MACRO ENVIRONMENT - PESTEL
China¡¦s market accounted for the largest percentage of Lenovo¡¦s business, while the US and Europe market is the main opportunity for Lenovo to expand its global business, together they accounted for more than 70% of the global PC market revenues. PESTEL is analyzed as below:
- Political: In 2002, China lowered its import tariffs to meet its WTO commitment. It is also working on reducing taxes and unifying income tax rates.
- Economical: In the past decade, China is performing a strong economic growth; it is now the most desired country for FDI due to its cheap and large size of labour force. On the other hand, consecutive interest rate rise in the US results in the forecast slowdown of the US economy. As for Eurozone, the likelihood of a stronger Euro also point to a reduction of economic growth in 2007. The rising energy price may also be a key factor for the decelerating consumer spending growth.
- Socio-cultural: Asia¡¦s consumer spending power is growing; the percentage of spending growth is predicted to be catching up with the US & Europe.
The economic reform in China also created social problems such as increasing disparity between the rich and the poor, loss of farmlands etc.
- Technological: The trend for PC is going compact, cheap and affordable, while at the same time emphasizes on home entertainment.
- Environmental: There is a rising concern about environmental friendly PCs. The concern is mainly about energy saving, disposal and recycling. Western countries have introduced some measurement and specification to ¡¥green¡¦ PCs. Major PC suppliers such as Dell, HP as well as specialized firms also handle disposal of PCs.
- Legal system: Property / intellectual property rights, severe corruption and the Judiciary dependency can be seen as barriers to enter the China... [continues]
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