Strategic Analysis - Research Paper Example

The Gulf Region consists of six distinct member countries say Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates (International Monetary Fund, 2003). The challenges experienced regarding tools and techniques used for the purpose of evaluation will also be analysed critically. PEST Analysis is a Strategic Management device used for scanning environmental variables in macro level of an economy to examine business prospects of a new organization in the economy or to understand the political, economic, social and technological factors that may influence business operations of an organization (Cullen, 2011).

Apart from its stable business in the UK, Costa Coffee has expanded its business in emerging nations such as China, India, Pakistan as well as countries in Gulf Region. In this discussion, how the macroeconomic variables prevailing in the Gulf Region influence the operations of Costa Coffee will be evaluated. Political environment of Gulf Region works towards developing coordination, integration and inter connection among the member countries. Gulf Cooperation Council (GCC) is the regional intergovernmental body for controlling the economic and political matters arising out of those six countries (Enz, 2009).

Hence, uniformity in trade regulations and tax structure can be experienced as a result of strict monitoring and control of GCC which helps foreign companies like Costa Coffee to expand their business in this region. In the post reform period, Government has taken the initiative to reduce the direct, indirect and corporate taxation to a great extent. Replacing the old tax structure with modern tax laws have resulted in severe cut down of tax rates from as high as 55% in Kuwait to as low as 10% in Qatar.

Corporate tax has also been range bounded between 10% and 20%. Such enhanced fiscal policy taken by Gulf Countries,