1.
Use PEST framework to analyze the major differences among USA, China,
and India in year 2020?
PEST analysis of China
Political: Economic:
• China’s political environment is
stable;
• The Communist Party of China is
the founding and ruling political
party of the People’s Republic of
China. Although China enjoys a
stable political environment, the
lack of political freedom is an
area of concern;
• Tax is increasing steadily and tax
policy is quite foreign investment
preference;
• Complete trade policy and a more
and more important place in the
world trade-related organizations;
• Social welfare is comparatively
poor but Chinese government is
trying to increase the investment
and improve the situation.
Social:
• Population of China is 1.435
billion;
• The largest population in the
world (Rich labor resource);
• Life style change and
improved life quality;
• Big income gap between the
rich and the poor;
• Increasing high level of
education and social mobility.
• GDP of China in 2019 was $14.3
trillion (99 trillion Yuan);
• Increasing fixed asset investment;
• High foreign exchange reserves,
the biggest dollar holder as the
foreign exchange reserves;
• China became the largest
exporting country all over the
world;
• Increasing money supply from
central bank for supporting
economic activities;
• Comparatively high inflation rate;
• Gradually increasing residence
disposable income;
• Greatly growth of GDP (rank
NO.2 all over the world.
Technological:
• Biggest amount of trademark
application and registration all
over the world;
• Highly spending of government in
research (NO.2 all over the
world);
• Improving technology transfer;
• Technology can be easily copied;
• Social networks have empowered
consumers with an increased
transparency.
 PEST analysis of USA
Political:
• The oldest Democracy in the
world
• The USA is the second largest
democracy in the world
• Federal system: National
Government & states
• National government: Legislative,
Executive & Judicial. Congress
(they write U.S. Federal Law)
Executive Branch (Headed by
president) Judicial Branch (U.S.
Supreme Court)
• 50 States in total, 48 locked
within continental united states.
Other are Hawaii and Alaska
• The president is the head of the
country and is elected for a four-
year term.
Social:
• Population of USA is 329.45
million
• Like most developed countries,
US face the problem of an aging
population which can lead to a
serious labor shortage
• The education and healthcare
system is one of the best in the
world
• Majority of the population has a
liberal mind set, but rising racial
intolerance is a serious concern
• Increasing illegal immigration is
another concern
• America is a diverse country.
Economic:
• The GDP of USA in 2019 was
$21,427,100 million
• The economic system is well
developed and gathers its strength
from its service and
manufacturing industries
• The recession in 2009 adversely
affected the economy of the
country and unemployment rates
soared to an alarming point
• But the economy bounced back
with a growth of around 4% in the
third quarter of 2014 as
consumers and business have
stepped up spending
• Reduction in unemployment
• Non availability of cheap labor.
Technological:
• Home to one third of the world’s
scientists and engineers and
accounts for one third of global
R&D expenditure
• Technological innovation within
the private and educational sector
has been increasing
• The government’s R&D is
focused on defense (58.3% of its
R &D budget)
• Rising pharmaceutical market
• Significant development in
emerging technologies.
 PEST analysis of India
Political:
• Politically stable than other
developing countries.
Governments typically last a full
term in office;
• Good relationship with other
countries – BRICS, Non-Aligned
Movement, SAARC etc;
• Multi-party democracy, typically
two major parties who seem to
take turns every 4 years;
• Legislation are not strictly
enforced
• Governmental procedures are
very lengthy and time consuming.
Often involve bribery;
• Corruption- reduces credibility
and profit.
Social:
• Population of India is projected
close to 1.37 billion
• Qualified people with English
fluency, but 40% of population
are illiterate
• Cheap labor and operating costs
• Many languages and cultural
boundaries
• Globalization - globally
competitive
• About 50% of the population is
below the age of 21. Young
population, more opportunities
• Economic discrepancy between
rich and poor is too large
• Power shortages are common
• Caste system – discrimination.
Economic:
• GDP of India in 2019 at current
prices was projected at $2,972
billion;
• Increase in spending capacity;
• Fastest growing economy – 7th
largest economy;
• Middle class - With faster growth
in household income in Middle
class;
• Improving infrastructures in large
cities such as Delhi and Mumbai;
• Natural resources- iron ore,mica;
• Huge market for any business;
• Second largest populous country
in the world, with a growing
number of people
overwhelmingly poor;
• Inflation rate has been high, but
has been around 5% over the last
2 years;
• High inflation country leads to
high cost of operation.
Technological:
• Extremely strong in IT;
• Leading IT companies – Infosys,
Wipro, TATA;
• Innovation of new technology;
• Information protection regulations
are weak;
• Technology can be easily copied.
2. What are the major measures adopted by Microsoft to deal with piracy
issue in developing countries?
Microsoft, the world's biggest personal computer software company, developed MS-
DOS and then Windows, the operating system and graphical user interface that now
reside on more than 90 percent of the world's personal computers. In addition,
Microsoft has a slew of bestselling application software, including its word
processing program like a Microsoft Word, spreadsheet program like an Excel, and
presentation program like a Power Point. An integral part of Microsoft's
international strategy has been expansion into developing countries such as
mainland China and India. Microsoft's initial goal was to build up Chinese sales from
nothing in 1994 to $100 million by 2000, a goal that it appears to have met. However,
sales could have been very much higher were it not for a number of problems that
Microsoft encountered in China.
The most obvious and serious obstacle to Microsoft's success in developing
countries has been the rampant level of software piracy. The level of piracy in China
was 98% which is the highest in the world, and in India it is below 70% of piracy,
according to figures from the Business Software Alliance.
The several regulatory, legal, and market-based anti-piracy initiatives have been
adopted, such as major raids and the signing of Microsoft's license agreement with
a company called China's Great Wall company. Also, a Memorandum of
understanding between the USA and Chinese Governments in January 1992 was
signed. Unfortunately, none of these measures significant had success.
Microsoft's main anti-piracy measures are:
- market research;
- close cooperation with the Government (Microsoft’s Government Security
Program);
- open a research lab to focus on basic computer science research (Microsoft
Research Asia (1998), Microsoft Research India Center (2005)). Such
research lab will address the local consumer demand more accurately;
- Microsoft offered products at affordable prices (Microsoft coined strategy of
“good-better-best” product and pricing whereby multiple version of products
such as Windows and Office were launched at different price (Window Starter
Edition - $25-$30; Window XP Starter; package of Microsoft and Windows
for student only $3).
The problem of piracy still exists in developing countries. To solve this problem, I
suggest the following solutions:
- work directly with a Government, the Government of these countries can take
measures to combat piracy;
- need to change sales and pricing strategies for products;
- developing various software products that can compete in the different
emerging market on a price basis;
- creating a loyalty program for people who bought legitimate products;
- build flagship stores;
- launch marketing campaigns to create brand loyalty.
 References

1. Brand, D. (2017) China Says It Wants to End Poverty by 2020, available at:
https://www.globalcitizen.org/en/content/china-end-poverty-2020/ (Accessed 01 March
2018)
2. Chen, A. (2019) Doing business in China, available at
https://uk.practicallaw.thomsonreuters.com/8-501 377?transitionType=Default&context
Data= (sc.Default)&firstPage=true&bhcp=1 (accessed 10 January 2020)
3. PwC (2020) Overview of PRC Taxation System, available at:
https://www.pwccn.com/en/services/tax/accounting-and-payroll/overview-of-prc-
taxation-system.html (Accessed 10 January 2020)
4. The World Bank (2020) China Overview, available at:
http://www.worldbank.org/en/country/china/overview (Accessed 5 January 2020)
5. World Meters (2020) China population, available
at: https://www.worldometers.info/world-population/china-population/ (accessed 10
January 2020
6. Guardian News and Media Limited (2016) India’s trade: full list of exports, imports and
partner countries, available
at: https://www.theguardian.com/news/datablog/2013/feb/22/cameron-india-trade-
exports-imports-partners (Accessed 10 February 2018)
7. IBEF (2019) About Indian Economy Growth Rate & Statistics, available
at: https://www.ibef.org/economy/indian-economy-overview (Accessed 01 January 2019)
8. Plecher, H. (2019) India: Gross domestic product (GDP) in current prices from 1984 to
2024, available at: https://www.statista.com/statistics/263771/gross-domestic-product-
gdp-in-india/ (accessed 01 January 2020)
9. The World Bank Group (2018) India at a glance, available
at: http://www.worldbank.org/en/country/india/overview (Accessed 10 February 2018)
10. Trading Economics (2020) India Corporate Tax Rate, available
at: https://tradingeconomics.com/india/corporate-tax-rate (Accessed 01 January 2020)
11. https://countryeconomy.com/countries/compare/usa/china
12. http://www.tradingeconomics.com/search.aspx?q=economic%20growth%20
rate%20in%20india
13. http://www.tradingeconomics.com/india/gdp-growth-annual
14. https://www.cia.gov/library/publications/the-world-factbook/geos/in.html
15. http://www.business-standard.com/article/economy-policy/at-7-6-in-fy16-
india-is-now-the-fastest-growing-economy-116053101080_1.html
16. http://www.tradingeconomics.com/india/government-debt-to-gdp
17. http://edition.cnn.com/2015/08/02/asia/india-poor-census-secc/
18. http://censusindia.gov.in/Census_And_You/age_structure_and_marital_statu
s.aspx
19. https://en.wikipedia.org/wiki/Foreign_relations_of_India