The paper "Business Environment and Investment Opportunities" is a great example of a Marketing Case Study. The world retail industry is an ever-growing market based on the increased demand for food, clothing, and other consumer goods. The following paper has identified a market opportunity in Chile’ s retail and specifically the supermarket sector. Woolworths is the largest supermarket chain in Australia and has expressed its intentions to expand internationally. In this case, Woolworths has an opportunity at exploiting the supermarket industry in Chile. The retail and supermarket industry in Chile is attractive based on over 1.2 billion consumers.
Currently, there is no Australian or international supermarket chains with an increased presence in Australia. Moreover, is regarded as the regional leader in terms of trade and investment in the Latin America region. Moreover, the country has been ranked among the top recipients of Foreign Direct Investment in the region and the world. Based on the increased success of Woolworths in Australia and the market opportunities in the retail market of Chile, the following paper aims at developing a country/product brief as part of an international marketing plan. Situational Analysis Business Environment One of the main ways of understanding the external business environment is through the micros and macro environment analysis using the PESTEL model.
As indicated earlier, Chile is a regional leader in Latin America. In terms of politics, Chile is ranked among the lowest countries with political risk (KPMG, 2012). The current and previous political situations have been stable, thus illustrating a stable political future. The country’ s current political regime is also dedicated and committed to uplifting the standards of living through the development of infrastructure, public safety, and social stability (KPMG, 2012).
Moreover, the government has illustrated increased transparency with reduced levels of corruption. The economic situation in Chile is also the most dynamic in Latin America. Chile’ s GDP rose by about 5.2% in 2010 while the per capital revenue rose its highest level in about 8 years (KPMG, 2012). The country’ s GDP has also risen steadily from 2010 despite suffering an earthquake. In 2015, the GDP rose from 1.8% to 2.4% illustrating increased growth into the future. Moreover, consumer spending has also increased with the growth of GDP in Chile.
Additionally, Chile is based on an open or free economy with a floating exchange rate and numerous provisions aimed at decreasing economic volatility (Australian Department of Foreign Affairs and Trade, 2014). The Chilean government also implements a strong financial position that has enabled the repayment of debts (Australian Department of Foreign Affairs and Trade, 2014). The country has also eradicated most non-tariff barriers and trade distortions. Inflation rates are also maintained under OECD standards since Chile joined the organization. Overall, the economic attributes of Chile are positive and offer an attractive business environment for many international and Australian companies.
According to the Australian Department of Foreign Affairs and Trade (2014), about 120 Australian companies have expanded to Chile, but more than half of these are in the mining industry. There is little or no presence of Australian companies in the retail and supermarket industry. In the social aspects, Chile’ s population is about 14 million. One of the main cultural issues is that the official language is Spanish; therefore business such as Woolworths should ensure they understand and can effectively communicate to consumers through the official language.
Additionally, the standards of living are medium based on Chile's being and emerging market in the world. The country also boasts of a large pool of highly-qualified labor sector. Technology-wise, the country is ranked among the best in Latin America with extensive IT infrastructure as well as human resources (KPMG, 2012). Numerous efforts have also been made to increase sustainability efforts by requiring companies to comply with environmental regulations. Additionally, the legal structure of Chile is very strict, but its taxation environment is friendly and one of the lowest in the Latin America region (KPMG, 2012).
Overall, based on the PESTEL analysis, Chile is an attractive country for doing business and offers a unique opportunity in the retail sector.
Arellano, M. M. (2012). Chile: business environment and investment opportunities. Policy, 5-0.
Australian Department of Foreign Affairs and Trade, (2014). Chile country brief. Retrieved from http://dfat.gov.au/geo/chile/pages/chile-country-brief.aspx
Hephaestus Books, (2011). Articles on Woolworths Limited, Including: Foodtown, Countdown (Supermarket), Progressive Enterprises, Dick Smith (Retailer), Georgie Pie, Dan Murphy'. Canada: Hephaestus Books.
KPMG, (2012). Doing business in Chile. Retrieved from https://www.kpmg.de/docs/2012-01-kpmg-doing-business-in-chile.pdf
UK Trade & Investment, (2010). Retail Sector Opportunities in Chile. Retrieved from https://s3.amazonaws.com/StagingContentBucket/pdf/20110321121448151.pdf