EXTERNAL FACTORS AND CULTURAL
DIFFERENCES
INTRODUCTION
I am going to write a two-part investigative journal article. Part One will recommend one
country a selected business could target for international trade and Part Two will evaluate
the impact of cultural differences on international business.
PART ONE
In this first part I will research, select an appropriate
business, and two countries that might be suitable for it to
trade in. The two countries that I have chosen to trade in
are Argentina and Iran. This article will include how
international business support systems which enable LUSH
to trade internationally and a situational analysis of
Argentina and Iran. Also, I will be explaining the external
influencing factors and the impact on LUSH. Finally, I will
provide a justified conclusion that recommends one of the
countries that I have chosen for LUSH.
P5. Explain the external factors that influence a selected business considering trading
internationally.
PESTLE ANALYSIS
I am going to explain the external factor that influence LUSH, to identify these external
factors I am going to use one situational analysis which is PESTLE Analysis. This tool involves
researching data about the external environment to identify issues that might affect the
business.
Political factor
LUSH operates in many countries across the world. Therefore, the political situation of each
country that LUSH operates will have a different impact on the business. The impacts that
LUSH might face are government policy, political stability, tax policy, labour law and trade
restrictions. LUSH is aware of the political changes that occurs in the countries they operate
in. They respond to world events, new legislations and try to improve their own inspiration
as well as encouraging their partners in the other parts of the world to adopt similar
policies. For example, LUSH supports Fair Trade and Community Trade initiatives, by
purchasing directly from suppliers and considering workers right, environmental safety,
animal protection and transport for its products.
Economic factor
, This factor will be a concern for LUSH as will have an impact on their profit, prices, demand
and costs per product. LUSH would have to be aware of the economic growth, exchange
rate, interest rate, inflation rates, disposable income and unemployment rate that occurs in
the countries they operate in. LUSH will have to be aware in any changes within policies in
in taxation which can affect their finance stability. For instance, if there is a rising inflation
then the cost of raw materials will increase for LUSH. Also, if the economic growth in the UK
is growing the purchasing power may increase as well.
Social factor
The demand for environmental products have been growing over the years and becoming a
trend in today’s day. LUSH comply to this trend by making its products from natural and
organic ingredients as well as using eco-friendly packaging for its products. Also, people who
doesn’t have children would have more time and more money to spend on skin care
products. LUSH is becoming more “men care acceptance” as they are introducing skin care
products for males as well. Another, social factor is that more people from middle class is
aiming to purchase products from LUSH. Most of LUSH costumers are vegetarian or vegan
young, professional woman between the 20 – 35 who purchase eco-friendly products.
Technological factor
LUSH have been following the use of technology and new technology innovations which
allow them to take new opportunities. They also invested in the e-commerce sector where
customers can purchase the products in their official website. Also, the technology team of
LUSH is constantly innovating and building solutions such as augmented reality apps and
bespoke till to speed up in-store transactions. For instance, one successful innovation is
LUSH Lens AR app which allows customers to scan the products using their smartphones for
ingredients and instructions in an attempt to remove packaging.
Legal factor
Government policies, employment laws, health and safety laws, consumer protection laws
and other laws impact the performance of LUSH. This can be such as the UK General Data
Protection Regulation which apply to individuals that work for LUSH, it will protect their
privacy and secure their personal information. They also comply with the law in each
country they operate in apart from any laws that require them to carry out test on animals.
They also take all Anti-Bribery and Corruption laws seriously and are committed to
investigate any incidents that could happen.
Environmental factor
LUSH as an ethical business has always been facing the impact of environmental factors.
They focus on becoming truly carbon positive. Over 10 years, they have been using
electricity and gas from Ecotricity. Therefore, they are working to build their business on
truly renewable energy for the future. Around the rest of the world in their factories and
shops they also purchase green electricity. Also, reducing packaging is something that LUSH
has been working for many years. They have invented shampoo, soaps and bubble bars so
these can help reducing the unnecessary packaging. The packaging they use it is made from
100% recycled plastic as well they encourage customers to be eco-friendly by bringing back
5 clean pots or tubes from LUSH and they will get one fresh mask for , free.
DIFFERENCES
INTRODUCTION
I am going to write a two-part investigative journal article. Part One will recommend one
country a selected business could target for international trade and Part Two will evaluate
the impact of cultural differences on international business.
PART ONE
In this first part I will research, select an appropriate
business, and two countries that might be suitable for it to
trade in. The two countries that I have chosen to trade in
are Argentina and Iran. This article will include how
international business support systems which enable LUSH
to trade internationally and a situational analysis of
Argentina and Iran. Also, I will be explaining the external
influencing factors and the impact on LUSH. Finally, I will
provide a justified conclusion that recommends one of the
countries that I have chosen for LUSH.
P5. Explain the external factors that influence a selected business considering trading
internationally.
PESTLE ANALYSIS
I am going to explain the external factor that influence LUSH, to identify these external
factors I am going to use one situational analysis which is PESTLE Analysis. This tool involves
researching data about the external environment to identify issues that might affect the
business.
Political factor
LUSH operates in many countries across the world. Therefore, the political situation of each
country that LUSH operates will have a different impact on the business. The impacts that
LUSH might face are government policy, political stability, tax policy, labour law and trade
restrictions. LUSH is aware of the political changes that occurs in the countries they operate
in. They respond to world events, new legislations and try to improve their own inspiration
as well as encouraging their partners in the other parts of the world to adopt similar
policies. For example, LUSH supports Fair Trade and Community Trade initiatives, by
purchasing directly from suppliers and considering workers right, environmental safety,
animal protection and transport for its products.
Economic factor
, This factor will be a concern for LUSH as will have an impact on their profit, prices, demand
and costs per product. LUSH would have to be aware of the economic growth, exchange
rate, interest rate, inflation rates, disposable income and unemployment rate that occurs in
the countries they operate in. LUSH will have to be aware in any changes within policies in
in taxation which can affect their finance stability. For instance, if there is a rising inflation
then the cost of raw materials will increase for LUSH. Also, if the economic growth in the UK
is growing the purchasing power may increase as well.
Social factor
The demand for environmental products have been growing over the years and becoming a
trend in today’s day. LUSH comply to this trend by making its products from natural and
organic ingredients as well as using eco-friendly packaging for its products. Also, people who
doesn’t have children would have more time and more money to spend on skin care
products. LUSH is becoming more “men care acceptance” as they are introducing skin care
products for males as well. Another, social factor is that more people from middle class is
aiming to purchase products from LUSH. Most of LUSH costumers are vegetarian or vegan
young, professional woman between the 20 – 35 who purchase eco-friendly products.
Technological factor
LUSH have been following the use of technology and new technology innovations which
allow them to take new opportunities. They also invested in the e-commerce sector where
customers can purchase the products in their official website. Also, the technology team of
LUSH is constantly innovating and building solutions such as augmented reality apps and
bespoke till to speed up in-store transactions. For instance, one successful innovation is
LUSH Lens AR app which allows customers to scan the products using their smartphones for
ingredients and instructions in an attempt to remove packaging.
Legal factor
Government policies, employment laws, health and safety laws, consumer protection laws
and other laws impact the performance of LUSH. This can be such as the UK General Data
Protection Regulation which apply to individuals that work for LUSH, it will protect their
privacy and secure their personal information. They also comply with the law in each
country they operate in apart from any laws that require them to carry out test on animals.
They also take all Anti-Bribery and Corruption laws seriously and are committed to
investigate any incidents that could happen.
Environmental factor
LUSH as an ethical business has always been facing the impact of environmental factors.
They focus on becoming truly carbon positive. Over 10 years, they have been using
electricity and gas from Ecotricity. Therefore, they are working to build their business on
truly renewable energy for the future. Around the rest of the world in their factories and
shops they also purchase green electricity. Also, reducing packaging is something that LUSH
has been working for many years. They have invented shampoo, soaps and bubble bars so
these can help reducing the unnecessary packaging. The packaging they use it is made from
100% recycled plastic as well they encourage customers to be eco-friendly by bringing back
5 clean pots or tubes from LUSH and they will get one fresh mask for , free.
