M3- Impact on Costa- Political, legal and social factors in
China and the UK
China
Political factor
Changes in trading conditions
China recently have introduced new import regulations. Food and drink recently
increased from 10% to 15% tax rate. This will affect the finances department as they
would need to be paying higher tax on their coffee so this could mean that their costs
will rise. Because of the rise in prices, it could lead to a decrease in sales. To avoid this,
Costa may reduce their staff to have less costs. They may also have to come up with a
new marketing campaign to bring in more consumers and get more sales to balance
their costs and profit out. This means that the marketing department will be affected as
they need to come up with the new campaign and advertise it, as well as the finances
department because they need to fund the advertisement.
Legal factor
Changes in the Chinese employment law
A new law in China has made it easier for the public to get jobs as they no longer need
permits to get a job so this means that Costa can offer jobs. If its easier to get a job
then that means that people have more money so this can also mean more sales for
Costa. However a change in the employment law in China that they have introduced is
that employees are only aloud one hour overtime and are entitled to three public
holidays during the time of the Chinese new year. This may affect the company hugely
as they would need to employ more employees, which means a higher cost affecting
the company as a whole and the financing department as well as the human resources
department having to deal with planning for the new holidays and employing new
people.
3 Social factors
The increase in the middle class
An increase in the middle class will mean that there will be a higher demand in coffee
so Costa would need to buy more coffee as well as hiring more staff to serve the
middle class customers so this may have an affect on the human resources
department. The positive thing about having more middle class people is that they
have more money that they can spend on luxury items like Costa coffee although the
finance department may be affected as they would need to pay more taxes and buy
more materials to make the coffee. The production department will also be affected as
they will need to produce more coffee. The suppliers will also be affected as they
would need to supply Costa with more coffee and food items as well.
Social demographic
China and the UK
China
Political factor
Changes in trading conditions
China recently have introduced new import regulations. Food and drink recently
increased from 10% to 15% tax rate. This will affect the finances department as they
would need to be paying higher tax on their coffee so this could mean that their costs
will rise. Because of the rise in prices, it could lead to a decrease in sales. To avoid this,
Costa may reduce their staff to have less costs. They may also have to come up with a
new marketing campaign to bring in more consumers and get more sales to balance
their costs and profit out. This means that the marketing department will be affected as
they need to come up with the new campaign and advertise it, as well as the finances
department because they need to fund the advertisement.
Legal factor
Changes in the Chinese employment law
A new law in China has made it easier for the public to get jobs as they no longer need
permits to get a job so this means that Costa can offer jobs. If its easier to get a job
then that means that people have more money so this can also mean more sales for
Costa. However a change in the employment law in China that they have introduced is
that employees are only aloud one hour overtime and are entitled to three public
holidays during the time of the Chinese new year. This may affect the company hugely
as they would need to employ more employees, which means a higher cost affecting
the company as a whole and the financing department as well as the human resources
department having to deal with planning for the new holidays and employing new
people.
3 Social factors
The increase in the middle class
An increase in the middle class will mean that there will be a higher demand in coffee
so Costa would need to buy more coffee as well as hiring more staff to serve the
middle class customers so this may have an affect on the human resources
department. The positive thing about having more middle class people is that they
have more money that they can spend on luxury items like Costa coffee although the
finance department may be affected as they would need to pay more taxes and buy
more materials to make the coffee. The production department will also be affected as
they will need to produce more coffee. The suppliers will also be affected as they
would need to supply Costa with more coffee and food items as well.
Social demographic
