Political Aspects
The political arena has a huge
influence upon the regulation of the businesses, and the spending power of the
consumers and other businesses.
- India is politically stable
which have a positive impact on their business activities in Asian
sub-continent.
- There is no FDI limit for
retail companies operating in India which contributes to extensive
competition among the existing companies and expand in different
geographic areas.
- EPCG (export promotional
capital goods scheme)-zero duty scheme allows import of capital goods for
production, pre production and post production.
- L.G. electronics also has to
comply with the standards set by environmental protection agency.
- Setting of plants in tax
incentive areas like greater Noida and Pune.
Economic Aspects
Marketers need to consider the
state of a trading economy in the short and long-terms. Important economic
factors are :
- Inflation in India saw a
decrease from 10.5 in 2011 to 7.18 percent in 2012. The decrease in
inflation see reducing of cost of raw materials and manufacturing cost
which would give LG Electronics a
opportunity of making higher profits.
- GDP growth (annual %)
Rounded 2011: 6% ,
Growth in GDP combined with
increasing disposable income of consumers with their changing lifestyles and
trends in the industry will see a rise in demand for high-end segment durables,
which gives LG an opportunity to expand and invest more in its manufacturing
processes.
- AC industry reversed its
declining trend and grew by 20% YoY in Q3FY13.”
Social Aspects
- Penetration of white goods
across all major consumer appliances categories is more than 70 % in urban
areas and more than 50% in rural areas
- Increase in the employable
population in the country and more nuclear families, so more potential
customers.
- Number of first-time users and
people upgrading to better products is been increasing at a fast rate due
to increasing disposable income.
- Increasing competition among
brands leads to decline in prices therefore higher affordability and
greater chances of people up-grading.
- Change in consumer preferences
and trends.
- They leave an impact on
customer’s life by making it easy with 6thsense technology as consumers
can achieve significant savings in time and power usage.
- It shows lifestyle of
customers.
Technological Aspects
- With the advent of new
technology, more features are being added to the existing products.
- Increasing technology has
helped to enhance its manufacturing and deliver more on quality front.
- Service Centers have been
opened up to provide quality services post-sale and faster addressing of
customer problems.
Legal Aspects
- GST for energy efficient
appliance is less than a third of the regular tax for consumer durables.
- Rules established in 2005
maintain restrictions on most existing joint ventures but allow new ones
to negotiate their own terms on a commercial basis.
Environmental Aspects
- Severe summers ranges through
most part of the year which add up to the increasing demand for Air Conditioners
and Refrigerators.
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