Hungarian Political, Economic and Cultural Environment - Report Example

HUNGARIAN POLITICAL, ECONOMIC AND CULTURAL ENVIRONMENT ANALYSIS FOR SOUTH KOREAN TELEVISION MANUFACTURER Name Course Institution Date Introduction Market opportunity analysis is consistent of a strategy aimed at analyzing a certain market segment. Through proper analysis, a clearer description on potential advantages, profits and revenues to be realized ensues. As such, market opportunity analysis has been a tool that has ever been used by various businesses. Through the use of the analytical tool, businesses have managed to curve out the right market niches in which they can venture and sustain profitable levels. However, in the analysis of the various market niches, businesses have inculcated a more factor based strategy in selection. Population income levels, government support, market saturation, population density and political stability are among the various factors that businesses have internalized in choosing the market for venture. Hence, in this paper, I will look at the market opportunity analysis of the three aspects of cultural, political and economic facets of Hungary for a TV company in selling their TV products to the potential country. PEST analysis is a prudent tool that can be used when scanning the external environment in which the business operates. Moreover, PEST is an acronym that denotes the following factors, Political, Economic, Social and technological. The aforesaid factors play an immeasurable role in the creation of opportunities of the company strategy. However, within the case analysis, it is imperative that a more focused evaluation of Hungary prevails. The focused analysis of the region denotes an analysis of the cultural, political and economic environment of Hungary. Thus, an evaluation of the diverse facets will be as follows: Cultural environment The cultural environment comprises of diverse facets of imperative analysis. First and foremost, the population is imperative for analysis. The population entails the potential customers that the organization is bound to obtain revenue from. Thus, from the analysis of Hungary, the various facets of population are as follows: As at 2002 the population of the country had grown by over 40% with the census revealing that the population was at 10.152 million In the last twenty years, the population has been grappling with an increase in mortality rate In accordance to the demographic rates coupled with the health of Hungarians, there is a possibility of improvements in health. The health improvement commenced in 1980s due to the effective policy change within the political environment The average life expectancy within birth is 68 years in regards to men whereas women it is 74 years Majority of the EU members, coupled with Hungary are grappling with an ever emergent prospect of ageing population. Additional to the ageing population, there is an implausible level of comparison between the ageing populations to that active. Accordingly, the individuals dependent on the aged are 22% in Hungary as compared to the 24% average across EU. Majority of the pundits emphasize that the population that is ageing will increase further to 31% in Hungary as at 2018. Hence it may seem like a plausible outcome for the south Korean company As per the result of the increasing ageing population, it is evident that the costs of pension will impact on the government. The trend will result into a negative impact on the health care system coupled with the social services within the economy. Thus, through the analysis of the diverse facets of population in Hungary, it is evident that it is imperative to analyses the equally important to analyses the educational, lifestyle and cultural facets. Thus, an analysis of the three facets is as follows: First and foremost pundits emphasize that the Hungarian education system is often regarded as one of the most developed across EU. Accordingly, Hungarian researchers coupled with IT specialists are considered one of the most outstanding globally. As such, the government makes an in-depth investment into the education sector. As at 2013, the budgetary allocation comprised of 18% of the country’s GDP. The extensive investment by the government has been critical towards opening new avenues for learning and expanding for the educational and employment facets of an individual. Admittedly, over 60% of individuals attend school as early as the toddler years. On the other hand, the total number of individuals attending the higher education has been on the rise. McGee & Wilson (2014) emphasizes that the increase in school has been by more than one and a half times. In the period of 2012, those attending higher education increased from 112000 to 367000 which is a more than three and a half times. The attendance to education is highly plausible for the diverse businesses since they can capture the increasing middle and high income society that is expanding rapidly within the country. On the other hand, other facets of cultural environment may impact on the South Korean business. As such, the South Korean business should grapple with the following Hungarian aspects that are imperative for consideration: i. The Hungarian cultural life, within a traditional mandate is highly political since the national culture became a proper tool for national building in the early years of the 19th century ii. Theatre, literature coupled with Opera have been particularly important in the development of national consciousness and are still pivotal within the Hungarian culture iii. In regards to the gender roles, the traditional father cements his role as the dominative force in the family. Furthermore, both the parties in the family work. Approximately 70% of the female population have jobs with men playing a critical role in the family chores iv. Adult children play a pivotal part and parcel in the family with utmost care emanating from the parents v. As at 2011, the level of unemployment for women was at 5.3% whereas that for men was at 6.5%. however, majority of the pundits emphasize that the level of female unemployment was as a result of slack in participation of women in the employment scene Finally, it is imperative to evaluate lifestyle changes within the cultural environment. As such, it is important to acknowledge that the Hungarian market is undergoing restructuring in regards to the lifestyle coupled with leisure time activities. During the era of socialism, the termed Workplace communities had a grave impact on the spare time of the population. Additionally there were diverse strikes for children construed towards organizing common based trips such as leisure activities. However, after the 1990s the shift in economic policies was evidenced by a shift in the lifestyle of the individuals within the economy. As compared to the free time evidenced, there was an extensive need for more working time for the individuals. In the aforesaid period, the weekdays were evidenced by minimal time to indulge in leisure and so forth. For the numerous families in the rural regions, TV has been playing a central role as the entertainment source. The significant role of the TV should play a critical role towards determining the targeting process of the South Korean company. On the other hand, it is important to accept that the most widely popular sport is Football. The love for football entails that focus on effective targeting and sale of television will generate revenue. Majority of the population prefer watching through the television as opposed to going to the stadiums. The investment into effective marketing is bound to catapult the performance prospects of the South Korean company. Political environment The television industry in Hungary is bombarded with various laws and regulations that govern their operations. The laws stem from the industry specific laws that cover the telecommunication services delivered and the general competition. Antitrust laws and consumer protection laws are examples of the laws that mobile phone companies need to take heed. Most specifically, the Hungary regulatory framework to govern the communication sector, adopted in 2002, is of ponder. Correspondingly, the regulation is focused on the improvement of the functioning in a sole market and the guarantee of user interests. From the analysis of Hungary, the significant shift from communism was a plausible facet. However, it is pivotal to comprehend that the most imperative facets of the political economy in Hungary emanate from its membership in EU (Johnson, Scholes & Whittington 2012). The country has been on the steadfast path towards acceptance of a more capitalist nation. Accordingly, the country implemented a more capitalist approach and diverse from the socialism view. As at the 1980s, Hungary shifted from the socialism approach that was highly evident in the Soviet Union. Through the shift from the policy statement, the country managed to woo very many investors. Accordingly, from the analysis of the country, it implemented a multi-party system. The multi-party system enabled a more democratic nation. Democracy entailed that individuals can choose from a wide array of leaders. Additionally, the country has incorporated a more effective constitution. The constitution with its amendments in 1989 forms a more effective part and parcel of the economy. Through the plausible political system, it is imperative to acknowledge that the various unions that the country is a member of that will make a plausible avenue for the South Korean television company include: The European union United nations World trade organization World bank European bank of renovation and development European council Central European free trade agreement Economic environment For any television company, knowledge pertaining to the GDP, inflation rates, and economic stability and tax rates imposed form a bed rock to the economic factors. As such, GDP analysis is a common yet crucial tool in analyzing the economic activity of the proposed area of operation. GDP indicates the production degree of the resident producers which is calculated through summing up the gross value added from the overall activities/ the industries in the economy. Hence, through comprehension of the GDP, a business is able to project the economic stability of the nation of operation. Thus, from the evaluation of Hungary, an analysis of the diverse economic facets is important to lay forth effective strategy formulation. First and foremost, Hungary’s domestic market is comparatively small. However, despite the relatively small size, it is imperative to acknowledge the country’s position in the European economy. Hungary is the third largest economy in the eastern-central Europe in regards to US dollars. Additionally, after the inculcation of a more comprehensive economy, the country is regarded to as the most open economy in the Eastern Europe region. Admittedly, the significant sectors in the region are tied closely to the Western Europe through foreign investment coupled with trade. Accordingly, through the analysis of Hungarian projections, the diverse pundits emphasize that the region is bound to meet the economic performance criteria. The country has been reducing its public debt coupled with fiscal deficits. The television company should be aware of the facets pertaining to the debt aspects of the economy. An economy that is highly in debt is bound to put off potential investors. A country with increased debts is not bound to meet its operational liquidity. Operational liquidity emanates from the capability of a given country to run its performance effectively through the evident finances. The growth rate of the country as at 2009 was at 3.8%. The slight yet plausible growth rate has been as a result of effective policy statement by the government. Effective policy making such as fiscal and monetary policies have ensured profitable outcomes for the country. In regards to the ministry of finance, the estimated 4% growth per annum until 2016 has become a viable estimate within the nation. Despite the international instabilities, majority of the pundits emphasize that plausible performance is bound to prevail through effective production and output. Furthermore, from an unemployment standpoint, the country has maintained a less than 10% rate in the past years. The slight reduction in unemployment rate has been through foreign direct expenditure by the government. The unemployment rate as at 2003 was at 6.3%. However, despite the reduced unemployment rate, the young have been impacted on significantly. The youth, who form the main consumers of entertainment, exude a significant effect emanating from the unemployment levels. The youth form over 50% of the individuals unemployed. The level has been pegged to rise due to the prospect of increasing ageing population that enjoy the pension rates and are not ready to relinquish their jobs. Nonetheless, it is imperative to acknowledge that the unemployment rate is within a lower rate as compared to the European average of 8.2%. Through an analysis of the unemployment rate, it is important to analyses the inflation rates that are equal aspects that impact on the decision making of the South Korean television company. Admittedly, as at 2011, it was stated that the inflation rate was at 4.8%. The rate seemed realistic despite the impact on the consumer spending. The government asserts that through effective policy statement the diverse inflation rates will be evaluated and minimized extensively. Through the stabilization of the economy coupled with focus on the working population, effective output is bound to prevail. The diverse legal and educational frameworks of the country are important towards improvements in the employment rates. There is a broadening gap between the skilled and non-skilled workforce and sectors. An examination of Hungary reveals that there is an increase in the capital intensive sectors. Capital intensive sectors rely highly on the skill sets of an individual. Individuals that exude plausible skills are highly adaptable to the emergent technologies like those that emanate from the South Korean television company. Conclusion Through strategic analysis of Hungarian country, an overview of the market in which South Korean Television Company will operate has been analyzed. Similarly, the information pertaining to the environment that it faces generates a noteworthy tool of reference in maintaining a competitive advantage over its rivals (Barney 2009). However, strategic analysis further leads to strategy formulation. In every business across the globe, there are independent and concurrent processes in which strategy can be defined. Through formulation of strategies, long range decisions concerning the environmental opportunities and threats ensure survival of the business (Barney 2009). As such, formulation of strategies is inclusive of formation of corporate mission, specification of attainable objectives and development of strategies through setting up of guidelines. Accordingly, through the aforementioned PEST portion analysis of Hungary, the South Korean television company will be able to formulate strategies to ensure survival in the various markets. Consequently many of the researchers state that in formulating strategies, three core levels in formulation are used. Corporate level, business level and functional level play a significant role in formulating the strategy to be used by the business. References Ackoff, R. L. 1981. Creating the Corporate Future. New York, NY: Wiley & Sons. Drucker, P. F. 1986. The practice of management. New York: Harper. Gluck, F. W. 2012. A fresh look at strategic management. Journal of Business Strategy, 6(2), 4-19. Tregoe, B. B., Zimmerman, J. W., Smith, R. A., & Tobia, P. M. 1989. 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