Test Post 4

3 MIN READ
 | April 4, 2020
By Kelvin Low 

1.1.1 Index of Political Stability and Absence of Violence/Terrorism

The lack of political stability in a country can potentially impact the business operations on any company. (Shaw 2018) Hence, it is important to analyze the political stability of a country before expanding into it. Index of Political Stability, and Absence of Violence/Terrorism is an effective approach to analyze the political stability of a country. According to the Global Economy, the Index of Political Stability and Absence of Violence/Terrorism of South Korea in 2018 is 0.54 points. As compared with the world average on 195 countries in 2018, the index is recorded at -0.05 points which is performing not as good as South Korea. (The World Bank 2020) Hence, we can say that South Korea is a political stable country without having to worry much on how their business operations and activities will be disrupted by political instability. With that said, this is a good reason for Royal Selangor to expand their business in South Korea.

1.1.2 Corruption Level

Expanding business into a highly corrupted country is risky as the legal system of the corrupted countries can be manipulated. (Mirzayev 2019) With this said, it is vital to analyze the corruption level of a country before expanding internationally. According to the Trading Economics, South Korea is listed as the 39 least corrupted country out of 180 countries by looking at the Corruption Perceptions Index. (Transparency International 2020) Hence, we can say that South Korea is a country with extremely low corruption level. More so, this can positively influence the creativity of a company as they can be certain that their creations is protected by local patents and will not be duplicated by parties that know they can get away with legal cases by bribing the authorities. (Mirzayev 2019) With this said, this is a good indicator for Royal Selangor to expand their business in South Korea.

1.2.0 Economical Environment

 

1.2.1 Inflation Rate

In some ways, inflation can help the economy and business to grow, reduce unemployment rate, and encourage consumers spending. (Floyd 2019) With this said, it is crucial to analyze whether if the country is having a healthy inflation rate before expanding to a different country. According to Macrotrends, South Korea is having an inflation rate of 1.48% in 2017 while other countries are having a relatively higher inflation rate. (Macrotrends 2020) Hence, we can say that South Korea is having a healthy inflation rate which can positively help the business to maximize their potential earnings. With this said, this is a good signal for Royal Selangor to expand their business in South Korea.

1.2.2 Unemployment Rate

In a country whereby the unemployment rate is high, it is a clear indication that the citizen in that country will have a lower purchasing power and is most likely unable to afford luxury products. (Hamlett 2019) With this said, unemployment rate is another metric to study when it comes to expanding to a new international market. According to Satista, the unemployment rate in South Korea on 2020 is expected to be 4.15% while the global unemployment rate is at 4.95%. (Statisca 2020) Hence, we can see that the unemployment rate of South Korea is in fact lower than the average inflation rate, which is a good sign that the citizen in South Korea is not likely to experience low purchasing power. With this said, we can conclude this is a reason for Royal Selangor to expand their business to South Korea.

2.0.0 Examine the socio-cultural and technological environment that supports the country of choice.

2.1.0 Socio-Cultural Environment

2.1.1 Population & Growth Rate

When a country is experiencing a slow population growth rate, we can say that the country will also be facing a slowdown in the consumption and demand of goods and services provided as well. (Ozimek 2017) With this said, population growth rate of South Korea is another metrix that needs to be analyzed before expanding to South Korea. According to the Worldometer, South Korea is currently having a population of 51,258,721 with a growth rate of 0.1% in 2020 and median age of 41.4. Hence, we can say that South Korea is experiencing an aging population. (Worldometer 2019)

Despite this data, South Korea is still an attractive market to enter as we can see a migrant population is having a drastic growth since 2005. (Macrotrends 2020) According to Business Korea, the migrant in South Korea consists of Chinese, Korean Chinese, Vietnamese, Thai, American, Uzbek, Filipino, Cambodian, Indonesian, and Nepali. Hence, South Korea is still a good country for Royal Selangor to enter.

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Kelvin Low
Digital Marketer | Investor | Content Creator | Web Developer
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