Pestle Analysis of Andorra Essay

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PESTLE Analysis

PESTLE analysis a useful tool for understanding the ‘big picture’ of the environment in which an organisation is operating and is the abbreviation for - Political, Economic, Sociological, Technological, Legal, and Environmental. PESTLE analysis is a useful tool for understanding risks associated with market (the need for a product or service) growth or decline, and as such the position, potential and direction for an individual business or organisation.

The Principality of Andorra, the highest country in Europe, is located on the Mediterranean slope of the Western Pyrenees, between two countries of the European Union: France and Spain. Andorra is a mountainous country with narrow valleys. It
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Towards the end of the 20th Century, the Andorran Economy was based on agriculture and livestock but the change in the economic model started to develop during the middle of the last century, the 50s and 60s, due largely to tourism. To provide incentives for growth and diversification, the Andorran Government, since 2006, has taken the country through an economic reform. The General Counsel (Parliament) approved three main regulations to complement the first phase of economic openness: The law of Companies (October 2007), the Law of Business Accounting (December 2007) and the Law of Foreign Investment (April 2008). These regulations establish a transparent, modern and internationally comparable regulatory framework.
The tourism and trade represents the fundamental column of the economy. Tourism accounts for roughly 80% of GDP. Around 9 millions of people visits Andorra per year. There are more than 1.400 stores, and the quality of the products and the prices are competitive. The majority of the shops are located in Andorra la Vella, Escaldes-Engordany and in El Pas de la Casa. During the winter the affluence of tourism grows because of the snow. The ski sector generates 340 million euros aprox.
The banking sector, with its tax haven status, also contributes substantially to the economy. Agricultural production is limited—only 2% of the land is arable—and most food has to be imported. Some tobacco is grown locally. The principal livestock activity is domestic