Technological environment in South Africa. This is particularly valid in the light of S.A.’s accession to the International Maritime Organisations (I.M.O.) He holds an MSc in Tourism & Hospitality from the University of Sunderland. Political Environment South Africa is a multiparty parliamentary democracy in which constitutional power is shared between the president and the Parliament. The PESTLE Analysis highlights the different extrinsic scenarios which impact the business of the brand. He is a lecturer in Management and Marketing. The PESTEL/PESTLE analysis model is used to determine the most important issues that Starbucks must address in its business strategies. South Africa has a system of mixed economy in place. South Africa - Pestle Analysis (Economic (Main industries (Industry 31…: South Africa - Pestle Analysis The problem is, while the Reserve Bank has the ability to influence Rand, it’s staying neutral, except in relation to interest, where the Reserve Bank will respond with interest rate spikes as the rand continues to weaken. Social mobility and economic growth are often halted by poor and inadequate infrastructure. - South African Maritime Safety Authority (SAMSA) continues to generate new regulations for all vessels operating in South African waters. Corporate income tax in South Africa for both resident and non-resident companies for tax years ending between 1 April 2018 and 31 March 2019 is a flat 28% (PwC, 2018). Legal environment is the last element to discuss in the PESTEL analysis of South Africa. This PESTLE analysis will examine the many situations South Africa is currently experiencing that may affect businesses within it. In relation to trades, South Africa trades primarily with China, but China’s economy has been slowing down. There are 11 official languages in the country and Christianity, Islam, and indigenous beliefs are the major religions. Kiesha Frue is a freelance writer and editor with a love for health, wellness, and entrepreneurship. The South African currency, Rand, is at an all time low. South Africa is rich in mineral resources. SOUTH AFRICA INTRODUCTION Introduction The country analysis report on South Africa provides a wide array of analytical inputs to analyze the country's performance, and the objective is to help the reader to make business decisions and prepare for the future. The purpose of this project is to analyze the place of South Africa in International Trade. However, some economists believe that the economy can potentially grow at a rate of 3.7% or more in the near future. With the government preoccupied with lowering employment rates and removing corrupt politicians from local campaigns, plus the devalued Rand, technology may be more stagnated than in other locations, such as the United States of America. Up until 1994 the country was ruled by an apartheid government (BBC, 2018). M Rahman writes extensively online with an emphasis on business management, marketing, and tourism. Everyday our market is changing the way it is. Despite the hardships, people are moving towards creating startups. This could stifle the rising interest in entrepreneurship. But companies outside the country question whether to expand into it due to several issues. The PESTEL / PEST Analysis of South African Airways (B) HBR case study includes analysis of Political, Economic, Social, Technological, Environment, Legal factors. Life expectancy for men is 53 years, while 54 years for women (BBC, 2018). But with the unemployment rate so high, it also means people can’t buy products from these startups. Main Sectors of Industry. However, there are some big challenges South Africa faces today. mining, defence, insurance, broadcasting, telecommunications, and banking. Access the latest politics analysis and economic growth summary through 2011 for South Africa from The Economist Intelligence Unit After growing by 3.1% in the fourth quarter of 2017, the South African economy shrank in the first quarter of 2018. Not only that, but there have been 88 longstanding strikes within South America in 2014, where workers stopped their jobs for months. The bill of rights The president appoints a Deputy President and Ministers to form the Cabinet to administer the state affairs. Right now, this is a good thing. Copyright ©2017 - 2025. The final board exam for CA(SA) students will take place on 22 November. Individual income tax starts at 18% and goes up to 45% depending on the amount an individual earns. Political • The President of South … This PESTEL analysis of South Africa aims to address some of the political, economic, social, technological, environmental, and legal factors that affect South Africa today. Lucintel, a leading global management consulting and market research firm, has analyzed the political, economic, social, technological, legal, and environmental factors of South Africa and has come up with a comprehensive research report, “PESTLE Analysis of South Africa 2016.” This negative current account balance indicates that South Africa will remain a net borrower from the rest of the world till 2024. The letters stand for Political, Economic Socio-cultural, Technological, Legal and Environmental. PEST or South African Airways A PESTEL analysis is a easy and effective tool employed in situation analysis to acknowledge the essential external (macro environment level) forces which may affect a company. Well, putting these challenges aside, South Africa offers these days good business opportunities in industries such as building and construction supplies, eye care, beauty and cosmetics, automotive, telecommunications, education and utility services (The South African, 2017). Also enter your email address at the bottom of the site to ‘Join us’ free for our newly published articles and newsletters. All rights reserved BSSL. A graphical way of PEST analysis known as' PESTLEWeb 'has actually been developed at Henley Company School in the joined kingdom. PESTLE ANALYSIS: Political/ LEGAL: Small business development in South Africa is an important vehicle to address the challenges of job creation, and generating sustainable and equitable growth. Amazon, IBM, Microsoft, Facebook, LinkedIn, Intel, Dell, Novell, and Apple are some of the companies that can be considered in this regard. PESTEL or PESTLE analysis, also known as PEST analysis, is a tool for business analysis of political, economic, social, and technological factors. This PESTEL analysis of South Africa aims to address some of the political, economic, social, technological, environmental, and legal factors that affect South Africa today. We hope the article on the PESTEL analysis of South Africa has been useful. PESTEL ANALYSIS POLITICAL There is immense political pressure for SAA to bring back CSI, this after the airline took a unilateral decision without consulting its shareholder (Government) to shut down the department in 2014. Pestle analysis of SOUTH AFRICA. The South African government believes that the real engine of sustainable … SWOT analysis of South Africa focuses on the country's greatest strengths, weaknesses, opportunities, and threats affecting the area. Likewise, due to a number of high profile cyber-attacks and other online vulnerabilities, demand for IT security products and software is high as well. Many …, There are many companies the world over, that conduct PESTLE …. (2015) Doing business in South Africa, available at: https://content.next.westlaw.com/Document/I2ef128301ed511e38578f7ccc38dcbee/View/FullText.html?contextData=(sc.Default)&transitionType=Default&firstPage=true&bhcp=1 (01 July 2018), Mobius, M, (2017) South Africa: Key Issues and Challenges, available at: http://emergingmarkets.blog.franklintempleton.com/2017/03/16/south-africa-key-issues-and-challenges/ (Accessed 29 June 2018), PwC (2018) South Africa – Corporate: Taxes on corporate income, available at: http://taxsummaries.pwc.com/ID/South-Africa-Corporate-Taxes-on-corporate-income (Accessed 29 June 2018), Statistics Times (2018) List of Countries by Projected GDP, available at: http://statisticstimes.com/economy/countries-by-projected-gdp.php (Accessed 25 June 2018), The South African (2017) These are the seven biggest business opportunities in SA right now, available at: https://www.thesouthafrican.com/these-are-the-seven-biggest-business-opportunities-in-sa-right-now/ (28 June 2018), The International Trade Administration, (2017), South Africa – Information Technology, available at: https://www.export.gov/article?id=South-Africa-information-technology (Accessed 29 June 2018). The next element to address in the PESTEL analysis of South Africa is the country’s economic environment. This doesn’t look promising to new startups. PESTLE, also known as PEST analysis is a term used in strategic marketing, which describes a framework of macro-environmental considerations used for the development and management of a business strategy. The South African political environment is often clouded by corruption, mismanagement, political intolerance, popular protests, and violence. The country is the world's largest producer and exporter of gold, platinum, chrome and manganese, the second largest palladium producer and the fourth largest producer of diamonds - with mining rents accounting for around 2.4% of GDP (World Bank, Latest available data), a similar share to manufacturing. Understanding PESTLE analysis. But companies outside the country question whether to expand into it due to several issues. BRICKS stand for Brazil, Russia, India, China, and South Africa. 3. 4. Know More South Africa SWOT Analysis This market research report covers SWOT (strengths, weaknesses, opportunities and threats) analysis for South Africa. However, a lot of things have changed since the country’s first fully democratic election in 1994. Businesses started within South Africa follow the Value Added Tax (VAT). Location is good, but the weakened economy holds businesses within South Africa at a standstill. From 1990s the African National Congress (ANC) has dominated South Africa's politics. PESTLE analysis is a framework which is imperative for companies such as Woolworths, as it helps to understand market dynamics & improve its business continuously. However, there are some restrictions on foreign shareholders in some sectors e.g. Environmental factors: a good spot. South Africa is one of the most popular tourism destinations in the world. South Africa has coasts on both the South Atlantic and Indian Oceans. Archbishop Desmond Tutu first coined the term to describe South Africa’s multicultural diversity. Country Profile Population: 48,810,427 GDP:$554.6billion (2011 estimate) Ethnic Groups: Black African 79% White 9.6% Coloured 8.9% Indian/Asian 2.5% (2001 Census) (CIA Factbook 2012) South Africa - An analysis of the Marketing Environment Political Environment The Republic of For example, unemployment is high and the public health system is ailing. You may also like reading PESTEL analysis of the UK and PESTEL analysis of Canada. Economical factors: rand (currency) is in limbo, Social factors: high entrepreneurship spirit, PESTLE Analysis: Business Environmental Analysis, How Business Journalists Can Streamline Their Workflow, Important drivers to Vietnam’s economic growth, Bangladesh PESTLE Analysis 2021: Challenges and Potential, Johnson and Johnson SWOT Analysis 2021 – Comprehensive …. It is worth mentioning that South African companies sell a lot of ICT products to growing African markets. South Africans also elect provincial legislatures which govern each of the country's nine provinces. By: M Rahman | Tags: Global Business Issues. Pestle Analysis Of South Africa Hotel Industry. PESTEL analysis provides great detail about operating challenges Coal Of Africa Limited will face in prevalent macro environment other than competitive forces. They are in charge for creating the laws of and taking care of bills involving monetary issues. Similarly, there are some special rates for certain industries e.g. Until all corrupt politicians can be removed, their current positions can cause inconveniences for new businesses (depending on the politician’s personal agenda). Nelson Mandela’s South Africa is often referred to as the ‘rainbow nation’. But with such low currency and exchange rate, it’s a wonder how businesses will start or stay in demand with the diminishing Rand. Pretoria is the administrative capital of South Africa, while Cape Town is the legislative capital. But with every election, there are people who want the corrupt to stay in power. South Africa is improving conditions for budding businesses. South Africa is a parliamentary republic with the president being both the head of state and the head of government. Right now, the currency is subjected by the market forces. In World Bank’s ease of doing business ranking South … mining and long-term insurance. ANC councilors are attempting to remove corrupt politicians. 3 | P a g e 1.1 POLITICAL ANALYSIS The Republic of South Africa held its first universal suffrage elections in April 1994. It will consist of a case study based in South Africa. It also makes it more difficult for businesses within South Africa to branch out — a high exchange rate makes costs and expenses for South African businessmen difficult. South Africa is in the midst of local elections. Many labor laws are similar to the United Kingdom’s labor laws, particularly when exporting to South Africa. South Africa exports gold, diamonds, platinum, cars, metals and minerals, machinery and equipment to a number of countries, notably China, the UK, the United States, Germany, India, and Saudi Arabia. Also, graduated from Leeds Metropolitan University with a BA in Business & Management Studies and completed a DTLLS (Diploma in Teaching in the Life-Long Learning Sector) from London South Bank University. People in general in South Africa desire for better education for their children, rewarding employment opportunities and faster economic growth that offer great opportunities for both local and international organisations. Step 6 - PESTEL, PEST / STEP Analysis of South African Airways (A) Another way of understanding the external environment of the firm in South African Airways (A) is to do a PESTEL - Political, Economic, Social, Technological, Environmental & Legal analysis of the environment the firm operates in. This negative current account balance indicates the South Africa is a net borrower to the whole world. The interest rates of South Africa might spike if the inflation is not controlled lesser than 3% to 6% due to high food and crude oil prices (earth times, 2011). Pestel Analysis on South Africa Retailindustry . As of April 2018, the total population of the country is 50.7 million. https://www.bbc.co.uk/news/world-africa-14094760, PESTEL analysis of Austria (Austria country profile). PEST ANALYSIS South Africa Political Type: Parliamentary democracy.. South Africa is a multiparty parliamentary democracy in which constitutional power is shared between the president and the Parliament.. A weak economy will cause new corporations to be cautious when thinking of expanding business into South Africa. Commercial activity, like the addition of Uber and AirBnB, shows South Africa is open to outside business developments. South Africa is one of the most powerful countries in Africa and plays a considerable role in global economy and politics. However, small businesses pay a lower rate of tax. Therefore, winning the support and confidence of general public and investors in light of the political challenges becomes one of the most important jobs of the president of South Africa. The neighbouring countries of South Africa are Botswana, Mozambique, Swaziland, Lesotho, Namibia, and Zimbabwe. The Employment Equity Act 1998 (EEA) aims to achieve equality in the workplace by promoting equal opportunity and fair treatment in employment (Kleitman, 2015). The current account balance for South Africa was estimated to be negative at USD 12.654 billion for the year 2019 and is expected to further decrease at a CAGR of 6.08% and reach USD -17.003 billion by 2024. It is one of the five BRICKS economic giants. PESTLE analysis. 1. The Standard Bank Group is one of South Africa's largest financial services groups having presence in 20 countries in sub-Saharan Africa as of 2018. Employees receive fundamental protection in South Africa. BBC (2018) South Africa country profile, available at: https://www.bbc.co.uk/news/world-africa-14094760 (Accessed 27 June 2018), Kleitman, Y. South Africa is the 34th largest economy in the world in terms of nominal GDP (Statistics times, 2018). Country Analysis Report - South Africa - in-Depth Pestle Insights . An improved workflow is important for business journalists to ensure that they always have their work process smoothened out for them. The depleted rand currency and unemployment in South Africa being 25% affects the buying power of the people. Our website is made possible by displaying online advertisements to our visitors. Because of their strong relation, this affects South Africa’s value in business as China’s investment in South Africa fell by 87% in 2015. While this could have been good for South Africa’s exports, it does not help that global prices of key South African exports such as iron ore and coal have fallen. A number of international tech and social networking companies already operate in South Africa often through subsidiaries. What are the key drivers for economic growth in the region? Consequently, there are great opportunities for online retailers. South Africa encourages Foreign Direct Investment in all sectors of the economy. When she’s not researching into the sunrise, her nose is stuck in the latest (and cheesiest) of fantasy novels. South Africa is one of the most powerful countries in Africa and plays a considerable role in global economy and politics. The Parliament includes two parts, the National Assembly and the National Council of Provinces. South Africa remains a divided society with growing tensions between immigrants from other parts of Africa and the local communities. The African National Congress (ANC), which led the resist against white minority rule and the apartheid system of state-enforced racial separation, won control of the National Assembly. PESTLEanalysis.com is an educational website collecting all the information and resources related not only to PESTLE but also SWOT, STEEPLE and other analysis that will come useful to business owners, entrepreneur, and students alike. ... PESTEL or PESTLE analysis, also known as PEST analysis, is a tool for business analysis of political, economic, social, and technological factors. These problems often slow down economic development and progress. Political Analysis The Republic of South Africa is a parliamentary representative democratic republic. PESTEL ANALYSIS . PESTEL Analysis, SWOT Analysis and Risk Analysis of South Africa South Africa PESTEL Analysis This report covers South Africa's PESTEL (political, economic, social, technological, environmental and legal) analysis. This PESTLE analysis will examine the many situations South Africa is currently experiencing that may affect businesses within it. … Political Factors Affecting Starbucks Coffee’s Business This part of the PESTEL/PESTLE analysis framework identifies the impact of … PESTEL Analysis is one of the tools that often used by managers to analyze the broad macro-environment of an organization. As this is a recovery stage that South Africa is going through inflation is expected to keep low (earth times, 2011). conventions on Safety, Training, Certification and Watch keeping for all seafarers. Topics: Economics, ... Managers can analyses these factors through the PESTEL analysis. Country Analysis Report: South Africa, In-depth PESTLE Insights Summary This PESTLE country analysis report on Mexico provides a holistic view of the country, with insightful analysis of current and future issues, supplemented with relevant quantitative data to support trend analysis. Online shopping is on the rise in South Africa. Some of the top imports of South Africa are machinery and equipment, chemicals, petroleum, scientific instruments, and food materials. The Standard Bank Group is one of South Africa's largest financial services groups having presence in 20 countries in sub-Saharan Africa as of 2018. However, the country faces some environmental challenges such as water pollution, air pollution, land degradation, solid waste pollution, and deforestation. Other relevant articles for you are: If you liked any of these articles, please feel free to share with others by clicking on the icons provided. Technological advancements, within manufacturing and supply chains, may be thin. South Africa is improving conditions for budding businesses. In conclusion we provided the possible forecast for country’s development. Datamonitor's South Africa Country Analysis Report analyzes the political, economic, social, technological, legal and environmental (PESTLE) structure of South Africa. , the South African rand, in January 2016, hit record lows against the dollar and has lost about 30% of its value in the past six months. Please consider supporting us by disabling your ad blocker. In order to do so we analyzed the background of the country, developed PESTLE analysis, looked at the balance of payments as well as trade balance, examined exchange trade policy and growth rate of the economy. Economical: 350.6 billion USD (2013).. Legal Laws are strict.. Real GDP growth rate: 1.9% annual change (2013). At the G20, it was found South Africa is low-risk for investors looking to breakthrough. It has made an enormous progress in mobile software, security software and electronic banking services (The International Trade Administration, 2017). As of June 2018, the GDP stands at around 371 billion USD. South Africa is one of the most technologically advanced countries in Africa. Abundant wildlife, scenic beauty, impressive coastlines, brilliant penguin-filled beaches and vivacious coral reefs have all contributed to the development of South Africa as a tourist destination. PESTLE analysis is also referred to as PESTEL analysis. Being mixed up in questionable politics puts a damper on those attempting to build a business and those on the fence about investing in South African businesses. Similarly, Cape Town came at the top of The New York Times’ list of ‘52 Places to Go’ in 2014. Similarly, Bloemfontein is the judicial capital of the country. One country that has showcased robust strength in the wake of the coronavirus pandemic is Vietnam. Unsurprisingly, the readers of Telegraph (a British newspaper) rated Cape Town ‘the World Best City’ in 2016. PESTEL Analysis • The PESTLE Analysis is a framework used to scan the organization's external macro environment. For example an Industry may be highly profitable with a strong growth trajectory but it won't be any good for Coal Of Africa Limited if it is situated in unstable political environment. This PESTLE country analysis report on South Africa provides a holistic view of the country, with insightful analysis of current and future issues, supplemented with relevant quantitative data to support trend analysis. Established in 1864, it is headquartered in Johannesburg, South Africa and has over 55,000 employees as of 2016. The report provides a holistic view of the country from historical, current and future perspectives. Of April 2018, the readers of Telegraph ( a British newspaper rated... 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