A realistic PESTEL analysis showing relevant factors Essay Example
A realistic PESTEL analysis showing relevant factors Essay Example

A realistic PESTEL analysis showing relevant factors Essay Example

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  • Pages: 3 (818 words)
  • Published: January 6, 2018
  • Type: Case Study
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In order to assess the potential advantages and disadvantages of setting up a satellite facility in Turkey, I will perform a PESTEL analysis for Autoliv. Turkey, as an emerging country, actively encourages the creation of new businesses within its territory. However, it is important to recognize that the nation is currently undergoing reforms which have led to demonstrations and civil unrest, presenting a possible threat to Turkey's stability.

There is a high level of security in businesses due to the riots and terrorist alerts.

Economic

Turkey's economy is a mix of modern industry, commerce, and traditional agriculture. In 2001, 40% of the population still worked in agriculture. The private sector is strong and expanding quickly, but the government plays a significant role in key industries like banking, transportation, and communication. Turkey's most important and largest exporting industry is the privately-owned textile

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and clothing industry. Other industries include food processing, automotive manufacturing, mining (coal, chromites copper boron), steel production petroleum construction lumber paper. The country recently experienced volatile economic growth and notable imbalances.

Turkey's economy has experienced significant growth in recent years, with real GNP increasing by more than 6% on multiple occasions. However, this growth was disrupted by notable declines in output in 1994, 1999, and 2001. Additionally, the public sector fiscal deficit consistently surpassed 10% of GDP. This can be attributed to the heavy burden of interest payments, which account for over half of central government spending. Inflation has also remained high, with rates reaching double digits. Consequently, foreign direct investment in Turkey remains relatively low at less than $1 billion per year.

In late 2000 and early 2001, the economy faced a crisis arising from an expanding trad

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deficit and vulnerabilities within the banking sector. As a result, the lira's exchange rate was allowed to float freely and the country entered into a recession. Nevertheless, significant progress was made in 2002 thanks to substantial financial assistance from the International Monetary Fund (IMF) and stricter fiscal policies.

Looking ahead to 2003, there are concerns about sluggish global economic growth as well as political tensions in the Middle East that create uncertainty regarding Turkey's future prospects.

Socio-Cultural

The company in Turkey addressed the religious needs of its workers, who are predominantly Muslims (98%). To accommodate their prayer practices, the company installed a mosque in each factory, allowing employees to pray conveniently during their break instead of having to travel to a distant mosque and risk being late for their shift. In addition, the company recognized the societal divide in Turkey between the affluent westernized individuals and the less privileged traditional population. By attracting highly skilled workers and managers from the wealthier westernized group, the company benefited from their expertise.

The firm faced challenges in recruiting uneducated individuals due to their lack of knowledge. Adjusting to the work would take a long time for them compared to skilled workers who could start right away. In response, the firm decided to hire double the necessary number of workers for a short-term contract of six weeks. At the end of this period, they would dismiss the unskilled workers while retaining the skilled ones. In Turkey, every man is required to complete either 18 months of national service or 6 months of service depending on their educational background. As a result, Autoliv only hired men who had completed

their national service to avoid disruptions in the workplace.

In both the UK and Turkey, women have important roles in different areas of work. In the UK, women often perform practical tasks like cleaning and cooking. However, in Turkey, cultural norms limit women's involvement in employment. Autoliv, for example, follows these cultural guidelines by not hiring women. Nonetheless, friends and family frequently visit and witness their loved ones engaged in their job duties.

Without asking anyone, the individuals simply enter. Autoliv, however, has implemented security measures to prevent unauthorized entry without proper identification. Although they are cautious not to upset their family and friends, it is a necessary precaution in case a bomber attempts to plant something within the factory. Despite the challenges, the diligent workers in Turkey display a strong work ethic and a willingness to learn. The country's technological infrastructure and electronic development are lacking, with underdeveloped and basic ports. Nevertheless, there is progress being made as Turkey strives to catch up with the technological advancements of Western Europe by investing in improvements and becoming more up to date.

Regarding the environment, Turkey, as a developing country, has fewer restrictions and planning regulations for constructing buildings. Compared to Western European countries, pollution controls are less strict and there are reduced costs for pollution management. On the legal side, Autoliv employed a consultant who came highly recommended by Autoliv France. This consultant collaborated with the company's accountants and other specialists. Additionally, the consultant assisted in implementing anti-fraud measures within government bureaucracy and obtaining necessary permits.

Acquiring government incentives and establishing factories to provide employment opportunities for others.

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