Pest Analysis: Business Environment in Russia
Russia, with a wide base of natural resources and one of the BRIC countries is seen as an attractive market to gain a toehold in by global investors including the United Kingdom’s retail industry. This report aims to analyze the business environment in Russia for British retailers using the PEST analysis. The PEST analysis will focus on four different aspects of the business environment which are the political, economic, sociocultural and technological factors.
The political factor will consider the level of corruption in Russia and how it affects the retail industry seeking expansion. …show more content…
This is an advantage that the British retailers can capitalize on when introducing their brand into the Russian market.
Russia may be the largest country in the world, but it also has a declining population with an amount of 145 million in 2003 reducing to 143.5 in 2005, further reduced to 141.9 in 2009 (Federal State Statistics Service, 2011). Even so, BBC (2010) recently released that this long term trend of declining population may be coming to an end at last as the population has grew at last for the first time in 15 years. The increase in population is a good sign as it means that there will also be an increase in consumers in the future. According to Euromonitor (2011), the annual gross income of 2011 in Russia is as much as US $1,078,551.7 million and the annual disposable income increased from US $832,977.1 million in 2010 to US $870,813.1 million in 2011. Furthermore, the standard of living in Russia is improving with more and more Russians moving towards the middle class section leaving poverty behind (Smirnov, 2010). With the increase in income and living standards, Russia is growing to be one of the largest consumer markets in Europe.
Lastly, technological factors in relation to the development and research will be touched on in this report. Russia has always been lagging behind in terms of technology and infrastructure. However they have begun to recognize the importance of technology development and