Distinction BTEC Business Unit 5 Assignment 2 - External Factors and Cultural Differences

EXTERNAL FACTORS
AND CULTURAL
DIFFERENCES
Unit 5 Assignment 2




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SUBMIT AS YOUR OWN, YOU MAY RISK BEING
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, Unit 5 Assignment 2



Contents
Introduction...........................................................................................................................................2
PESTLE Analysis......................................................................................................................................2
PESTLE Analysis of the USA................................................................................................................2
PESTLE Analysis of India.....................................................................................................................4
Support Systems....................................................................................................................................5
Internet..............................................................................................................................................5
International Payment Methods........................................................................................................6
SWOT Analysis.......................................................................................................................................7
SWOT Analysis of the USA.................................................................................................................8
SWOT Analysis of India......................................................................................................................9
Country Recommendation for Amazon to Trade In.............................................................................10
References...........................................................................................................................................11
Introduction.........................................................................................................................................12
Importance of Language......................................................................................................................12
Ethnicity...............................................................................................................................................13
Religion................................................................................................................................................13
Social Structures..................................................................................................................................13
Values..................................................................................................................................................14
Attitudes to Work................................................................................................................................14
Attitudes to Business...........................................................................................................................15
Openness to Change............................................................................................................................15
Impact of Cultural Factors on International Business..........................................................................15
Advertising.......................................................................................................................................15
Contract Negotiation.......................................................................................................................16
Management Style...........................................................................................................................16
References...........................................................................................................................................17

, Unit 5 Assignment 2



Introduction
In this report I will be doing a PESTLE and SWOT analysis on 2 contrasting countries that
Amazon trades in. Thereafter I will be recommending one country for trade.

PESTLE Analysis
To start off, I will be doing a PESTLE analysis on the USA and India when it comes to
international trade. PESTLE analysis is a useful tool as it aids a company in identifying
external influences that may have an impact on internal decisions. Understanding the
impact that these external factors can have on a business helps firms prepare more
effectively. I will then be making a recommendation if Amazon should continue to trade in
one of the two countries.
PESTLE Analysis of the USA
A political factor of the United States is that the country has been the first choice for many
multinational companies for foreign direct investment for a long time. This is because the
USA has a stable political environment, advanced infrastructure, and technology, positioning
the USA as a great destination for foreign direct investment. The USA’s GDP is currently $20
trillion, the largest in the whole world. It also has a huge impact on the political dynamics of
numerous countries all over the world. However, the United States has been chastised
internationally for some of its interventionist policies in other parts of the world. For
Amazon, the USA would be a great country to operate in as they can take the advantage of
the huge economic opportunity and gain access to over 330 million customers across the
country. Most US residents have the privilege to internet access, meaning that they will be
able to use Amazon to do their online shopping.
An economical factor of the United State is that they have the largest economy in the world
in terms of GDP. It is a country where multinational corporations such as Coca-Cola,
McDonald's, Amazon, Subway, Microsoft, Apple, Facebook, Google, and others shape and
lead global financial debates. The global economic landscape is rapidly shifting, posing a
challenge for the United States. The country is undeniably an economic superpower and
global leader. By 2050, it may, however, be ranked third in the world in terms of gross
domestic output by purchasing power parity. Another economic factor of the United States
is that the USA has the advantage of global in-house tech companies. They contribute a
major portion to the country’s economy. The unemployment rate is increasing and it’s
declining the purchasing power of people. This could be a both positive and negative factor
for Amazon, as they have a large market to work alongside of, allowing huge potential
growth of the company. However, this could also be a negative factor as unemployment
rates are increasing due to the recent pandemic, meaning that people will have less money
that they will be willing to spend while shopping with Amazon, decreasing sales for the
company.
A social factor of the United States is that it is the third most populated country in the
world, with over 330 million residents. The USA also has the highest number of aging
populations, which can lead to issues when it comes to labour supply. Another social factor
is that there is a high diversity rate, as people from all over the world live in the US. This