Development in Eastern Europe: Azerbaijan - Assignment Example

PESTEL Analysis of Country Azerbaijan Introduction Azerbaijan is an oil-producing nation, which touches the Western shore of the Caspian Sea, and it borders Iran, Georgia, Armenia and Russia (Plunkett 2008, p. 16). Its population is approximately 8.3 million people, and at least a quarter of the population stays in the capital in the cosmopolitan urban region, which consist of ultramodern skyscrapers with a historic walled town that is known by the UNESCO being a world heritage center (Wind & Mahajan 2011, p23). The religion that dominates this country is Islam, though there are others like Orthodox Christians, as well as the Jews. The nation gained its independence from the USSR in 1991, and it had declared its state sovereignty in 1988 (Plunkett 2008, 09). Since then, it has had conflict with the neighboring nation, Armenia (Luca 2014, p. 12). The conflicts lasted from 1988-1994, but a ceasefire was established in 1994 when the separatists were looking for full independence from this nation, and they had control over Nagorno-Karabakh, as well as the seven provinces that surround it. This paper evaluates the PESTEL analysis of Azerbaijan country, and this consists of the political, economic, social, technological, environmental and legal factors of the nation. Azerbaijan still seeks control over these areas; on the other hand, it has been hard to get the solution through diplomatic means. Its economic status relies on the oil and gas. They also have beautiful temples, which act as the tourist attraction. It has learned to use bountiful natural resources, as well for industrial fuel (Murphy 2014, p. 42). The country has a well-established infrastructure, and development of banks, retail shops, and real estates, though the greatest challenge is the financial crisis. The economic growth has grown from 2006 to 2008 before dropping down by 3.7% in 2010. The economic status experience rapid growth with use of the available natural resources, but it has been affected by corruption (Schmidt 2009, 15). However, transparency is the key of the nation and it is ranked 134 among the 178 nations that practice corruption, though the nation has tried to reduce the vice. Culturally, Azerbaijan has gone global, and could win the Eurovision song contest in the national wide music competition (Murphy 2014, p. 20). For a company to go global it has to analyze the foreign markets and understand the major factors that might affect the operation of the new product. One strategy of understanding the nature of a country is to carry out PESTEL or PEST analysis, which consists of the political, Economic, Social, and Technological. Environmental and legal systems, which vary from one state, top another. This also helps the managers to understand the dynamics of the market and factors that might affect it so that they can find the strategic ways that can help the company to win over giant companies and capitalize on the opportunities at hand (Luca 2014, p. 34). PESTEL Analysis of Azerbaijan Political The political factor is one of the major roles that any company intending to expand its business should know. This knows the political stability of the country since it has a direct impact on the operations of the company; for example, Azerbaijan is an independent country with a stable political structure since 1918 to 1920, and it became a democratic republic of the Muslim nation. It received independence from the Soviet Union in 1990s and the situation has been in flux on various levels (Parasuraman et al., 2009, p. 23). The biggest challenge now is that the country is the separatist republic of Nagorno-Karabakh, and they still reclaim their territories dating back from its separation from U.S.S.R. In this area, most of the people, who occupy it, are Armenians, and this has led to a conflict between them and the Azeri people; hence, leading to instability in the nation. However, due to instability going to some places in the nation might be hard; hence, you are given a passport for identity (Murphy 2014, p. 19). Only foreign countries are allowed to cross the land borders to Russia and Iran at Astra that is if one has the required Visa. There are still some challenges and instability in some areas due to the slowly recovering from the turmoil in the country. The human rights have also not been well established, whereby the freedom of speech, religion and politics can easily be violated (Neubert 2013, p. 29). Economic Oil, gas is the major economic resource in the country; this has helped to boost development in other economic sectors. For instance, this led to macroeconomic stability, as well as the sustainability of the other economic fields in the country, resulting to the economic reforms that has improved the social welfare of the people (Organization for Economic Co-Operation and Development 2011, p10). There is development of entrepreneurship that attracts both local and international investors that come to establish other businesses and invest in the nation. The major area of interest is the oil production and other non-oil sectors as major sources of development. As a result, the private sectors have also formed their social economic development that has increasingly led to economic growth in the country (Luca 2014, p. 34). The country implements measures that provide diverse strategies of property that contributes to the positive impact to sustain the economic growth in the country. Nevertheless, privatization, specific weight was less than 10%, but has now risen to 85%. The industrial production is 25% agriculture and foreign trade is 53% that is 4 times, and the monthly average wage of 5.6% as well as 2-3% inflation leading to a total investment of more than 20 billion USD (Murphy 2014, p. 13). Social The country is mainly made up of various ethnic backgrounds such as Azeri 90%; Dagestan 2.2%, Armenian, 1% and Russians 1.8%, while others make up to 3.9% according to the census statistics. The religion is mainly Muslim and other like, orthodox, Christians, among others. The main language in this nation is Azeri, which a Turkish language is 38 % of the Russian speakers also dominate the economy and politics of the nation. The Azerbaijan language is also part of the Oghuz or Turkic group and Anatolian (Simba Information 2014, p. 16). The family makes up of the basic social structure in Azerbaijan the families, small and they work independently and received support, both financial and emotional support from one another (Murphy 2014, p. 12). They still dwell in the culture where there are hierarchies; there is a mixture of tradition, religion, culture and family hierarchy that proceeded over the official laws. Their customs are welcoming; they have warm and friendly greetings where men greet with a handshake, and kissing on the cheek whereas the women hug, as well as kissing each other, but they always shake hands with strangers. They remove shoes before going to any house, one can still arrive thirty minutes from the time of invitation dressing may be casual, but descent (Neubert 2013, p. 30). In addition, there are business etiquettes that must be direct communication, the information should appear in a more diplomatic way so that there are no misunderstandings. There are more business cards that can be exchanged and that forms the means of having and exchanging contacts. The business meetings should be invited through the invitation and introductory letter that outlines the history of the company and the purpose (Schmidt 2009, p. 25). There are protocols to be followed and they are more sensitive to titles and status. In general, politeness is the key to any communication and business deal. There is bargaining and haggling as well in the business transactions (Dhlamini 2009, p. 18). Technological Technology plays an important role in all business organizations in the world, and this leads to a sustainable competitive advantage from the other giant well-established businesses in the world. Most of the small businesses are entering a global market and managing to compete with the big companies because of advanced technology. For instance, Azerbaijan oil and gas producing country has many challenges that affect the production and performance, but because of innovative technology in the country, it has been able to gain a competitive advantage in maximizing the resources. The nation has managed to recover oil and gas from complicated sources through technological means and innovative ways; therefore, the government spends more on the alternative energy technologies that leads to new developments, as well as changes the organizational category (Claitor 2014, p. 09). Environment The Azerbaijan environment is surrounded by a variety of climates, animals, habitats and animals. There is a natural protection because of the tapped oil reserves that has led to the development of the industrial sectors. However, the industrial development has led to increased pollution, but the city is an industrialized capital city (Luca 2014, p. 38). The government ensures protection of reserves for protection of their natural resources, as well as a center of tourist attraction. The scientist re allowed to go there and study, and the Azeri law prohibit the industrial development or destruction of the world life and plants around and within the boarders (Mcloughlin & Aaker, 2010, p. 20). There are 16 major natural parks, which protects the Fauna, and flora ecosystems. The national parks also have tight security, and have been kept under favorable conditions for tourist attraction, which is also a source of income. The nation is located between the Caucasus and Asia, bordered by the black and the Caspian Sea. It has a rich natural culture and the brad biodiversity for the European nations it is known for its natural resources, which plays a vital role in the biodiversity preservation and the economic growth of the country (Stone & Foss 2014, p. 14). In addition, the nation has 7 major national parks, as well as 13 natural parks and 21 reserves and the largest known national park is Caucasus in Europe. Moreover, it has many landscapes, which consist of mountain ridges plateaus, and crests. The refining and extraction processes need many chemicals and extraction of gas, as well as petroleum, which pollutes the air. This leads to various health hazards of the water products released and the environmental risks, however, the government manages to get ways to reduce the risky environmental factors caused by extraction of gas and oil (Chakrabarti & Sen 2012, p. 12) Legal Factor Health and security are major factors in Azerbaijan country since most people are linked to the oil production, therefore, the health sector and the government has established the safety and healthy policies, which are regulated by the government (Mcloughlin & Aaker, 2010, p.10). This helps in protection of individual health of the workers and environment drilling oil extraction, drilling and supplying to various customers. Furthermore, product safety is also a major key since any leakage can lead to a dangerous impact on people and the environment. The government is concerned with material that is used to form the products. It also contains legal procedures that should be followed before release to the market to ensure that the products are of quality and good standard for human use. There are laws and policies that restrict the risk of violation based on the products and materials. This has led to special measures for future development (ÇAlişKan 2010, p. 09). Conclusion The nation is situated on the Western shore of the Caspian Sea and it borders Iran, Georgia, Armenia and Russia with approximately 8.3 million people. A quarter of the population stays in the capital in the cosmopolitan urban region, which consist of ultramodern skyscrapers with a historic walled town that is known by the UNESCO being a world heritage center. The country has a well-established infrastructure, and development of banks, retail shops, real estates, though the greatest challenge is the financial crisis. Oil gas is the major economic resource in the country; this has helped to boost development in other economic sectors (Murphy, 2014, p12). The economic growth has grown from 2006 to 2008 before dropping down by 3.7% in 2010. The economic status experience rapid growth with use of the available natural resources. The country has well established legal laws based on health and security are major factors in Azerbaijan country since most people are linked to the oil production, therefore, the health sector and the government has established the safety and healthy policies, which are regulated by the government. The nation has managed to recover oil and gas from complicated sources through technological means and innovative ways; therefore, the government spends more on the alternative energy technologies that leads to new developments as well as changes the organizational category Recommendations Most organizations are getting involved in the world trade and activities to increase their economic growth and stability. Trade between developed and marginalized countries has greatly increased due to current technology. They are trying to develop their domestic market in order to reach the standards to qualify in the global trade and businesses. The regional development of the trade market has enhanced their export and import market (Luca, 2014, p. 37). The following are some of the factors that the company should consider social, political, environmental and economic factors of the nations. Moreover, the company should use the improved technology as an opportunity to improve and maintain a sustainable competitive advantage. To add to that, having studied the social cultural differences in various nations the company should look for strategy management that helps to maintain a good customer relation management in the nation through provision of the tastes and preference of the clients that lead to their satisfactory (Dhlamini 2009, p.10). Bibliography ÇAlişKan, K. (2010). Market Threads How Cotton Farmers And Traders Create A Global Commodity. Princeton, N.J., Princeton University Press. Http://Site.Ebrary.Com/Id/10405147. Chakrabarti, G., & Sen, C. (2012). Anatomy of Global Stock Market Crashes: An Empirical Analysis. New Delhi, Springer. Claitors Law Books and Publishing Division. (2014). The World Factbook 2013-14. Claitors Pub Div. Dhlamini, Z. (2009). Status of Research and Application of Crop Biotechnologies in Developing Countries: Preliminary Assessment. Luca, C. 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Potential Analysis for Further Nature Conservation in Azerbaijan A Spatial and Political Investment Strategy. Greifswald, Geozon Science Media. Simba Information (Firm: 2013). (2014). Global Stm Market: Analysis & Forecast 2014. Stamford, Ct, Simba Information. Stone, M., Bond, A., & Foss, B. (2014). Consumer Insight: How to Use Data and Market Research to Get Closer To Your Customer. London, Kogan Page. Wind, Y., & Mahajan, V. (2011). Digital Marketing Global Strategies from the Worlds Leading Experts. New York, J. Wiley. Http://Public.Eblib.Com/Choice/Publicfullrecord.Aspx?P=117489. Read More