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It is proposed to follow a cost leadership strategy combined with the market development approach, which focus on broad market of foreign customers in a particular targeted country as the appropriate business strategy for initial expansion in order to stay competitive.1.4 Window of Opportunity Due to unforeseen political and economic fluctuations in the world economy and labour issues in the domestic market, the profitability of the company has been deteriorated.
According to Hopkin (2012), the PESTLE risk classification system is advantageous because it provides a clear analysis of the issues that should be addressed within the external context. Italy has been a part of the Saudi Arabia’s foreign policy states European Union since 1958 and that the security and stability of the it last held the EU Presidency in region is the responsibility of the 5 Education lovers.
Key factors ITALY SAUDI ARABIA POLITICAL Political Stability Government effectiveness Foreign Agreement Italian market is a stable market Despite few external burdens, the as been stability of the country is presumed to maintaining a stability average be strong compared with the last few value of 0.50 points from 2011 decades. Italian government has taken The appropriate measures to ensure regulated laws to protect the country proper quality of public and with legal justice and is measured to civil have achieved effectiveness of 0.23 the country services by has avoiding country’s government has political pressures in the nation. The literacy rate in Italy is 94.47% is the literacy rate.
➢ Saudi Arabia roads quality computed to be 5.01 points in average.
➢ Language barriers since the use of foreign languages are very low.
In order to examine the most suitable market from Italy and Saudi Arabia, the author conducts PESTEL Analysis, CAGE framework, 12C’s model and also utilizes the Harrell and Kiefer model.
The above assessment determined the current business market situation and the possible opportunities and threats to be experienced by Up Country Tea Estate.
99.07% TECHNOLOGICAL Research & Development Italy's gross domestic As the R& D industry is expenditure on Research and underdeveloped, 43% of the market is Development attributed to spending on foreign in 2016 was nearly 22, 3 billion euro. increased by 6.2% compared to Social media presence 2013.
The average number of Internet 69.62% is the average number of users Internet users in Saudi Arabia. penetration in Italy is 38.42% ECOLOGICAL Environmental Laws Climatic conditions Italy imposes strict regulations Saudi for the disposal of waste water legislation sets out vast prohibitions and has national targets for of pollution and contamination of air, reduction of greenhouse gas land and water, emissions, renewable energy reference to parties involved in efficiency.
➢ Food is a means for establishing and maintaining ties among family and 8 Source: Author's work based on (Everyculture.com, 2017) (Commisceo-global.com, 2016) (European Union, 2017), (Camuffo and Costa, 1993) , (Tradingeconomics.com, 2017) (OECD, 2016) , (The Global Economy.com, 2016) 2.2.1 CAGE Analysis for Saudi Arabia CULTURAL DISTANCE ➢ Business operations are hierarchical. GEOGRAPHIC DISTANCE Consumer spending is 259378 SAR Million in 2015.
Personal income tax has been 0 from 2004 to present.