PESTLE Analysis of Trinidad and Tobago - Research Paper Example

PESTLE Analysis of Trinidad and Tobago- Part I Political factors Trinidad and Tobago (T&T) got independence in 1962 and currently its government operates under a parliament democracy system which evidently resembles the UK government system. To illustrate, the state follows a two party system and a bicameral parliamentary system. President is the head of the state while Prime Minister is the head of government. While analyzing the country’s political spectrum, it seems that corruption has become a barrier to the rapid development of the T&T economy. However, the present Prime Minister Patrick Manning is vehemently working to restructure the T&T economy with intent to keep civil order. The government promotes the cultural aspects of the country such as carnival, music, visual arts, theatre, and dance. As the T&T Carnival and musical programs attract thousands of people including foreigners, the government considers cultural tradition as a means to enhance the country’s development (Caribbean News). Economic factors The State of Trinidad and Tobago keeps its door open to overseas firms with intent to achieve foreign investment. The Royal Bank of T&T finances the operational requirements of corporate and governmental organizations across the Caribbean (Economic Commission for Latin America and the Caribbean). The country has signed special export agreements with European Union, United States, Canada, and a number of other countries. The government greatly fosters private market entrants and foreign investments by liberalizing its cross border trade policies. Presently, the country has become an excellent site for international business investments. The T&T government believes that the country’s traditional carnivals and musical fests can be effectively employed to promote its different industries. According to several studies, global marketers hold the view that the T&T’s distinctive cultural tradition would offer them a potential market segment in the country. Due to the increased foreign investments, the country achieved an economic growth of 12.6% in 2006. Social factors The country encourages foreign countries to invest in its tourism industry so as to make its land a significant tourist destination in the world. Trinidadians spends a fair amount of their time for music, sports, and other cultural activities. The Trinidad and Tobago carnival, highly regarded as “the Greatest Show on Earth” attracts thousands of people across the globe (National Library and Information System Authority). Often, foreigners reach the country one or two months in advance since there are a lot of events preceding the carnival. Since this annual event provides the country with huge volume of revenue, the T&T tourist sector organizes visual arts, dance programs, and music fests as part of the carnival. Obviously, the country has not much deviated from its traditional way of life. Technological factors The country has invested a lot in research and development sector over the years. The country effectively makes use of research institutions in neighboring countries in order to overcome its limitations with technology sector. To illustrate, when the T&T struggled with crop infections by WB, the Venezuela assisted the country with improved coca plants that would effectively prevent WB infection. However, the T&T’s technology sector has been rapidly growing for last several years and the growth is now at its peak. The Trinidad has one of the best telecommunication networks and it assists foreign visitors to keep in contact with their family. Legal factors The T&T’s legal system is based on the English common law. The parliament of T&T has the power to repeat earlier statues, overrule an existing law, or develop a new one on various subjects. This Parliamentary Sovereignty feature assists the country to flexibly deal with different situations. The Upper House, the Lower House, and the President constitute the country’s parliament. However, as mentioned earlier, the increased corruption in the legal system threatens the quick development of the country. In addition, it is observed that law enforcement practices are not much effective in T&T and this situation would adversely affect the country’s cultural tradition. Environmental factors Environmental issues like water pollution, industrial wastes, and raw sewage also greatly threaten the stability of the T&T economy. In addition, oil seepages, deforestation, and soil erosion are some of the worse environmental problems in Trinidad and Tobago (“Environment..”). It evident that modern marketers give great emphasis to environment as part of their corporate responsibility, and therefore, the country’s mounting environmental issues may prevent foreign investors from investing in its industries. Obviously, a decline in trade activities and tourism development in turn would impact the country’s traditional cultural activities such as carnival and music. The PESTLE analysis indicates that Trinidad and Tobago offers potential opportunities for its cultural arts despite the increasing environmental issues and corruption. Global Entertainment Industry: Trends and Opportunities - Part II Trends in global entertainment industry The global entertainment industry has undergone tremendous changes over the last decade and the number of people involved in entertainment activities has greatly increased as compared to the 20th century. By the late twentieth century, people mainly indulged in technology based entertainment activities such as computer games and video games. However, this trend resulted in diseases like obesity, especially in Europe and the United States. As a result, people again turned to sports and games that are physically demanding by the beginning of the 21st century. This change also increased the significance of tourism industry which in turn contributed to the emerging trends like people visiting hill stations, seashores, and historical places of domestic land, or people travelling abroad to enjoy the beauty of foreign destinations. The dramatic growth of domestic and international tourism has forced governments to restructure their tourism policies in way that would attract more number of visitors. Hence, many countries have liberalized their tourism policies and offered tax exemptions to tourism sector with intent promote entertainment activities and thereby overall economic growth. The concept of cultural tourism has achieved wide popularity all over the world and the proportion of ‘cultural tourists’ visiting cultural places have been notably increased over the last few years. Cultural tourism can be conceptually defined as the “the movement of persons to cultural manifestations away from their normal place of residence, with the intention to gather new information and experiences to satisfy their cultural needs” (Smith, 16). See table 1. Table 1 (Source: Richards, Greg. “Creative tourism: Development, trends and opportunities.” Tilburg University. (2010). Web) From the figure illustrated above, it is clear that the concept of cultural tourism has been increasingly important for the last several years. The diagram reflects that this trend became more intense in 2001. The growth of cultural tourism again intensified in 2007 and this growth is still constant despite the economic downturn associated with the 2008-09 global financial crisis. Currently, iconic structures, mega events, and heritage mining have become the major parts of the cultural tourism. Nowadays, many countries consider cultural tourism as a way of expressing their cultural features before the world. Recently, a shift from tangible to intangible tourism resources has also been observed. To illustrate, nowadays people tend to know more about lifestyles, atmosphere, narratives, creativity, and media rather than just visiting museums, monuments, and mountains. It is obvious that such a situation will certainly benefit cultural arts of Trinidad and Tobago as the country possesses more intangible tourist resources than physical tourist destinations. Opportunities in global entertainment industry The global entertainment industry witnessed dramatic growth over the last decade and it has been significantly contributing to nation’s overall GDP growth. According to several reports, the global entertainment industry would achieve a sustained growth rate over the next five years. According to Barathi, Balaji, and Meitei, the global entertainment industry would grow over $50 billion in the next 10 years with more than half of the revenues generating from Asia. In addition, significant growth in global internet usage also offers potential opportunities for global entertainment industry. The data show that the number of internet users across the globe has been increased by 480.4% during the period 2000-2011 (Internet World Stats). This dramatic growth in turn would contribute to the emerging concept of cultural tourism since countries can make use of the internet to promote their arts and other cultural aspects. Transportation sector growth and increasing infrastructural developments also intensify the growth tourism industry since majority of the tourists nowadays tend to visit overseas destinations. Furthermore, the unimaginable growth in the number of international cultural tourists over the last several years contributes to global entertainment industry, especially to the tourism sector of Trinidad and Tobago (see table 2). Table 2 International cultural tourist 1995-2007 (OECD) (Source: Richards, Greg. “Creative tourism: Development, trends and opportunities.” Tilburg University. (2010). Web). The figure represented above clearly depicts the rate at which the number of international tourists grew during the period 1995-2007 in OECD countries. Similarly, surveys indicate that most of the Western and European people are interested in carnivals, music, dance, and other traditional arts. This rapid industrial growth is potential enough to improve the unemployment rate of a country since tourism and other entertainment industries create a lot of job opportunities directly and indirectly. For instance, tourism sector growth directly leads to the need of more guides simply due to the growing significance of narrative. Moreover, the development of global entertainment industry would enhance the growth of other related sectors. To illustrate, the increased popularity of internet and television channels stimulate the need of dance and music shows. The continuing growth of entertainment sector has influenced entrepreneurs to start their venture near important tourist destinations. Obviously, this practice would contribute to urbanization, which is the direct indication of a region’s growth. Finally, this industry provides further expansion opportunities to people who have already invested in different entertainment sectors. In short, the global entertainment industry offers a range of potential opportunities to national economies. Trinidad and Tobago entertainment industry- Part III While analyzing the T&T and entertainment industry, it is obvious that a number of other industries affect its growth rate. Mainly, the tourism sector plays a pivotal role in determining the growth rate of the entertainment industry in T&T. Trinidad and Tobago is one of the most famous tourist destinations in the world because of its excellence in cultural arts and the attractiveness of its different destinations. The country situates in the southern Caribbean Sea, to the north-east of the Venezuela and near to both Barbados and Guyana. These two islands, Trinidad and Tobago, are known for their South American heritage, which was built by Amerindians and then discovered by Christopher Columbus (World Guides). Although the T&T tourism sector is relatively small and less developed, it has high growth potential to dominate Latin America’s tourism industry. “Tobago is a leading destination for scuba diving, with the Buccoo Reef and its manta rays standing out, while to the east, the rainforest remains completely unspoiled” (World Guides). Statistical data show that nearly 52% of the T&T’s GDP income is derived from the tourism sector. Despite the adverse impacts global economic downturn, the T&T tourism sector continues to grow and contributes a significant portion to the country’s total revenues (Euromonitor International). Similarly, the telecommunications sector noticeably influences the entertainment industry in Trinidad and Tobago. As discussed earlier, the country has an improved telecommunications network and it assists T&T to promote its overall growth. It is clear that online media have become an important part of any type of entertainment and therefore the country’s increasing internet usage rate greatly contributes to its entertainment industry. Internet usage in the Trinidad and Tobago increased from 7.9% in 2000 to 39.5% in 2010 (Internet World Stats). This trend reflects that more and more people are likely to use internet in coming days and this would add values to the T&T entertainment industry’s growth potential. Likewise, manufacturing industry can also have an influence on the entertainment sector of the T&T. It is obvious that foreign tourists would not visit Trinidad and Tobago unless they get satisfactory accommodation facilities. Reports point that the country’s tourism sector cannot effectively provide necessary infrastructure facilities to overseas tourists. The country’s entertainment sector may also be influenced by food and other related industries. Finally, film industry also plays its role in determining the efficiency level of the country’s entertainment industry. It is necessary to provide various improved facilities to people visiting T&T in order to serve their trip interests. In total, the efficiency of the T&T entertainment industry is largely dependent on a number of other industries. Therefore, it is essential for the country to ensure integrated operations of those industries to maintain a well operating entertainment industry. Synergies among these industries would be greatly beneficial for an entertainment promotion company to maximize its operational revenues. It is clear that synergies with these industries would significantly promote the entertainment industry and this situation may in turn attract large number of global visitors to the country. It is possible to offer cheap rates to visitors if those identified industries are operated jointly. To illustrate, an entertainment promotion company can offer fairly low cost food and accommodation facilities to people who visit the country during the carnival time. Such a strategy would attract more visitors and therefore the allowed cost reductions can be bridged with the increased volume of tourist revenues. Hence, the major advantage of combined operation for an entertainment promotion company is that it allows the firm to effectively meet visitors’ needs and requirements. By way of integrated market operation, it is possible to cut down operational expenses, especially advertisement costs. For instance, a hotel or film theatre can use flex boards or LCD monitors depicting the T&T’s cultural arts and carnivals at their entrance. This would not only assist the entertainment industry to reduce its operational costs but also to achieve wider geographical coverage. Increased accessibility to information is another benefit of combined operations in the entertainment industry. Works Cited Bharathi, C, Balaji, C. D & Meitei, Ibohal. “Trends and potential of the Indian entertainment industry: An indepth analysis.” International Refereed Research Journal 2.2 (2011): 286-297. Caribbean News. “Trinidad government promotes carnival tradition.” (22 February, 2011). Web. 31 January 2012. Economic Commission for Latin America and the Caribbean. “The impact of privatization on the banking sector in the Caribbean.” (2001): 1-33. Web. 31 January 2012. “Environment.” Trinidad & Tobago: General Info. Caribsplendor.com. (2004). Web. 31 January 2012. Euromonitor International. “Travel and tourism in Trinidad and Tobago.” Travel and Tourism. (2011). Web. 31 January 2012. Internet World Stats. “Internet users in the world distribution by world regions-2011.” (2012). Web. 31 January 2012. National Library and Information System Authority. (2012). Web. 31 January 2012. Richards, Greg. “Creative tourism: Development, trends and opportunities.” Tilburg University. (2010). Web. 31 January 2012. Smith, Melanie K. “A framework for global cultural tourism studies.” In Issues in Cultural Tourism Studies. USA: Routledge, 2009. Print. World Guides. “Trinidad and Tobago information and tourism.” (n.d). Web. 31 January 2012. Read More