Tufftuff Pest Analysis
1. Introduction
Tuffstuff is a well-founded cement manufacturing company with deep-roots in continental Europe and UK. The company is currently considering extension of its operations into Sub-Saharan African; specifically Rwanda. The CEO, although new to the Rwandan environment believes that Rwanda is a possible location for the proposed venture since it presents minimal competition and great potentials.
1.1 Purpose
The report provides necessary information with regards to the proposed investment, considering: a) the ability of the company to create value in the Rwandan environment; b) insights for understanding the company’s position and operational direction in Rwanda; and c) the potential influence of Rwandan macro factors on the company’s …show more content…
PEST considers four macro environmental factors; political, economic, social and technological (Abdullah & Shamsher, 2011; Gupta, 2013; Ward, 2005; Koumparoulis, 2013; Nunes & Peng, 2007). The framework investigates the external environmental factor of a business to examine a business’s position in an industry or environment and feasibility of the business venture in that environment (Nunes & Peng, 2007). PEST assumes that the success of companies is dependent on knowledge of its external environment (Nunes & Peng, 2007). This is because, a business’s environmental factors influence creation of value; therefore, the PEST analysis is a necessary tool which presents a “satellite view” of the business’s external environment (Ward, …show more content…
The economy lacks diversification and has a degree of corruption and mismanagement. However, there is growing political concerns on economic and financial stability. The government is investing in human resource development. The country obtained improved inflation rate from 10% in 2013 to 9% in 2014. 2014 real GDP was 3145.04 (LCU billions 2005 base) and grows at about 7.5% yearly. The exchange rate (LCU/$US) dropped from 5833 in 2010 to 716 per dollar in 2014 and Interest rate declined from 16% in 2010 and 2013 to 10% in 2014. Unemployment rate has increased to 0.85% in 2014, from the consistent rate of 0.6% over the years. There was Increase in hydroelectric and renewable production in 2014 was about 0.0015 billion kwh and 0.0002 billion kwh respectively. Also, the country experienced a drop in prices of coal and fuel in 2014. Price of natural gas surged to $4.369 in 2014 from previous year’s $3.729. Money supply growth rate was 15.66% in 2014; a decline from 16% in previous year. Again, licencing procedures are simplified with maximum rate of 40% a reduction from 100% previously. The government is actively pursuing free trade zone and encouraging foreign investment through the Rwandan Investment Promotion Agency (RIPA). According to World Bank (2015) Ranking, out of 189 countries, the ease of starting business in Rwanda has improved by 6 digits from 117 rank from 2015 to 111 2016 (Coleman,
Tuffstuff is a well-founded cement manufacturing company with deep-roots in continental Europe and UK. The company is currently considering extension of its operations into Sub-Saharan African; specifically Rwanda. The CEO, although new to the Rwandan environment believes that Rwanda is a possible location for the proposed venture since it presents minimal competition and great potentials.
1.1 Purpose
The report provides necessary information with regards to the proposed investment, considering: a) the ability of the company to create value in the Rwandan environment; b) insights for understanding the company’s position and operational direction in Rwanda; and c) the potential influence of Rwandan macro factors on the company’s …show more content…
PEST considers four macro environmental factors; political, economic, social and technological (Abdullah & Shamsher, 2011; Gupta, 2013; Ward, 2005; Koumparoulis, 2013; Nunes & Peng, 2007). The framework investigates the external environmental factor of a business to examine a business’s position in an industry or environment and feasibility of the business venture in that environment (Nunes & Peng, 2007). PEST assumes that the success of companies is dependent on knowledge of its external environment (Nunes & Peng, 2007). This is because, a business’s environmental factors influence creation of value; therefore, the PEST analysis is a necessary tool which presents a “satellite view” of the business’s external environment (Ward, …show more content…
The economy lacks diversification and has a degree of corruption and mismanagement. However, there is growing political concerns on economic and financial stability. The government is investing in human resource development. The country obtained improved inflation rate from 10% in 2013 to 9% in 2014. 2014 real GDP was 3145.04 (LCU billions 2005 base) and grows at about 7.5% yearly. The exchange rate (LCU/$US) dropped from 5833 in 2010 to 716 per dollar in 2014 and Interest rate declined from 16% in 2010 and 2013 to 10% in 2014. Unemployment rate has increased to 0.85% in 2014, from the consistent rate of 0.6% over the years. There was Increase in hydroelectric and renewable production in 2014 was about 0.0015 billion kwh and 0.0002 billion kwh respectively. Also, the country experienced a drop in prices of coal and fuel in 2014. Price of natural gas surged to $4.369 in 2014 from previous year’s $3.729. Money supply growth rate was 15.66% in 2014; a decline from 16% in previous year. Again, licencing procedures are simplified with maximum rate of 40% a reduction from 100% previously. The government is actively pursuing free trade zone and encouraging foreign investment through the Rwandan Investment Promotion Agency (RIPA). According to World Bank (2015) Ranking, out of 189 countries, the ease of starting business in Rwanda has improved by 6 digits from 117 rank from 2015 to 111 2016 (Coleman,