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Appendix F: PESTLE Analysis
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- Doing Business in Australia
- Stable and Competitive
- Global Trader
- World class Service Sector
- Technological
- Internet, E-commerce and Mobile Telecommunications
Appendix F: PESTLE AnalysisPoliticalGovernment StructureAustralia’s political system is based on the liberal democratic platform. The Commonwealth of Australia is one of the oldest democracies in the world. It was created in 1901 when the former British colonies (now the six states) decided to merge. Their democratic practices and principles such as religious tolerance, freedom of speech, and rule of law are similar to the British and American models but at the same time have a distinct Australian flavour. The Government comprises of two sections: the Senate and the House of Representatives. It must be noted that even though Australia is an independent country, Queen Elizabeth II of Great Britain is also officially the Queen of Australia. Based on the recommendations of the elected government, the Queen appoints a Governor-General to represent her. A national general election is held every three years during which it is compulsory for all citizens over 18 to vote. Australia has a written constitution which defines the responsibilities of the federal government. These include foreign trade, relations, immigration and defence (Department of Foreign Affairs and Trade, 2008).
Doing Business in AustraliaThe Government has modelled the institutional and regulatory structure in such a manner so as to promote industrial growth and welcome foreign investment. Some of the key decisions to foster this include deregulation of financial markets, dismantling of several of its protectionist tariffs, introduction of domestic competition laws and decentralizing of its labour market. It has also modified and simplified the tax system which has resulted in significant drop in business costs. The goods and services tax (GST) which is levied at 10 per cent is applicable to almost all products and services. In addition to the business-friendly regulatory environment, companies are also attracted to Australia because of the competitive operating costs. The corporate tax rate is 30% and there is no stamp duty on stock dealings. The Government is also encouraging investment in R&D by providing tax concessions of close to 175%. Not only is Australia strategically located for expanding business in the fast growing Asia-Pacific sector but also it has favourable time zone. The time difference provides the American and European businesses the opportunity to be continuously operational (Global Economy, 2008). All these steps to encourage growth of businesses in Australia have resulted in it being ranked at number 9 from 181 countries for the ease of doing business (Doing Business, 2009). In fact, it is ranked even higher at number 3 when it comes to starting a business. According to World Bank, it takes only 2 days to start a new business in Australia as compared to the OECD average of around 20 days. EconomicStable and CompetitiveAustralia is considered to be one of the strongest economies in the world, with close two successive decades of growth. From 1991, it has grown an average of 3.3 per cent a year. In 2007, Australia’s gross domestic product (GDP) was about $1 trillion. As per the IMD World Competitiveness Yearbook, it is ranked number one in the Asia-Pacific region for labour, industrial and agricultural productivity per person. The unemployment rate is relatively low at 5.2% (2008) and the gross per capita income is around $40,000. According to Organization for Economic Co-operation and Development (OECD), Australia’s standard of living surpasses the standards of all Group of Eight Countries (G8) except the United States. Global TraderAustralia promotes itself as a global trader and is looking to improve international market conditions. It is working very closely with Asia-Pacific Economic Cooperation (APEC) to break down trade barriers and free up international trade and investment rules. It is aiming to build partnerships of strategic importance with the help of free trade agreements that generate new trade investment opportunities for Australia. Australia is also a staunch supporter of the World Trade Organization (WTO). During the last decade, there has been an annual growth of around 6.6% in Australia’s exports of goods and services. In 2007, Australia’s trade in goods and services totalled $454 billion and it accounted for about 1% of world trade. The goods and services exports were valued at $218 billion. Services exports were the second largest after minerals and were responsible for 22% of the total exports (Global Trader, 2008). As mentioned before, Australia welcomes foreign investment. It realizes the importance of foreign investment in developing competing industries, increasing exports, stimulating economic growth and creating jobs. In 2007, the total foreign investment in Australia was valued at $1.6 trillion (Exporting to Australia, 2008). Note: The dollar amounts are Australian World class Service SectorAustralia has a world class service sector that is not only competitive but also aided by a highly skilled and multilingual workforce. The services sector account for close to 80% of Australia’s economic activity. The services include banking, finance and insurance, consulting, media and entertainment, government services, education and other business services. Australia is a critical financial services centre in the Asia-Pacific. Its foreign exchange market is the seventh largest in the world. More than 2000 companies are listed on the Australian Stock exchange and about 50% of the adult population owns stocks. The media and entertainment services also play a major role in the services sector. The Australian media is monitored by the Australian Communications and media authority. In 2007, close to $4 billion of advertising revenue was generated by the television industry. In recent years, Australia has also earned the reputation of being a knowledge-based economy. This has been the result of higher standards of education and rapid pace of technological changes. Australian ICT sector has close to 25000 firms generating revenue of close to $90 billion and employing around 240,000 professionals. SocialOriginAustralia is a mix of distinct blend of established traditions and new influences. Its original inhabitants were the Aboriginal and Torres Strait Islander people. They are known to have one of the world’s oldest cultural traditions. There is evidence that they have been living in Australia for close to 50,000 years. The rest of them are migrants who arrived in Australia from 200 odd countries. The first lot of migrants came mainly from Europe. They were followed by migrants from Middle East, Asia-Pacific and Africa. CultureAustralians are said to be the hardest-working people in the developed world. They are mostly informal with their workplace colleagues and generally call each other by their first names. They prefer to queue up while waiting to be served. Also, being on time for meetings is crucial. Australia is an egalitarian society. This means that there are no class distinctions and there is equal opportunity to everyone. If one is committed and hard working then he can realize his dreams. Australians love their sports. In spite of having a relatively small population, they excel in many sports like rugby, cricket, hockey and several others. The government uses sports to build active and healthy communities. Not surprisingly, English is the national language. However, there are more than 200 different languages spoken in Australia. Italian, Greek, Mandarin and Arabic are the other popular languages. Australia respects and accepts cultural diversity (Cultural Diversity, 2008). FactsAustralia’s current population is over 21 million. Most of the Australians prefer to live in big coastal cities like Sydney, Melbourne, Brisbane, etc. The women (50.6%) outnumber the men (49.4) in Australia by a small margin. Interestingly, more than 40% of Australians were born outside or have at least one parent who was born overseas. TechnologicalTech Savvy AustraliaAustralia’s Information and Communications Technology (ICT) industry is the 11th largest in the world and also the 4th largest in the Asia-Pacific region. This sector includes businesses providing computer and telecommunications services as well as hardware sales and service. The ICT sector has played a key role in Australia’s economic growth. Some of the leading areas of work in this sector include software development, networking, e-commerce and gaming. A number of multinational ICT firms have their regional headquarters for the Asia-Pacific region in Australia in order to take advantage of the available opportunities and also the local expertise. In 2007, Australia’s ICT sector employed close to 400,000 people. The ICT sector accounts for close to 5% of Australia’s total GDP (ICT Australia, 2008). Australia was ranked the 3rd most tech savvy country as per the 2007 Globalization Index conducted by A.T. Kearney. Internet, E-commerce and Mobile TelecommunicationsThe internet and e-commerce too have been responsible for the rise in competitiveness of Australian businesses. Almost 100% of the large businesses and around 60% of medium sized businesses have online presence. The low overheads, initial capital and fast return of investment has resulted in large number of SME’s employing e-commerce. According to Australian Bureau of Statistics (2007), around 80% of Australian households had access to a computer and about 70% had access to the internet. In 2007, around 7 million people used the internet for online purchasing of goods and services. The following table is taken from recent Nielson Online Internet and Technology report (2008) to provide details about trends of internet usage in Australia: Table 41 - Activity statistics for internet use in Australia 
In recent times Mobile telecommunications has shown rapid growth in Australia. It contributed close to $9 billion in 2007. At 21 million mobile phone subscribers, the penetration rate is above 99%. Download 4.93 Mb. Share with your friends:
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