PEST Analysis of Australia - Essay Example

PEST Analysis of Australia

Product Description: Garnier is a cosmetic brand designed for skin care and hair care products.

1. POLITICAL & LEGAL FACTORS.
2. Stable Government

There is a strong and stable democratically elected government in Australia. This is represented through a constitution vesting executive powers in a Governor-General, an elected federal government, and a vibrant and independent judiciary whose powers are vested in the high court. In a study done by the Economic Intelligence Unit, Australia ranked the sixth most democratic country in the world.

1. Political Stability

The political stability in Australia is reflected by the number of multi-international companies present and the existence of very little political-related violence in the country. Jahdi and Acikdilli (2009) note that Australia ranked third worldwide in terms of political stability.

1. Business Policy

The Australian Government has set aside a very strong business policy known as the Gillard Government Trade Policy Statement. According to Jahdi and Acikdilli (2009), it has a central theme of ‘Trading our way to more jobs and prosperity.’ This set out various guiding principles. These were separation, non-discrimination, unilateralism, transparency, and indivisibility. Since its inception, Australia has improved its trade intensity from 28% to 40%. 

1. Labor Laws

 It should be noted that each province and municipality has powers to legislate laws relating to the worker and the minimum wage for the worker varying from province to province.

2. ECONOMIC FACTORS
3. Domestic Growth

Australia ranked as the 13th largest economy in terms of nominal GDP in 2009. This actually represented 1.7% of the world’s economy. The service sector represented 68% of it.

1. Economic Stability

Australia has a very strong GDP growth which expanded by 0.4% in the fourth quarter of 2011. There is a low business risk and the interest rates are very stable. The inflation rates are very low at 1.60 in 2012. Imports were also seen to be on the rise; in February 2012, imports were worth 24,905 million AUD.

1. Consumer confidence

In research carried out by the Melbourne Institute, the index for consumer sentiments fell by 1.6% in April to 94.5%. One of the components measured in this research was the buying conditions of major household items.

1. Business confidence

Business confidence surveys provide useful tips about the current economic conditions. According to the Australian Bank monthly survey, business confidence improved from 3 in March 2012 to 4 in April 2012.

3. SOCIAL FACTORS
4. Consumer Tastes and Preferences

Research has shown that the Australian population has a superior taste for internationally recognized brands.

1. Demographics

Australia had a population of 22.5 million by March 2011, which was an increase of 1.4% from the previous year (Charter and Polosnky 2011, pp 5-9). There were 11.12 million males in comparison to 11.21 million females. The median age was 36.8 years. This shows there is an already existing market for Garnier products.

1. The Media

The media in Australia will play a very vital role in propelling the sales and marketing of Garnier. There are various radio stations, TV channels, newspapers, magazines, the Internet, and other avenues that are already established and reach out to the general population.

1. Education

A majority of the population is well educated, hence most of them have an idea of which products are the best and how those products would affect their health.

4. TECHNOLOGICAL FACTORS
5. Available Technology

The levels of technology in Australia are at an advanced stage. This means the best technology will be at the disposal of the company both in terms of production and marketing. This advanced technology will make it easier for a larger mass to be reached in a very short time and at cheap costs.

1. Future for growth

The advancements in technology will enhance the future of Garnier in Australia. Future marketing will depend on these advancements and will help in outwitting competition as there is an influx in skin and beauty care products recorded in Australia (Charter and Polosnky 2011, pp 9).