Macro Forces Analysis for a Beverage Manufacturing Company within an International Market - Essay Example

Facilitator Introduction Success of any international business will lay wholly to the environment under which it is situated. Investors should consider the macro environment factors which affect the success of their business now and in future. Before investors start a business, it is important that they look for information on the trends of businesses in the area that they want to position their business. Moreover, they should consider looking at the needs and wants of their customers and aim at producing or supplying them with the goods that ensure they get maximum utility. When customers realize that the product gives them the satisfaction that they need, they will be buying the product from the producer or supplier since it meets their needs and wants. Generally, this paper will analyze the macro environment factors within an international market for investors who are willing to start a fruit juice processing company in the United States. The paper will also provide a research on the macro environment factors in the US and will give recommendations to the investor whether to invest or not. Macro Forces Analysis for A Beverage Manufacturing Company Within An International Market. In the analysis of the macro environment of the fruit juice processing industry use of PESTEL analysis framework to scan the environment in United States will be of great advantage. One of the factors that the investors should consider is the technological factor. The investors should consider looking at the technological inventions in the United States which will help in the processing of the fruit juices. The more advancement in technology, the more the production hence high returns due to the mass production of products that are availed to the consumers. According to the CIA (20), World Fact Book, United States is a country that has undergone a very rapid technology advancement since colonialism. It has made many inventions which have brought a transformation in the fruit juice production industry. The investors should consider placing their business in United States because of its technological advancement. Another factor that the investors should consider is the economic status in the United States. Economic factor will influence the consumer buying power and investors should understand the economic trend of United States because of positioning the business. During inflation, the prices rise and the customer’s income is not sufficient to sustain them hence low demand for goods. United States is a country that is economically stable and has no problems of unemployment. Where there is employment opportunities there are reduced cases of poor standards of living. Government taxes in the United States are also not very high hence the consumer’s disposable income is high. This will lead to a high purchasing power by the customer because he or she has enough income to meet his or her demands. The investors should position their fruit juice processing industry in the United States because its economy is stable and the standards of living are high. Investors should also consider the political environment in positioning of their business. Laws and regulations of the area where the enterprise is to be positioned should be considered. In some countries there are laws that do not protect firm’s rights and this serves as a blow to the enterprise. Patent rights and copyrights of a company should be protected by the laws of the country to ensure that investors come in to invest. The political stability of the country chosen for investment should also be considered. United States is a state that has not been faced by problems of instability in the recent years and therefore it is advisable that the fruit juice processing industry be positioned in the United States. Competitive environment should also be considered before positioning of the business. Investors should look at other producers of fruit juice drinks and come up with a strategy to win customers trust and retain them to ensure high profits are met. The investors can choose to produce fruit juices of high quality than those produced by other companies. They can also choose to reduce prices of their fruit juice and also to promote it in order to tolerate the competitive environment in the United States. The investors should strive to surpass fruit juice producing companies in the United States such as the Coca Cola Company and the Pepsi Bottling Group Inc in order to be successful. Despite the high competition in United States, investors should not retreat from investing there. This is because of the high population in the United States hence many customers are available to purchase fruit juice. Culture of the area where the investors want position the enterprise should not be left out. Social cultural factors such as age distribution, population growth rates, level of education and lifestyle are some of the things that investors should consider. They should position the enterprise where the age distribution consumes the fruit juice. Demography of the area should also be considered. Positioning the business in highly populated area will assure the investors high returns from the sale fruit juice. United States is a country with high literacy level and the lifestyle that people live will lead to a high purchase of the fruit juice. Investment in the United States has been increasing over the past years and it is advisable for the investors to start their enterprise there because of availability of market and other factors of production such as capital, labor and raw materials. The graph below from US SIF foundation shows the trend in investment in the United States since 1995-2012. These increase has led to many investors from foreign countries to choose United States as their preferred investment position because of the favorable environment in terms of culture, economy, competition and politics. Recommendations. It is recommendable that the investors choose to invest in the United States because some of the restrictions found in other countries are not available in United States. Unlike other countries were taxation is very high, United States government has cut short the rates of taxation. This has helped in cash flow in the country because income earners can save more and use it in purchase of goods. The savings will also increase the standards of living and there will be no shortage of employees to work in the fruit juice processing industry because of the high wages that they get. UnitedStates is a country that attracts capital because of the lower taxes, labor productivity and consumer wealth (Sinn 88). However, the investors should be willing to incur some expenses before their enterprise develops. They have to coup with the high competition from their competitors and therefore should spend a lot in promotion and advertisement of their product. In order to win the customers and retain them, they can choose to produce products that are not more pronounced in the United States. They can choose not to produce fruit juice only because they are widely pronounced in United States and instead choose to produce food & beverage products. Production of two related products will put them at an advantage than the other producers who only produce fruit juices. This will ensure the sustainability and success of the enterprise. Works cited Sinn Hans-Werner. “U.S. Tax Reform 1981 and 1986: Impact on International Capital Markets and Capital Flows." National Tax Journal 41, (3) pg.327-340 CIA. World Fact Book. 2005. Web. 2014. www.cia.gov/cia/publications/factbook/index.html The forum for sustainable and responsible investment. Growth of sustainable and responsible investment (1995-2012). 2012. Web. 2014. http://www.ussif.org/photogallery/SRI1995to2012.jpg Read More