Systemic PEST Analysis Strategic Analysis †MyAssignmenthelp.com

Question: Discuss about the Systemic PEST Analysis for Strategic Analysis. Answer: Introduction Based on the assignment, the country chosen is China and I am assuming BluEarth Renewables INC. a renewable energy developers which is headquartered in Calgary, Canada. In order to maximize the wealth of the company it has decided to expand its business operations in China which is an emerging economic nation. In this report, it is explained that the elements of chinas business environment affect and influence the business operation decision taken by the owner. All the aspects covering marketing and operations are being explained and the benefits it will obtain after setting up the business there. Added to the assignment given, Business model canvas is also prepared for renewable energy business to be settled in china. There are various factors (macro environmental) which influence the business operation decisions in China. An analysis is being carried on to know the factors and how they influence BluEarth Renewables setting up in China. A PESTLE analysis (includes political, economic, social, environmental and technological factors) is being done keeping in mind how it is going to affect the business there (Ho, J. K. K. 2014). Political factors: Political consultation is one of the most important factor that affects business in various ways. Chinas political systems is no more a complex system as compare to past years. The political stability is one of the most asked questions by foreign industries. The conflict between political parties and countrys central government has improved so far it creates a path for foreign countrys to set up their businesses. Its a myth that chinas system of congress is not flexible enough for foreign businesses setting up here. There are government regulations who have formed both formal and informal rules to abide by industries. In China there is an unsettled force which is beneficial for any industry there for a long term plan it gives the freedom to stabilize new industries and greater future prospects. The government in China has mainly focused on developing businesses there and adapt e-commerce effectively. Though China has very less experience in drafting regulations reg arding e-commerce but the growth seen is commendable and covered the whole market by having bigger shares. It can be said that political factor is much flexible in terms of setting up business in China it will help to grow BluEarth renewable developers and promises to be for a long term. Economic factors: Chinas economy have grown significantly in these recent years. There GDP has increased and has become the fastest growing sector of all. The surveys and reports shows if China will continue to grow at this rate it will surpass other countries GDP soon. It also includes factors like adequate rate of savings, skilled labor in abundance, the exportation of business and the urban growth it promises. Chinas GDP allow industries to add value to the society as much as they can. A great example for abundance of workers available in china and that too at a very low cost is Apple. Big companies like Apple have been hiring since long, much of their workforce from China. Also china has given a relax to the restrictions they have applied for foreign countries which are planning to establish their businesses in order to promote foreign direct investments and increase their GDP in economy to compete with other countries. The main industrial exports settled and manufacture in China are electronics, textiles, garments which all requires various sources of energy to manufacture goods so it gives BluEarth renewable developers an opportunity to grow more in the business environment. So it is concluded that Chinas economy will help grow more and at a faster pace. Social factors: With the growing population China is one of the most populated country in the world and this much population affects demographically the business there. The fluctuating growth and age distribution comes with fluctuating taste and preferences it requires a proper study on their behavior. The alteration in trends and values highly depends upon consumers, their lifestyle, their education and religion. The literacy rate is commendable, the majority of people there are literate and China is known to be a communistic culture so it makes easier to know the aspects regarding their tastes and preferences. The market for renewable energy is adapting as the nature of the business is appealing it promotes the use of renewable energy and adopt ethical practices which attracts clients automatically. Technological factors: The technological factor is one of the talking point in China. As China is the only country who have grown so far in this sector and set standards for other countries. The up to date technology is of greater advantage for any business who is seeking to establish there. It promotes latest technology by innovating products, the mechanisms of purchasing and distributing like intranet and internet, Develop new methods of working. For an industry like BluEarth renewable developers technology plays an important role and works for the best to improve their product quality by saving costs and time utilize in it. Environmental factors: Chinas government pay a special attention to environmental factors as pollution and degradation in China is a biggest challenge for a renewable energy industry. So the Chinese leadership is paying attention to the challenges regarding protection of environment on the same hand BluEarth Renewable developers deals in producing renewable energy and keeps in mind the optimum utilization of resources. Marketing Aspects The challenge in entering the market of China is not that tough as it seems in the past years, the image of Chinas market for foreign investments is not clear in the minds of investors and establishers but it is a myth which is making the rounds. The market in China is constantly changing as the time passes by, with the increase in number of people there the spending consumers are also increasing which is one of the huge attraction towards Chinas market to set up a business here. The economy of China shows a decline in the graph of domestic market which is a positive sign for foreign companies to think of diversifying their business and invest in China. As the survey says, China being a homogenous market and no uniformity is present in the market which creates a path for new foreign businesses to focus on sub-markets and target on different segments to cover up the whole market. In terms of population there, it is emerging fast and that affects the tastes and preferences of the custo mers which is changing constantly. But on the other hand with the increase in population there is also an increasing number of new buyers and consumers which are easy to gain. The market is moving fast towards such customers to gain them. BluEarth Renewables produces renewable energies which is required by most of the industries in China whether they are textiles or IT industries so the requirement of different sources of energy is in huge numbers. The need to reassess the requirements and preferences is high in this case and in order to compete in market. As per the analysis it is known that China is technology driven and clients need an assurance that they get up to date technology so their need of renewable energy is much higher. (Kostelijk, 2015). Business Model Canvas A business model canvas is a strategic chart or template of a management which describes the infrastructure, business requirements, value propositions, key partners, key suppliers, key resources and the activities which are required to perform and the finances to support these requirements. What customer segment is being followed by the business, the benefits of following a channel of distribution, the cost involve in the said channel of distribution. The cost structure and revenue streams are explained in the business model canvas. Here it is the business model canvas for BluEarth Renewables Developers Inc. is presented to show various aspects: Key Partners People Groups Landowners Suppliers Lenders Shareholders Entrepreneurs The key supplier of BluEarth is Canadian Solar, Inc. which is engaged in solar modules. Financial Resources Equipment Solar parts Turbines, Shaft, Hydro belt Wind mill blades Construction equipment Accessing capital Provide financial strength Deep Experience Key Activities Diversity in generation type Geography Lifecycle stage stability Long-term returns for shareholders. Value Proposition Foundational Values Organizational Values The customer problems that we are helping to solve are renewable sources of energy that we produce at a low rate. The services and products we offer is developing energy, independent producer of power, hydroelectric. Wind power. The need for renewable energy (hydro, wind, solar) facilities, greenfield projects are being satisfied. Customer Relationships The relationship a customer segment want from us is of trust and a long term successful relation and promises of best innovations with an updated technology management. This model has focused on the requirements of customer segment only by providing sustainability, innovated products by utilizing the resources optimally in order to get subsidized from the government. The relationship with segments does not involve huge costs they are cost effective. Customer Segments Textile Industries Steel plants FMCG IT Industry Government Manufacturers Corporates Key Resources The key resources required by the value propositions are up to date technology to obtain the goals of innovation and labor force to execute the operations. Our Distribution channels are B2B (business to business) B2G (business management to government) Channels The customer segment wants to reach us by direct channel and no other party or chain involved in it. The channels are integrated on the basis of business operation requirement. Direct distribution channels works for the best from the past year experiences. Direct channels of distribution (B2B), (B2G) are one of the cost efficient channels of distribution. Cost Structure The inherent costs in the business model are of equipment cost which is most required. The key resources which are most expensive are blades, solar plates, shaft, turbines and construction equipment which cannot be dismantled. The key activities which involves huge costs are advertising, purchasing equipment, the area required to establish business. Revenue Streams Customer pay for ethical business management practices which are environment friendly. Sustainability Environment Clean and Green energy Cheap Rates Conclusion It is concluded that China has got greater aspects for the future growth of BluEarth Renewable Developers. The flexibility in various factors can be seen after the analysis done on Chinas business prospects which affects the business operations of a foreign venture which is BluEarth Renewable Developers deals in renewable energy. The nature of the business is also an advantage as it promotes renewable sources of energy, subsidy would be given by the Chinese government or central government for carrying out such ethical business practices. The analysis shows how different factors be it cultural and social, environmental, legal and political that they are positive to set up any business there. The flexibility in these factors allow BluEarth Renewable to plan their business marketing strategies for a longer term. The expectations are good enough for operations held in China as the growth prospects shows a good curve. The only limitation in establishing the business in China would be env ironmental factors, as Chinas government is strict regarding the use of resources and industrial waste that straight goes into seas. So this limitation has to keep in mind while establishing business there. A saving in time and costs is higher than the domestic country itself as the labor force available are huge but they require less incentives as compare to domestic country. It is said that China would be a great idea to set up BluEarth Renewable Developers there. References Ho, J. K. K. (2014). Formulation of a systemic PEST analysis for strategic analysis. European academic research, 2(5), 6478-6492. Kostelijk, E. J., Alsem, K. J. (2015). Doing Business with China: A Marketing Perspective. Hanze University of Applied Sciences.