Good Essay On Pestel Analysis Of Bae System In Australia
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BAE system refers to a British Aircraft Corporation that turns into British Aerospace Australia in 1977. The company offers various defense products to shipbuilding industry in terms of tools and systems that helps in better navigation. Not only that, the company offers different IT solutions to the companies associated with shipbuilding industry in Australia. These products include Cyber & Intelligence, defense, security and technical services to military and private ships attached with the shipbuilding industry in Australia . Company is providing services to the industry for more than half a century and has contributed in the safety and progress of the shipbuilding industry to a great deal. The purpose of this paper is to analyze internal & external environment for the company. A comprehensive PESTEL analysis not only identifies the position of the company but access the possible threat and opportunities exist in the internal environment.
PESTEL is a comprehensive analysis that consists of political, economic, social, technological, environmental and legal situation of the market that exists for a company or industry in a particular country. An in-depth analysis helps in making concrete ground for future steps of the company. It is to ensure that company’s future decisions are backed with enough information to take confident decisions. Globalization has affected everything across the globe and this is the reason that defense, once thought to be absolute national, has now changed and companies across the globe compete with each other to contribute in defense of a country.
BAE has a history of over 50 years in Australia but it has to compete with different national and International companies to strengthen its position within the shipping industry. The paper will analyze Australian Market for BAE to see what potential exists for the company.
Political environment is an important factor for the companies related to defense as nation’s foreign policies are attached with defense in a great deal. Australia’s political environment is stable and transition of government doesn’t yield a great deal of impact over the foreign policy of the country. BAE doesn’t really have any threat from political environment that deals with the outside world apart from those independent contracts which the company with different other companies across the globe . Local political environment does have its effects over the performance of the company. An example of such threat includes the increase of minimum wage for the employees that results in increase of cost of its products. An expensive product is difficult to sell in a market of competition outside the country. BAE is primarily working with the government and its defense related activities in the sea but it has some good number of civil clients within Australian shipping industry . A minimum wage makes it hard for the company to compete with the local organizations that enjoys tax concessions and other national benefits.
Market regulations are another factor closely associated with the political environment of the company. Any change in these regulations makes it difficult for the company to adjust and especially affects the company that works to such huge level. The market regulations are determined by government in terms of the products that are allowed to manufacture. Australian market is quite supportive in this regard and company’s current range of product is quite wide that allows greater target market to the company . Quality standards of the shipbuilding industry are quite high. The standards for defense related products are even high especially in wake of Australia’s contribution in the war of terror as third biggest contributor as well as huge waters in the form of waters. The quality need is actually a competitive benefit for the company and as it raise the cost of the product at one hand, it throws the competitors with low quality products on the other hand which reduces an undue competition within the market.
Australian economy is quite stable and taxes within the country increases with a stability over the years. Recession in 2008 hit the company badly but it recovered with pace and became the second best company in terms of naval defense supplies across the globe in 2010. Economies have recovered from the recession to a great deal and as the governments are the foremost buyers of BAE systems, the revival of economies across the globe is quite vital for the company. The recovery of Australian economy results in an increase of defense budgets especially related to the enhancement of naval security. This helps the company to show increased profitability in recent years.
Socio-culture environment of Australia is quite an opportunity for BAE Company. This is for the reason that Australia has sacrificed great amount of soldiers in the war against terrorism and the need to have unmanned combat vehicle has increased with the passage of time. Company has offered few products related to defense and operates automatically. There is still a great deal amount of opportunity for the company to explore and gain the target market . Technological environment for the company is quite vast and this is the reason of an increase in technological improvements of its products. An area in which the company has improved to a great deal includes the cyber intelligence. BAE has provided different cyber security products that help in securing navigational data and other security information of the defense vehicle.
Technological environment is quite supportive for the company. Regulations and laws related to technology exist within the country as well as the infrastructure of IT. Technical human resource is very important in this regard and Australia is quite rich in technical human resource as it offers attractive job opportunities to the human resource in different countries . Another advantage is the fact that Australia is emerging educational market for students from different parts of the world and these students prefer to stay and look for better jobs within Australia because of its economic stability.
Environmental conditions for BAE are quite supportive as it builds state of the art products for its customers that follow environmental regulations of the country. Legal environment of the country is quite accommodating for the international ventures. Australia’s legal system is quick and laws are updated according to the needs of time. Government’s involvement is quite low within the judicial system of the country and that makes the environment suitable for the companies to work in Australia. Along with that, company has also applied to get an exemption from Victoria’s Equal opportunity Act to ensure company can scrutinize those not feasible for the organization and to create a competitive environment within the company.
Summing up, as BAE is still a leader within Australian security industry, there is a great deal of opportunity for the company to excel even further and to focus towards its research department in order to ensure that it remains a leader within the market. The needs for the market can only be met if company continues to lay stress on its competitive activities.
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