beach resorts, live events and children sports ground the resorts successfully cater more than 385,000 visitors every year (Butlins, 2020). The growing number of visitors every year has added strength towards the financials of the establishment where the gross profit margin has touched 74.67% and net profit margin of 8.8% annually (Thedrum, 2020). Moreover, the organizational capabilities of the business establishment have also been increased due to increasing the skills and capabilities of the workforce through different training and coaching.
22.214.171.124 Product/service evaluation
Butlin’s accommodation for their intended target customers include seaside resorts, events, and entertainment that largely caters to the adventure seeker, family members and travelers to enjoy their leisure time while availing the services of the organisation. The organisation within their service provision also offers different varieties of foods and cuisines that increases the taste buds of the people. Theme parks for children’s, golden sandy beaches for grown-up people are also being provided by the organisation (Butlins, 2020). Special discounts with seasonal offers during winters and summers have also been added to the service portfolio of the business establishment in order to cater to the needs of all types of the segment. One of the main strengths of the business enterprise includes designing services keeping in mind all backgrounds of people and based on their spending capabilities (Butlins, 2020). The organisation offers value-based pricing, mid-range pricing and premium pricing that mostly features all types of service comestibles and adds values towards the organisation.
|1. High brand recognition and large service assortment.
2. 3 well-established resort locations, with more than 85% of the occupational rate.
3. Large market share in UK seaside resorts breaks markets.
4. Different ranges of sports and leisure activities.
|1. The profits for the firm over the 3 years period have lowered down.
2. Negative feedback from the customers.
3. Limited target audiences mainly lower-income families.
4. Lack of diversifications.
|1. Brexit might be beneficial for Butlin’s as a whole.
2. Competitive pricing will earn the firm financial gains.
3. Cutting down of national interest rates will ease the financial burden for Butlin’s.
|1. Rising competition from other holiday operators.
2. Brexit might affect the operations of the business in terms of shifting the business from other nations.
3. Moreover, rising Brexit might also increase the wage cost with the national minimum wage.
Figure: SWOT analysis
|Internal Strengths (S)
1. With large service assortment and great seaside location of the resorts, the firm has immensely enjoyed higher occupancy rates than that of other competitors.
2. The firm enjoys a good brand reputation among its customers.
3. The establishment offers different sports and entertainment activities.
4. Strong resources and capabilities.
|Internal Weakness (W)
1. Unstable financial situation.
2. The firm is also receiving negative feedbacks from both customers and competitors.
3. The limited target audiences that only cater to low-income household people.
|External Opportunities (O)
1. The rise in staycations and domestic holidays.
2. Cutting down in interest rates has increased the purchasing capability of people.
3. Changing the mindset of people towards vacations such as relation vacation and caravans.
Butlin’s enjoys brand recognition for this service assortment, keeping this in mind the firm can design events and entertainment services for all group of people in mid-price ranges that generates opportunities of scalability for the organisation.
Limited target audience is their weakness, which the firm can turn it onto opportunities by lowering down the national interest rates that will increase domestic holidays within the geographical location.
|External Threats (T)
1. The growing number of competitors possess a threat to Butlin’s.
2. The impact of Brexit means the firm has to shift their offices somewhere else.
3. The wage cost for the employees is being increased.
The firm can count upon its high occupancy rate in order to attract a large number of customers and eliminate the threat of growing competition within their business.
It becomes challenging for Butlin to turn their weakness and threat into opportunities because of negative feedbacks and poor financial status.
Figure: TOWS analysis
The mission statement is referred to as the short statement that explains the overall goals and objectives of the organisation. The mission statement for Butlin’s is as follows.
To deliver best quality accommodation and leisure activities and services to the customers. The organisation aims towards achieving their mission with the help of aligning their resources and design better service facilities that shows their commitment and integrity towards their customer group.
The objectives of Butlin’s are as following.
Specific: The specific objective for Butlin’s while operating in US geographic location will be to establish their Blue View Resorts and offer value proposition through their services so that higher number of customers traffic can be generated towards the enterprise.
Measurable: The UK based hospitality business venture has taken up the decision of measuring their performance by using the best sustainable practices that includes sustaining environment through eliminating the risk of greenhouse gases.
Achievable: All the objectives of Butlin’s are achievable due to their global presence and high brand reputation among the customers.
Relevant: The operations of Butlin’s are relevant as because it helps the firm in earning higher market share along with the aim of opening up two more resorts in between 2019-2024.
Time-oriented: The total time duration for achieving the overall objective is 5 years.
Strategy type statement:Butlin’s organisation has adopted diversification growth strategies, where through it the firm aims towards opening up Blue View Resort in US geographic location. Opening up a new resort will enable the business organisation in offering upgraded services that include staycations, relation vacation and beach holiday destinations to USA people. The diversification strategy will also enable the business organisation in gaining higher market share along with earning higher profits. The low-price strategy will also benefit the business organisation in tapping low-income earning people by offering them value-based recreational activities during their operational activities in USA geographic location.
Directions: The direction for Butlin’s comprises of generating higher market share along with opening up two more resorts in US business market.
Methods: Butlin’s will undertake different methods in order to reach out to their objectives that include diversification, differentiation and low-pricing strategy in order to reach out to their intended target market of families and young and enthusiastic young travelers in USA. Different services will also be introduced as a method of venturing into the international market such as live events and lights shows and circus.
Butlin’s international strategy comprises of venturing into USA geographic location, the decision has been taken up by the organisation based on the identification of stable political and growing economic condition of the country. Moreover, the global tourism industry in UK is considered to be the 13th largest in the world. Diversification strategy has been considered where the firm is eying towards offering extended services including light and sound shows, adventure sports and night life party hub that helps Butlin’s to grow their business in USA geographic location(Butlins, 2020). The target market for Butlin’s while operating in USA business market will be people between the age group of 5-60 years old. The firm targets all segment of customers based on their service provisions. Furthermore, the establishment also targets people based on their demographic factor that includes of their income level and lifestyle. People with earning capability of US $ 100-300 are the target customers for Butlin’s.
126.96.36.199 Organising and resourcing
- Resources planning
People: Employees within the organisation plays an integral part, as because they help in performing the overall activities within the management. Butlin’s will be recruiting 100 employees initially while they start operating in US geographic location. The employees will be recruited from agencies and through company’s own website after a series of test and scanning procedures. Based on their skill sets and knowledge employees will be recruited and offered job responsibilities.
Finances: The initial financial capital that the business organisation will be requiring while operating in USA geographic location will be US $ $ 202,000 million. The capital amount will be required to purchase plants and machinery, resources and other equipments.
|Total Start-up Expenses||$ 5,000|
|Cash required||$ 30,000|
|Start-up inventory||$ 0|
|Other current assets||$ 0|
|Long-term assets||$ 167,000|
|Total assets||$ 197,000|
|Total requirements||$ 202,000|
Figure: Financial allocation of business planning for Butlin’s
Technology:Butlin’s organisation will also be requiring highly advanced IT infrastructure in order to carry out their operations in USA geographic location. Upgraded software needs to be implemented within the organisation in order to organize the personal information of the customers along with making sure that the firm remains forefront in the competitive market arena. Technology such as virtual reality will be used within the firm in order to offer better visual experiences to the customers while offering them services such as live events and light and sound shows. Upgraded CRM system such as Beatrix24 will be used in regards of maintaining smooth operations and most efficient business productivity.
Plants:During their initial stage of establishing their brand in USA geographic location the organisation will be opening up two holiday resorts one in Miami, Florida and O’ahu, Honolulu. Different beach villas, resorts and caravan accommodation services and food options will be offered in order to enrich the satisfaction rate of the customers.
- Coordination plan
Figure: Gantt chart
The coordination plan will be undertaken by Butlin’s business organisation in order to lay down the strategies along with procedure that will help the organisation in operating in USA business organisation. The total duration of the coordination plan is of 5 years, during this time period all of the activities needs to be performed. During their first year in USA, Butlin’s needs to establish their clear goals along with prioritizing the most important goal that needs to be performed at earliest possible ways. Moreover, the coordination plan will also discuss about the key resources and external business environment that needs to be performed within second year of their operations in USA in order to understand the business market and perform their activities accordingly. Finally, as the organisation operates they also need to increase the presence of the corporation through online presence among their customers and offer them value proposition that attracts the customers towards the venture.
- Organisational structure:
Figure: Organisational structure of Butlin’s
Source: (Butlins, 2020)
Butlin’s business organisation mainly follows a divisional organizational structure because it will help the UK based resorts and holiday organisation in dividing the jobs based on the specific skill sets of the employees so that a particular task can be performed while operating in USA geographic location with higher accountability. Furthermore, the divisional organizational structure also brings efficiency towards the organisation that earns the management with high capability and resourcefulness (Ramanadham, 2019). The divisional structure also benefits the firm in identifying the changes that need to be made within the organisational structure during their operations in USA, so that the best results can be determined for the Butlin’s organisation.
188.8.131.52 Monitoring change
- Performance targets (KPI’s): Butlin’s will take up the decision of using market share KPI matrix with the help of conversion rate KPI matrix in respect of focusing towards earning higher market share while operating in US business market by improving their performances(Kerzner, 2017). Whereas, conversion matrix will benefit the Butlin’s establishment in measuring the total sales amount by dividing the number of the visit made by the customer in USButlin’s webpage.
- Control systems: The accommodation and resort service provider will use SAP and ERP information technology systems to take integral responsibilities along with control over the activities while the business takes control over their US business operations(Shim & Shim, 2019). Besides, SAP and ERP also become crucial in terms of controlling and monitoring the activities within the US location of Butlin’s establishment.
- Measurement of performance: Performance within Butlin’s USA geographical location will be measured in comparison to their objectives that the organisation has stated during the initial course of the study.5 years of strategies are being developed by Butlin’s where the prominent role of the organisation will be to measure their overall performance on a daily basis so that their business goals of earning high market share in USA market can be attained within a specified time period.
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PESTEL analysis of 3 countries
The interpretation of external environment of the business is highlighted PESTEL analysis which has focused on political, economic, social, technical, environmental and legal factors.
PESTEL of China
Political: China is considered as most powerful country across globe which is the permanent member of United Nations Security Council. Communist Party of China was always ruling party and stable political freedom is ensured which is beneficial from the business aspect.
Economic: China has attracted the record volume of US$139 billion foreign direct investment in 2016 which is highlighted as the third largest destination in world. On the other hand, rapid urbanisation, high inequality and damage to the environment are highlighted as the issues which are needed to be addressed (PWC, 2019). The standard rate of corporate income tax is 25% which has minimised to 15% for the qualified business.
Social: China is largest in population density and 1.4 billion individual have resided in the country. The literacy rate of China is 96.4% which has reflected the improvement of education that is beneficial for the businesses (Globalcitizen, 2019). Contemporarily, ageing population is considered as the issue which is to be addressed.
Technical: Approximately 772 million individuals have used internet technology which is highest in the context of one particular country (Worldbank, 2018). It has aimed to assist the country for moving from the labour-intensive economy to innovation-driven economy.
Environmental: The severe natural environment has been influenced by rapid development which has focused on climate change, deforestation, industrial waste and pollution. The encouragement of public participation and responsibility to the local people are highlighted as the environmental concern for the country.
Legal: The Government of China has established diversified range of legislations and rules for being regulated effectively. The encouraged category, restricted category and prohibited category are highlighted as the classification for following the rules and regulations.
PESTEL of USA
Political: USA is considered as the second largest democracy across globe which has faced international criticism due to the interventionist policies across globe. The country is considered as the suitable position for investing in the light of foreign direct investment.
Economic: The GDP of USA has grown by 0.5% in the last quarter of 2019 and the economic perspective of USA is leading across globe (Independent, 2018). The GDP growth of the country is reflected as 2.9% which has provided the companies an opportunity to invest in the company context.
Social: The population of USA is 327.2 million in 2018 which also demonstrates one birth in every 8 seconds (Statista, 2018). The education and healthcare system of the country is developed and the socio economic mobility has also been identified.
Technical: USA is considered as leading country in the field of technology and science which is reflected from the company headquarter of Microsoft, Apple, Google, Facebook and others. The application of technology has changed the overall system of living for the human being.
Environmental: USA comprises diversified climate, geography and wildlife which has sustained 218 climate and weather disasters since 1980 (Aamerica.gov, 2015). Moreover, 79.62 million international tourists have come to USA in 2018 which needs strong regulation against environmental concern.
Legal: All the state of USA comprises own structure of Government and presidential structure has enabled the Government to regulate overall concern for the business. The legislation for protecting the rights of intellectual property are also highlighted as the legal concern.
PESTEL of Spain
Political: The political condition of Spain is not favourable due to the independence campaigning of Spain for long-term. The violent clashes, independence bid and jail sentencing of Catalan politicians has caused serious issues for the country. On the contrary, the country is the member of powerful institutions of the world such as EU, NATO, WTO and OECD.
Economic: Spain is thirteenth largest economy for the country whose GDP $1426.19 billion was in the year of 2018 (Europa, 2018). The unemployment rate of the country is 14.2% on September, 2019 which caused serious threats for the business to expand their operations.
Social: The citizens of Spain, known as Spaniards are friendly and open-minded who are mainly communicated in Spanish, Catalan and Euskera. The life expectancy for women and men are considered as 85 and 79 years respectively (BBC, 2018). The social challenges faced by the citizens are considered as low income, child poverty, healthcare pressure, ageing population and little credit.
Technical: Spain is improved in technical up gradation which is reflected from issuing national identity cards through digital medium (Worldatlas, 2017). The application of technology is demonstrated in the control of road and air traffic, securities over international medium, civil engineering and mobile communications.
Environmental: As the country is enriched with tourism sector, the environmental aspects are ensured to be followed for maintaining natural balance across globe (Financial Times, 2018). Some of the environmental challenges are considered as air pollution, water pollution, deforestation and desertification which are also need to be followed.
Legal: The independence of Spanish Judiciary system has demonstrated control legislations and rules for assuring business process execution. The perspective of both the employer and employees are maintained to follow the balance in the country.
3 country comparison table
|Criteria||Weight||Score for China (0-4)||Overall for China||Score for USA (0-4)||Overall for USA||Score for Spain (0-4)||Overall for Spain|
|Cost of labour:||2||*3||6||*4||8||*3||6|
|Short term credit:||1.5||*3||4.5||*3||4.5||*3||4.5|
|Convertibility of currency:||2||*2||4||*3||6||*3||6|
|Delays due to bureaucracy:||1.5||*3||4.5||*3||4.5||*2||3|
|Foreign investor attitudes:||2||*2.5||5||*2.5||5||*2.5||5|
Based on the analysis, USA is identified as most preferred country for expanding the business operations. The score for USA is 82 whereas the score for China and Spain are 76 and 73 respectively which has provided the company an opportunity to expand their business process.
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