Pest Analysis

The PEST analysis means Political, Economical, Social and Technological analysis. It is a useful strategic tool for understanding market growth or decline, business position, potential and direction for operations. The PEST analysis examines the impact of each of the factor on the company. 

Pest on China:

• Political: China allows foreign businesses to enter. However, the government has issued policies that ban console games and certain online games. The restrictions set by the government could be worrying since Square Enix’s main product line is video games. This would involve Square Enix to readjust their main products, which is impractical. A one party state controlled by the Chinese Communist Party (CCP) since 1949 and the government always been subordinate to the CCP. Human rights are always ignored in practice, particularly when citizens challenged the CCP’s political authority (Geoffrey, n.d.).
• Economical: China has the third biggest economy in the world and has a constantly growing economy. This allows China to keep going itself and Square Enix will be able to expand into China. The earthquake in Japan has little pressure over China. There will be limited trade between China and Japan. However, Japan is China’s top fifth destination for China to export their merchandise. This may lead to some products, such as clothing and electronic apparatus, to not be traded as much. This will also lead to harming China’s economy. Under new foreign exchange guidelines, the RMB is conditionally convertible for certain trade and current account transactions for Chinese exporters and importers at the unifies rate (Geoffrey, n.d.).
• Social and Cultural: China has a lot of gamers in the country. This allows Square Enix to create products to target these customers, since their main focus is on games. Because of huge population, there is surely to be enough potential customers willing to buy Square Enix’s products. However, because of the ban on console games, Square Enix will have to be able to adapt and be aware of the culture of online gamers in China (Geoffrey, n.d.).
• Technological Factors: China has a growing country due to factors like foreign business, more population. China doesn’t allow all the technologies to work on. Even not all areas in China have the latest technology since they are underdeveloped (Geoffrey, n.d.).

Pest on Australia: 

• Political: In Australia, the Competition and Customer Act 2010 (CCA) aims to get better the welfare of people through the promotion of competition and fair trading and provision for consumer protection. It is significant when developing marketing initiatives to be aware of any relevant restrictions under the Trade Practices Act to avoid possible fines, negative publicity and expensive civil damages. There are also many laws and regulations in place with respect in place with respect to marketing on the internet and dealing with exposed consumers (Kurtz, 2009).
• Economical: Australian’s Economical situation can change levels of non-refundable income for consumers and influence the prices they are willing to pay and the types of purchases they will make. For example: an economic recession or slowdown may reduce the consumer’s non-refundable money, in that way reducing the consumers spending to the lowest level. Other factors that can affect the economic environment are price increases, redundancy levels, unemployment and income (Kurtz, 2009).
• Social and Cultural: With changing times, the culture of Australia became Americanized in terms of food, dress, lifestyle, and celebrations. A successful marketing policy should reflect the desires and requirements of consumers. For example: a greater importance has now been placed on environmentally friendly products and services. As a result, Virgin Blue Airlines now offers customers the chance to offset their carbon emissions for each flight by paying a slightly higher fare during the booking process (Kurtz, 2009).
• Technological Factors: For Australia, It is important to monitor advances in technology and think about adopting new technologies that can increase the marketing capabilities. Yet, given the opportunities and benefits that Internet technologies can provide it has been found that Australian small businesses are relatively slow in adopting them. The internet offers excellent opportunities to cost effectively research markets and identify ways to improve the business by analysing competitors (Kurtz, 2009).

PEST on U.S.A:

• Political: The United States is a federal constitutional republic, in which the President of the United States is the head of state and head of the government, Congress and magistrates share powers reserved to the national government and the federal government shares sovereignty with the state government. There are major differences between the political system of the United States include greater power in the upper house of the parliament, a wider scope of power held by the Supreme Court, the separation of powers between the legislature and the executive (Shekhar, 2012).
• Economical: The main sectors of economy are Retailing, Energy, Agriculture, Finance and Manufacturing. The retail industry is the second largest industry in the U.S. (responsible for approximately 12% of all US employment) with over $3.8 trillion in sales annually ($4.2 trillion if food sales are included). President Obama is spending huge amount money to stimulate the economy and also trying to stabilize the financial system (Shekhar, 2012).
• Social and Cultural: Demographics of the United States Includes Race/Ethnicity (2011) White 72.4% Black/African American 12.6% Asian 4.8% American Indian and Alaska Native 0.9% Pacific Islander 0.2% Other 6.2% Two or more races2.9% Hispanic/Latino ( of any race ) 16.3%. 80% of the population aged five years and older spoke only English at home. According to the religion belief, there are78.2% Christian, 0.6% Muslims, 0.4% Hindu, 0.7% Buddhism, 2% Judaism and 16.2% people with no religion (Shekhar, 2012).
• Technological Factors: USA Technologies is a proven leader in secure cashless business unattended for point-of-sale, network services and energy preservation solutions have made it an interesting investment opportunity. USA Technologies sold an collection of 5,200,000 shares of common stock at $2.064 per share, as well as warrants to purchase up to 3,900,000 additional shares in the aggregate of its common stock (Anfield, 2011).
  

Opportunities to U.S.A for doing business in China:

China and the United States face global challenges such as financially, cyber security and climate change, the two countries have much to gain from working together. The opportunities arise from rapid economic growth in the world’s largest market and the availability of a cheap manufacturing base from which to sell to U.S and the world. From a manufacturing perspective, China in the long run will be well-known by its overall business strength and structure, including the huge investments made to make sure China has a modern and economical manufacturing sector. There has always been a stable market for imported foods in China, especially in respect to hotels, bars and western style restaurants. Increasingly, Chinese consumers themselves are becoming to lay great stress on brand and brand loyalty than before. This means that companies with a strong international brand and aggressive marketing strategies continue to hold large market shares. Cheap labour is the main factor for U.S to do business in China. The United States is accusing China of controlling the exchange rate of its currency to gain trade advantages. But it is still strengthening its export controls, casting doubt on its willingness to settle its trade imbalance with China (Nye Jr, 2011).

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