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Unit 39 M2
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Essay of 4 pages for the course Unit 39 - International Business at PEARSON (Unit 39 M2)
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IntroductionIn this task I will compare how cultural differences and foreign business environments affect
multi-national corporations.
Pestle analysis: Pestle analysis focuses on the political, economic, social, technological, legal
and environmental side of a business or a country.
Political/Legal Factor: Political/Legal factor involves in the government decisions on laws
and regulations which needs to be imposed on different sectors of the countries factors;
education, jobs, welfare, trading, housing, monetary, and banking.
For this assignment I’ll be writing about Pizza Hut and how does the operation in the United
States of America affect their operation. By doing this, I’ll be going through all the PESTLE
factors step by step and using facts and figures.
Political factor 1: Tax policy and tariff controls of USA.
Effect of this political factor on my chosen business:
Majority of Pizza Hut branches are located in the USA. More than 5,000 branches are
location in the USA alone. This political factor has a great effect on the Pizza Hut operation
due to different taxes operation charges; corporation taxes and car insurance taxes. The
corporation taxes for Pizza Hut in the USA are 15% and this has a great effect on Pizza Hut
due to the government taking away 15% of Pizza Hut annual profits. This decreases the
chance of Pizza Hut investing in future projects such as the Improvement in technology,
investments into different branches and equipment’s. The tariff control varies in the USA,
depending on the importation or exportation of the amount of products. Pizza Hut is an
international business, therefore they will need to import products from different countries.
The government of USA are in favour of protectionism to protect small businesses and t
impose tariff to big businesses such as Pizza Hut does have a great effect. This does affect
Pizza Hut as its stripping away money from their budgets for future uses.
Political factor 2: Employment legislation
Effect of this political factor on my chosen business:
The population of the USA IS 318 million and the country is ethnically diverse. There is
much employment legislation which are regulated and enforced upon businesses. Health and
safety, wage regulation and contract of employment. All of these factors have a good effect
on Pizza Hut as they can comply with the regulation by ensuring that the employees’ health
and safety and rights are protected. Furthermore a good employment law will make the
employees of pizza hut to feel comfortable and this will enable the work force to be
motivated and to achieve maximum sales and operation of Pizza Hut.
Political factor 3: Rule of law, corruption, democracy and freedom
Effect of this political factor on my chosen business:
The government system in the USA is currently stable and there’s no political instability in
the country at the moment. The political risk in the US is relatively low. Today, the stability
has translated to peace and better standard of living.
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