SCENARIO ANALYSIS

 Business Project Name: "Dhakai Hijab".

1. Where are you going to go?
In which country we will do the international expansion, we took decision based on
Location proximity and Cultural proximity:
 Location proximity: Almost all the Muslim country where women are wearing hijab as
their daily clothing are located closely. Hence, for ensuring the significant demand, we want
to expand in such country (such Saudi Arabia, Iran, Afghanistan, Pashtun) where Muslim
women are wearing hijab by law.
Among of these we decided to expand in Iran. Though, Iran is located far from the host country
but it has a significant market size and higher demand accessibility than other others.
 Cultural proximity:(Hofstede’s theory of cultural distance): Bangladesh and Iran are
approximately following similar culture. As both country is following non-egalitarianism,
Uncertainty aversion, Collectivism, high cultural context and believe in employee
relationship and their opportunities.
Size of target Buying power of
Country Name Competition Approximate
market target market
Saudi Arabia Large High High Low

Iran Large Medium High High

Afghanistan Medium Low Moderate Low

Pashtun Small low Moderate Low

2. How are you tracking the next 2 years?
By following value chain analysis and KSF framework we are going to track the external and
internal environment factors. However,
1. We will try to identify What is likely to be their impact over time—in the short,
medium, and long term.
2. Based on the analyzed data we will identify what type of impact are they likely to
have—positive or negative?
3. After that, we will also analysis, what is the importance of each factor? How
significantly would its implications affect our business if they did (or didn’t) become
a reality?
4. Finally, we will rate the impact and likelihood of each factor and take action to either
leverage potential opportunities or mitigate potential threats.
3. How do you plan to achieve success by then?
After doing the scenario analysis, we will utilize the information in a range of different
scenarios, and that information will guide us in strategic decision-making.
By understanding the business position better in terms of external factors we will achieve
success by fitting our strategies into the broader environment. Overall, our success will be
achieved by more decisive and knowledgeable decisions under the umbrella of scenario
analysis.
For the local market we plan to achieve success through insiderization. For local success-
 We would gather local market knowledge.
 Consider local sensitivity.
 Give customized products for the target customers.
 Follow cultural aspects in terms of product design and service.
4. Complete scenario analysis based on the previous 3 items.
 Scenario Analysis:
 Timeline: 2024-Auguest (2 years).
 Planning scope: International expansion.
Pestle Analysis:
Political Environment Analysis:

Election and political movement: (Instable.) On 3 August 2021, new president was elected
and the ruling party will exist till 3 August 2025. According to the world bank, the political
instability weak as the latest rating is -1.67(Political stability index (-2.5 weak; 2.5 strong)).

Future Impact: By 2024 this rating may goes higher as the former president was on power
almost 9 years hence, political imbalance may be seen from 2024 as the next election will be
held on mid-2025.

Corporate tax rate: (Very risky.) Customs taxes are typically around 30% of the Cost,
Insurance and Freight (CIF) value of the goods. Foreign company also need to pay other taxes
like Income tax, Islamic taxes, Real estate taxes, Capital gain tax, Indirect taxes.

Future Impact: In the next 2 years, the tax percentage may higher if international market
may face any difficulties like Russia and Ukraine war. As the new government take the power
so in the upcoming years, the tax percentage may higher under new ruling party’s rule.

International Relationship: (Negative.) Other nations have expressed their displeasure

with Iran's determination on developing nuclear bombs and weapons. However, Terrorist
groups frequently benefit from Iran, and Iran openly supports terrorism and even provides
resources to it.

Future Impact: In the upcoming years, Iran may face more difficulties from other nation if
the situation continues. Hence, the foreign brands will also face difficulties and international
relationship will affect the Iran’s business operation in their country also.

Corruption Rate: (Negative.) Iran constantly ranks in the top third of nations with the
greatest perceptions of corruption. Hence, the crime rate is also higher due to the higher
corruption rate and it directly affects the foreign business operation.
Future Impact: It is expected that; corruption rate will be higher in the upcoming years.

Economic environment analysis:

Economic growth: (positive) Iran’s economy has grown by 1.5 percent in fiscal year 2020-
2021. In2019 to 2020, Iran's GDP growth rate was 6.78 percent in 2019 and climbed to1.66
percent in 2020, a rise of 8.45 percent. The economic growth rate expected to be higher as
IRAN remains one of the Middle East top countries when it comes to the growth potential.

Future Impact: It is expected that, Iran’s economy will increase slowly due to the decade-
long stagnation such as oil price cyclicality, and the COVID-19 pandemic.

Inflation rate:(high.) The Statistical Center of Iran (SCI) revealed that Iran's inflation rate
hit about 50% in March-April 2021.

Future Impact: as the Inflation has always been high in Iran, hence, it has been considerably
worse in recent years.

Purchasing power of buyer: (Moderate) The COVID-19 epidemic has had a significant
impact on jobs and income in variety of labor-intensive industries. The unemployment rate
fell to 9.4% as a result of the labor market's discouragement (World Bank 2021).

Future Impact: If Iran can utilize its young generation power, it is expected that, the
unemployment rate will have declined in the future years and the purchasing power of buyer
will increase. `

Socio-Cultural Environment:

Population growth rate: (negative.) the sustainable population growth rate of Iran was at
0.95 percent in 2019, but it has now dropped to 0.73 percent in 2020.

Future Impact: due to the Socioeconomic factor: decreased fertility rate the pace of
population growth is expected to lower in the coming years.

Crime rate:(High) In Iran, the level of crime is moderate, but in the last three years the
number of crimes has risen to high levels. On top of that, corruption is more than 70 percent
high.
Future Impact: as the corruption rate usually higher in Iran, hence, in the upcoming years
the crime rate will increase in upcoming two years.

Consumer lifestyle: (Positive) Iran’s consumer lifestyle has changed a lot since the ease of
sanction. The Iranian people do not appear to be affiliated with the Arab world. Besides,
consumers now expect shops to fill shelves with high-quality foreign brands since
restrictions are expected to be eased (Market Research 2016).

Future Impact: as the women in Iran, wearing hijab by law, hence, following the Western
fashion culture may not affect the potential Hijab market.

Technological Environment Analysis:

Global Innovation Index:(positive) From 2015 to 2019, Iran's Global Innovation Index
rose 45 steps from 106 to 61, indicating continual development.

Future Impact: as the government is taking initiative in terms of continual development,

the pace of Global Innovation will have increased in the upcoming two years. Over the last
five years, the growth of accelerators and innovation centers has resulted in a
surge of startups and knowledge-based businesses (Tehran Times2021b).

Technological Law: (Positive) In 2007, the Vice-Presidency of Science and Technology

drafted comprehensive law to encourage small and medium-sized businesses to innovate.

Future Impact: As the Lawmakers in Iran have proposed a law aimed at technology, in
the coming years, Iran may come up with more laws in terms of technology.

Technological development budget: (sustainable) On March 2,2022, the Iranian

Parliament received amounts for less than 1% of the GROSS domestic product, was
disregarded as in past years (Tehran Times 2021c).

Future Impact: Technological development budget may sustainable in the upcoming two
years, as the ruling government gave emphasis on it.
Pestle Analysis for Iran’s External Environment in a nutshell:

Impact on
Key Drivers Most likely scenarios
demand
Political
 Election and political  High strike, unstable situation Low Demand
movement  Very risky
 Corporate tax rate
Economic
 Economic growth rate  High growth rate Low Demand
 Inflation rate  High
 Purchasing power of buyer  Low power
Sociocultural
 Population growth rate  Negative Moderate Demand
 Crime rate  High
 Consumer lifestyle  Wearing hijab
We didn’t entry the environmental and technological factors as these environment
is not affecting our business operation actively.
 Bibliography
State Government 2017, ‘STATE SPONSORS OF TERROR OVERVIEW’, viewed 17
August2021, https://2009-2017.state.gov/documents/organization/65476.pdf

Azadi, P 2020, ‘The Structure of Corruption in Iran’, Stanford Iran 2040 Project,
Stanford
University, viewed 16 August 2021,
<https://stanford.app.box.com/s/vzsjsnp53couuw6nxtljru0qxrpb8ezf>.
Azadi, P 2020, ‘The Structure of Corruption in Iran’, Stanford Iran 2040 Project,
Stanford University, viewed 16 August 2021,
https://stanford.app.box.com/s/vzsjsnp53couuw6nxtljru0qxrpb8ezf.

The Iran Primer 2021, IMF: Iran’s Economy Grew in 2020, viewed 16 August
2021, <https://iranprimer.usip.org/blog/2021/apr/21/imf-iran%E2%80%99s-economy-
grew-2020>.

Iran International 2021, Iran's Inflation Rate Reaches An Alarming 50 Percent,

viewed 17August 2021, https://iranintl.com/en/iran-in-brief/irans-inflation-rate-
reaches-alarming-50-percent.

Market Research 2016, Consumer Lifestyles in Iran, viewed 17 August 2021,

https://www.marketresearch.com/Euromonitor-International-v746/Consumer-Lifestyles-
Iran-10423715/