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Value chain analysis

FRONT END

MINES CONVERSION,ENRICHMENT,
& FUEL

This Photo by Unknown Author is licensed under CC BY-NC-ND This Photo by Unknown Author is
licensed under CC BY
MINERAL EXPLORATION MINES
MINING OPERATIONS CHEMISTRY
ORE PROCESSING ENRICHMENT
FUEL

REACTORS & SERVICES RENEWABLE ENERGIES

This Photo by Unknown Author is licensed This Photo by Unknown Author

PLANTS
under CC BY-NC WIND POWER
is licensed under CC BY-SA
EQUIPMENTS BIOENERGIES
NUCLEAR SERVICES FUEL CELLS
NUCLEAR MEASUREMENT
CONSULTING AND INFORMATION SYSTEMS
AREVA TA
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Value chain analysis
BACK END INTEGRATION TRANSMISSION & DISTRIBUTION

This Photo by Unknown Author is licensed

RECYCLING
under CC BY-SA
LOGISTICS
NUCLEAR SITE VALUE DEVELOPMENT. PRODUCTS
ENGINNERING SERVICES
CLEAN UP SYSTEMS
AUTOMATION

Nr 1 world wide in the overall front end

Mining: explore, extract, and process uranium ore from which nuclear fuel is made.
The BU then reclaims mining sites once production is finished.
Chemistry: Converts natural uranium(U3O8) into uranium hexafluoride(UF6) required
for enrichment.
Enrichment: increasing the proportion of U235 found in natural uranium from 0.7% to
3% --5% in order to manufacture fuel for nuclear reactor.
Fuel: design, Manufacture and sells nuclear fuel, assemblies for pressurized water
reactors(PWR), boiling water reactors(BWR) and research reactors.

Nr 1 world wide in the overall reactors & services

Plants: Design, construction and commissioning of nuclear islands and monitoring,

replacement, upgrades and renovation of installed base.
Equipment: Manufacture of key components for nuclear power plant.
Nuclear services: Reactor optimization services.
Nuclear measurements: Design and construction of systems and devices designed
to measure radioactivity.
Consulting and information systems: IT services.
Areva TA: Design, production and maintenance of nuclear reactor research and for
the propulsion of submarines and aircraft carriers.
Renewable Energies: Design and consultation of systems using either wind power,
biomass and hydrogen energy.
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Value chain analysis

Nr 1 in used nuclear fuel management

Recycling: A full service of fuel recycling, including mixed oxide fuel and
Reprocessed Uranium fuel Production.
Logistics: Design and supply of casks for the transportation and storage of
radioactive material; also safe and secure transportation and logistics services.
Nuclear Site value development :Performance based project management for
dismantling and decommissioning program; development of integrated and
innovative solutions for both AREVA and external customers.
Clean Up: Operation of dismantling and waste processing facilities, specialized
nuclear maintenance.
Engineering: Engineering services contributing to the design and construction of
installations for global nuclear operators.

Nr 3 in the overall Transmission & distribution

Design and manufacturers a complete range in high end medium voltage equipment,
system and services on a global basis:
1.To transmit and distribute electricity from the power plant to the end user.
2.To optimize power grids.

Installs complete systems and supplies services for every market segment;
transmission, distribution and power intensive industries.

Mining

 Uranium prices were very volatile in the first part of the year. The Spot price
stabilized in the 20 US$ per pound zone at year- end, while the long-term
indicator stabilized in the 32 US$ per pound zone.
 In April, New AREVA and KazAtomProm signed a strategic agreement aimed
at strengthening their long-standing cooperation in the uranium mining sector
in Kazakhstan. This agreement provides Katco, a joint venture owned by the
two parties, with new long-term prospects with the development of the South
Tortkuduk project and allowing its production to be sustained for the coming
two decades.
 In June 2017, the State of Mongolia entered the capital of AREVA Mines LLC,
thus allowing it to initiate its operating activity. The implementation of a pilot
site at Zooch Ovoo was started, using the in-situ recovery (ISR) technology,
with the objective of confirming and improving the technical and financial
conditions of the project. The mining operating licenses for the deposits at
Dulaan Uul and Zoovch Ovoo in Mongolia were granted to AREVA Mines LLC
in July 2016.
 In June, New AREVA obtained a new 10-year operating license for its facility
at McClean Lake in Canada from the Canadian Nuclear Safety Commission
(CNSC). The license is valid from July 1, 2017 to June 30, 2027.
 From June to September, New AREVA participated in the Astana-Expo 2017
international show, held in Astana, Kazakhstan, as an official partner of the
“World of Nuclear Energy” pavilion, dedicated to energy of the future.
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Value chain analysis
Front End

 The decline of market indicators continued over the year. After holding stable
at 50 US$ for five months at the beginning of the year, the long-term SWU
reference price published by UxC once again declined slightly to reach 48
US$, its lowest level since it was first published in 2004. The long-term price
of the conversion stabilized at 14 US$ per KgU, whereas the Spot price
dropped below 5 US$ at the end of August 2017.
 The Comurhex II project made satisfactory progress over the year. UF 4 has
been produced at the Malvési site since the beginning of 2017 as a result of
this new investment. The project continues as expected on the Tricastin site
with the physical completion nearing 90% and the “phase 2” functional tests
expected to be completed before the end of 2017. The active mode tests are
expected to be held in 2018, allowing the first production of UF 6 via
Comurhex II before the end of 2018.
 In order to enable ETC to retain its centrifuge production, assembly,
installation and maintenance skills, in 2014 SET undertook to purchase a
minimum of services and supplies from ETC until 2020. In June 2017, this
agreement was redefined for the years 2017 through 2020 and extended until
2024 in order to reduce the minimum purchase quantities and still guarantee
the continuity of the skills of this key supplier for SET.

New AREVA Holding | Annual Activity Report – Period ended August 31, 2017 7/100

Back End

Recycling

 During the year, New AREVA signed several international contracts for the
dismantling of vessels and vessel internals: for the Philippsburg and
Neckarwestheim reactors for EnBW (Germany, March), for the Brunsbuttel
and Krummel reactors for Vattenfall (Germany, April) and for the Vermont
Yankee reactor for Entergy (United States, July),
 In July, New AREVA signed a contract with Japan’s NFI (Nuclear Fuel
Industries) for the fabrication of 32 MOX fuel assemblies for the Takahama 3
and 4 reactors operated by Kansaï Epco, in Japan.
 The MELOX and La Hague facilities have experienced production difficulties
linked to technical problems during the period. An improvement plan is in
place in order to return to the expected production levels.
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Value chain analysis

Nuclear Logistics
 The Nuclear Logistics business signed several Dry Storage contracts during
the period, in the United States with Exelon (in March and May) and Duke (in
July), and in Europe with Synatom (in July).
 On June 30, 2017, the Group sold its subsidiary MAINCO, specialized in
industrial logistics operations, to a French family group.
 In the summer, New AREVA carried out a shipment of MOX fuel for its client
KANSAI Epco between the MELOX plant in France and the Takahama
nuclear power plant in Japan. The vessels of the British company PNTL,
carrying 16 MOX nuclear fuel assemblies supplied by New AREVA, left the
port of Cherbourg on July 5, 2017, and arrived in Japan on September 21,
2017.
 The Nuclear Logistics business obtained several certifications during the year:
 In April and June 2017, respectively, the French Nuclear Safety
Authority (ASN) and its Belgian counterpart AFCN granted transport
authorizations for the new TN® MW (MW for “Multi Waste”) transport
cask, developed by AREVA TN.
 In July, the United States Nuclear Regulatory Commission (NRC)
certified the new NUHOMS® EOS used fuel dry storage system
developed by AREVA TN. This system has a thermal capacity of 50
kW, the highest ever certified by NRC.

Dismantling and Services (D&S)

 New AREVA completed the operations to clean up and dismantle the

equipment of the former MOX fuel fabrication plant at Cadarache (Bouches-
du-Rhône). The sixty or so premises vacated by the fabrication process have
therefore been transferred to the French Alternative Energies and Atomic
Energy Commission (CEA), which operates the nuclear facility.
 On the operational side, the first eight months of 2017 were marked by the
progress of several major projects. In La Hague over 500 New AREVA
employees were mobilized for the dismantling of the former UP2-400 plant
and the recovery of legacy waste ; several significant milestones have thus
been reached, such as the successful removal of plutonium from building 107
of the MAPu facility.
 The Dismantling and Services business has continued to grow, with the
recruitment of several dozen new employees in France since early 2017. The
growth was combined with new commercial accomplishments, in particular
with ANDRA (operation of the Centre de l’Aube disposal facility) and CEA
(processing of waste at the various CEA sites in France).
 Furthermore, the Dismantling and Services business continued its “Towards
2020!” transformation plan launched in late 2016. This ambitious initiative
concerns all of the entity’s teams and sites. The project aims to strengthen the
coordination of the wide range of services offered by Dismantling and
Services, in order to enhance its commercial and operational efficiency.
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Value chain analysis

Other operations

AREVA Projets

 As part of the restructuring of the AREVA group and to strengthen its position
in nuclear fuel cycle engineering, New AREVA Holding acquired AREVA
Projets from AREVA NP SAS on January 1, 2017.
 In 2017, AREVA Projets continued to provide its services for the steering of
the inactive tests of the Comurhex II Tricastin project.
 Within the framework of an agreement with Sellafield signed in late 2016,
AREVA Projets (France and UK – via RMC Ltd) completed studies in 2017 on
options for the reuse of two existing facilities on the Sellafield site for the
setting up of a unit on the site for the reconditioning and processing of 1,000
boxes of chlorinated Pu to be commissioned as of 2023. The objective was to
determine the interest of the two facilities and to develop the two options:
modification of the Pu line of the Thorp processing plant and rehabilitation of
part of the building of the MOX fabrication plant (SMP), currently not in use.

New AREVA Holding | Annual Activity Report – Period ended August 31, 2017 8/100

AREVA Med

 A project to expand the Maurice Tubiana Laboratory was launched early in

the year in order to increase the production capacities and comply with the
applicable regulations in view of the upcoming clinical tests ; a design review
was completed with an engineering firm specialized in pharmaceutical
facilities. The work is scheduled to commence in 2018.
 The capacity of the Preclinical Research Laboratory on the Plano site (United
States) was significantly increased in order to meet the stepped-up pace of
the R&D program and the wider portfolio of candidate molecules.
 The various scientific research programs conducted by AREVA Med and its
partners advanced in line with expectations.

1.2.2 Other developments in the nuclear fuel cycle

On February 21, 2017, New AREVA and CNNC signed a framework agreement for
industrial and commercial cooperation concerning nuclear fuel cycle operations. This
contract bolsters the industrial negotiations in progress between New AREVA and
CNNC and opens the door to new industrial and commercial prospects between the
two countries.

2.2 The businesses of the Group

Refocused on nuclear fuel cycle operations, New AREVA develops operations in
Mining, in the Front End and Back End of the cycle,

and in other operations.

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Value chain analysis
2.2.1 Mining

The main business lines of the Mining business are as follows:

 Exploration: seeking new deposits for the future;

 Mining projects: mine development and construction;
 Operations: extraction of uranium ore using various mining techniques, and
ore processing (chemical concentration of natural

uranium);

 Site rehabilitation after operations: rehabilitation of mine sites in accordance

with applicable environmental standards

VRIN/VRIO Analysis Of AREVA

Posted by Matthew Harvey on Apr-08-2020 

1.VRIN/VRIO analysis
The VRIN/VRIO analysis is a strategic tool that is used for the assessing and
evaluating the resources of a company, and determining its strategic advantage, and
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Value chain analysis

competitiveness. The strategic tool facilitates the identification of a long term

competitive advantage for the company through evaluating the internal resources
and capabilities of the company, and thus helping the business identify its core
competencies to be able e develop a sustainable long term competitive advantage.
The VRIN/VRIO analysis evaluates resources and competencies based on the
characteristics of:

1. Rare
2. Inimitable
3. Non-substitutable/organization
4. Valuable

There is no difference as such between the VRIN and the VRIO analysis. The VRIO
makes use of the characteristic of organization to assess if the company has the
ability to exploit its resources for purposes of growth and competitiveness. This
organization is closely linked to the non-substitutability –which was present in the
earlier model of the business and elaborated on unique resources present to the
company that gave it an edge over other players. 

The AREVA also makes use of the VRIN/VRIO analysis frequently for developing
competitive strategies that are based on the company’s core strengths and
resources to help it gain a competitive advantage over other players in the market.
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Value chain analysis

Figure 1 VRIO Analysis

2.Valuable
Competencies that are valuable help the AREVA in exploiting the opportunities
available and in neutralizing the threats from the internal and external environment.
These competencies allow a business to grow, develop, and expand further.

2.1.Brand image in terms of social responsibility

 The AREVA has a defined corporate social responsibility function

 The AREVA regularly engages in social responsibility actions, and makes
them transparent
 All stakeholders are acknowledged about the company’s activities, and social
responsibility actions through official documents including the annual report,
and website
 Engagement in CSR activities allows AREVA to build a non-substitutable
competency- as engagement and strategies for CSR are integrated with the
broader business goals and developed strategically.

2.2.Brand image

 The AREVA brand image is unique and contains high brand integrity
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Value chain analysis

 The brand image has been developed over a long time, and through
continuous effort and quality product offering by the AREVA
 The brand image represents trust and honesty on part of the AREVA\
 The brand image is a source of competency because it is unique to the
AREVA, and cannot be imitated by other players, r be substituted by them.

2.3.Reckoned brand 

 The AREVA brand enjoys high brand recognition

 This brand recognition is a direct result of high brand integrity and appositive
brand equity
 The high brand recognition is important for not only sales but also for the
company value
 The brand image is a result of long term brand investment, and cannot be
substituted by other players in the industry

2.1.Relationship with suppliers

 The AREVA is valued globally for its distribution system

 The company has also successfully provided products, and made them
extremely accessible for countries where operating units do not exist
 This has been made possible through the highly efficient distribution system
of the company that supplies products globally
 The company’s relation with dealers and suppliers is particularly string and
based on strictly followed standards and criteria
 This is a valuable resource for the company that allows the AREVA Company
to exploit further opportunities in different regions and countries globally

2.2.Propensity for innovation 

 The AREVA is highly innovative in its product offerings d services

 The innovation also expands into other functional areas of the company such
as marketing
 The innovation is helpful in making processes more effective for the company
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Value chain analysis

 This allows the company to lower its operational costs, and achieve
economies of scale
 As such, the propensity for innovation has been a valuable resource for the
company that helps it navigate environmental threats effectively, and benefit
from the opportunities presented in the environment

2.3.Ability to raise capital

 The AREVA is large conglomerate. 

 The company is able to raise equity through internal source
 The ability to raise capital internally is important for the company’s planned
expansion and diversification
 This ability has also allowed the company to engage in mergers and
acquisitions, and thereby reduce the market competition
 The AREVA has also been able to gain increased market penetration and
market access through its ability to raise capital
 The ability to raise capital is important for the company to be able to take
advantage of potential opportunities in the market. 

3.Rare
Competencies that are rare in nature are possessed and developed by only a handful
of firms in the industry, and help in building competitive advantage for the AREVA.

3.1.International presence

 The AREVA has a global presence, and operates in multiple countries and
regions
 The global presence has allowed the AREVA to build an expanded consumer
base and earn revenue through multiple regions
 This has given the company not only higher financial strength but also higher
cultural exposure and international recognition
 The global heritage and experience is  rare resource that has allowed AREVA
to enhance 
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Value chain analysis

3.2.Problem solving skills

 The AREVA fosters an organizational culture of problem solving amongst its

employees and management
 This allows higher teamwork, creativity and innovation in the company
 The innovation in turn leads to higher competitiveness, which leads to
competitive advantage and benefit for the company in the market place in the
short run and the long run
 This is thus a rare competency for the company that allows it to steer away
from potential threats, and benefit from opportunities.

3.3.Risk taking characteristics

 The AREVA shows high propensity towards taking calculated and guided risks
 This capability is important for a company to be able to grow and expand –
especially in unknown regions and countries.
 The AREVA’s risk assessment function is strong, and allows the company to
identify potential opportunities and take guided actions and steps to benefit
from.
 The ability to take risks is thus an important aspect and competency for
business growth for the AREVA.

3.4.Adaptability

 The AREVA has global operations and a global presence

 As such, the company has high exposure to global cultures and different
societal norms and values
 Being a global conglomerate and giant, the company has shown high
adaptability to different cultures through engaging in localization activities,
and marketing communication – as well as different managerial functions
 This localization is important for the company to gain penetration in different
local markets
 The localization however, if often guided by a standardized global strategy to
help different managerial functions perform optimally
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Value chain analysis

 The ability of the AREVA to adapt to different external environmental and

regional cultures is a rare resource that has allowed the company higher
penetration, improved accessibility, stronger brad recall, and greater visibility. 

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4.Inimitable
These inimitable competencies help in adding value to the competitive advantage,
and long term sustainability for an organization. These resources and competencies
are hard and costly to imitate by the competing players

4.1.Quality product offering

 The AREVA offers high quality products to consumers that have been a
source of the brand appeal
 The high and consistent quality leads to repeat purchases, and increases
consumption of AREVA’s products
 This is an inimitable resource for the company as the high quality, and
specific of prediction are known internally to the top management of the
company only. 

4.2.Location of the stores/ placement in stores

 The AREVA operates through multiple stores in different countries and

regions
 All the places where the AREVA stocks its products are easily accessible, and
provide higher visibility to the band
 Consumers can easily purchase the AREVA’s offerings and products in all the
countries and regions it operates

4.3.Marketing communications 

 The AREVA has made use of marketing communications strategically to

induce higher  consumption
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Value chain analysis

 The strategic focus of the business sis enveloped by the organizational

culture, and the business vision under the strategic leadership – which in turn
is inimitable
 The marketing communications for the company are thus an inimitable
resource that have allowed the brand to maintain long term competitive
advantage internationally.

4.4.Competitive pricing

 The AREVA has efficient production capacities that operate at economies of

scale
 The company has controlled operational costs that have been achieved
through expansion, and a consistent demand
 The company has also integrated technology to minimize costs, and improve
processes and operational internally
 This cost saving function allows AREVA to continuously maintain competitive
pricing in comparison to competitors
 This is an inimitable resource for the AREVA

4.5.Customer experience

 The AREVA provides a unique customer experience to the customers

 The company offers customers high brand engagement with the experience
that is memorable, and relevant for the target groups
 The company engages with the customers at multiple touchpoints, and offers
a holistic experience that leads to customers wanting repeat purchases
 The engagement and brand experience for customers for the AREVA has also
expanded beyond the basic product offering, and evolved into offering and
engaging consumers with relevant content generation that allows the brand to
increase its equity.
 This is thus a non-substitutable advantage enjoyed by the AREVA
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Value chain analysis

5.Organization
These resources are uniquely developed for the AREVA, and cannot be used by
competing players in the industry. These resources have no substitutes, and thus
cannot be employed by companies other than the AREVA, and as such allow the
company to exploit opportunities and make use of resources effectively for business
growth

5.1.Financial strength

 AREVA enjoys substantial financial strength in addition to its brand strength

 The financial strength supports the company in exploring opportunities for
new product developments and launches
 The financial strength is also important in allowing the company to evaluate
potential mergers and acquisitions for gaining competitive advantage
 The financial strength has also been a source of value for the company in
helping it focus on innovation in product offerings, and maintaining consistent
quality thought out different countries where it operates
 The financial strength is also valuable because of the support it offers to the
company’s vast and well managed distribution system
 The financial strength is particularly important for the AREVA in enabling it to
realize possibilities and opportunities –internally as well as externally

5.2.Technological integration and advancement

 The technological advancements and integration at the AREVA are also an

important resource for developing competitive advantage
 The technological advancement allows the AREVA to maintain effectivity and
efficiency in its various business processes and operations
 The technological advancement and integration also allows a smooth
management of global operations for the company which is important to
maintain effective logistic management
 The technological advancements and systematic integration is a competency
that allows the AREVA to build long term competitive advantage over
competition.
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Value chain analysis

5.3.Employee training

 The company provides in house trainings specific for different job roles and
job designs to its employees which helps them in achieving their desired job
responsibilities
 The training provided by the company refines individuals not only for their job
roles and professional growth, but also towards personal growth and
development
 The training and investment by the company in individuals leads to strong
organizational commitment, and is a valuable competency in allowing the
AREVA to benefit through a strong and committed workforce. 

5.4.Investment in research and development

 The AREVA makes substantial investments in research and development

 The research and development function at AREVA enables it to stay abreast
of market trends and consumer behavior
 With knowledge of changing consumer tastes and preferences, AREVA
Company is able to make use of its research and development function to
develop offerings that meet the changing tastes and demands
 Investment in articulate and focused R&D is a resource for the Coca Cola
Company that has allowed the business to maintain competitive focus and
exploit other resources effectively.

5.5.Distribution channels

 One of the greatest strengths and resources enjoyed by the AREVA Company
is its control over, and development of distribution channels
 The company’s distribution system, and the supply chain comprises of a
number of different distribution channels – that re agent and dealer based,
and also owned and controlled by the company
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Value chain analysis

 The mix of distribution channels allows the AREVA to have access to, and
penetrate different markets, and increase the number of sales and
consumption of its products
 The articulate and intricately designed distribution network has proven to be
an inimitable resource for the company that has developed with time through
strong relations with suppliers and distributors.

5.6.Corporate leadership and vision

 The corporate leadership and vision are also non substitutable, and cannot be
applied to other firms in the industry
 The leadership provides unique strategic vision and direction to the company 
 The leadership also plays an important part in motivating employees and
settings business goals and targets to be achieved
 The AREVA’s expansion and growth is directly related to the leadership it has.

5.7.Production capacity

 The AREVA has high production capacities.

 The brand supplies products globally at different location, in over a hundred
countries
 The streamlined production process that employs effective and efficient
operational costs and inventory management systems provides a unique edge
and competitiveness to the AREVA Company
 This in turn becomes a non-substitutable advantage for the company that
allows it to explore new regions efficiently as well. 

5.8.Human resources

 The AREVA invests substantially in its human resources. 

 The human resource function of the brand is important in building the
competitive advantage for the company by providing it with improved talent
 The human resource function at the AREVA is responsible for all employee
related activities – from recruiting to compensation management to
succession planning and training
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Value chain analysis

 The human resource function is also important for maintaining the supportive
organizational culture at the AREVA
 The human resource function is important for the AREVA to grow and develop
further, and exploit other resources with smoothness.

5.9.Organizational culture

 The AREVA enjoys a supportive and innovative organizational culture

 The organizational culture at the company allows growth and development of
not only the business at large, but also of individual employees
 The organizational culture is free sharing in information, and supports team
work and synergy
 This is an important competency and resource for the AREVA which allows it
to grow internationally, and support various diversifications as well.

5.10.Marketing strategy

 The AREVA has a broad standardized strategic focus for its marketing
strategy and communications
 This broader strategy is localized at different regional levels and customized
for countries based on different target groups and populations
 This customization has allowed the AREVA to increase its visibility, and create
higher brand awareness

The Group’s mining operations involve uranium, a metal which, in its natural state,
contains two main isotopes: more than 99% is non- fissile U-238, while fissile U-235
accounts for 0.7%. The latter is used after enrichment to make fuel for nuclear
reactors.
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Value chain analysis

AREVA PESTEL Analysis
PESTEL analysis is a widely used strategic planning and management tool. It is an
acronym for political, economic, social, technological, environmental and legal
factors that shape the macro business environment. AREVA. operates in a complex
and dynamic environment characterized by regulatory changes, growing
environmental activism, collective social trends, technological changes and evolving
legal system. 

2. Application of PESTEL to AREVA.

The application of PESTEL analysis can help AREVA. identify the major external
environmental forces that shape the strategy and competitive landscape and
support its strategic decision making process. As AREVA. looks to expand and
leverage its competencies and core capabilities, conducting the PESTEL analysis is
imperative for developing effective strategies and achieving long-term growth
objectives.

2.1 Political factors

2.1.1 Importance of political factors in the PESTEL framework

Within PESTEL analysis, political factors exert a strong influence on the long-term
sustainability and profitability of AREVA. The presence at international stage
increases the company’s sensitivity to changes in political environments of different
countries. In a political context, the key to success in a dynamic international
business environment is to diversify the systematic risks. The political environment
of a country comprises multifaceted factors. AREVA. needs to consider the following
political factors during the strategic planning process: 

2.1.2 Political factors that influence AREVA.

2.1.2.1 Political stability

High political stability provides a stable and friendly business environment with
predictable market growth trends. However, when there is political chaos, it deters
the investors and harms the stakeholders' trust in economic and consequent
organizational performance. Currently, AREVA. is present in different countries, each
having own political tensions. Growing tensions and instabilities in the global
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Value chain analysis

political environment can affect the Gold industry growth and limit the growth
opportunities available to AREVA.

2.1.2.2 Changing policies

Frequent changes in government policies harm business performance by increasing

environmental uncertainty. It is important for AREVA. to study the current trends in
the country's political scenario as changes in government may alter the
government's priorities towards the development of different industries.

2.1.2.3 Protests/pressure groups and governance system

AREVA. should carefully analyze the protests by pressure groups,

social/environment activists and worker unions as such protests play an important
role in the policy making process. Close collaboration with such groups may
enhance the AREVA.’s ability to collaborate with community and achieve long-term
corporate goals. Moreover, a well-developed governance system with a democratic
political environment makes the business environment more comfortable for
international business organizations like AREVA.

2.1.2.4 Bureaucracy and corruption

Bureaucracy and corruption negatively influence the business environment.

Operating in countries with high corruption level and weak law enforcement makes
the business environment increasingly unpredictable for AREVA. due to jeopardized
public trust on business organizations and overall political and economic structure.
The corruption can influence various business operations, ranging from licensing,
contracting, fraudulent deals to frequent lawsuits. If AREVA. decides to enter in
markets with the corrupt economic, political system, it will threaten the
organization's sustainable development by destabilizing the society, harming justice
system and endangering the rule of law.

2.1.2.5 Taxation, trade restrictions and intellectual property protection

Entering in countries with high taxation level will directly influence the profitability of
AREVA. High taxation affects international trade and prevents exports. AREVA. can
enter in low taxation markets and benefit from high profits that can be invested in
research and development activities. The organization may also study the industry
specific taxation policies to understand the host government's priorities and interest
in developing industries. Similarly, high trade restrictions can make the business
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Value chain analysis

environment more complex by affecting the exports and harming relationships with
foreign trade partners. Moreover, if the government of the country under
consideration is not serious about protecting the intellectual property rights of
business organizations, it will deter the entrepreneurs from investing in
organizations due to high risk of ideas being stolen. Hence, AREVA. should study
how intellectual property rights are protected in the host country and make the
business strategies accordingly.

2.2 Economic factors

2.2.1 Importance of economic factors in the PESTEL framework

It is important for AREVA. to understand economic factors such as foreign
exchange/interest rate, labor market conditions, inflation and saving rates etc. as
they determine the overall economic environment of the country. A detailed
understanding of the economic environment can help AREVA. estimate the growth
trajectory of industry and organization. Following economic factors need to be
considered by AREVA. to make informed decisions:

2.2.2 Economic factors that influence AREVA.

2.2.2.1 Economic/business cycle stage

The economic development of a country directly influences organizational

performance. Growing economies offer wide-ranging growth opportunities to the
AREVA. Similarly, it is important to understand the industry lifecycle stage. Entering
in mature industries can be more challenging due to market saturation than
industries at the growth stage. Moreover, the business performance of AREVA. is
also influenced by the extent to which the host country government has spent on
core infrastructure development. A well-developed infrastructure facilitates the
business environment and increases the growth potential of the gold industry in the
respective country.

2.2.2.2 Inflation/employment/interest/exchange rates

The GDP growth rate will determine the AREVA.’s ability to pursue its long-term
growth strategies. High GDP also signals the consumers’ ability to spend more on
offered products. High unemployment signals the availability of surplus labor at
comparatively lower wages. Operating in such a market can lower the production
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Value chain analysis

cost of AREVA. The organization should also carefully consider the interest rate and
its influence on borrowing ability and attitude towards investment. The high interest
rate will encourage the attitude towards investment and increase growth
opportunities for AREVA. Finally, the exchange rate fluctuation can also influence the
profitability and international trade. The high fluctuation on local currency can be a
cause of serious concern for AREVA.

2.2.2.3 Labor market conditions

The demand and supply of labor determine the wage rates and supply of skilled
workforce. AREVA. must study and predict the labor market conditions to
understand how it can attract talented workers and leverage their skills to improve
business performance. When labor markets are flexible, AREVA. can take advantage
of higher labor productivity. Whereas, operating in rigid labor markets may cause
labor wage and other issues raised by powerful labor unions. AREVA. should also
carefully analyze the availability of skilled human capital as a shortage of skilled
labor can affect business efficiency and make talent attraction and retention more
challenging. 

2.2.2.4 Financial markets efficiency

The global expansion strategies of the AREVA. are influenced by the financial market
efficiency as operating in highly efficient financial markets leads towards improved
liquidity position and strengthened ability to enter new markets. The health and
efficiency of financial markets will determine AREVA.’s ability to raise the capital at
fair prices.

2.2.2.5 Economic structure

The business practices of the AREVA. are influenced by the prevailing economic
structure. The economic and regulatory environment in a monopolistic or
oligopolistic structure will be different from the monopolistic competition and
perfect competition.

2.3 Social factors

2.3.1 Importance of social factors in the PESTEL framework

Organizational culture derives strong influence from the societal norms, values and
trends. Understanding the demographic trends, power structures, consumers’
23
Value chain analysis

spending patterns and shared beliefs can help AREVA. design effective marketing
messages and fulfil corporate objectives through informed PESTEL analysis. The
marketing department of AREVA. can use the information retrieved from social,
environmental analysis to target the consumer groups and increase the appeal of
offered products to potential buyers. AREVA. must consider the following social
factors to conduct macro-environmental analysis:

2.3.2 Social factors that influence AREVA.

2.3.2.1 Demographic trends

Changes in demographic patterns like aging population, migration trends and socio-
economic variables have paramount importance for international business
organizations like AREVA. Studying the demographic characteristics can help
AREVA. in choosing the right market segment/segments with high growth potential.
The business and marketing strategies are also influenced by migration. It is
important for AREVA. to understand the people’s general attitude towards migration
as it can influence firms’ ability to bring international managers to host country.

2.3.2.2 Equality and power distance

The power distance within any society shows the acceptance of hierarchy and
income inequality. AREVA. must adjust its business management practices while
entering in markets with high or low power distance. The growing inequality in many
countries is altering the power structure, which has serious implications for
international business organizations like AREVA.

2.3.2.3 Gender Roles

AREVA. need to study the traditionally assigned gender roles to align its marketing
and communication practices accordingly. Marketing and human resource
strategies in a traditional, patriarchal society with clearly distinguished gender roles
will be different from societies with low gender stereotypes.

2.3.2.4 Societal norms and class distribution

Culture is considered an important variable by international marketing managers.

Each society has distinctive norms and values that play an important role in shaping
consumer behavior. AREVA. should develop local teams and develop local
partnerships for understanding the societal attitudes and norms to tailor marketing
strategies according to unique cultural context. The observation of social class
24
Value chain analysis

stratification is also important for AREVA. Offering luxury products at premium

prices to a market where the high-end market is considerably small in number will
require AREVA. to adopt the niche marketing strategies. Similarly, market
segmentation based on social class may be ineffective where social class
stratification is low.

2.3.2.5 Online shopping

The advent of social media and e-commerce has encouraged online shopping
behavior among customers. AREVA. needs to understand the online shopping
behavior by considering the generational differences as younger consumers are
more inclined to shop online than older customers. The growing use of mobile
phones and social networking sites must be considered when developing marketing
and communication strategies.

2.3.2.6 Spending patterns and behavior

The consumers’ spending patterns are influenced by their purchasing power of

money. Studying and forecasting the consumers’ purchasing power based on
relevant economic indicators is important to analyze the customers’ interests and
spending patterns. In some societies, consuming the offered product is considered a
status symbol, while, some people use the same products for functional aspects.
AREVA. should invest time on understanding the consumption motivations and
social trends that define the consumption behavior. AREVA. should also attempt to
understand the degree of consumer ethnocentrism and consider the country of
origin effect to determine local consumers’ evaluation of foreign products. Lastly,
AREVA. should study the consumers’ leisure interests and should focus more on
enhancing the customer experience if customers prefer experiential products over
traditional product offerings. 

2.4 Technological factors

2.4.1 Importance of technological factors in the PESTEL framework

‘Technology' is the fourth factor of PESTEL analysis. The rapid technological
advancement and technological diffusion across the globe have increased the
importance of understanding technological factors during the strategic decision
making process. A detailed analysis of the technological environment can help
25
Value chain analysis

AREVA. capture the technological trends to achieve certain business advantages,

such as- increasing profitability, boosting innovation process and enhancing the
operational efficiency. Following technological factors can influence the business
performance of AREVA.:

2.4.2 Technological factors that influence AREVA.

2.4.2.1 Social media marketing

The development of information and communication technologies has led towards

the adoption of innovative marketing techniques to enhance collaboration with
customers. Use of social media has become common in a modern business
environment. AREVA. can leverage the opportunities offered by social media
marketing to improve business performance. Technological trends can be used to
start the creative social media campaigns for developing online brand communities.

2.4.2.2 Technological innovations and development level

AREVA. should carefully consider the on-going technological innovations to stay

ahead of the competition. A close eye should be kept on analyzing the 5G and
determining its potential to deliver positive business outcomes through enhanced
user experience, increased speed and expanded access. Technological innovations
like this can bring major transformations in the industry and reset the success rules
for market players. Moreover, considering the development and maturity level of
technology in the respective market is also important. Entering in markets where
technological advancement has not reached the maturity means AREVA. can
increase the market share by focusing on emerging technological innovations.

2.4.2.3 Research and development on technology and impact on cost structure/value chain

AREVA. needs to consider the investments made by competitors on a micro and

macro level to understand how new technologies influence the firm’s value chain and
prevailing cost structure. Research and development activities are highly important
in an environment characterized by creative disruption. In such an environment,
AREVA. should invest in disruptive technologies to maximize the profits and re-invest
the profits for future disruptive technologies.

2.4.2.4 Shortened product life cycles

The adoption of new technologies has shortened the lifecycle of new product
development. Today, new products are developed quickly, and supply chain partners
26
Value chain analysis

have also gained more power. It pressurizes the AREVA. to develop new products
quickly, increase product range diversity, integrate flexibility into the value chain and
develop healthy business relationships with value chain partners.

2.5 Environmental factors

2.5.1 Importance of environmental factors in the PESTEL framework

The growing environmental consciousness and changing climatic conditions have
made ‘environmental analysis’ an important part of the PESTEL analysis. The
environmental standards, laws and regulations vary across different markets. The
international presence of AREVA. require the organization to consider these
differences to avoid undesired circumstances carefully. Detailed environmental
analysis is imperative before deciding to enter a new market or start a new product
line. Some examples of environmental factors that AREVA. need to consider are
given below. 

2.5.2 Environmental factors that influence AREVA.

2.5.2.1 Recycling and waste management

The growing environmental pollution coupled with technological advancement has

compelled business organizations to adopt innovative recycling and waste
management practices. In some countries, recycling has almost become a business
norm. Moreover, adopting efficient waste management practices in organizational
units that are located in or near urban areas is highly crucial for AREVA. Many
countries have placed strict norms to protect their urban areas through effective
waste management.

2.5.2.2 Renewable technologies

Some countries offer subsidies for encouraging investment in renewable

technologies. AREVA. can benefit from it and invest in renewable technologies to
ensure long-term sustainability. This investment will also increase stakeholder
satisfaction and expand the customer base due to enhanced brand image.

2.5.2.3 Weather and climatic conditions

Changes in weather and climatic conditions can influence business efficiency. For
instance, extreme weather conditions can increase the cost of operations and
compel the AREVA. to make the value chain more flexible. Such changes can also
27
Value chain analysis

influence the consumers' spending patterns, causing the organization to revise its
product and marketing strategies.

2.5.2.4 Attitude towards eco-friendly products

There is a growing trend towards the use of green/eco-friendly products. AREVA. can
take it as an opportunity and adopt green business practices to win the trust of
stakeholders. Regulatory bodies’ emphasis on ensuring compliance with
environmental norms is altering the product innovation priorities. It requires AREVA.
to prioritize and focus on marketing the eco-friendly nature of their products over
customary value propositions.

2.5.2.5 Environmental regulations to avoid resource depletion

Excessive resource depletion by AREVA. can draw the negative response from
media, environment protection groups, customers and the general public. AREVA.
must study the specific environmental regulations of the country under
consideration to understand which resources (like water, electricity etc.) are
considered rare or which species are endangered whose excessive consumption can
cause trouble for the organization.

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2.6 Legal factors

2.6.1 Importance of legal factors in the PESTEL framework

“Legal” is the sixth factor of PESTEL analysis. AREVA. cannot enter a new market
without studying in detail the legal environment and regulatory structure of the new
consumer market. A careful evaluation of legal aspects is required to avoid getting
into some serious trouble. Ignorance in this regard can cause undesired
circumstances for AREVA., such as- hurting competitive advantage as a result of
intellectual property rights violation and harmed organizational image due to
violation of consumer/employee/environment protection standards. AREVA. should
consider the following legal factors when exploring a new market. 

2.6.2 Legal factors that influence AREVA.

2.6.2.1 Employee protection laws (discrimination and health and safety)

AREVA. must follow the employee/labor health and safety laws as some countries
have strict regulations to ensure labor safety. Providing a secure work environment
28
Value chain analysis

for the workforce is the ethical and moral obligation of AREVA. Similarly, anti-
discrimination laws (like equal employment opportunity) also need to be carefully
studied when developing human resource practices as discriminatory suits against
employer harm the organizational image and affect organizations’ ability to attract
and retain the talent.

2.6.2.2 Consumer protection laws

The data protection has become an important issue due to consumers’ privacy and
security concerns. AREVA. need to study data protection regulations to protect the
customer data. Moreover, there are laws to set the maximum price, ensure a certain
quality standard and protect consumers from fraudulent marketing claims. AREVA.
must consider these factors to ensure compliance with consumer protection laws.

2.6.2.3 Intellectual property laws

Intellectual property regulations are designed to protect the companies' patents and
valuable ideas. Inability to protect intellectual property rights can result in losing
competitive advantage, which may weaken the positioning of AREVA. against other
market players.

3 Concluding statement
To conclude, the PESTEL model is an important business tool that involves a
detailed analysis of macro-environmental factors that shape the business
environment. Ranging from political factors to environmental factors, each factor
comprises various variables that influence the strategic decision making process of
business organizations like AREVA.

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business models. European Journal of Innovation Management, 16(3), 285-300.
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Value chain analysis

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