Chick-fil-A is kins-oriented fast food corporation in American. The Corporation is a well known for its manufacturer of products of chicken in the business that deals with the chicken cafe. Besides, the cafe has been recognizable crosswise the southern area of the U.S that is gifted. The expansion of company of Chick-fil-A to other regions of the United Arabs Emirates and other places around the globe is necessary to allow the company to continue their growth in the marketplaces. The main head office of the company is in the Atlanta. As reported by Chick (2015), the company operates to offer different chicken products to its clients unlike Srithanpong (2014) who reports that the primary product that the firm specializes in is the chicken sandwiches.
Introduction to PESTEL analysis
PESTEL Analysis stands for abbreviations of Political, Economic, Social, and Technology impact on any organization. Walter (2012) reports that many people roll their eyes and believe that the PESTEL analysis is just another exercise in data for geeks, but Jennipher (2016) argues that PESTEL analysis is not data for geeks. PESTEL analysis has the major purpose of giving decision makers understanding of different developments that may be occurring within the particular marketplaces. Besides, PESTEL analysis has persisted to be an essential factor in operations of companies because it enables the shareholders like managers and employees in keeping and maintaining their marketplaces and environment of services. The changes can thus affect relationship and marketing relations that the company has worked hard to create. The examination also ensures that the firm continues to be a strong competitor among other restaurants that deals with the sales of chicken products. The implementation of PESTEL analysis in the business environment remains to be the kind of examination that is widely applicable to various corporations in maintaining track of their marketplace. The study also helps businesses to keep track of the environment in which different companies operates. These aspects of the PESTEL structure in a global production include government steadiness, taxation plan, foreign business policy, and basic welfare economics (Jiang 2015).
The analysis offers the strategic management of different aspects of managing current operations of business. It consists of the formation of different goals and instituting programs that fulfill the set goals by an organization. Jiang (2015) show that PESTEL remains to be the strategic marketing tools as it does involve scanning of business environment where the organization operates. The idea allows organizational managers to examine various economic, social, as well as political factors that might affect operations of their organizations. The use of environmental scanning can aid business managers to identify untapped markets while they avoid costly mistakes during their operations. Therefore, PESTEL as a strategic marketing tool helps organizational leaders to brainstorm as well as organize their ideas during the process of scanning business environment. The use of PESTEL analysis during operations of a company enables people in leadership to dodge commencing some schemes that are probable to disappoint for basis beyond management. Moreover, Sang-Shink (2011) report that PESTEL helps managers within an organization break free of unconscious assumptions when they enter the new region, country, or marketplace. The analysis helps an individual to develop the objective view of the new working environment.
PESTEL analysis in the establishment of the company in the business climate is critical because it shows the stability of governance in the region. It also illustrates the policy of taxation within the country, regulations of conducting business as foreign policy, along with welfare of communal economies. All these factors presented by the PESTEL analysis can help during implementation to learn about the factors within the business marketplaces (Gerlach & Habler 2014). Moreover, different analysis of business ideas in a county through PESTEL models offers the best opportunities along with threats that a company should be ready to face during operations.
PESTEL analysis remains to be an essential tool for every company for analyzing and understanding the ground realities of the business environment where they operate. It aids the organization to identify all of the various external factors that affect their operations like political, economic, social, legal, and technological, along with environmental factors that might influence operations of the business (Yuksel 2012). Through PESTEL analysis, managers are abe to assess the dangers that every identified factor pose and use that understanding to inform decisions. Both Shilei and Yong (2014) argue that PESTEL analysis can be essential in inform managers when conducting a SWOT analysis, unlike Chick (2012) who said that PESTEL could be categorizable as opportunities for threat in the SWOT analysis. As reported by Chick & Inoue (2012), PESTEL and SWOT analysis can be essential in an organization in making best strategic decisions by managers. Jiang (2015) accounts that PESTEL analysis help in spotting business opportunities and give it an advanced warning of significant threats unlike Hrbacek (2013) who argues that PESTEL shows business opportunities, but it does not give appropriate step to aid managers in achieving great profits.
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Strengths |
Weaknesses |
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• The analysis leads to the development of healthy growth and world-class infrastructure • It leads to branding of company’s products and sponsorship for advanced developments • It leads to development of local government support • It aid in the development of global alliance and partnerships |
• It results in highly priced products compared to competitors • It also leads to falling in product price which is a business paradox |
The three components of the external context of the UAE for the establishment of business by Chick-fil-A under investigation by the use of PESTEL analysis in UAE comprises of political, economic, and technological factors (Chick 2015). These three components each affect the creation of Chick-fil-A in different ways.
The economic environment is always having an impact on business and its operations in the marketplaces. The economic factor makes the Chick-fil-A in UAE to be considerable as an inferior product. The Saudi Arabia remains to be the 7th leading petroleum reserves as well as the 7th major natural gas assets and this help in improving its economic status and thus attracts several foreign investors and tourists. As a leader in petroleum exports, make the country to have the robust present account rebudant along with towering foreign assets that allow for establishment of different businesses. Moreover, the industrial sector in the UAE persists as the primary driver of the economic growth in the region (Issa et al., 2013). The UAE economy bases on Oil and gas exploration in Abu Dhabi but in Dubai relies on open trade and encouraging investments that result in the strong economy. Moreover, unstable oil prices in the UAE form a threat towards the establishment of other businesses in the region. The consideration presents that the income by consumers might change so does the habits of clients about their buying habits.
The most important factors in the external economic environment under consideration influences establishment of Chick-fil-A. The GDP of developed countries that look at the national income and output for their economy persist in helping in allowing foreign investors to establish their operations in the country. The UAE develops its activities on the high GDP per capita. The GDP in the UAE stands at 370.29 billion US dollar as per the current business survey. According to Kampanje (2012), these factors include inflation rates, interest rates, unemployment rates, and availability of investors and credit. The countries like US and Germany that has a commodity-based economy with shipments of various products ranging from machinery to technological devices receives high income from the exports. Moreover, managers responsible for the creation of Chick-fil-A in a new marketplace must control the cost of the chicken products. The prices of the products must be low to allow the company to attract the vast number of clients to purchase their products in competitive markets.
Technology plays an essential component in the activities of Chick-fil-A in UAE. Presently, variables of technology are more prominent in UAE than ever. Countries that keep their operations updated like China and Japan attract a huge number of investors. The UAE cities like Abu Dhabi and Dubai focuses on investing more on technological advancements. The idea of advancement in technology follows the need of the region to cater for the huge population of visitors and tourists around the global societies. For instance, the UE remains an appropriate place for the establishment of the Chick-fil-A company because it imports machinery from nations that manufacture such machines like Japan. The importation has enabled the cities of Abu Dhabi and Dubai in the UAE to be establishable as cities equipped with technology (Saavedra-Rivano 2015). The progress in technology enables the UAE to have an adequate internet connection and gsm companies.
The developments brought about by technology forms the center of an establishment of other businesses like Chick-fil-A Company over the world. For instance, the Dubai Internet City is an example of technological advancement city that allows for the easy establishment of new companies. The practices of using technology can appear in the mode of different requests from online platforms for service, advertising using traditional media for the firm, or utilization of procedure in the production along with the delivery of the chicken products o the clients (Jennifer 2016). Presently, broad-based along with dynamic growth in the United Arab Emirates has remained to be stagnant by continuous efforts that the region makes in strengthening the business climate, boost ideas of investment and fastening the emergence of the more vibrant and diverse private sector. Therefore, this global liberal trade regime in the region has helped the country to sustain momentum for the growth of different companies that operates in the UAE. The various countries around the global society earn profits through commerce on improved technological breakthrough. Enterprises that deal with the sale of consumable products like Starbucks Stores and Coca-Cola Company have always been able to establish their operations with the help of technological drivers. The existing and development of unlimited outlets of information and other forms of social media platforms in the UAE enables businesses that plan to establish their operations to use such devices in advertising their activities and products across the new business environment. Faster internet accesses are all over the city of Dubai allowing customers to check through for the services offered by the companies at any given time.
Politics within UAE have a significant impact on any business operations. The entire country of UAE has the few different political factors that affect its standings (Walter 2012). There are no political parties in the UAE, but the fact does not mean that the country does not indulge into political issues. It plays an essential role in international politics. The political interests of rulers in the region have not harmed the performance of the state thus allowing for the provision of a favorable environment for business operations. Political stable government like in different countries around the globe attracts many of the foreign investors along with businesspeople, so it the government in Abu Dhabi. The government in regions like Saudi Arabia also provides many incentives that aid in attracting various investors from around the world. Therefore, it is easy for the establishment of Chick-fil-Company in the UAE. The prince governs the United Arab Emirates. The ruling system is not dictatorship neither democratic (Oliviero et al., 2014). It is in between the prince that has a consultant to rule the country.
The political ruling body within UAE causes harsh political unsteadiness leading to the declination of the business associations. According to Gerlach & Hubler (2014), the fading of connections will not allow Chick-fil-A Company in UAE to establish its operations in such countries. The high political instability like the war between different communities can share Chick-fil-A as potential investors and customers from coming into the certain business environments. Under the rule set by the prince in UAE, each state has its rules-making business operations in regions like Dubai to be different with those in Abu Dhabi although there is a federal rule in the UAE.
Conclusion
The investment on the UAE must follow the PESTEL analysis as it form the idea factor in attaining strong establishment of company. The PESTEL form the baseline through which the company operates as it serves it affairs in different marketplaces. The culture of using PESTEL to establish operations of the company in the UAE has the impact on the productivity, effectiveness, and efficiency. Therefore, PESTEL model that the Chick-fil-A Company can use in setting up the most appropriate working culture is not just to move or increase the profitability, but it also focuses to make the stakeholders like consumers and suppliers to be happy and satisfied with the company’s products.
The Chick-fil-A Company should embrace the use these external analyses correctly making PESTEL examination to be extremely useful in its capacity for perceiving marketplaces and position of business. The PESTEL analysis of different factors should be applicable as the core for examining the activities of the firm as well as ecological factors of the establishment of Chick-fil-A Company into a new marketplace in a different country. Chick-fil-A Company should embrace the use PESTEL during its inception to meet the market tastes and preferences among the targeted clients (Srithanpong 2014). Therefore, Chick-fil-A Company management needs to be able to respond to the anticipated future and current legislations while adjusting their marketing policy in the right manner by using PESTEL.
References
Chick, G. (2012). Writing Culture Reliably: The Analysis of High-Concordance Codes. Ethnology, 39(4), p.365.
Chick, S. and Inoue, K. (2012). Corrigendum: New Selection Procedures. Operations Research, 50(3), pp.566-566.
Chick, V. (2015). On Microfoundations and Keynes’ Economics. Review of Political Economy, 28(1), pp.99-112.
Gerlach, K. & Hübler, O. (2014). Employment Adjustments on the Internal and External Labour Market – An Empirical Study with Personnel Records of a German Company. SSRN Electronic Journal.
Hrbacek (2013). Relative set theory: Some external issues. Journal of Logic and Analysis, pp.1-37.
Issa, D., Chang, A. and Issa, D. (2013). Sustainable Business Strategies and PESTEL Framework. GSTF INTERNATIONAL JOURNAL ON COMPUTING, 1(1).
Jackson, S. (2016). Coping with the PESTEL Factors in Safety and Security. INSIGHT, 8(3), pp.29-31.
Jennifer Sterling (2016). The College Football Hall of Fame and Chick-fil-A Fan Experience. Journal of Sport History, 43(3), p.329.
Jiang, X. (2015). Establishment and Analysis of the Sales Model of Fresh Agriculture Food Based on Business to Business E-commerce Platform. Advance Journal of Food Science and Technology, 9(3), pp.202-205.
Kampanje, B. (2012). Pestel Analysis of Malawi’s Non-Life Insurance Industry. SSRN Electronic Journal.
Oliviéro, G., Pestel, V., Bottey, L., Philippe, M. and Frémont, F. (2014). Theoretical analysis of Young-type electron interference inHe2++H2collisions using a semiclassical model. Physical Review A, 90(4).
Saavedra-Rivano, N. (2015). A critical analysis of the Mesarovic-Pestel world model. Applied Mathematical Modelling, 3(5), pp.384-390.
Sang-Shik Lee (2011). A Case Study of Chick-fil-A (Fastfood Restaurant in U.S.) Based on Service Profit Chain Concept. Journal of Korea Service Management Society, 12(4), pp.1-18.
Shilei, L. and Yong, W. (2014). Target-oriented obstacle analysis by PESTEL modeling of energy efficiency retrofit for existing residential buildings in China’s northern heating region. Energy Policy, 37(6), pp.2098-2101.
Srithanpong, T. (2014). Exports, Imports, and Profitability in Thai Manufacturing: Evidence from Establishment-Level Analysis. International Business Research, 7(12).
Walter, T. (2012). Why different countries manage death differently: a comparative analysis of modern urban societies1. The British Journal of Sociology, 63(1), pp.123-145.
Yuksel, I. (2012). Developing a Multi-Criteria Decision Making Model for PESTEL Analysis. International Journal of Business and Management, 7(24).
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