Running Head: PIATEX MACRO-ENVIRONMENT ANALYSIS REPORT 1

Piatex Macro-environment Analysis Report

Name

Institution

Date
PIATEX MACRO-ENVIRONMENT ANALYSIS REPORT 2

Table of Contents
Executive Summary........................................................................................................ 2

Introduction.................................................................................................................... 3

Political Factors Analysis................................................................................................... 4

Economic Factors Analysis................................................................................................. 5

Social Factors................................................................................................................. 6

Technological Factors....................................................................................................... 7

Other Contemporary Factors............................................................................................... 8

Conclusion..................................................................................................................... 9

References................................................................................................................... 10
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Executive Summary

This report will evaluate the various external operating environmental factors that could affect

the operations of the company in India, upon introduction of Piatex. It will assess the

political-legal, economic, social, technological, and other contemporary factors in India, to

ascertain how they could affect various operational aspects of the business. Based on the

findings, the report will make recommendations to promote operational success and

competitiveness of the company in the particular economy.

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Introduction

Designed and manufactured by Ananas Anam, a company operating from Philippines,

Piatex is a material made from pineapple leaf fibres that can be used as an alternative to

various textile and leathers in the manufacturing processes of various items such as motor

vehicle parts, furniture, shoes, and other items (Ananas Anam, 2017). The pineapple leaves fibres

are extracted through a process known as decortications, from which non-woven textiles can be

extracted and used in the manufacture of the aforementioned and other items (The Mind

Unleashed, 2017). In pursuit of a strategy to foster social change and expand globally, Ananas

Anam is contemplating expanding into India. According to the United Nations (2017) profile of

India, it is a country located in the Southern part of Asia, which has been experiencing steady

economic growth since the implementation of the 1991 economic reforms. The population of

India is approximately 1.3 billion people, with an average annual economic Gross Domestic

growth of approximately 6 percent. This report will assess the macroeconomic environment in

India, in order to have an understanding of how political, economic, social, and technological

factors would affect the establishment of operations in India.

Political Factors Analysis

India has a federal form of government, with three main levels of government, the local,

state, and union or federal government (Kumar, & Sethi, 2016). The current president of India is

Pranab Mukherjee, who took office in 2012, while the current Prime Minister of India, Narendra

Modi, assumed office in May 2014 (Sreeramulu, 2016). The main political parties in India are

The Party with a Difference (BJP), which is the ruling party; Indian National Congress; Bahujan

Samaj Party; Communist Party of India; and National Congress Party, which have different

ideologies as envisioned in their respective manifestos (Rajagopal, 2017). Kumar and Sethi
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(2016) observed that most of the political parties are pro-business growth and the formulation of

strategies that foster business activities as the basic driver of economic growth, since the

inception of the 1991 economic reforms.

This information will provide the management with an understanding of the ideologies

propagated by the political administration in place and if the same will favor the formulation and

implementation of the legislations favoring social entrepreneurial businesses such as Ananas

Anam, and subsequently, the product Piatex. Kumar (2016) observed that the union, state,

and local government, working with the justice system, have formulated and implemented

initiatives that protect the property and intellectual property rights, which is important to the

competitiveness of businesses, such as the recently launched National Intellectual Property

Rights (IPR). Another element of the political environment, is the taxation system of India,

which is three tiered, with the Federal government being in charge of services taxes, income

taxes, and sales taxes, while the state and local governments levy and administer octroi and

utilities taxes (Kumar, & Sethi, 2016).

Economic Factors Analysis

India is one of the members of the BRICS group of emerging economies, which include

Brazil, Russia, India, China, and South Africa (Stephen, 2016). Indian currency is known as the

Rupee and has been relatively stable compared to major currencies of the world such as the

Dollar, Pound, and Euros, which has increased the level of competitiveness of India in the global

market (Subbarao, 2016). After the 1991 economic liberalization reforms, India has been

experiencing a steady economic growth, recording an average 6 percent growth in GDP, with the
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2014 growth rate recorded at 7.3 percent indicating continued economic stability (The World

Bank Group, 2017; Kumar, & Sethi, 2016).

Further, according to the World Bank report on India, most sectors of the economy,

including Industry, Services and other activity and Agriculture, have recorded a continuous

growth over the years realizing an average of 30 percent growth as a percentage of the Gross

Value Added (GVA). Attributable to the continued economic growth, the unemployment rate as

at 2014 stood at 3.5 percent compared to 4.4 percent in 2005. With improved economic

performance in the country, the employment rates have been on the rise in the last two decades,

which has resulted to improved levels of disposable incomes, translating to improve abilities to

purchase products and goods (Kumar, & Sethi, 2016). Kumar and Sethi (2016) further observed

that the interest and taxation regimes, especially after the 1991 liberalization strategies, have

been favorable for businesses. Holistically, these factors indicate a favorable operating economic

environment for Ananas Anam.

Social Factors

The current estimated population of India is 1.3 billion people, with majority of the

citizens, approximately 70 percent, falling between the ages of 15 and 65 years (The World Bank

Group, 2017). Approximately 28 percent, 63 percent, and 6 percent of the population fall in the 0

to 14, 15 to 64, and above 65 years respectively, with an almost 50 to 50 percent gender

combination in the respective age brackets, with a life expectancy of 68 years (Office of the

Registrar General & Census Commissioner of India, 2011). Approximately 79 percent of Indians

are Hindus, 14 percent are Muslims, Christians make up approximately 2.2 percent, and other

religions such as Sikhism, Buddhism, Jainism and others make up the remaining percentage of
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the population (Office of the Registrar General & Census Commissioner of India, 2011). The

average literacy rate among the males is approximately 86 percent and 65 percent among

females, varying from one state to the other (The World Bank Group, 2017).

The gender and age configuration, religious beliefs, and literacy levels among other

social factors of the Indian population, affect the operations of a business in the country. The

ageing population, with approximately 5% of the population aged above 65 years, and a majority

aged between 15 and 65 years, will determine the kind of marketing approaches that the business

will use to foster interaction with the target market. Moreover, this will also influence the tastes,

preferences, and buying behaviors of the Indian population. In addition, the literacy levels of the

country indicate that the business will have access to skilled and semi-skilled labor upon entry

into this market.

Technological Factors

As one of the rapidly growing and emerging economies, Indias government has

implemented various initiatives aimed at fostering innovation and technology in various sectors

of the economy. The TRIPS agreement, has led to the formulation of intellectual property rights

policies that have fostered innovation, research and development within different sectors of the

economy (Greenhalgh, 2016). According to the 2015 World Economic Forum report on

information technology, India was ranked 89th globally in the 2015s Network Readiness Index,

which incorporates various aspects of adoption and utilization of information technology in the

economy (Dutta, Geiger, & Lanvin, 2015).

Joshi and Ruparel (2016) on the other hand, observed that the uptake of mobile

communication technology has increased over time with most of the countrys regions having 3G
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and 4G connectivity, which coupled with growth in the uptake of mobile telephony services, has

improved the national internet penetration rates. India is connected to the global internet network

via different fiber optic cables, while local terminating points for the end-user are through

various technologies such as WiMAX, WI-Fi, fibre, and other wire connections (Greenhalgh,

2016). The Governments policy fostering innovation and technology has resulted in s thriving

manufacturing and other industries, which have seen the increased uptake and use of technology,

as evidenced by the emergence of Tata as one of the major global automotive manufacturing

firms especially after the 2008 acquisition of Jaguar Landrover (Joshi, & Ruparel, 2016).

Overall, the technological environment in India is favorable for business activities, because of

the improved regulation protecting intellectual properties, which is essential for a patented

product such as the companys Piatex.

Other Contemporary Factors

Other factors in the macro environment that could affect the operations of a business

include the environmental factors. According to the World Bank Report (2017), the continued

growth of the Indian economy and industrialization has contributed to a steady increase in the

utilization of fossil fuels, which greatly contribute to the increase in carbon dioxide and other

greenhouse gases emissions, contributing to environmental pollution. Further, industrialization,

coupled with the growth in population in India, and poor solid and other forms of waste

management policies, has contributed to an increase in other forms of pollutions such as water

soil pollution (Joshi, & Ruparel, 2016). With these changes, within India, a class of

environmental and other activists, have emerged that lobby the government to implement rules,

policies, and other regulations that regulated business and peoples activities to protect the

environment (Greenhalgh, 2016).

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Moreover, religious beliefs of the majority of the population of the Indian population, that

is, the Hindus, have contributed to the growth of environmental activism, which propagate the

ideology that people should exist in harmony with and protect the environment (Kumar, & Sethi,

2016). The nature of Ananas Anam business will fit well with the current environmental

ideologies in the Indian economy because the production of Piatex promotes agricultural

production, management of agricultural waste, and creates employment without leaving a

negative environmental footprint. Moreover, the environmental factors will influence the kind of

marketing programs that will be formulated and implemented to foster the uptake and use of the

product in various manufacturing sectors in the country.

Conclusion

The macro environment is favorable for business operations. The political-legal factors

are favorable to business activities because the current government, has implemented policies

that foster business activity. The economy of the country is also growing, as evidenced by growth

in GDP and reduction in unemployment rates. Further, the population growth and other

demographic and social factors show a favorable operating environment. Technological factors,

because the uptake of information technology and implementation of intellectual privacy policies

has promoted research, development, and innovation, which is favorable for business activities.

The environmental factors are favorable for the establishment of environmental friendly

businesses.
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References

Acharya S, Mohan R (2010) Indias economy: performance and challenges. Oxford University

Press, New Delhi

Ananas anam. (2017). ananas anam - New materials for a new world. Retrieved April 16, 2017,

from http://www.ananas-anam.com/

Dutta, S., Geiger, T., & Lanvin, B. (2015). ICTs for Inclusive Growth. Retrieved from

www3.weforum.org/docs/WEF_Global_IT_Report_2015.pdf

Greenhalgh, C. (2016). Science, technology, innovation and IP in India: new directions and

prospects. Economic Change and Restructuring, 49(2-3), 113-138.

Joshi, A., & Ruparel, P. (2016). India. In Angel Financing in Asia Pacific: A Guidebook for

Investors and Entrepreneurs (pp. 151-169). Emerald Group Publishing Limited.

Kumar, R., & Sethi, A. (2016). Doing business in India. Springer.

Kumar, V. (2016). Intellectual Property Rights for SMEs With Case Studies on Patent Protection.

Small Enterprises Development, Management & Extension Journal (Sedme), 37(2).

Office of the Registrar General & Census Commissioner, India. (2011). Census of India

Website : Office of the Registrar General & Census Commissioner, India.

Retrieved April 16, 2017, from http://www.censusindia.gov.in/2011census/C-01.html

Rajagopal, A. (2017). On Media and Politics in India: An Interview with Paranjoy Guha

Thakurta. South Asia: Journal of South Asian Studies, 40(1), 175-190.

Sreeramulu, N. (2016). Foreign Policy Of Narendra Modi Prime Minister Of India. Editorial

Board, 5(1), 97.

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Stephen, M. D. (2016). India and the BRICS: Global Bandwagoning and Regional Balancing.

Vestnik RUDN. International Relations, 16(4), 595-602.

Subbarao, D. (2016). The SIGNAL and the NOISE. The Big Squeeze, 40.

The Mind Unleashed. (2017). Vegan Leather is Now a Thing, And You Won't Believe What it is

Made Out Of! The Mind Unleashed. Retrieved April 16, 2017, from

http://themindunleashed.com/2016/03/vegan-leather-is-now-a-thing-and-you-wont-

believe-what-it-is-made-out-of.html

The United Nations. (2017). UNdata | country profile | India. Retrieved April 16, 2017, from

http://data.un.org/CountryProfile.aspx?crName=INDIA

The World Bank Group. (2017). India | Data. Retrieved April 16, 2017, from

http://data.worldbank.org/country/india