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PESTLE Analysis of current affairs 2018
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A presentation on the PESTLE analysis of any petrol station in South Africa a project given in Grade 11 at Curro Hazeldean
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Economical: Increase In VATThe recent VAT increase (from 14% to 15%) will not
only influence consumers but business as well. The
increase will raise the price of goods that are not
viewed as basic needs goods and this could impact the
public’s views of a business’ product as it may not be
an affordable product. The business’ budget plan will
have to change in order to accommodate the cost of
assets. The fuel levy will affect the cost of the business
use of vehicles. The VAT also influences trade with
other countries as exports and imports costs will be higher, the increase has already had a negative
effect on the rand, the rand raised by 0,09% (making to R12 to the dollar) after the 2018 budget was
made public, making import cost higher.
The VAT increase forces the lower class to pay tax indirectly (through non-essential goods
purchased) this taking the stress off the wealthier classes and small businesses, as the increase in
income tax is minimum.
The increase in fuel price will also directly impact public transport users, as the fuel levy is increased
to 52c per litre, public transport cost will be raised. The increase in fuel levy could negatively impact
on business; employees making use of public transport are not able to arrive to work on time or
refuse to arrive to work because they cannot afford to pay public transport. Business will slow down
because there are no employees to produce goods or provide a service and this will affect the
businesses reputation on punctuality and this could lead to the business losing customers.
The main reasoning for the increase was to create funding for the fee-free tertiary education set up
by former president Jacob Zuma. This will have a positive influence on the country as under
privileged scholars will have the same equal opportunity to education and this will create a higher
rate of skilled persona within the country, this could potential decrease unemployment rates and
thereby decrease income tax in the long run. The second reason is to pay social grants, social grants
for the youth will have a greater impact on the further development of the country.
The increase in VAT maybe insignificant for most franchise and mega corporations as the difference
is marginal, but the company must keep in mind that for a certain percentage of their customers the
VAT may not be seen in the same way. The company might want to revaluate the production process
that the business currently operates in and ensure that they are putting in the minimum inputs for
the maximum outputs. The quality of the goods received are in with a reasonable price range and is
of a superior quality- by ensuring this, the customer will purchase the product as it is of a high
quality and they know that it is value for money.
, Ethical: Listeriosis
“Ethics can be defined as a system of moral
principles or rules of conduct which govern
behaviour, in other words – choosing between what
is “right” and what is “wrong”. Moral principles are
not based on legal requirements, they relate to a
person’s innate sense of justice and what is the
“right” thing to do in the circumstances and can be
applied over and above any laws and policies which
may be in place.” – extracted from Tiger Brand Code
of Ethics 2017 [page 5 of 13].
The recent listeriosis outbreak has caused Tiger Brands to close down their factories. However, this
was not a forced decision but one that the company made as their product was taking lives of
consumers. This has had had an impact on their recent stakeholders whose shares have decreased
by 13% and there trading price was down by 7,06%. Companies and farmers that are linked to Tiger
Brands will also be affected as their production market will not be able to function as the production
system is shut down for the time being.
The ethical decision of Tiger Brands promotes that the business has a structured business culture
and that business principles and ethics are obeyed by the company’s employees, mainly top
management. Tiger Brands customers, concerned with their health being at risk, have opened a
lawsuit against Tiger Brands stating that the company knew about the listeriosis bacteria in their
products but did not act sooner. Tiger Brands argues that they did not know about the bacteria and
when they did they took their product off the market with immediate effect.
Companies that share the same market with Tiger Brands are affected as consumers assume that all
related products are will have the same effect on them and is infested with the same bacteria, this
will decrease sales and demands for the products. All companies have undertaken a strict health and
hygiene standards examination to prevent a further cause of death due to listeriosis. Due to the
health regulations companies must have their product tested. The lowering in production and
increase in expenditures will cause a decline in total annual income. Total sales may also decline as
the industry is currently viewed negatively in the public’s eye. Even though businesses are not being
forced to stop product production it is the ethical decision to make.
By obliging to the Code of
Extracted from Tiger Brands Code of Ethics 2017 [page 6of 13] Ethics, the company’s
vision can still be
accomplished as the
public may see it as the
company obeying the set
rulings of the business
and therefore may see
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