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4 D 448 F 059 CCF 4 e 38301 e
4 D 448 F 059 CCF 4 e 38301 e
PESTLE Analysis
Gavin West
Nov. 4, 2021
Product: Cologne
PESTLE Analysis
legal, and environmental aspects of my chosen countries Spain and Italy in order to determine if
attempting to sell cologne in these countries would be a viable idea. I am planning on producing
my own luxury cologne here in the United States, and I will export the cologne to these countries
Political
First, I will look at the political system and philosophy of my countries. Spain is under a
constitutional monarchy and Italy is primarily a constitutional republic. Both of these political
systems are friendly to business so I don't believe I will run into any problems when it comes to
their political philosophy. Next is how stable their political systems are. Spain has a fairly stable
political system with small Parliamentary fragments. Due to the stability of Spain’s political
system I do not believe that I would run into any problems selling my product. Italy’s democracy
is unfortunately flawed, there is a lot of instability and fragmenting, and it often has many short
lived governments. Currently Italy is decently stable enough to do business in, but the possibility
of instability in the political system will be something to look out for when attempting to do
business within the country. Due to the political aspects of these countries, Spain will be very
favorable to do business in and it would still be possible in Italy, just a bit more risky.
Economic
would be a good idea to attempt to sell cologne there. This will be an important thing to research
and many aspects could potentially affect my decision of doing business within these countries.
The economic system in Spain is mixed capitalism with private freedom but also government
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regulation. Italy also has a mixed capitalist economy that is very diverse and industrial. Both
economies of these countries would allow me to easily distribute and sell my cologne. Spain and
Italy are both under the Euro monetary unit and they are both under the European Union. Spain
has a monetary policy separate from the national government that is controlled by the Bank of
Spain. However, Italy’s monetary policy is more involved and controlled by the European
Monetary Union rather than it being controlled mainly by the state. It is very helpful that they are
both under the Euro and the EU, but because Spain is more private when it comes to monetary
policy it may be easier to do business there, but still very viable in Italy. Both Spain and Italy are
very economically integrated in their region of the EU. Because of this, both economies of these
countries are fairly strong with Spain having a projected GDP growth rate of 6.5% this year
alone and Italy having a 6% GDP growth rate. Both countries have a strong climate for
innovation as there are a lot of privately owned and operated businesses in both of their mixed
economies. Cologne is already a very popular product in both of these countries, both having a
few of the leading fragrance markets in the world, so the innovative climate would not be of
much effect on my attempt to sell cologne. Spain ranks 39th in the world for its economic
freedom, making its overall economic attractiveness very high. Italy ranks 68th in the world for
its economic freedom, so its economic attractiveness is still substantial but Spain is much more
attractive in this sense. Due to these rankings in freedom, Spain would be much more desirable
than Italy, but the ability to sell a product in each of these countries freely is still very doable.
Spain has a very competitive economy, with a very competitive fragrance market. The popularity
of cologne and perfume in Spain would make it an easy choice to sell these products in, but
because of how competitive the market is, it would make it difficult to compete against bigger
more well known companies. This is a very similar situation in Italy, as it is ranked 30th for its
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economic competitiveness, and it also has a very strong fragrance market. Spain has a labor force
of around 57.7% with it slowly rising as the pandemic settles down, making for a decent amount
of labor availability that is slowly growing. Italy’s labor force is also between 57% and 58% that
is slowly recovering from the pandemic, with an abundance of labor availability. In my personal
operation, I would not need to be hiring many employees from either of these countries because I
would be producing in America and exporting there, but it is still an important thing to know that
affects their overall economy. Spain has a very open philosophy when it comes to trade, they are
the world's 11th largest exporter of goods, and multinationals that are foreign in Spain make up
for 45% of Spain's total global exports. Italy has a trade balance of 53 billion, and they export
more than they import and are very open to international trade and look towards it as a major
revenue source. Because of how open and active these countries both are when it comes to trade,
it is a no brainer that exporting and selling goods in these countries would be a reasonable thing
to do. As for foreign direct investment climate, Spain ranks high as the 13th in the world for
receiving foreign direct investments. Italy is also very open and welcome to foreign direct
investment, and it ranks 8th in the world in the foreign direct investment confidence index. Both
Spain and Italy are very open and receiving of foreign direct investments, which means their
economies are very stable and being supported by an abundance of investors, and this would
make international business in these countries very viable. As was said, Spain has a very strong
export and import climate, with them ranking 16th in the world for total exports and 15th in total
imports. Italy has an even stronger import and export climate with them ranking 8th in total
exports and 10th in total imports. Both of these countries export a greater volume of products
and services than they tend to import, making their standing in global trade very high and their
dependence on it also very high. Because of their extremely strong export and import climates,
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economic stability, and economic freedom, these countries would be very favorable to export and
sell cologne in. However, due to the high amount of economic competition in these countries,
specifically in their popular fragrance markets, it would prove to be difficult to sell a product that
already has major companies that rule the industry. However, the popularity of the industry
would make it a great possibility to grow if the correct marketing and sales tactics were taken.
Social - Spain
Another very important aspect to pay attention to in pursuing international business is the
social aspects of the countries you are entering. Social structure, religious influence, customs and
traditions, and lifestyle are all important things to consider. Spain is under a social structure of
democratic and social rule of law, and it advocates for plural politics, justice, and equality. Spain
is also greatly influenced by Catholicism and they often observe important religious holidays.
Spanish people also have many unique customs and traditions such as cheek kissing, coffee, beer
and wine, litter at bars, late meals, nightlife, personal space, and cleanliness. The Spanish people
also greatly value fashion and various nice things such as clothes and food. Also, thankfully for
my product, cologne and perfume are also highly valued in Spain as they uphold cleanliness and
Spaniards of every age can be associated with a clean smell. In Spain they love to spend time
with friends and family, eating out is also a very popular aspect of Spanish culture, and they
enjoy outdoor activities. Nightlife is also very popular in Spain. Considering the cultural
practices and lifestyle in Spain, Cologne would be a very successful product to sell there. When
we look at Hofstede’s framework and where Spain sits, it scores a 57 in power distance, 51 in
in indulgence. I can only see a problem being with the high uncertainty avoidance, this could
cause people to avoid purchasing a product that they are unfamiliar with such as a new cologne,
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or it could lead them to easily purchase it because many people in Spain are already well
Social - Italy
In Italy, they have a social structure with a defined class system, but it does not constitute
what their occupation or quality of life will be. They simply just recognize it, and it is seen that
about 52% are identified to be middle class, 37% are part of the lower class, and 11% being part
of a higher class. Due to the high amount of middle class citizens, it would be a very good idea to
create a cologne and price it such that it is attractive to those in this middle class. Italian culture
is greatly influenced by the tradition of Roman Catholicism. Many of Italy’s bordering countries
also deeply influence Italian culture. Italy has many unique customs and traditions, they value
many of the same things that the people of Spain value such as family, food, holidays and
celebrations, religion, and they also have a deep connection and love for art and architecture.
Body language and gestures are also very important to the social culture of Italy. Consumer taste
in Italy consists greatly of ceramics, sweets and baked goods, food, and fashion such as shoes,
accessories, jewelry, and fragrances. Based on their popular consumer tastes, we can see that it
would be a great idea to sell a cologne to the people of Italy. As stated, the lifestyle of Italians
consists of family and friends, drinking and eating well, and enjoying the beauty that surrounds
orientation, and a 30 for indulgence. Based on these scores, I would only consider their amount
of uncertainty avoidance and long term orientation to be potential roadblocks. This is because
they could avoid purchasing a new and unfamiliar type of cologne, and they might not see the
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value of cologne to be long term in certain situations. Overall, because of the social aspects of
Technological
I will next examine the technological aspects of Spain and Italy to see if any of them
would affect my attempt at international business in these countries. This is an important thing to
consider for many specific products, but my product may not be largely affected by it. Spain is
very technologically advanced and has kept up with much of the world's technological
advancements and infrastructure. It has a very efficient telecommunications system and is ranked
23rd in the world for best technological conditions for companies to establish themselves there.
Because I am not establishing a company in Spain and simply just exporting my cologne from
elsewhere, this will not be the most effective to my efforts. Spain also is very advanced when it
comes to production and distribution. However, their distribution abilities will be of much more
use to me than their production. They have a large network of vehicle transportation of goods
and mainly distribute goods in large retailers and stores classified as traditional. They also have a
very prominent digital distribution system across social media and ads that we are also used to
here in the United States. Since I am planning on selling my cologne through select retailers in
my countries, Spain will be very helpful in the effort and if I am to digitally market my cologne,
the abilities of Spain will also come to great use. Italy is also very technologically advanced with
a strong infrastructure in technology. They are well known for their production technology, and
many Italian companies invest in technological research. This information is not the most useful
to my specific needs, but they could have a slight positive effect on my sales in the country.
Italian industry does offer a wide variety of advanced means of distribution such as roads, freight
hubs, and digital means. They also distribute products in large retailers which will be helpful to
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the sales of my cologne. Their distribution capabilities both physical and digital will greatly
assist in getting my cologne on the shelves of retailers, and putting ads out for the public to see.
Both Spain and Italy have favorable technological conditions that will prove to be useful when
selling my product.
Legal
Next, I will consider the legal regulations, and the ethical climate of Spain and Italy. I do
not anticipate that these two things will be greatly influential to my selling of cologne because
the practice of selling goods, specifically fragrances, is already so prominent in these two
countries so I don't believe that there will be any legal regulations that will prohibit me from
doing so. However, regulations with imports and trade may be present which could affect my
efforts, but also observing the economic freedom and the great degree to which both these
countries indulge in trade also makes it safe to assume there will be little to no regulation in that
area as well. Spain uses a law system that comes from Roman law, it is very civil and based on
legal codes that are comprehensive also to Roman law. There are small legal shipping regulations
when it comes to cologne and any liquid in Spain. Since many fragrances are flammable, they
must be held in a sealed container that cannot have any easy access to fire. There are also
regulations with how much liquid can be transported at once. They do have specific health
regulations that prohibit certain chemicals from being used in toiletries such as cologne, but
these regulations are no different than what is in the United States where I will be producing it. I
can assure that if I stick to using traditional and harmless ingredients in my cologne, I obey
Spain’s importation and trade laws, and distribute my cologne under their specific legal
conditions, I will not have any legal problems in Spain when selling my product. Spain also has a
strong ethical climate but this should not be of much affect to me. Italy also is rooted in civil
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Roman law, and they have many of the same elementary regulations when it comes to shipping
and transporting liquids, the chemicals that are used in products applied to the body, and trade
and importation regulations. Again, if these basic laws are followed, I will have no problems
importing and selling my cologne. It will be even more helpful to use commodities such as
transportation and distribution that are already in these countries because I can be very certain
that regulatory laws are already being followed and that should not have to change with my
Environmental
Lastly, I will discuss the environmental policies and practices of Spain and Italy, and how
sustainable these two countries are. Like previous aspects such as legal and political, I do not
believe that this will have a huge impact on my efforts. Spain has a very solid environmental
policy and they are focused on using only renewable energy sources in the next 10 years. They
are also responsible when it comes to recycling and making sure their country's environment is
clean. Italy is also dedicated to using fully renewable energy sources and they have a unique soil
protection law and they are also advanced when it comes to keeping their country's environment
clean. Spain is highly sustainable with it ranking 21st of 162 other countries in environmental
sustainability. Italy follows these footsteps while ranking 15th in environmental stability. These
aspects are surely helpful on an extended basis to my business efforts, but they do not profoundly
Conclusion
After widely analysing the political, economic, social, technological, legal, and
environmental aspects of Spain and Italy, I have come to the conclusion that attempting to
produce my cologne in America and sell it through retailers in these countries would be a very
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possible feat. However, because of the general economic competition, the competition in the
popular fragrance industry, and specific social aspects of these countries, I do not believe that it
would turn out to be the most successful idea. As stated in the economic section, both these
countries are very economically competitive, which would make it difficult to enter the market
with many products. Also because of the already very prominent fragrance industry in Spain and
Italy, it would make it almost impossible for people in these countries to abandon their beloved
and familiar colognes and purchase mine. I would need to have a marketing tactic much more
extreme than even my distribution of the cologne in order to catch people's attention in the sea of
different cologne brands that are already existent and popular. I also believe that because of how
dedicated the people of Spain and Italy are to their own customs and traditions in terms of beauty
products, they would have a harder time bringing themselves to purchase an American made
cologne as opposed to a designer Spanish or Italian cologne that is already very popular.
However, I do believe that I would have better luck trying to sell cologne in Spain because their
fragrance industry is not quite as strong as Italy’s but I still think it would be difficult to do so. It
was very interesting to research the different aspects of these countries and I was somewhat
surprised to find that I came to the conclusion that it would not be the best idea to try to sell
cologne in these countries. I would focus on finding places that don’t have the biggest fragrance
industry and attempt to build that industry bigger with my product, and I would focus on finding
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