pestle analysis on saudi arabia

8/3/2019 Pestle analysis on Saudi Arabia

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PESTLE on SaudiArabia

Industry- Textile Retailing

Group 12

Charles Denis-754Souvik Nandi- 11IB254

Sudeep Mehrotra- 11IB256Tom George- 11IB258

Tuesday 17 January 12


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Introduction- Country

Largest in Western Asia, Second Largest in the Arabworld in terms of land area.

Second Largest Oil Exporter.

Absolute Monarchy.

Founder Member of the Arab League.

Joined the WTO in 2005.

Saudi Arabia's economy has ranked 17th on theGlobal Competitiveness Index.



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Doing Business ranking



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Introduction-Product

Ethnic Indian wear. Embroidered Kurtas and Kurtis, Burkhas, Pajamas,

Dhotis, Sherwanis.

Why???-

Climate.

Cultural Norms.

Huge potential market of traditional Saudis as well asIndians (1.8 million)



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Pestle

Stands for Political, Economic, Social, Technological,Environmental and Legal analysis to describe aframework of macro environmental factors.

Further extended to STEEPLE and STEEPLED withEthics and Demographics.

Useful strategic tool for understanding marketgrowth/ decline, business potential etc.



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Political

Monarchy.

Business Friendly government regulations.

The King governs through a Council of Ministers, onwhich he serves as President.

The Kingdom of Saudi Arabia is divided into 13provinces, each of which is administered by aprovincial governor appointed by the King. Provincesare subdivided into governorates, districts andcenters.

The provincial councils are empowered to determinethe development needs of their respective provinces,make recommendations for projects andimprovements and request appropriations in the

annual state budget.

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Economical

Since the discovery of oil in 1938 has grown to beamong the wealthiest nations.

Produces more than 5% of the total production ofpetrochemicals in the world.

Capitalist Economy. GDP (PPP) $622 Billion and Growth 3.7%.

40% of GDP from private sector.

As part of its effort to attract foreign investment anddiversify the economy, Saudi Arabia acceded to theWTO in 2005 after many years of negotiations.

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Social

Adherence to Islamic values and maintenance ofsocial stability in the context of rapid economicchange have been consistent goals of Saudi Arabia'sdevelopment plans.

Major variations in accumulated wealth, althoughdistinctive income groups exist they all are boundtogether either by kinship, religion.

Religious values.

Mix of culture, Indian diaspora.

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Technological

Modern high technology arsenal makes Saudi Arabiaamong the worlds most densely armed nations.

Although internet was introduced late in 1999, therewas a growth rate of 3750% by 2000.

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Legal

The Saudi civil legal system is based on the Sharea, which isderived from the Quran, Sunna and Ejtihad.

The commercial legal system differs very much from the civilsystem, but shares some basics. This system is more influencedby west in many ways, this due to the amount of internationalbusiness that the country was involved in after the discovery ofoil.

At the present time, there are no exchange control regulationsgoverning the repatriation of funds, profits or capital aftercorporate dissolution.

Immigration- Companies are required to register theiremployees contracts with the Ministry of Interior before aresidency permit can be issued.

Employment Law-Employment matters in the Kingdom ofSaudi Arabia are governed by the Labor Law.The Ministry of

Labor regulates all labor related issues in the Kingdom throughLabor Offices located in different regions of the Kingdom.

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Environmental

The Meteorology and Environmental Protection Administration(MEPA) is the entity responsible for regulating pollution controland related environmental matters.

Government has also approved the General EnvironmentalRegulation.

The GER prohibits any actor failure to act that may result inadverse environmental effects and, among other things,requires that precautionary and preemptive measures beimplemented to ensure that such adverse effects do not occuras a result of construction of any project.

The Environmental Assessment Regulation applies to a longlist of projects that may have an environmental impact andrequires that an environmental assessment be conducted withrespect to such projects that fall under its coverage.

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pestle analysis on saudi arabia

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