Chapter 2 | Going abroad to the Czech Republic (PESTLE) In 2012, Kellogg’s made approximately $2 billion in fast growing economies, an increase of 140% compared to the figure in 2011. This was achieved through organic growth, joint ventures, and cross selling opportunities created by the acquisition of Pringles (Kellogg's, 2012). Kellogg’s are extremely optimistic in expanding to countries with favorable demographics, such as the Czech Republic. The Czech Republic has been chosen as the perfect candidate for expanding into. It is one of the most successful CEE (Central and Eastern Europe) countries in terms of attaining foreign direct investment, recording a net total of €77.8 billion of FDI since 1993. Over 173,000 firms in the Czech Republic across all sectors are being supported by foreign capital . The following is a PESTLE analysis on the Czech Republic that will outline different conditions within the country for the consideration of Kellogg’s: 2:1 | Political The Czech Republic is considered as highly democratic and liberal country but there still remains a piece of old conservatism. Also, there is a high level of corruption, especially in political parties. This could bring forth unfair advantages and uncompetitive practices in the business environment . It is also important to mention that the Czech Republic is part of the EU but is not part of the monetary union, which means they have not accepted the euro currency yet. Therefore, during the economic crisis in 2008, people were not affected that much compared to rest of the EU and USA. 2:2 | Economical According to statistics, the average salary in the Czech Republic is €750 per month. The minimum wage is 8,500 Czech koruna per month, which is €293 . The population spends 15% of their annual income on food, and the majority of the people are price oriented, regularly seeking the best value through advertised discounts and special offers. In fact, this year the Czech Republic recorded the highest number of leaflets
Chapter 2 | Going abroad to the Czech Republic (PESTLE) In 2012, Kellogg’s made approximately $2 billion in fast growing economies, an increase of 140% compared to the figure in 2011. This was achieved through organic growth, joint ventures, and cross selling opportunities created by the acquisition of Pringles (Kellogg's, 2012). Kellogg’s are extremely optimistic in expanding to countries with favorable demographics, such as the Czech Republic. The Czech Republic has been chosen as the perfect candidate for expanding into. It is one of the most successful CEE (Central and Eastern Europe) countries in terms of attaining foreign direct investment, recording a net total of €77.8 billion of FDI since 1993. Over 173,000 firms in the Czech Republic across all sectors are being supported by foreign capital . The following is a PESTLE analysis on the Czech Republic that will outline different conditions within the country for the consideration of Kellogg’s: 2:1 | Political The Czech Republic is considered as highly democratic and liberal country but there still remains a piece of old conservatism. Also, there is a high level of corruption, especially in political parties. This could bring forth unfair advantages and uncompetitive practices in the business environment . It is also important to mention that the Czech Republic is part of the EU but is not part of the monetary union, which means they have not accepted the euro currency yet. Therefore, during the economic crisis in 2008, people were not affected that much compared to rest of the EU and USA. 2:2 | Economical According to statistics, the average salary in the Czech Republic is €750 per month. The minimum wage is 8,500 Czech koruna per month, which is €293 . The population spends 15% of their annual income on food, and the majority of the people are price oriented, regularly seeking the best value through advertised discounts and special offers. In fact, this year the Czech Republic recorded the highest number of leaflets