PESTLE Analysis Of Factors That Could Influence The Sports Direct Business Decision To Trade Internationally Essay

Political

A political factor that could impact Sports Direct is the trading regulations and tariffs which are related to consumer services. Tariffs give a price advantage to locally-produced goods over similar goods which are imported, and they raise revenues for governments. For example America has imposed tariffs on China meaning goods are more expensive for China to buy from America. Another political factor is the political stability of the country they are operating in and the importance of the retail sector of the country’s economy. For example if Sports Direct operated in Venezuela the goods they would sell will change and fluctuate due to the high inflation which has a high of 110%. Inflation could affect the business financially they will not know how much they will earn and it may be too expensive. Inflation will affect the cost of the goods Sports Direct sell and may lead for the business to be financially unstable and become bankrupt.

Economic

An economic factor that could affect Sports Direct is the exchange rates and stability of the country. What might occur is that the projected amount of profit they usually make in the market maybe different to the actual profit they make in a different market. Sports Direct would need to consider the comparative difference between the host country and the current country they operate in. Sports Direct will need to think about the unemployment rate in order to see if they can provide opportunities to help the country which can help alleviate the economy`s instability. Unemployment rate can affect the business because it would mean people in the country do not have the skills and qualities for them to work for Sports Direct which would mean that they would need to relocate some of their current staffs currently working to a new place. Another factor that could impact Sports Direct is if the employment rate is high too many people will be working for one business whereas if they are is a high unemployment rate it would mean they will not be roles filled which will lead for the business failure when trading internationally.

Social

There are a lot of social factors that could impact Sports Direct for example the demographics and the skill level of the population which could mean they are more young people than older people: they are more people employable for the jobs that Sports Direct offers. The skill level of the older population would mean that Sports Direct will not be able to operate properly because they cannot do the jobs to their best of ability. What could impact Sports Direct is the education level and the education level of standard required in Sports Direct`s industries.

When trading internationally you would need to consider this in order to make sure the people working for you are intelligent enough and can do their job accordingly. The beliefs and attitudes of the area (market) that Sports Direct operates in needs to shared and come to an understanding of how they should design the Retail industry to best suit.

Technology

Sports direct use advanced technology to keep their business operating. Sports Direct maybe impacted by online shopping in order to keep up with their competitors and using this form of technology will help them do their work fast. This will allow the customers to shop online and access the place everywhere 24/7. The advantages of using this feature is that it will be a positive impact which will allow the customers to shop online instead of going to a local shop.

Online shopping will help them be more ahead in than their competitors because more customers will be able to buy and they will make huge profits from this. An advantage of having this is that Sports Direct will be operate around the world however everyone cannot access this because the business does not operate in that place which will result in loss of sales and uncertainty of where to export to and how.

Online communication is good form of where Sports Direct can communicate with their suppliers and there partners this will help them greatly when you cannot arrive for a meeting. Online communications will help them communicate fast and help avoid waste of time when the other person needs to book a flight and arrive at the place of meeting. With the help of this technology Sports Direct and partners or suppliers will be able to stay in touch with each other through online meetings this is helpful because it is for free and no transport is needed.

Legal

Sports Direct when they decide to operate another country they will need to follow different laws of the country and failing to follow these laws might lead to countries not accepting deals meaning they will not be able to operate in that country. Sports Direct will need to know the different laws of the countries they operate in so that they can follow it. Laws are different in every country you go to for example in the United States paying tax is high compared to the UK. Sports Direct will need to think before operating in another country and it should evaluate before entering markets as it can lead to theft of the business competitive edge.

Sports Direct may be impacted by the employment law which covers employees’ rights and responsibilities and their health and safety. The employment law is crucial and should be followed by businesses when recruiting. This law covers wages and workplace safety to discrimination and wrongful termination. Sports Direct follow that law when trading and operating in other countries because failing to do so may lead for the business to be sued by the employer and make the business have a bad image in public which may affect sponsors, partners and markets they operate in.

Environmental

Sports Direct will need to consider the environmental impact of their industries whether it causes harm to habitats and wildlife near their industries. They need to make sure that they business is environmentally friendly even when operating in another market. It is important for them to keep in mind the country`s environment and whether or not if this could affect the business. America is affected by natural disasters in different states of the country. There are a lot of earthquakes that occurs in the west coast whereas in Central America there are active volcanos. In the north there is high water levels which leads to floods occurring there. Maybe operating in the states is not the best of place to operate in but it surges in a lot of revenue. Sports Direct will need to consider the climate and the weather of the place they operate in whether or not if they business will be able to carry out their operations accordingly. The two suitable countries for Sports Direct to operate in is Japan and Turkey. Japan is a developed country whereas Turkey is developing.

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