Environmental Analysis Assignment: Seljak Brand Entering United Kingdom Market

Question

Task: For this environmental analysis assignment, students are required to conduct an environmental analysis on the country selected to evaluate the potential opportunities and/or threats that may influence the chosen company's entry into that country. Environmental factors to be analyzed may include economic, financial, political, legal, social, cultural, technological and other contemporary factors. If an environmental factor does not have an impact on companies international marketing decisions, it is irrelevant and, therefore, should not be included in this report.

Answer

Executive Summary
While entering into a new market, there are certain chances that the company might face several environmental issues which have been discussed in this environmental analysis assignment. However, along with the different environmental issues, the company will also get various opportunities, which, if used well, may help the company to uplift its brand in the new global market. In this assessment, the Australian-based company Seljak Brand aims to enter the UK's new market. The assessment starts with a brief introduction about the company's product and the background of the UK. The purpose of this assessment is to analyze the opportunities as well as the threats for the company while entering into a new market. The threat and the opportunities and the threats have been evaluated by presenting the PESTEL analysis and SWOT analysis of the UK in order to identify the potential issues and the opportunities for the Seljak Brand.

Introduction
The company that has been chosen for the assessment is Seljak Brand, which was established in March 2016 by the two sisters Karina and Samantha Seljak. The brand has accelerated the transition in the business towards a circular economy. The company is renowned for the supply of woolen blankets that are recyclable in a wide range of Australian and Asian markets. The products of the company are made of high-quality wool that is recycled, as well as recyclable, along with some of the significant features such as stain and odor resistance, antibacterial, breathable, and light in weight. The company collects the torn-out blankets and recycles them, and if the blankets are still in the usable condition, then it is donated to the ASRC's Material Aid program. The company follows the circular model with the aim to use the waste materials from the landfill and create useful and luxurious blankets for the customers. For this purpose, the company is associated with different textile recycling while performing charity work as well by donating $5 to the Asylum Seekers Resource Center.

Since the company is already established in the Australian and Asian markets, it is also aiming to expand its business in the UK. Therefore, this assessment aims to analyze the environmental issues that the company might face while trying to expand its brand in the market of UK. The UK is one of the significant trading powers in the global market, which has the fifth-largest economy in the world, and it is highly diverse, sophisticated, and developed. The country has a comparative advantage in terms of both financial services and business which is rapidly growing and has the potential to grow further(Blackaby, 2018). However, it is likely for the business to face certain opportunities as well as threats while exploring a new market.

Identification of environmental factors
In order to identify the environmental factors as well as the issues that may influence the company while entering the UK market has been and evaluated in the form of both the PESTEL analysis and the SWOT analysis.

PESTEL Analysis
Political- The UK is one of the most influential as well as the prosperous nations in the world market, which plays a vital role in the global market. The political segments of the government play a key role in shaping the business, especially to those that are trying to enter into a new market because the immigration policy of the country is an important aspect of the general environment that offers significant implications to the news organizations. The economy of the UK is underpinned by a distinct variety of national business models, which plays a key role in regulating international financial services (Lavery, Quaglia, and Dannreuther, 2017). Since the company Seljak Brand deals with the manufacture of woolen products through the process of recycling, the company might not face major political issues while entering the retail market in the UK, while the country does not have higher taxation issues.

Economical- The UK has a diverse economy which provides an equal opportunity to all the businesses for its efficient growth. However, since 2017, inflation in the UK has increased about 3.1%, despite the announcement that the tax rate will be reduced by 18% by the end of the year 2020. The country takes FDI as a net foreign investment outflow of capital, wherein if the FDI is increased, it will correspondently result in the increase in the growth of the economy(Othman et al., 2019). All this is brought by the capital influx as well as the huge tax collection pool by the government, which might also affect the Seljak Brand while trying to enter the market of the UK.

Social- The UK has a diverse society which provides many opportunities for the business to flourish in the market of the UK. The UK is one of the largest consumer markets in the global market, where most of the retail companies have earned a lot of profit and success. Since the company Seljak Brand deals with the supply of the woolen materials created from the waste wool, the company might not face any social challenge in establishing the business in the UK. Furthermore, such productivity and innovations in the retail industry are more valued by society that promotes sustainability while improving the quality of life(Zhenmin, 2020).

Technological- The UK is a highly developed country, with the invention of innovative technologies in all sectors. In terms of business perspective, the transformation of the market through digitalization can enhance the production of goods and services with higher quality(Guterres and Kituy, 2019). Furthermore, the value chain transformation through innovative technologies may provide numerous channels to add more value to the business. Seljak Brand might face certain technical issues in such an advanced country because of the competitive digital market. The UK also promotes the technology that reduces the intensity of carbon to promote sustainability, where the products of Seljak Brand, made from waste materials, can also get a higher value (Haydock et al., 2017).

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Fig. 1- Rate if lower carbon power technologies
Source- (Haydock et al., 2017)

Environmental - In terms of environmental factors, the company such as Seljak Brand, which deals with the manufacture of the products from the waste materials, may not have an adverse environmental issue. There are possible chances for the company to adapt to the new environment with maximum chances of survival. However, the company cannot avoid one of the crucial elements, i.e., the regulatory requirements, which often force the newly entering business to exit from the market (Lampadarios, 2017).

Legal - The legal system in the UK is transparent, organized, and efficient, which makes a conducive environment for the business. At the same time, the general tax-avoidance rule brought by the government makes it difficult to start up a new business in the UK. The company's issues while establishing a new business are especially the issues of tax evasion while finding the balance between increasing terror threat and the traditional liberties (MarketLine, 2014).

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Fig. 2- Legal landscape analysis
Source-(MarketLine, 2014)

SWOT analysis
Strength- The government of the UK is concerned about the emergence of too many companies while lagging in innovation and productivity. However, the country poses some strength in the business environment, with a certain pattern of competitiveness(Porter, 2018). The larger population, diverse culture, innovative technologies, and advanced labor are the strength of the nation that paves the way for the newly emerging companies in the market of the UK.

Weakness- Though the county is regarded as one of the developed countries, especially in the field of technology and different industries, the country is said to have a poor industrial transportation facility. Also, compared to the other western countries, the UK is considered less innovative and productive with a lower contribution in the field of tech innovation. Such attributes are labeled as the weakness for the organization, which might influence the performance of the business organizations (Phadermrod, Crowder and Wills, 2019).

Opportunities- The rapid growth in technologies has provided many opportunities to the different emerging companies in the UK. Trade partner is one of the significant opportunities for the newly entering companies in the market of the UK. The country also provides the opportunity to establish trade in alignment with the existing trade partners, which offers a good chance for the company that is trying to enter the UK industry. The other opportunities are advanced technology equipment, a wide range of customers, and an expert consultant (McManus, 2017).

Threat-After the world has been hit by the Covid-19 pandemic, the UK has also implemented many policies in order to prevent destructions of business. However, some of the policies implemented by the UK are still considered a potential threat to the business (Lambert and Reenen, 2021). The emergence of many multinational companies in the UK market is also one of the potential threats for those who are trying to enter the UK market UK, which might also be faced by the company Seljak Brand.

Conclusion
Though the company Seljak Brand is one of the established brands in the Australian as well as Asian market, it is likely to face certain challenges and opportunities while entering into a new market. Furthermore, the UK is one of the top industrial countries in the global market where there are both opportunities and threats in terms of business. In consideration of the PESTEL analysis and SWOT analysis, it can be said that the company Seljak Brand also has to face numerous environmental issues for the establishment of its brand in the UK. However, there are certain opportunities that the company might take advantage of as well in order to establish the business efficiently and successfully in the business environment of the UK.

References
Blackaby, D. (2018). (PDF) The UK Economy and Brexit. [online] ResearchGate. Available at: https://www.researchgate.net/publication/324459620_The_UK_Economy_and_Brexit [Accessed 23 Aug. 2021].

Guterres, A. and Kituy, M. (2019).VALUE CREATION AND CAPTURE: IMPLICATIONS FOR DEVELOPING COUNTRIES VALUE CREATION AND CAPTURE: IMPLICATIONS FOR DEVELOPING COUNTRIES. [online] . Available at: https://unctad.org/system/files/official-document/der2019_en.pdf [Accessed 24 Aug. 2021].

Haydock, H., McCullough, A., Nuttall, C., Evans, L. and Kaar, A.-L.(2017). UK business opportunities of moving to a low carbon economy Ricardo in Confidence. [online] . Available at: https://www.theccc.org.uk/wp-content/uploads/2017/03/ED10039-CCC-UK-Bus-Opportunities-Draft-Final-Report-V7.pdf [Accessed 24 Aug. 2021].

Lambert, P. and Reenen, J. (2021).Covid-19 Analysis Series. [online] . Available at: https://cep.lse.ac.uk/pubs/download/cepcovid-19-016.pdf [Accessed 24 Aug. 2021].

Lampadarios, E. (2017). A Qualitative Perspective of Enterprise Success Factors for SMEs: A case study in the UK Chemical Distribution Industry. Case Studies in Business and Management, [online] 4(1), p.49. Available at: http://www.eajournals.org/wp-content/uploads/An-insight-into-Entrepreneurial-Success-Factors-for-SMEs.pdf [Accessed 24 Aug. 2021].

Lavery, S., Quaglia, L. and Dannreuther, C. (2017).The Political Economy of Brexit and the UK’s National Business Model. [online] . Available at: http://speri.dept.shef.ac.uk/wp-content/uploads/2018/11/SPERI-Paper-41-The-Political-Economy-of-Brexit-and-the-UK-s-National-Business-Model.pdf [Accessed 24 Aug. 2021].

MarketLine (2014).PESTLE Country Analysis Report: United Kingdom Country Profile Series United Kingdom In-depth PESTLE insights. [online] . Environmental analysis assignment Available at: https://www.marketline.com/wp-content/uploads/United-Kingdom-Country-Analysis.pdf [Accessed 24 Aug. 2021].

McManus, J. (2017). (PDF) BREXIT THREATS AND OPPORTUNITIES FOR PEOPLE AND BUSINESS - PART 2 (Journal Management Services). [online] ResearchGate. Available at: https://www.researchgate.net/publication/329567689_BREXIT_THREATS_AND_OPPORTUNITIES_ FOR_PEOPLE_AND_BUSINESS_-_PART_2_Journal_Management_Services [Accessed 24 Aug. 2021].

Othman, B.J., Al-Kake, F., Diah, M.L.M., Othman, B., Hussein, S. and Hasan, N.M. (2019).(PDF) Impact of the Foreign Direct Investment on the Economy of the United Kingdom. [online] ResearchGate. Available at: https://www.researchgate.net/publication/339827945_Impact_of_the_Foreign_Direct_Investment_ on_the_Economy_of_the_United_Kingdom [Accessed 24 Aug. 2021].

Phadermrod, B., Crowder, R.M. and Wills, G.B. (2019). Importance-Performance Analysis based SWOT analysis. International Journal of Information Management, [online] 44, pp.194–203. Available at: https://eprints.soton.ac.uk/394441/2/elsarticle-template.pdf [Accessed 24 Aug. 2021].

Porter, M. (2018).UK Competitiveness after Brexit. [online] . Available at: https://www.hbs.edu/ris/Publication%20Files/19-029_f2da1d32-2843-4405-8d7a-7110e3536cc0.pdf [Accessed 24 Aug. 2021].

Zhenmin, L. (2020). ECONOMIC AND SOCIAL CHALLENGES AND OPPORTUNITIES A Compilation of the United Nations High-level Advisory Board on Economic and Social Affairs. [online] . Available at: https://www.un.org/development/desa/en/wp-content/uploads/2020/07/RECOVER_BETTER_0722-1.pdf [Accessed 24 Aug. 2021]. ?

Appendices
Appendix 1

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