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PIATEX MACRO-ENVIRONMENT ANALYSIS REPORT 2
Table of Contents
Executive Summary........................................................................................................ 2
Introduction.................................................................................................................... 3
Social Factors................................................................................................................. 6
Technological Factors....................................................................................................... 7
Conclusion..................................................................................................................... 9
References................................................................................................................... 10
PIATEX MACRO-ENVIRONMENT ANALYSIS REPORT 3
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
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
Introduction
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
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
PIATEX MACRO-ENVIRONMENT ANALYSIS REPORT 5
(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
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
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
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
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
PIATEX MACRO-ENVIRONMENT ANALYSIS REPORT 6
2014 growth rate recorded at 7.3 percent indicating continued economic stability (The World
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
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
PIATEX MACRO-ENVIRONMENT ANALYSIS REPORT 7
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
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
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
PIATEX MACRO-ENVIRONMENT ANALYSIS REPORT 8
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
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
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
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
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
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.
PIATEX MACRO-ENVIRONMENT ANALYSIS REPORT 10
References
Acharya S, Mohan R (2010) Indias economy: performance and challenges. Oxford University
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
Joshi, A., & Ruparel, P. (2016). India. In Angel Financing in Asia Pacific: A Guidebook for
Kumar, V. (2016). Intellectual Property Rights for SMEs With Case Studies on Patent Protection.
Office of the Registrar General & Census Commissioner, India. (2011). Census of India
Rajagopal, A. (2017). On Media and Politics in India: An Interview with Paranjoy Guha
Sreeramulu, N. (2016). Foreign Policy Of Narendra Modi Prime Minister Of India. Editorial
Stephen, M. D. (2016). India and the BRICS: Global Bandwagoning and Regional Balancing.
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