Pest and Swot Analysis for Expansion of Services to Spain

Topics: Inflation, Spain, Macroeconomics Pages: 10 (2600 words) Published: September 6, 2008
Date:29th August, 2008
To:Senior Manager
From:Human Resource Manager
Subject:Feasibility of Spain as a possible location for global operations

The purpose of this memorandum is to inform the Senior Manager, Ms. Nava of D’Tandoor Restaurant, on the feasibility of Spain as a possible location for global operations.

An analysis of the external environment of Spain and a SWOT analysis of our organization are the main contents of the report attached. Recommendations have been suggested on the feasibility of the expansion.

Executive Summary
This report encompasses the feasibility of expanding operations to Spain. The analysis was separated into a PEST and SWOT analysis. The political and legal element resulted in positivity due to the reelection of the current Prime Minister and also the friendliness of foreign investment into Spain. Labor laws were also evaluated in terms of discrimination and hours of work. The economical element however, resulted negatively due to the increasing rates of decreasing currency exchange rate, an increasing inflation rate and a decreasing unemployment rate. The weight-age of currency and inflation rates out weigh the unemployment rate. The socio-cultural element was positive towards investment as the cultures put high importance on dining. The technological element was negative towards the expansion, mainly due to the inability to use technology other than in communication. The SWOT analysis on the other hand resulted in portraying high strengths and opportunities as opposed to weakness and threats for D’Tandoor. All in all, D’Tandoor should hold off on an expansion to Spain, as it does not seem to be viable. However, a recommendation includes an expansion nonetheless, but in Asia. This recommendation was based on the strengths and opportunities of D’Tandoor.

Table of Contents

1. Introduction
1.1 Purpose and Aim
1.2 Limitations
2. Political and Legal Environment
2.1 Political Stability
2.2 Foreign Direct Investment
2.3 Labor Law
3. Economic Environment
3.1 Currency Exchange Rates
3.2 Inflation Rate
3.3 Unemployment Rates
4. Socio-Cultural Environment
4.1 Language and Religion
4.2 Social Practices, Customs, and Behavior
5. Technological Environment
5.1 Communication
6. SWOT Analysis
7. Recommendations and Conclusion
8. References
9. Appendices
9.1 Appendix 1: Company Profile

1. Introduction
This report was authorized by the Senior Manager of D’Tandoor, Ms. Nava.

1.1 Purpose and Aim
The purpose of this report is to assess the feasibility of an expansion of international operations of D’Tandoor in Spain. The aim of this report is to provide extensive information on an environmental analysis of Spain, alongside a SWOT analysis of D’Tandoor to assess its compatibility. For company profile see Appendix 1

1.2 Limitations
The main limitation of this report is its constraints on word count; however, other limitations include the lack of precision on information concerning environmental elements. This may be due to the fluctuation of the economies, political stability as well as the innovation of technology.

2. Political and Legal Environment
The framework of a country is mainly based on the laws its possesses and the political elemant of Spain has authority to influences its legal system (Bartol 1998, 71). Therefore, in order for D’Tandoor to expand operations to Spain, it must be able to operate within the legal framework of the country. However, the political stability of Spain is also important.

2.1 Political Stability
The Spanish parliamentary elections were held on March 14, 2004. The Spanish Socialist Workers Party (PSOE) won and leader, Jose Luis Rodriguez Zapatero swore in on April 17, 2004 (Bureau of European and Eurasian Affairs, 2008) During his first term, Prime Minister Zapatero withdrew troops from Iraq and took initiative to realign Spain’s foreign...

References: 2.1 Political Stability
The Spanish parliamentary elections were held on March 14, 2004
The maximum hours of work per week in Spain, is 40 hours. There are also strict regulations on overtime work that need to be considered when hiring employees (Labor and Social Security Regulation, 2006).
4.1 Language and Religion
Spain has four official languages; Castilian Spanish, Catalan, Galician, Basque (Central Intelligence Agency, 2008)
However, Spain has no official religion. About 90% of the domestic population is nominally Catholic; the remaining 10% is a mixture of evangelical Christians and Protestants, Muslims, and Jews (Bureau of European and Eurasian Affairs, 2008).
Regardless of business, Spaniards put importance on family as well (Priest, M., 2007).
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