Pestel Tesco

1. PESTEL ANALYSIS

The PESTEL Analysis takes into consideration the operations of Tesco situated in Hungary.

1.1. Political Environment

Political factors such as influence by means of power as well as abuse of power affect the efficiently and effectiveness of businesses. Thus clearly understanding the political aspects which govern the country of business indulges a thorough control of the business's life expectancy. Therefore it is crucial that Tesco is aware of the environment for further success. For the purpose of understanding Hungary's political background the following information is available.

1.2. Government Information

Ð'* Hungary's Government is of a Parliamentary Democracy.

Ð'* According to U. S. Department of Commerce (n.d.), The Orban Administration (1998 - 2002) has effectively accomplished their promises with regard to the tax evasion, organized crime, corruption as well the EU and NATO memberships. Hungary is stable country.

Ð'* Hungary entered NATO in the year 1999

Ð'* Member of the Organisation for Economic Corporation and Development (OECD)

Political Parties

According to Wetzel, H. (2004), the following include the political parties in Hungary;

Main Political Parties

Alliance of Free Democrats or SZDSZ

Christian Democratic People's Party or KDNP

Hungarian Civic Alliance or FIDESZ

Hungarian Democratic Forum or MDF

Hungarian Justice and Life Party or MIEP

Hungarian Socialist Party or MSZP

Hungarian Workers' Party or MMP

Independent Smallholders or FKGP

1.2.1. Trade Regulations

Trading Policies & Barriers

Ð'* Association Agreement with the EU

Ð'* Gradual elimination of tariffs for industrial products imported from EU and CEFTA.

Standards

Ð'* GATT Agreement on Technical Barriers to Trade (Standards Code)

Ð'* International Standardization Organization (ISO)

Ð'* International Electro-technical Commission (IEC)

Ð'* Commercial Quality Control Institute (KERMI)

Ð'* Hungarian Electro-technical Control Institute (MEEI)

Import/Export Documentation Requirements

Ð'* All importers and/or exporters must obtain a VAM 91 document from the Hungarian Customs. The VAM 91 serves as a declaration of the type and number of goods being imported and exported.

Ð'* For consumer distribution, a certification document must be obtained from the Commercial Quality Control Institute (KERMI). Goods cannot be cleared from customs unless a KERMI permit is present.

Free Trade Agreements

Ð'* Central European Free Trade Agreement

Ð'* European Free Trade Agreement

Pressure Groups

Ð'* GATE Green Club Association

Ð'* Tescopoly Alliance

Ð'* TÐ"¶lgy Nature Conservation Association

Wars and Conflicts

Ð'* No ongoing war or conflict, however according to Ganse, A.(2004),Hungary participated in the Liberation of Kuwait in 1999

Government Policies

Ð'* Production Policy - Grain, Oilseeds, Oils, Meals, Meat, Milk, Milk Products

Ð'* International Trade Policy- Oilseeds, Oils, Meals, Meat Milk, Milk Products

Ð'* Consumption, Marketing and Stock Policy Ð'- Grain, Oilseeds, Oils, Meals

Ð'* Domestic Policy Ð'- Grain

Ð'* General Energy Policy (International Energy Agency (2000))

Ð'* Science and Technology Policy Ð'-( Food and Agriculture Organizations of the United Nations (2002))

Government Term

Ð'* Viktor Orban , elected in 1998.

Ð'* Hungary acquired democracy in 1990

Inter-Country Relationships

U. S. Department of Commerce (n.d) states the following countries with relations to Hungary;

Ð'* United Nations

Ð'* European Union

Ð'* Council of Europe

Ð'* United States

1.3. Economic Environment

Economical Environment pertains to the changing economy of the country as well as the factors such as the consumer's purchasing power with regard to the organizations income and expenses. The following provide evidence of the UK's economic stability;

1.3.1. Home Economy Situation

1999 2000 2001 2002

Gross domestic product (GDP) 4.2 5.2 3.9 3.7

Final consumption 4.2 3.9 3.9 3.4

Personal consumption 4.6 4.1 4.3 3.8

Collective consumption 1.8 1.6 1.6 1.5

Accumulation of basic stock 5.9 7.7 3.1 5.1

Gross stock accumulation 3.6 7.9 3.6 4.9

Domestic use 4.0 5.1 3.7 3.9

Export 13.1 21.8 12.5 9.5