From the course: International Marketing Foundations

PESTCL framework: Political factors

From the course: International Marketing Foundations

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PESTCL framework: Political factors

- What makes one country different from another? It's more than just the borders, and outlining the land, and the language being spoken. When you're thinking of entering a new geography with your business, there are several factors that must be considered. A commonly used framework is to analyze the political, economic, social, technological, competitive, and legal structure in new countries. The shorthand for this is P-E-S-T-C-L. Some pronounce it pestle. We'll explore each factor one by one in this chapter and start with the political factor first. Researching and learning the political structure of another country is actually more simple than you may think. Online government resources, such as cia.gov have up-to-date information on how governments are structured and the current political trends in every country on the globe. The political environment is an important factor for your consideration because not all countries and governments will see your business the same way you do. You may look at your business as being all about giving consumers a choice, to have better access to products and services. But the politicians in the country you're about to enter may see your business as a threat to an industry that employs a lot of their people, or they may see it as a source of tax revenue for their coffers. There are also some countries where the bureaucracies with which you must deal to get your product or service to market can make a visit to the driver's license bureau feel like a day at the spa. In essence, some nations are more business friendly than others. In some countries, corruption within the government ranks can create challenges for you. So how do you go about finding out which countries might be a better political fit for you than others? There are great websites, such as transparency.org, and doing business.org, where you can see how countries rank on both the ease of doing business and the transparency with which the markets operate. You can visit these websites and look at the factors that are important to your business. Once you've gathered the information, it may be helpful to create a chart where you can show others in the organization how the countries stack up. I suggest creating a scoring system so you can assign a weight reflecting the importance of a specific factor and then rate the countries you're evaluating compared to one another. For example, if your margins are really narrow, you may want to look at the tax rates by country and rank them accordingly. A rating system will help you prioritize your efforts.

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