Is Spain Is A Potential Market For Australian Business

Submitted By huynhbill
Words: 1157
Pages: 5

Huynh Nhat Nguyen
Count words: 968

1. Introduction: At the early of twentieth first century, the global economy has been decreased sharply. Most of Australian companies have been many problems to maintain income, thus, they have to investigate thoroughly before they decide to invest overseas. This report will discuss the reasons from economy, politics and society aspects to examine if Spain is a potential market for Australian business. 2. Discussion: 2.1 Economic environment: 2.1.1 Economic environment definition: “The economy is the fact that pertains to the income, expenditures and resources that affect the cost of running a business or household.” (Kerin, R., McDonnell, J., de Meyrich, J., Garrett, T., Rod, M., Rugimbana, R., … Rudelius, W. 2008, p. 74). 2.1.2 Economic environment facts and impacts: Recently, the economic downturn in Europe is increasingly serious, and Spain is the one of countries in danger of following in the footsteps of Greece. The GDP per capital in Spain decreased from $35,113 in 2008 to $28,976 in 2012 (Department of Foreign Affairs and Trade (DFAT), 2012), and the real GDP growth is -1.5% in 2012 (DFAT, 2012). The rate of unemployment in Spain is the highest in Europe which rose up to 25.8% on July 2012 (European People’s Party (EPP), 2012). In addition, population below poverty line is approximately 9.2 million people (Central Intelligence Agency (CIA), 2005), and import from Australia is quite low with 0.3% in 2011 (DFAT, 2011), mainly medications (include veterinary) and goods vehicles. Therefore, Australia companies should focus on conducting marketing to the majority of medicines, essential foods and goods vehicles as well as sometimes reducing the prices of essential commodities to encourage shopping, and Australian firms may restrict the export of luxury products and services. However, it may be a huge opportunity for Australian companies if they continue to invest improved product and service in Spain. Australian corporations may have a large market in there after Spain overcomes economic crisis because other competitor company can leave this market in this period. 2.2 Socio-cultural environment: 2.2.1 Socio-cultural environment definition: The social forces of the environment include the demographic characteristics of the population and other forces that affect the basic values, behaviours, and preferences of the society; all of which have an effect on consumer marketing decisions. (Kerin, R., McDonnell, J., de Meyrich, J., Garrett, T., Rod, M., Rugimbana, R., … Rudelius, W. 2008, p. 63). 2.2.2 Social environment facts and impacts: The Spain’s population is more than 47 million (CIA, 2011. In addition, the population is aging with the population growth rate under 1% (CIA, 2012), however, the rate of working-age is quite high with more than 60% of the population (CIA, 2012). Moreover, 77% of the population is living in city (CIA, 2010), and the adult literacy rate in Spain is 97.7% (CIA, 2012). Those facts indicate that Australian firms may easily advertise through public transport, television or radio, and they can develop products and services for aging as well as providing wide variety of healthy products and canned food for elder and working-age people. On the other hand, the riots and demonstrations in Spanish are increasingly widespread because they do not agree with the new policy of government. Besides, most of the demonstrations in Spain occurred with violence (BBC, 2012). Consequently, it may influence the number of sales of Australian companies. As a result, Australian corporations should not export numerous products to Spain during this period. Most of residents speak Spanish; people believe that Spanish is a single language. However, eastern Spanish speak Catalan, northeastern Spanish’s speak Basque, and northwest corner of Spanish speak Gallegos (Pavlovic, 2012). Therefore, Australian