Country Development Comparison: Sweden and Vietnam PESTEL

Country Development Comparison Sweden and Vietnam PESTELTable of ContentsVietnam soil semipolitical factorEconomy socialTechnologyLegalEnvironmentSweden Background.Political factorSocial factorsTechnological FactorLegal FactorsEnvironmental factorIntra summary of Sweden and Vietnam Political Factorsstinting FactorConclusionReferencesPESTEL ANALYSISInitially known as PEST Analysis, this is a macro environmental structure used to descry the impact of the external factors on the institution and is used as strategic analytical technique. PEST stands for Political, Economic, Social, and Technological factors.Francis Aguilar is referred to as the originator of this tool. He talked ab bring out ETPS Economic, Technological, Political, and Social as the four important factors for Scanning the Business Environment. Later Legal and Environmental factors were in like manner introduced by some analysts and thus evolved the term PESTLE Analysis.Vietnam backgroundVietnam is a domain situated in the extreme east on the indo-China peninsula. It is the 13th around populated country in the earth with 90.3 million batch world estimated in 2012. It is single among the fastest emerging countries in Asia. It has a very fast growing sparing as many counterbalance world countries are being attracted by its resources and Foreign Direct Investment showed an increasing trend for some years.Political factor2011Vietnam Communist Party held an eleventh intercourse in 2011 by which followed an election where the leading political party was the Party Central Committee. Following the event, aboriginal Minister Mr Nyugen Tan Dung retains his former position. Mr Nguyen Phu Trong was elected as General Secretary and Mr Truong Tan Sang as Vietnams hot seat. The tender party brought about some amendments in the current 1992 Constitution. Companies which have a think to economic training were preyn certain facilities when the government took some extra value actions. Also, con cerning the conflict among Vietnam and China over the East Sea, some elder bureaucrat of the two countries had to visit each other in order to reduce the pressures.2012Following an issue of farmers and villagers land being confiscated by governments officials, the natural law force used extreme force to combat the riot. Conferences session were held to deal with these problems but no actions was taken to improve human rights which was elaborated in 2011. Prime Minister Mr Nguyen proves his subordination by restricting citizen from deriving their rights.Economy2011The year 2011 proved to be a dynamic year for the Vietnamese economy with the first year of constitution of the Socio-Economic Development Strategy. It aims to boost up the countrys labor force, creating high standards infrastructure and stabilizing the economy. However, the Vietnam Development Report of 2012 showed that in the fresh years there was an agitating macroeconomic experience. Vietnam experiences a slow up GDP growth of 5.8%, inflation being 11.75% in 2010 to 18% in 2011. Both imports and exports ruddiness and FDI increased as investors were attracted by certain core business of the country.2012Following the slowing down of GDP in 2011, 2012 in any case depicted a slow pace with GDP growing by only 5%. However, inflation decreased as it change from a two-digit control to mavin digit figure of 9.1%. FDI inflows witnessed a fall of 4.5% in 2012 and seeing a boost in exports of 18.3% and imports of 7.1%.Social2011In vietnam, education is considered to be the key of good moral set and that every person should have a desire for achieving it. Despite having a poor education strategy, the economy has a highly educated population. The National fair(a) population rose by 1.04% (87.84 million) with a act asing age of 46.48 million which is a rise of 0.12% and constituting an un fight rate of 2.27%.2012Average population rose by 1.06% (88.78 million). working age from 15 and above rose was 52.58 million in 2012 which Is a rise of 2.3%. Unemployment rate was 1.99% and peoples standard of vivacious decrease by 27.6% to 2011.Technology2011Year 2011 illustrated a new implementation of a strategic plan for social and economic development. Vietnams government emphasize on the establishment of new infrastural building and thereby constructing new express ways to facilitate the task. This would befriend to ease the modenisation concept. Various training is being offered to have competent scientist and also the government promoted technological innovation.2012Being cost advantageous compared to other countries, Vietnam captured some big economies for investment including South Korea and US technology enterprises. This boosted up the export revenue. atomic number 53 of the major influences was the implementation of Samsungs mobil-ph whizz plant which totalized an investment of $700 million.Legal2011Vietnam was called upon in a conference on the Rule of law to restructure its legal system and bring it into line with the international Human Rights Laws. The Human Rights were only theoretically being used in Vietnam after the war. In 2011, Vuong family created havoc by wounding 6 civil servants. The Prime Minister had to step into the matter so as to solve the case and the Haiphony establishment was proven wrong.2012The dominance of the ruling party persisted. Human Rights were only proposed in 2011 and it was not given legal force. It did not abide by the international standards even in 2012. Freedom of the population was strip from them. The police force still do massacre to the general public. Foreign countries tried to step into the matter to reform the legal system but the supremacy of the government re principal(prenominal)s.Environment2011Recent depict of the World Bank stipulated that due to rapid economic growth and technological advancement in Vietnam, the environment is being affected significantly. many a(prenominal) natural resources are being deployed. Moreover, 2011 was officially the year where Vietnam Rhino was declared extinct. Also, with the growing urbanization, environmental taint has increased. Water pollution is the main one as lakes area is decreasing sharply while many are disappearing. 80% of lakes are polluted and this called upon environmentalist to take necessary measures to take over the problem. Vietnam is a country with drastic damages concerning climate change with 257 people missing and dead, 1200 houses being damaged or carried away. The natural calamities caused a loss of most over 10 trillion VND.2012With the support of US, in 2012 at the United Nations Conference on Sustainable Development, Vietnam essential a strategy for sustainable development following the increase in industrial work. Agriculture as a percentage of total national income is declining.Sweden Background Sweden was army powered in the seventeenth century, but it was no present in any war for almost 200 years. It rema ined armed neutral in both World Wars. It is a capitalistic country. In 2000-02 and 2009 by the global economic downturns it had to face unemployment to a great extent, but fiscal policies were planned and implemented in a way that has permitted the country to survive in economic difficulties. Sweden joined the EU in 1995, but the public disagree to the introduction of the euro in a 2003 referendum. It is located between Finland and Norway.The universe of Sweden is 9,074,055 (July 2010 EST.) Religion is Lutheran 87%, other 13 %( includes Roman Catholic, Orthodox, Baptist, Muslim, Jewish, and Buddhist) Language of Sweden is Swedish (official), also Sami- and some Finnish talking minorities.About Literacy rate it is observe that age 15 and over can read and writeCapital of Sweden is StockholmGDP growth rate is 4.5%inflation rate is said to be 1.4%Currency Krona (SEK)Industries iron and steel, precision equipment (bearings, radio and telephone parts, armaments), wood pulp and paper pr oducts, processed foods, motor vehiclesSweden is retaining its place as the tenth most attractive country in the world that is the result of the 2012 years Anholt-GfK Nation Brands Index (NBI), this index measures the global likeness (image) of 50 countries in attractor and perceived qualities.Political factorOfficial name of the country is mightinessdom of SwedenLegal system Based on the constitution of 1974Head of accede Sweden has King Carl XVI Gustaf as head of state. The nations legislature is the Swedish Parliament (Riksdag), with 349 participants. Elections are heald on a four year basis but it should be pointed out that the king plays no role in government. In the 2006 election, the Riksdag set a new world record as 47 percent of its elected members were women.The storage locker is headed by the prime minister. There has not been any major change in the political factor in Sweden between 2011 and 2012. Economic FactorIt is way out forward to maintain a sound fiscal suppo rt, improving greater grasp force participation and efficiently increasing the public expenditure would help handling future undesirable events.The industrial as well as the agricultural sectors both play an important role in contributing to the GDP. The estimate of investments in research and development is about 4 percent of its gross domestic product.In 2011 in order to prevent long-term unemployment The efficiency of labour market policies could be elevated by increasing the training, specially those who need it most and getting strength in cooperation between institutions. Reforms in the social arrive at and tax systems to provide the right incentives for increasing hours worked.In 2012, Efficient Capital Markets and Portfolio Investment Credit is made available to distant investors in an unbiased way. The clannish sector have been given access to a variety of credit instruments. The central bank focuses on increasing the international co-operation.Combined with a intentio nal labor force, excellent telecommunications network, and a stable political environment, Sweden has become more competitive as a choice for foreign companies forming a presence in the Nordic region. In the World Economic Forums 2011-2012 report, Sweden ranked third out of 140 countries in overall competiveness and productivitySwedens economy has intemperate potential to benefit from growing, technology-driven global competition. Sweden already hosts one of the most globally integrated economies in the world. Swedens effectiveness is manifested by large flows of trade, capital, and foreign investment. It is seen as a leader in adopting new technologies and setting new consumer trends. Products can be tested in a market with demanding customers and high levels of technical sophistication.Social factorsSwedens people in general are very on time. They do not smoke in general public places. It is a custom to remove shoes if a person is invited by a friend or anyone to his/her house. Swedes students are informal but they are always instinctive to help.It is not a practice to exchange business cards in Sweden.Swedes dont take generosity for granted they will surely give thanks. Fault to say thank you for something is perceived negatively in Sweden.Competition is not encouragedMaintaining eye contact along with a firm hand call forth, shake hands with all attendees on both arrival and departure.Call first names when you meet Swedes.These social factors have not change in one year i.e from 2011 to 2012Technological FactorThe image is adapted from The Global Information Technology report of 2010-2011Hennigan (2011) states that Sweden stands 1st in rankings of The Global Information Technology report of 2010-2011, by the World Economic Forum. The report emphasizes the role of ICT (information and communication technologies) as a facilitator of a more economically, environmentally and socially sustainable world.According to new ranking report published by the UN ITU, Sweden holds the first rank in the ICT Development Index (IDI).Legal FactorsSwedish laws provide a variety of types infra which a business can be established. The Swedish Law, Act (1992160) applies to overseas companies functioning some type of business The foreign branchs president must be living within the European Economic Area (EEA). Each and every business enterprise in Sweden are required to present at the Swedish Companies Registration Office. Trademark must be registered in Sweden so that legal protection can be obtained. The president if, not from EEA country, necessitate special permission from the Financial Supervision Authority to set up a branch in SwedenTaxes Swedens taxation structure is straightforward and corporate tax levels are low. Sweden has a corporate tax of 28% in nominal terms. Individuals income taxes are one of the highest in the world. Since it spends a lot in public finances to reduce deficits. One particular area has been tax reductions to encourage employers to hire long-term unemployed people. There are further deductions for own(prenominal) income taxes by the government. Profits earned by a Swedish branch of any foreign enterprise whitethorn be sent abroad without suggestion of any tax other than the regular corporate income tax.Incentives The government also offers specific incentives to set up a business. Loans are also given by the National Board for Industrial and Technical Development (NUTEK) and from regional development funds. The variety of regional support programs are in Sweden like location and employment grants, low rent industrial parks, and economic free zones. There are also several European funds that offer subsidies for starting enterprises and the Swedish Government provides collection of incentives for research and developmentEnvironmental factorSweden was an early adopter of sustainable thinking. Back in the 1960s, it acknowledged that the rapid loss of natural resources had to be deal with, and took a lead in setting up the first UN conference on the environment, held in Stockholm in 1972. Since then it has continued to work actively with environmental issues, both nationally and internationally.In 2011, Sweden had the highest percentage of renewable energy in the EU (over 47 per cent). By 2020, at least half of the countrys energy should be renewable, a target the Government says is within reach.Sweden has implemented a water management program in 2012. strike water is drinkable, and in the summer you can swim in central parts of the capital, Stockholm.Although Sweden is a frontrunner in environmental policy, the Government recognises that there is plenty of live for improvement. For 2013-2016, Sweden will allocate approximately SEK 22 billion to environmental measures.Intra Analysis of Sweden and Vietnam Political FactorsUnlike Sweden with a sound and stable political state, that of Vietnam is quite unstable. Vietnams political party shows its supremacy upon its citizen by depriving them of their human rights. Sweden can be said a country where its political factor would be less precarious that Vietnam. Following the comparison of year 2011 and 2012 of the two countries, Sweden proved to be consistent where as to correct the Vietnamese political stability various countries had to step forward.Economical FactorEconomic stability is of great concern to countries. Vietnam encounters a very fluctuating macroeconomic state with drastic changes. Sweden has a stable economic state as its figures do not change by a quite large amount. Vietnam with such agitation could be vulnerable to crises. This makes the economy poor and may lose investors confidence. Sweden on the other hand has a good economy and can boost up investors confidence. Being among the top competitive and productive countries in the world, investors are easily attracted. Social FactorIn comparison with Vietnam, Sweden can be said to be more socially stable. Swedes are well laurels for their moral values. It has a highly educated population with high prospect of flourishing as the people are back up by their government. Vietnam on the other hand also has a highly educated population but do not have the means available to ameliorate their living standard as year 2012 showed a decline. Sweden with its determination and perseverance became the third out of 140 countries for being competitive and productive. Technological FactorSweden being a country of high level of technology has a major advantage over Vietnam. The latter is now on the path of major technological advancement. Many efforts have been done to flourish its technological innovation. It is in 2011 and 2012 that the government is opening itself to new technologies and is constructing the required infrastructure whereas the case of Sweden is very different. Sweden is rank number one in information, communication and technology. Its telecommunication services is among the best due to high technology. Legal Factor Both Sweden and Vietnam encourages companies and individuals to prospect via tax cuts. Sweden is considered a country which is well known due to its high individual taxes and its large public sector. It encourages companies to hire persons by reducing corporate tax thereby reducing unemployment rate. Its government also helps to promote small and medium enterprises.Environmental Factor Sweden is the first country to adopt the sustainable development approach. It organises various conferences on environmental issues, the first one held in Stockholm. It has a clean environment where tap water is drinkable and it has the highest level of renewable energy in EU. Vietnam is on the other pole where pollution affects its water resources badly. Tap water is not consumable as its lakes are over 70% polluted due to industrial operations.ConclusionSweden is a developed country and this can clearly be seen from the PESTLE analysis. Swedish society has developed an exclusive culture with a robus t work code and strong ethical attitudes regarding the appealing of welfare benefits. There is also a great level of trust and social consistency. At present Sweden is now putting fierceness on its tertiary sector, more precisely on its financial sector. Vietnam on the other hand is a developing country still trying to vie with its primary and secondary sector, its main goals are to establish a continuous trend in its macroeconomic factors such as GDP and inflation. The difference between these two countries is eye catching and there is technically no way that in the near future they will be on the same level even if Vietnam development is at a more than average pace.