PESTEL Zomato Essay
Combat is an Indian website which provides information related to food, restaurants, pubs/bars etc. In countries like India, the Philippines, South Africa, Sir Lankan, Qatar, the United Arab Emirates and the United Kingdom. Companies are drawn towards international expansion because of lower costs, new opportunities, access to resources, better visibility etc. But along with all these rewards comes a large pool of challenges and heaps of risk. Some of the challenges Combat has been facing in its global expansion process have been listed below using PESTLE analysis:
Political * A company entering a global market is always prone to political risk. A host country will make political decisions that will prove to have adverse effects on the multinationals profits and/or goals. Adverse political actions can range from very detrimental, such as widespread destruction due to revolution, to those of a more financial nature, such as the creation of laws that prevent the movement of capital. * In general, there are two types of political risk, macro risk and micro risk Economic * Socio-economic factors like cost of labor can make a business unsustainable.
Hiring people and matching their pay scales is also an arduous task. * Global expansion also requires the firm to raise more funds * The banking system is different, so setting up bank accounts and carrying out transactions also takes time to settle. Social * It was difficult to operate in a new language while also trying to reinvent their operations. * Also, they needed people with a reasonable amount of international exposure to be able to go and get things done overseas Technological * An international market demands a world class product, and a product developed eely for Indian market might not be able to cater to the global demands.
Internationally, people are more reactive to design flaws that in India. So, Combat has to modify and customize its product to suit the local markets. * Technological advancement was required and this constituted the major portion of their cost. * User behavior is different. The technology user behavior is more mature. Environmental * It was difficult to understand the business-to-business environment in the foreign Pestle Combat Analysis of the Challenges faced by Combat in its global expansion Submitted By: market. It is difficult tort a sat rout to dotard a Market Research arm eke Pain and Company to the Job for them.
Combat had to do a very detailed on-the-ground study to evaluate a market. This means picking a list of cities that they think are feasible on a macro level (demographics, regulatory, etc. ) and then sending people to go through their entire operations process – from collecting information to talking about possible partnerships with local merchants to engaging with users by showing them the product. This is the best way to figure out the customizations a local market will need. * Existing competition in foreign markets. For egg. Gate and Just-Eat in London.
Legal * Abroad, understand the incorporation paperwork, labor laws and the limit of access to business is very difficult. There is a lack of clarity around regulations. For example, to set up shop in Dublin, you need to have a local partner. He could be a silent partner but he’s still necessary. Combat has been able to overcome all these challenges with its strategic planning and determination and has made rapid strides within a short span of time. It has already broken even or is on the verge of breaking even in most of the countries it has started its operations.