Executive Summary

This report is given presented to Kool Cucumber as an investigation to the possibility of

expanding their business into Spain. Spain’s external environments were analysed, which consists
of political, economical, socio-cultural, technological, and legal environments. The political,
economical economic, and legal environments presented as an opportunity opportunities while the
sociocultural, and technological environments presented as a threats. Based on these findings, the
opportunities outweigh the threats. It was is therefore recommended that Kool Cucumber expand
into Spain.

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Table of Contents
1.0 Introduction 3
2.0 Political Environment
2.1 Government Stability 4
2.2 Government Relations 4
2.3 Analysis 4
3.0 Legal Environment
3.1 Business Laws 5
3.2 Labour Laws 5
3.3 Analysis 5
4.0 Economical Environment
4.1 Currency Exchange Rate 6
4.2 Economic trends/forecast 6
4.3 Analysis 6
5.0 Socio-cultural Environment
5.1 Hofstede’s Cultural Dimensions 7
5.2 Analysis 7
6.0 Technological Environment
6.1 Technological Infrastructure 8
6.2 Communication Networks 8
6.3 Analysis 8
7.0 SWOT Analysis 9
8.0 Conclusion 10

9.0 Recommendations 10

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1.0 Intorduction
Kool Cucumber is an Australian-manufactured and owned bottling company. The Victoria-
based company was established 18 years ago and is in the business of manufacturing soft drink
bottles and bottling soft drinks for large reputable companies. The company is currently
growing internationally with their products being offered in Europe. Consequently, the
company is currently seeking to take advantage of their increasingly global reputation by
expanding their operations overseas to Spain. And therefore they need to understand each and
every country’s market in order to stay in line with their PESTL situations. Their market reach
is also very diverse, as they’re present in almost every country from the Australia to Spain.
The main aim of this report is to analyse the political, economical economic, socio-cultural,
technological, and legal environments (PESTL) that exists in Spain, which will then be
recommended to Kool Cucumber on whether to expand their business into Spain. Could have
improved sentence structure The proposed expansion strategy is by exporting required
resources from Australia to Spain, because they do not have the experience in working
overseas. Overall a good attempt at presenting a coherent and succinct ES and introduction.
However, some sections of the discussion could have improved in the sentence structure,
choice of words and grammar.

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2.0 Political Environment
2.1 Government Stability
Spain was rated by the international agency of transparency with a 6.9 in a scale
from 0 to 9 referring an honest government. Politicians in Spain, as well as in other
countries in the E.U, are elected in a democratic society because they have convinced a
majority of its citizens they are going to help and improve the community and its services.
The problem lies on how the government accomplishes its promises. No politician is able
to make use of corruption without being revealed sooner or later by other parties. Similarly,
the political and social pressures prevent politicians to make an abusive use of their power
to fulfill their wishes or personal interests. Politicians in Spain still have too many interests
in private businesses and companies, but I would not consider Spain a country with a
corrupt government.

This shows that Spain can be stable as there are elections regularly, but also being
unstable for a business to operate due to the protest. Good attempt at critical analysis but
could have improved written expression

2.2 Government Relations

Having been engaged in promoting and facilitating trade and investment between
Australia and Spain for over thirty years, it is very satisfying to see the considerable
deepening that has taken place in the bilateral relationship over the past decade. However,
the enhanced relationship is not exclusively commercial in nature. Other links have been
established and are thriving, helping to bring the two countries closer together than ever
before in fields as diverse as the arts, defence and cuisine, to name just a few. These positive
political relationships exhibit the government’s obligation towards international trades.

2.3 Analysis
Considering that the government stability can be both stable and unstable, and
government relations to be reliable, it can be concluded that the political environment can
be considered as an opportunity to start a business because the opportunities outweigh the
threats Consider revising the sentence > too long. Overall, the political environment poses
as an opportunity as it results in a positive business environment.

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3.0 Legal Environment

3.1 Business Laws

No politician is able to make use of corruption without being revealed sooner or

later by other parties. Similarly, the political and social pressures prevent politicians to
make an abusive use of their power to fulfill their wishes or personal interests. Politicians
in Spain still have too many interests in private businesses and companies, but I would not
consider Spain a country with a corrupt government. The anti-corruption legal framework
in Spain is fairly strong, and law enforcement has shown good results in investigations of
alleged corrupt practices (EUACR 2014). The Criminal Code makes it illegal for
individuals to offer or accept bribes to/from corporate individuals, along with Spanish and
foreign public officials. Well-presented discussion.

3.2 Labour Laws

The minimum wage for a professional salary may not be less than EUR 30 per legal
day of employment. If the working relationship lasts less than 120 days, the employee must
receive, together with the minimum daily wage set, a pro-rata payment for Sundays and
public holidays and a pro-rate payment for the two established extraordinary payments.
Minimum Wages in Spain remained unchanged at 764.40 EUR/Month in December from
764.40 EUR/Month in June of 2016. Minimum Wages in Spain averaged 648.32
EUR/Month from 1999 until 2016, reaching an all time high of 764.40 EUR/Month in June
of 2016 and a record low of 485.71 EUR/Month in December of 1999.

3.3 Analysis

Given that the business laws are weak and labour laws to be reliable poor written
expression, it can be concluded that the legal environment can be considered as an
opportunity for the business because the opportunity exceeds the threats. Therefore, the
legal environment poses as an opportunity as it results in a profit-oriented business.

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4.0 Economical Environment

4.1 Currency Exchange Rate

An Australian Dollar equals to 117.440 Spanish Peseta as of 15 December 2016,

this indicates that the Spanish Peseta has a weaker currency. Hence, this shows that the
Australian Dollar is stronger compared to Spanish Peseta.

4.2 Economic trends/forecast

Spanish is currently having an economic boom, thus, creating a higher profitability

for businesses. However, it is also said that the future is uncertain due to recent activities.
Thus, this demonstrates that the economical environment in Spanish is stable presently,
and business operations will show profitability

4.3 Analysis

Given that the currency exchange rate is reliable and economic trends are positive,
it can be concluded that the economical environment can be stated as an opportunity as it
outweighs the threats. Hence, the economical environment provides a substantial
environment to create a beneficial business outcome.

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5.0 Socio-cultural Environment
5.1 Hofstede’s Cultural Dimensions

Hofstede’s Cultural Home Host Country Managerial

Dimensions Country implications
Collectivism Individualism Individualism Australian employees are expected to be
Vs Individualism self-reliant and display initiative and
Spanish
employees prefer to
work alone.
Power Distance Low High Within Australian organizations,
hierarchy is established for convenience,
superiors are always accessible and
managers rely on individual employees
and teams for their expertise and Spain
has a hierarchical society. This means
that people accept a hierarchical order in
which everybody has a place and which
needs no further justification.
Uncertainty High Higher Employees in both countries follow sets
avoidance of procedures while working.
Time orientation Low Medium Employees in both has a normative
culture, exhibit great respect for
traditions, a relatively small propensity
to save for the future, and a focus on
achieving quick results.
Quality Vs Quantity High High Higher numbers of
of life OR Femininity Masculinity Masculinity workingmen in
vs Masculinity Australian.

5.2 Analysis
Given that the Hofstede’s Cultural Dimensions between Spanish and Australia are
dissimilar, it can be concluded that the socio-cultural environment is considered as a threat
as exceeds the opportunities. Therefore, socio-cultural environment creates a negative
environment for a business to function. Relevant discussion addressing key relevant issues.

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6.0 Technological Environment

6.1 Technological Infrastructure

Poor planning has plagued Spanish infrastructure in recent years. The sector has
suffered from a lack of prioritisation for the most socially beneficial projects, considerable
overspending of public resources on construction, and little long-term vision from the
government. Thus, this will create an obstacle in operating a new business in Spain.

6.2 Communication Networks

The communication network in Spain such as Internet and phones are considered
the Top 5 in the world. This exhibits a strong communication network for operating a
business. The survey by the Pew Research Center’s Global Attitudes Project, conducted
March 21 to May 15, also finds that social networking is popular in many nations around
the globe. This is especially true in Israel (53%) and the U.S. (50%), where half or more
say they use social networking websites. More than four-in-ten use these sites in Britain
(43%), Russia (43%) and Spain (42%). This exhibits a strong communication network for
operating a business.

6.3 Analysis

Given that technological infrastructure is weak, and communication network is

reliable, can be concluded that the technological environment may be a threat to provide
a good business, as the threat exceeds the opportunities. Thus, the technological
environment poses a threat as it results to a weak business. Well-presented discussion
addressing key relevant issues but the written expression could have improved.

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7.0 SWOT Analysis

Strengths Kool Cucumber company has:

• Good manufacturing system
• Good and friendly employees
• Success for price strategy
• Geographic diversity
• Market leader
Weaknesses Kool Cucumber company has:
• No experience working overseas
• A low production capacity
• Low demand in products
• More competitive market
• Not focusing on the technology
Opportunities Political environment
• Brazil and Australia has a bilateral agreement
• Regular elections
Economical environment
• Australia has a stronger currency exchange rate
• Brazil is in an economic boom
Legal environment
• Both countries have minimum wage for employees
Technological environment
• Good communication network
Threats Legal environment
• High level of corruption
• Corporate tax is high
Sociocultural environment
• Different similarity of employees between Brazil and Australia
• Kool Cucumber can also focus on the CSR (Corporate Social Responsibility)
activity.

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8.0 Conclusion

Based on the investigation of Spain's external environment, it can be concluded that the
opportunities outweigh the threats. The report discovered that the political, economical, and
legal environments presented as an opportunity while the sociocultural and technological
environments presented as a threat.

9.0 Recommendations
Based on the findings of this report, it is recommended that Kool Cucumber expand
into Spain using the following recommendation:

 Kool Cucumber can also focus on the CSR activity by which their name can
also be known in the social activity.
 Relocation of production where there is cheap labour and raw materials.
 Should improve the technology. Make easy access of their products all
around the world through the internet
 Kool Cucumber should expand into Spain in the short term of a year or two,
as the economical environment seems favourable to the business.

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https://geert-hofstede.com/australia.html

https://geert-hofstede.com/spain.html

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