Electronic Cigarette Sustainable Business in Japan- External Analysis Assignment

Electronic Cigarette Sustainable Business in Japan- External Analysis - Assignment Example PESTEL analysis is the best tool for making market analysis for external factors that might affect the operation of a business. External factors affecting Magpie Pty Limited include environmental factors, political, social cultural, technological, legal and economic factors. Consequently, in order to capture or maintain maintain a market, strategic measures to curb changes in these factors must be enforced by a company (Berg, 2009). The political environment of any nation is crucial in operating a business. Some of the political factors likely to affect the operations include, government stability, corruption levels, tax policy which includes rates and incentives, freedom of the press and government involvement in trade unions. It is important to have good relations with the political class in foreign markets. This is because of the value of political lobbying in business. This is not different in Japan as several laws have been enacted to deal with electronic smoking in the country. The Japanese health sector enacted some laws in 2003 inhibiting smoking of electronic cigarettes in public. The implementation of the laws about smoking electronic cigarettes in Japan operates on a two tier system. The first tier allows partial permission for smoking electronic cigarettes on the condition that they are nicotine free. The government has not yet given out a medical license to electronic cigarettes that contain nicotine. Magpie Pty Limited must adhere to the regulations set including analyzing the transport industry, local authorities and property owners. The transport industry includes airports if the cigarettes are meant for export and further distribution. Some airports however do not allow use of electronic c igarettes. The political environment in Japan is partially seen to be supporting sale of electronic cigarettes. This can be evident by the fact that electronic cigarettes are not exposed to the same tax laws as compared