ANALYSIS OF THE GENERAL ENVIRONMENT

MGT4030: International management (SPR2020)

Contents

Executive Summary...................................................................................................................3

Introduction to the apparel industries of countries.....................................................................4

Introduction to the apparel industry of existing countries.........................................................4

Introduction to the apparel industry of potential countries........................................................4

PESTLE Analysis of Existing Countries...................................................................................5

PESTLE Analysis of the potential countries..............................................................................9

Comparison of the current countries with the potential countries...........................................14

Recommendations....................................................................................................................15

Conclusion...............................................................................................................................16

References................................................................................................................................17

2
 Executive Summary
The world as we know it is constantly changing in every aspect which thereby affects an
organization in multiple ways. Therefore, it the responsibility of the organization to analyze
every aspect before making a decision. The main purpose of this report is to identify the most
suitable country to invest in a Soccer manufacturing business. This report is based on a
secondary research carried out by our team (Group B) to identify the general environment of
the potential countries. To identify and analyze the environmental factors, an in-depth
PESTLE analysis was conducted to the current countries which are Pakistan, Vietnam and Sri
Lanka, as well as the probable countries which are India, Mexico, Iran, Thailand and
Indonesia.
Our secondary research based on the study articles relating PESTLE analysis collected
through the Northwood Blackboard together with verified websites. Based on the research
findings, three countries showed more potential than two others which are Mexico, India and
Indonesia.
These three countries were further analyzed to select which country would be best to open up
a manufacturing company for Soccer.

3
 Introduction to the apparel industry of existing countries

Sri Lanka
The apparel industry of Sri Lanka employs about 15% of the country's workforce,
accounting for about half of the country's total exports, and Sri Lanka is among the top
apparel-producing countries in the world relative to its population.
Pakistan
Apparel industry of Pakistan is the largest industry with a 46% share of total manufacturing.
Accounting for 67% of exports, employment for 40% of the workforce and a 10.20% share in
GDP confirms the importance of this sector.
Bangladesh
The apparel industry of Bangladesh has been the key export division and a main source of
foreign exchange for the last 25 years. At present, the country generates about $5 billion
worth of products each year by exporting garment. The industry provides employment to
about 3 million workers of whom 90% are women.

Introduction to the apparel industry of potential countries

Thailand
The textile and apparel industry in Thailand play an important role in the country’s GDP and
export earnings. With over 50 years of development,
Thailand is well-known around the world for being one of the world’s largest producers for
fabric, sportswear, kids wear, womenswear and casualwear.
Iran
Apparel industry in Iran is developing especially in the wake of a stepped-up crackdown
which the government launched in 2018 on smuggled clothing. Smuggled clothing costs Iran
and its apparel producers some $2.6 billion in lost revenues a year.
Indonesia
Apparel industry in Indonesia is raising the bar in the global textiles market, with the revenue
of apparel reaching almost USD 16 billion, in 2018. The Indonesian government has set a
target to increase the export value of textiles and garments to USD 75 billion, by 2030.
Mexico
63% of the exports that Mexico sends out each year involve the apparel industry and over
87% of the apparel that Mexico exports each year is destined to reach the United States.
women’s apparel, represents a total of $7.7 billion in 2018

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India
The apparel industry in India contributes about 15% of the total export earnings, with the help
of factors such as the availability of raw materials, manufacturing bases and labor India has
become the world’s second largest exporter of apparel and textiles. The sector is also one of
the largest sources of job creation in the country, employing about 45 million people directly

PESTLE Analysis of Existing Countries

Political Factors Pakistan Vietnam Sri Lanka

Political Stability 2016 = (-2.48) 2016 = (0.23) 2016 = (0.00)
(-2.5 weak; 2.5 2017 = (-2.41) 2017 = (0.29) 2017 = (0.07)
strong) 2018 = ( -2.27) 2018 = (0.2) 2018 = (-0.18)
Government 2016 = (-0.65) 2016 = (0.02) 2016 = (-0.03)
Effectives Index 2017 = (-0.6) 2017 = (0.01) 2017 = (-0.15)
(-2.5 weak; 2.5 2018 = (-0.63) 2018 = (0.0) 2018 = (-0.24)
strong)
Business Freedom 2017 = 61% 2017 = 61% 2017 = 73%
2018 = 55% 2018 = 63% 2018 = 76%
2019 = 56% 2019 = 64% 2019 = 75%
Short Term political 2017 = 4 2017 = 2 2017 = 4
risk 2018 = 5 2018 = 2 2018 = 4
(1=Low, 7= High) 2019 = 5 2019 = 2 2019 = 4
Long Term political 2017 = 6 2017 = 4 2017 = 5
risk 2018 = 6 2018 = 4 2018 = 5
(1=Low, 7= High) 2019 = 6 2019 = 4 2019 = 5
Corporate Tax rate 2017 = 31% 2017 = 20% 2017 = 28%
2018 = 30% 2018 = 20% 2018 = 28%
2019 = 30% 2019 = 20% 2019 = 28%
VAT 2017 = 11%
2018 = 15%
2019 = 15%

Economic Factors Pakistan Vietnam Sri Lanka

GDP Per Capita 2016 = 1,368.45 2016 = 2,192.21 2016 = 3843.72
(USD) 2017 = 1,464.99 2017 = 2,365.62 2017 = 4104.63
2018 = 1,482.4 2018 = 2,566.6 2018 = 4102
Inflation Rate 2016 = 3.8% 2016 = 3.2% 2017 = 6.58%
2017 = 4.1% 2017 = 3.5% 2018 = 4.27%
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 2018 = 5.1% 2018 = 3.5% 2019 = 4.1%

FDI Inflows 2016 = 2.49 2016 = 12.6 2016 = 1.09

(Billions) 2017 = 3.23 2017 = 14.1 2017 = 1.56
2018 = 2.35 2018 = 15.5 2018 = 1.81
Imports 2016 = 45.03 2016 = 186.93 2016 = 28.46
(USD Billions) 2017 =53.53 2017 = 221.07 2017 = 28.86
2018 = 60.76 2018 = 225.68 2018 = 30.13
Exports 2016 = 25.48 2016 = 192.19 2016 = 21.17
(USD Billions) 2017 = 25.11 2017 = 227.35 2017 = 21.68
2018 = 26.66 2018 = 233.65 2018 = 22.78
Foreign Exchange 2016 = 22.03 2016 = 36.53 2016 = 7.3
Rate Reserves 2017 = 18.46 2017 = 49.08 2017 = 6.01
(Billions USD) 2018 = 11.84 2018 = 55.45 2018 = 7.96
Fiscal Freedom 2017 = 79 2017 = 80 2016 = 85
(0-100) 2018 = 79 2018 = 80 2017 = 85
2019 = 81 2019 = 80 2018 = 85
Economic Freedom 2017 = 53 2017 = 52 2017 = 57
(0-100) 2018 = 54 2018 = 53 2018 = 58
2019 = 55 2019 = 55 2019 = 56
Trade Freedom 2017 = 67 2017 = 83 2017 = 75
(0-100) 2018 = 66 2018 = 79 2018 = 75
2019 = 65 2019 = 79 2019 = 76

Social Factors Pakistan Vietnam Sri Lanka

Labor Force 2017 = 53.17% 2017 = 77.5% 2017 = 52.49%
Participation 2018 = 53.31% 2018 = 77.43% 2018 = 52.69%
(15 and above) 2019 = 53.43% 2019 = 77.29% 2019 = 52.27%
Unemployment Rate 2017 = 3.18% 2017 = 1.89% 2017 = 4.18%
2018 = 3.04% 2018 = 1.89% 2018 = 4.40%
2019 = 3.02% 2019 = 1.89% 2019 = 4.32%
Human 2016 = 0.556 2016 = 0.685 2016 = 0.774%
Development. 2017 = 0.558 2017 = 0.69 2017 = 0.776%
(0-1) 2018 = 0.56 2018 = 0.693 2018 = 0.78%

Literacy Rate 2013 = 55.59% 2000 = 90.16% 2017 = 91.9

2014 = 56.98% 2009 = 93.52% 2018 = 92

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 2017 = 59.13% 2018 = 95% 2019 = 92

Technological Pakistan Vietnam Sri Lanka

Innovation Index 2017 = 23.8 2017 = 38.3 2017 = 29.9
(0-100) 2018 = 24.1 2018 = 37.9 2018 = 28.7
2019 = 25.4 2019 = 38.8 2019 = 28.5
Internet Penetration. 2016 = 17.8% 2016 = 47% 2015 = 30%
2018 = 22.2% 2016 = 32.05%
2017 = 34.11%
Mobile subscriber 2016 = 67.03% 2016 = 128.79 2016 = 122.72
per 100 people. 2017 = 69.51% 2017 = 126.87 2017= 133.47
2018 = 72.56% 2018 = 147.2 2018 = 115.06
High technology 2016 = 311.29 2016 = 55,215.3 2016 = 67.49
exports 2017 = 362.38 2017 = 74,113.94 2017 = 79.03
(USD Millions) 2018 = 380.37
R & D Index 2015 = 0.25% 2015 = 0.44%
2017 = 0.24% 2017 = 0.53% 2018 = 0.11%

Legal Pakistan Vietnam Sri Lanka

Labor Law 14 years 15 years 14 years
(Minimum age)
Minimum wage and 97.09 USD 55.94 USD 55.13 USD
working hours 8 hours 8 hours 8 hours
Overt Time Rate 150% 150% 150%

Environmental Factors Pakistan Vietnam Sri Lanka

CO2 emissions 2013 = 164,326 2013 = 147,230 2013 = 15489
(Tons) 2014 = 166,298 2014 = 166,911 2014 = 18394
Access to electricity 2016 = 71.41 2016 = 100% 2016 = 95.76
2017 = 70.79 2017 = 100% 2017 = 97.54
Share of clean energy 2015 = 46.48% 2015 = 35% 2015 = 52.88
Environment Performance 169 132 69
index (Rank)

PESTLE Analysis of the potential countries

Political Thailand Iran Indonesia Mexico India
Factors
Political 2016 (-0.99) 2016 (-0.81) 2016 (-0.37) 2016 (-0.63) 2016 (-0.95)

7
stability 2017 (-0.75) 2017 (-0.93) 2017 (-0.5) 2017 (-0.72) 2017 (-0.76)
(-2.5 weak; 2.5 2018 (-0.73) 2018 (-1.31) 2018 (-0.53) 2018 (-0.57) 2018 (-0.96)
strong) Ranking Ranking Ranking Ranking Ranking
155/195 174/195 139/195 143/195 165/195
Short term 2017- 02 2017- 07 2017 -02 2017 – 02 2017 – 02
political risk 2018- 02 2018- 07 2018 -02 2018 – 02 2018 – 02
(low =1, high 2019- 02 2019- 07 2019 -02 2019 – 02 2019 – 02
=7) Ranking Ranking 6/195 Ranking Ranking Ranking
148/195 129/195 133/195 128/195
Long term 2017- 03 2017- 07 2017- 03 2017 – 03 2017 – 03
political risk 2018- 03 2018- 07 2018- 03 2018 – 03 2018 – 03
2019- 03 2019- 07 2019- 03 2019 – 03 2019 – 03
Ranking Ranking Ranking Ranking Ranking
151/195 14/195 139/195 144/195 138/195
Government 2016- 0.34 2016- (-0.19) 2016- 0.01 2016 – 0.13 2016 – 0.08
effectiveness 2017- 0.38 2017- (-0.2) 2017- 0.04 2017 – (- 2017 – 0.09
index 2018- 0.35 2018- (-0.43) 2018- 0.18 0.03) 2019 – 0.28
(-2.5 weak; 2.5 Ranking Ranking Ranking 2018 – (- Ranking
strong) 60/195 118/195 75/195 0.15) 66/195
Ranking
97/195
Ease of doing 2016- 46 2016- 120 2016- 91 2016- 57 2016- 130
business index 2017- 26 2017- 124 2017- 72 2017- 59 2017- 100
2018- 27 2018- 128 2018- 73 2018- 54 2018- 77
Ranking Ranking Ranking Ranking Ranking
21/190 127/190 73/190 54/190 77/190
Business 2017- 70 2017- 65 2017- 49 2017- 71 2017- 53
Freedom index 2018- 77 2018- 64 2018- 57 2018- 68 2018- 56
(1-100) 2019- 83 2019- 62 2019- 69 2019- 68 2019- 57
Ranking Ranking Ranking Ranking Ranking
18/182 100/182 72/182 75/182 121/182
Corporate tax 2016- 20 2016- 25 2016- 25 2016- 30 2017- 34.61
rate (%) 2017- 20 2017- 25 2017- 25 2017- 30 2018- 34.61
2018- 20 2018- 25 2018- 25 2018- 30 2019- 25.17
V.A.T+ (%) 2017- 07 2017- 09 2017- 10 2017- 16 2017- 18
2018- 07 2018- 09 2018- 10 2018- 16 2018- 18

8
 2019- 07 2019- 08 2019- 10 2019- 16 2019- 18

Economic Thailand Iran Indonesia Mexico India

factors
GDP (USD bn) 2016- 412.353 2015- 385.874 2015- 860.854 2015- 1171 2015- 2104
2017- 455.276 2016- 418.977 2016- 931.877 2016- 1078 2016- 229
2018- 504.993 2017- 454.013 2017- 1015 2017- 1158 2017- 2652

Inflation rate 2016- 0.2 2015- 13.7 2016- 3.5 2016- 2.8 2016- 4.9
2017- 0.7 2016- 8.7 2017- 3.8 2017- 6 2017- 2.5
2018- 1.1 2017- 10 2018- 3.2 2018- 4.9 2018- 4.9
FDI inflows 2016- 2.81 2016- 3.372 2016- 4.542 2016- 35.834 2016- 44.459
index 2017- 8.046 2017- 5.019 2017- 20.51 2017- 32.005 2017- 39.966
2018- 13.248 2018- 3.48 2018- 20.008 2018- 36.871 2018- 42.117

Exchange rate $ 0.032 $ 0.000024 $ 0.000073 $ 0.053 $ 0.014

Economic 68.3 51.5 65.8 64.7 55.2

freedom index #43 #155 #56 #66 #129
and rank
Trade freedom 2017- 83 2017- 55 2017- 81 2017- 80 2017- 73
index 2018- 83 2018- 55 2018- 81 2018- 88 2018- 72
2019- 83 2019- 55 2019- 80 2019- 81 2019- 72
Ranking Ranking Ranking Ranking Ranking
54/195 168/195 70/195 66/195 111/195
Investment 2017- 50 2017- 2017- 35 2017- 70 2017- 40
freedom 2018- 55 2018- 2018- 40 2018- 75 2018- 40
2019- 55 2019- 5 2019- 45 2019- 75 2019- 40
Ranking Ranking Ranking Ranking Ranking
117 /195 175/195 134/195 46/195 141/195
Fiscal freedom 81 81 84 76 79
index
(1- 100)
Unemployment 2016- 0.69 2016- 12.43 2016- 4.3 2016- 3.86 2016 – 2.73
rate (%) 2017- 0.63 2017- 12.1 2017- 4.19 2017- 3.42 2017- 2.56
2018- 0.67 2018- 12 2018- 4.3 2018- 3.32 2018- 2.55
Quality overall 4.1 4.0 3.7 4.4 3.8

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Infrastructure
index

Social factors Thailand Iran Indonesia Mexico India

Income level Lower middle Upper middle Lower middle Upper Lower
middle middle
Population 2016- 0.4 2016- 1.1 2016- 1.22 2016- 1.17 2016- 1.09
growth rate 2017- 0.3 2017- 1.3 2017- 1.18 2017- 1.13 2017- 1.063
(%) 2018- 0.3 2018- 1.19 2018- 1.13 2018- 1.1 2018- 1.037
Literacy rate 92.87 97 95.38 94.86 79.31
(%)
Labor force 67.4 44.21 69.21 59.83 52.5
participation
rate (%)
Human 2015- 0.741 2015- 0.789 2015- 0.686 2015- 0.759 2015- 0.609
development 2016- 0.748 2016- 0.796 2016- 0.691 2016- 0.764 2016- 0.624
index 2017- 0.755 2017- 0.798 2017- 0.694 2017- 0.765 2017- 0.640
2018- 0.767

Technological Thailand Iran Indonesia Mexico India

factors
R&D 0.5% 0.3% 0.1% 0.5% 0.8%
Average (% of
GDP )
Internet 56.82 % 70% 39.9% 65.77% 34.45%
Infrastructure
FDI and Tech 4.80 4.33 4.70 5.04 5.04
Transfers (%)
Availability of #56 #105 #67 #52 #52
latest tech (Rank)

Legal Factors Thailand Iran Indonesia Mexico India

Minimum wage 199.2 – 100 286.40 196.8 117-178
monthly (USD) 316.2
Minimum Age 15 15 15 15 14
Maximum work 42 44 40 48 48
hours (weekly)

10
 Country Total Points
Thailand 54
Iran 22
Indonesia 30
Mexico 47
India 28

Final Decision
Based of the external environment analysis above, the appealing country would be Thailand.
The country is further analyzed based on a SWOT analysis.

Strengths Weaknesses
 There is a growth in 2017 in the Thailand
 Being a country with the largest ageing
apparel industry by 2.5% which reaches a
population (23.39%), the proportion is
value of $11,751.6m and it is predicted that it
estimated to double in 2035.
would continue growing [ CITATION App18 \l
 A survey conducted to the citizens of
1033 ]. Thailand by Suan Dusit Rajabhat
 External position is strong due to the current University in April 2019 showed that
account surpluses and increasing foreign 52.22% claims that the worst factor of
reserves. [ CITATION Fab13 \l 1033 ] the country is their government
 It is one of the most important industries in the [ CITATION Pol19 \l 1033 ] due to the
county as the garment industry accounts for the political instability and corruption.
employment of 1,000,000 employees in the  Lack of freedom of expression in the
country while the textile industry accounts for country.
200,000 employees.  High household debt levels
 Well-known for their high-quality raw (figure
1) materials, Thailand reported an export
revenue of $1.2b in 2016 [ CITATION Tha16 \l
1033 ]
 The country provides various tax incentives as
seen in figure 2.

Opportunities Threats
 It is estimated that the industry would have an
 The domestic demand in the apparel
increase in 2022 of 14.5% since 2017 giving a
industry is lowering due to the lower
$13,452.8m value. There is persistent growth

11
 in the apparel industry that will benefit if we
expand to Thailand.
 Economic reforms within the country
including lowering the income inequality and
lowering the taxes charged
 The strategic location of Thailand as they are
in the central of GMS and ASEAN.
Figure 2
Figure 3
purchasing power.
 The environmental pollution
 There is a shortage of raw materials that
is used for manufacturing clothes. Cotton
imports have been rising within the
country while exports are reducing
[ CITATION Pra19 \l 1033 ]
Figure 1
Figure 4
12
Conclusion

13
References
Briegel, F. (2013 , May). Country Report - Thailand. Retrieved from RaboResearch - Economic
Research: https://economics.rabobank.com/publications/2013/may/country-report-
thailand/
Investment, T. B. (2016). THAILAND: TEXTILE INDUSTRY.
MarketLine. (2016). Apparel Retail in Thailand. 38.
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Host:
http://web.a.ebscohost.com.librarydb.northwood.edu:2048/ehost/pdfviewer/pdfvie
wer?vid=1&sid=8245437b-0e35-4d31-b83d-be2aa4a89bd2%40pdc-v-sessmgr06
MarketLine. (2018). Apparel Retail in Thailand.
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https://www.bangkokpost.com/thailand/general/1664720/politics-corruption-are-
thailands-biggest-problems-suan-dusit-poll
Prasertsri, P. (2019). Thailand - Cotton and Proucts Annual 2019.
Rana Hasan, N. K. (2017, January). Labor Regulations, Employment and Wages. Retrieved
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http://web.a.ebscohost.com.librarydb.northwood.edu:2048/ehost/pdfviewer/pdfvie
wer?vid=1&sid=b1338cf7-2f77-41ae-ba21-d31c64221d70%40sessionmgr101
Thailand's booming textile and apparel industry. (2016, January). Retrieved from
Fibre2Fibre: https://www.fibre2fashion.com/industry-article/7680/thailands-
booming-textile-and-apparel-industry

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