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Wine Consumption

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Australia’s cool-climate regions are gaining world wide pre-eminence. Most of the Australian wine industry is based on either warm or hot climate viticulture. The flavours and colours associated with cool climate viticulture are more refined and the grapes and wine have better opportunity to show the characteristics of their European ancestors.

The Southern Eyre Peninsula – and the Yorke Peninsula on the eastern side of the Spencer Gulf – is still at an embryonic state viticulturally, although the two wineries on the Eyre Peninsula are over 20 years old. It seems remoteness, rather than lack of appropriate conditions for grapegrowing, has held back the rate of development.[1]

2.Global business Environment.

a. A brief overview of the current global business environment.

The Australian wine industry developed an enviable aura from the eighties to early-noughties. It seemed, all of a sudden,that everything to do with wine was fashionable. Be that producing it, selling it, or drinking it. Wine consumption in Australia has grown strongly, while beer consumption has been flat. The Australian drinker, whostarted out by having the odd glass of cask-Chardonnay every now and again, was suddenly head-over-heels for Shiraz,Pinot or Sauvignon Blanc. Wine’s share of Australia’s bar-tab lifted from 17% from 37% between 1974/75 to 2009/10. Beer’s share dropped from 70% to 44%. Increasing cultural diversity, a changing drinking culture (i.e. fewer 5pm pub-stops), wine’s perceived health benefits, and rising household incomes help explain the rise of wine and the demise of beer.

The wine industry proves that not all agricultural commodities enjoy strong consumption growth.[2]

From 2000 to 2007, global wine consumption only expanded in-line with population growth (1.3%),with per capita consumption remaining flat at 3.65kg/person/year. While this relatively sluggish consumption growth over the past decade may appear disappointing, it remains far superior to thegrowth rates observed in the two-decades to 2000. Over that period, per capita wine consumption fell 3% per annum, while total world wine consumption fell 1.4% per annum from 29.4 million tonnes to 22.0 million tonnes.

The decline in global wine consumption from 1980 to 2000 is the consequence of global population growth being biased towards non-wine-consuming regions (i.e. Africa, Middle East and Asia) and a changing alcohol consumption pattern in traditional wine consuming regions.

For example, total alcohol consumption in Europe has declined over the past few decades while beer and spirits have increased market penetration.

a-1. Wine consumption

a-2. Top 10 wine consumers

Unsurprisingly, the Europeans dominate global wine consumption. The French consumed nearly 54L/person in 2006, followed by the Italian’s with 47.2L/person/year. In total, the French consume 3.3 billion litres of wine per year, or 14% of the world total, followed by Italy with 2.7 billion litres.

a-3. Changing of the guard

Despite dominating world league-tables, wine consumption in the traditional old-world countries is falling, both in total and per capita terms. For example, in the 11 years to 2006, French wine consumption fell by over 9L/person/year, and total French wine consumption fell nearly 400 million litres. Italian wine consumption fell 461 million litres over the period. There is somewhat of a changing of the guard in the world of wine. New-world consumers are picking-up the slack created by falling consumption in the traditional old-world countries. In the

11 years to 2006, US wine consumption grew 3.2% per annum (760 million litres) to 2.6 billion litres, UK consumption grew 4.8% per annum (470 million litres), Russian consumption grew 4.6% (414 million litres) and Chinese wine consumption expanded 8.5% per annum (357 million litres) to 601 million litres. Despite the strong growth of these new-world consumers, only the UK has displayed a sharp lift in per capita wine consumption. UK per capita wine consumption rose 7.4L/person to 19.5L/person/year from 1995 to 2006, while US consumption rose 1.6L to 8.5L/person/year and Russian consumption grew to 7.6L/person/year. Meanwhile, per capita wine consumption in China grew 6.5% per annum over the period, but still remains at just 0.4L/person/year. Further growth in new-world per capita wine consumption, particularly in countries such as China and the US, will be an important driver of future global wine consumption. But the extent to which declining old-world consumption offsets this new-world growth warrants continued monitoring. Wine consumption in Australia grew by a solid 3.1% pa between 1995 and 2006, with per capita consumption lifting nearly 2% per annum to 22.4L/person/year. By 2006, Australians were the 16th most important consumers on a per capita basis and [3]the 13th largest consumer on total consumption basis. Australia was the 7th fastest global growth market from 1995 to 2006.

b. Discuss any market trends or developments

Enjoying a glass of wine after a long workday or while eating dinner often proves irresistible to many: consumers in the U.S. now comprise the biggest chunk of the global wine market, drinking 13% of the world’s wine, according to analysis by a wine industry expert. The 6th Annual New York Wine Expo recently took over the Jacob K. Javits Convention Center in a frenzy of tasting and tippling, and National Wine Week is upon us (March 11-15), which features discounted pours at upscale restaurants around the country. Here are six trends in the wine industry that are taking off this spring:

Consumers reaching beyond the Old World stalwarts in search of undiscovered gems

The Wine Expo saw a strong subset of exhibitors from Eastern Europe and the Middle East, such as Bulgaria’s Izba Karabunar , Lebanon’s Ixsir and Greece’s Chatzivaritis, who aim to capitalize on increasing consumer interest in discovering wines that are new to the American market. Even within the Old World, Portugal is making a substantial push to come out of the shadows of the other European heavyweights. Portugal is known for blended wines that pair very well with food, and in an effort to appeal to the international market, “producers [of late] try to make blends of fewer grapes, so it can be easily understood what each grape gives to the wine,” says Miguel Nora, Wines of Portugal’s North America manager. (Nora recommends the Alvarinho and Touriga Nacional varietals as his personal Portuguese favorites.)

Rise of Finger Lakes wines

As consumers look increasingly to locally-sourced wines, bottles from the Finger Lakes are becoming a go-to for wine drinkers in the New York metropolitan area and beyond. “They offer quite a bit of value, even compared to their cousins in the Old World,” says Thomas Pastuszak, wine director of New York City’s NoMad hotel and restaurant. With over 100 wineries, the region’s cool climate makes it ideal for a number of varietals, particularly Riesling. “Finger Lakes Rieslings are really pushing the envelope in terms of what different quality and character can come from that grape,” Pastuszak continues. Dr. Konstantin Frank produces world class Rieslings as well as Gewürztraminer, and was named the 2012 Winery of the Year from NY Wine & Food Classic. Another notable bottle is Fox Run Lemberger, a rich spicy red from a grape that is native to Central Europe, but is starting to take hold in the Finger Lakes.

The rosé renaissance

Often derided as an overly sugary, unserious wine, rosé is in the midst of a comeback. Forget about the white Zinfandel blush wine that your mother used to drink—the new rosés are less sweet and cloying while still retaining a refreshing character. Pastuszak explains rosé 2.0 as “beautiful, dry, really expressive wines—basically like white wines that drink with a little bit of red wine character.” These new rosés will be perfect on a sunny summer day. Check out Goldeneye 2011 Vin Gris of Pinot Noir or Graham Beck 2007 Brut Rosé, a sparkling version from South Africa.

New grape varietals being grown in California as youthful winemakers take root in the area

Traditionally Chardonnay, Merlot and Cabernet Sauvignon have been the hallmarks of California wine production. But many vintners are looking beyond this triumvirate and exploring new blends and grape varietals—Pinot Grigio, Tempranillo and Petite Syrah, to name a few—previously unknown to the area. A new generation of young winemakers are bringing an experimental, innovative sensibility to this pursuit as they exploit the state’s temperate climate and fertile soil—orthodoxy be damned! Several to look for are the Scholium Project’s Prince in His Caves, an exciting sauvignon blanc, and Aaron Wines’ Petite Syrah.

Expecting higher quality at a lower price point

As consumers become better educated and more sophisticated about wine, they are seeking out good value bottles that don’t skimp on quality. Dollar for dollar, they are no longer satisfied with a wine that’s just mediocre. “That ten dollar bottle needs to taste like that twenty dollar bottle used to,” declares Pastuszak. This is good news for the rising players in the market, like the Portuguese wine industry, says Nora: “The [global economic] crisis was not good for anyone, but it could be worse for us, because our price quality is very good. We already had the quality, and in the last few years, maybe because of economic issues, [consumers] tried it more and now they keep buying it.”

Grower champagnes

Most imbibers think of champagne as a fancy, expensive bottle to be uncorked on a special occasion, but not something to pair with food or even to be had at a less-than-expense-account price. That is all changing, however, with the advent of grower champagne, which is bubbly grown and bottled from small grape growers in France’s Champagne region. Though many of these indie vineyards sell the majority of their grapes to companies like Moët & Chandon and Perrier Jouët, some are starting to produce and bottle their own champagne on the side, with exciting results. Instead of a standardized flavor that is specific to each big brand, grower champagne reflects more of the terroir and thus its vintages exhibit greater variety. “Ten years ago you couldn’t find this variety and assortment,” says Pastuszak. “But today it’s like finding great small-farm produce at the farmers’ market.” Look for grower champagnes by Vouette & Sorbée, Drappier, or Vilmart & Cie.[4]

Consumer trends vary considerably not only between markets but also between wines and wine styles. This next section looks at Australian, Canadian and UK consumers (as requested by the Langhorne Creek wine region), their consumption trends, wine preferences and importantly how Australian wines are perceived by consumers in each of these markets.

[5]Australian Consumer :

After price, Australian consumers clearly look for brand and variety when purchasing wine. Men have a greater preference to know about variety while women favour brand. Regionality is also deemed to be a strong factor in choosing a wine and discerning consumers are willing to spend more on wine from a wellregarded Australian wine region According to the Business Insights report “Future Trends in Beer and Wine” there are 5 key trends that will shape the future of the beer and wine markets over the next decade and wineries that respond to these emerging trends will have the advantage. These trends are:

• Craft products – Consumer interest in more flavoursome, individual products has been behind the rise of craft products in the beer market.
These offer more challenging tastes, authenticity and often a quirkiness not found in mass market offerings. There are signs that this trend is being replicated in the wine market. • Alternative packaging – this encompasses two very different trends: personal pack sizes for individual consumption; and super pack sizes for entertaining and outdoor consumption.

• Functional benefits – Functional benefits have already been seen in the emergence of the energy beer market. Functionality that delivers health benefits will continue to grow, particularly in Japan with its health obsessions and ageing population.

• Category blurring – The boundaries between drinks categories are blurring and this trend will increasingly impact on beer and wine. The most significant components of this trend will be the creation of soft drinks mixes, the encroachment of spirits into traditional beer and wine territory and the borrowing of product attributes from rival categories.

• New flavours and sensations – Over time consumers are becoming more interested in food and drinks that stimulate the senses. Brewers and vintners will respond with a greater variety of flavours, products designed to complement different flavours of food and products which provide different sensations beyond flavour alone.

UK consumers:

Consumers in the UK are becoming more “continental” in their alcoholic beverage preferences. More wine is being consumed in the place of beer and these trends are largely based on the increasing disposable incomes of UK consumers. New world wines excel in the UK market with around 55% share of total wine consumption, led in articular by Australian wine, with South Africa, Chile and the USA also performing well. The UK population of around 60 million people consumes 21 litres per capita per year.

The major driver of increased consumption has been from affluent middle-aged consumers rather than an insurgence of younger consumers. The 35 to 54 age group represents the biggest wine consuming segment of the population. There are three main factors influencing UK consumer’s purchasing decisions and these include: wine style; price; and promotional offers. Other factors include recommendation by friends or family and brand familiarity . A more recent Wine Intelligence survey (April 2010) confirmed these results.

In terms of style preference, the UK wine drinker continues its love affair with Rose . Sales of rose are showing consistent growth as it is seen as an easy to drink, everyday wine, principally targeting women and novice wine drinkers. However, white wine is the biggest category with approximately 50% of total still wine sales and its value sales were up slightly in 2009 compared to a decline in red wine.

Red wine lost share to rose and this may be because consumers consider rose to be a lighter alternative. The popularity of white wine may also be due to the trend towards lighter wines, as they generally have a slightly lower alcohol content than red and are usually served chilled, so can be refreshing in the summer. Varietal preference is still for Chardonnay, Pinot Grigio and Sauvignon Blanc which are all showing growth, while Shiraz and Merlot are the favoured red varietals.

UK consumers are buying less but appear to be seeking better quality wines. Therefore the fastest-growing red and white wines were above £5 (retail). Premium wines above £7 performed well, and this indicates increasing numbers of people seeking to treat themselves at home, as an alternative to going to restaurants and bars.

On the other hand, wines under £4 showed a decline as consumers who were likely to buy wine at low prices were more likely to switch to cheaper alternatives such as cider. However, rose continued to demonstrate growth in wines above £4 as the majority of this category is within the £4 to £6 band . The majority of wine sold in the UK market is through the off-trade retail channel (79%), in particular, through supermarkets. This channel has made wine accessible to more consumers; however the promotion-driven trading within this industry has seen prices fall. Supermarkets account for at least two thirds of retail sales, with Tesco leading the way, followed by Sainsbury, Asda (bought in 1999 by US retail giant Wal-Mart), Safeway, Kwik Save, Somerfield, Morrisons and Waitrose. The retail sector has experienced considerable consolidation in recent years, as both supermarkets and liquor store chains merge, resulting in fewer key buyers.

The on-trade market has suffered from a sharp value and volume sales decline as the recession has led consumers to eat and drink more at home rather than at pubs and restaurants. Interestingly, through 2009, online sales experienced strong development as consumers increasingly sought convenience and could easily search for the best deals. Tesco, which claims to account for 40% of on-line wine visits, revealed that its on-line sales were up by 8% year-on-year in summer 2009. Tesco is encouraging on-line sales by offering next day delivery and by providing extra information about wine products to help consumers to choose an appropriate product. Majestic also experienced a 16% increase in on-line sales, compared to a 2% increase in retail sales and despite a 56% decline in profit before tax for the year to 30 March 2009. Source Euromonitor International Country Sector Briefing – Wine United Kingdom.[6]

3. Trade patterns policies and agreements

Global wine trade virtually doubled from 1990 to 2008 according to UN FAO data, rising from 4.14 million tonnes to 8.14 million tonnes. The average annual rate of growth of 3.8% from 1990 to 2008 easily outstripped the 0.7% per annum average growth rate of observed from 1970 to 1990.

An increase in wine consumption in non-traditional wine consuming regions such as the US and Germany fuelled strong demand for global wine imports. Meanwhile, falling consumption in oldworld producers, such as France and Italy, and a sharp increase in production in low-population, net-exporting countries, such as Australia and Chile, allowed that import demand to be fulfilled.

3-1. Wine importers

The dominant wine importers are those countries that have only relatively recently adopted a wine drinking culture. This includes those countries that have traditionally consumed other alcoholic beverages, or those that have only relatively recently begun to consume alcohol of any kind.

Accordingly, Germany is the world’s largest wine importer and the fourth fastest growing wine importer since 1990, largely because wine’s share of the German alcohol market is increasing at the expense of beer. Similarly, UK drinkers are moving away from beer and into wine. And, as such, the UK is now the second largest wine importer with 13% market share. Finally, US consumers have broadening their alcohol consumption and have subsequently emerged as the fastest growing importer market since 1990. Total US wine imports have increased 590 thousand tonnes, or 7% per annum, over the period.

More recently, Russia and China have emerged as key growth markets. Russia has been the third fastest import growth market from 2000, rising by 255 thousand tonnes (12.5% per annum), while China was the sixth largest growth market, expanding by 140 thousand tonnes, or 20% per annum.

Further growth in US, Russian and Chinese wine imports should to support future global trade flows as consumers in those regions lift their per capita wine consumption.

3-2. Wine exporters

The old-world producers of Italy, France and Spain still dominate global wine exports, and their respective exportable surpluses have increased because of decreasing domestic consumption. However the dominance of these old-world exporters is waning because of rapid emergence of new-world producers, led largely by Australia.

In 1990 Italy and France captured a combined 58% of the export market, but by 2008 this share had fallen to just 34%. Over that period, Spanish wine exports increased their market share from 11% to 19%, while Australian wine exports increased its market share from just 1% to 8%. In total, Spanish wine exports rose by 1.26 million tonnes (7.8% pa) from 1980 to 2008, Australian exports rose 695 thousand tonnes (18.5% pa) and Chilean wine exports rose by 567 thousand tonnes (14% pa). Argentina and South Africa recently have emerged as key exporters, competing aggressively with Italy, Spain, France, Australia and Chile for market share. From 2000, Argentina was the third fastest wine exporter and South Africa was the fifth fastest growing exporter.

3-3. Australian Free Trade Agreements in force

• ASEAN-Australian- New Zealand FTA
• Australia-Chile FTA
• Australia-New Zealand Closer Economic Relations Trade Agreement
• Australia-United States Free Trade Agreement
• Australia-Korea FTA
• Australia-Japan FTA
• Australia-China FTA

3. Environmental Factors

a. Assessment of the social, cultural, political and economical factors impacting on the organisation for the country you have selected

Canada’s Economic Environment: Canada has a diversified, vibrant, and growing economy. In fact, Canada has the tenth largest economy in the world, is one of the world’s wealthiest nations, and is a member of the Organization for Economic Co-operation and Development (OECD) and Group of Eight (G8).

Canada has one of the highest levels of economic freedom in the world. As an affluent, high-tech industrial society in the trillion-dollar class, today Canada closely resembles the United States in its market-oriented economic system, pattern of production, and affluent living standards. Since World War II, the impressive growth of the manufacturing, mining, and service sectors has transformed the nation from a largely rural economy into one primarily industrial and urban.

As with other developed nations, the Canadian economy is dominated by the service industry, which employs about three quarters of Canadians. Canada is unusual among developed countries in the importance of the primary sector, with the logging and oil industries being two of Canada’s most important. Natural resources industries, such as forestry, mining, oil and gas extraction, farming and fishing, are important sources of jobs and export earnings. Canada is also a world leader in the fields of telecommunications, biotechnology, aerospace technologies, and pharmaceuticals. More and more jobs involve work in service industries or in information technology. Canada also has a sizable manufacturing sector, centered in Central Canada, with the automobile industry especially important.

International trade makes up a large part of the Canadian economy, particularly of its natural resources. The United States is by far its largest trading partner, accounting for about 76% of exports and 65% of imports as of 2007. Canada’s combined exports and imports ranked 8th among all nations in 2006.

Canada has considerable natural resources spread across its varied regions. In British Columbia, the forestry industry is of great importance, while the oil industry is important in Alberta and Newfoundland and Labrador. Northern Ontario is home to a wide array of mines, while the fishing industry has long been central to the character of the Atlantic Provinces, though it has recently been in steep decline. These industries are increasingly becoming less important to the overall economy. Only some 4% of Canadians are employed in these fields, and they account for less than 6% of GDP. They are still paramount in many parts of the country. Many, if not most, towns in northern Canada, where agriculture is difficult, exist because of a nearby mine or source of timber.

Given its great natural resources, skilled labor force, and modern capital plant, Canada has enjoyed solid economic growth, and prudent fiscal management has produced consecutive balanced budgets from 1997 to 2007. Canada had the fastest growing economy among the G-7 industrial countries in 1999, with real GDP expanding by 4.2%. Since the early 1990s, the Canadian economy has been growing rapidly, with low unemployment and large government surpluses on the federal level. In 2008, growth slowed sharply as a result of the global economic downturn, US housing slump, plunging auto sector demand, and a drop in world commodity prices. As of June 2009, Canada’s national unemployment rate stood at 8.6% as the effect of the world economic crisis settled in and more people looked for work.

Tight global credit conditions have further restrained business and housing investment, despite the conservative lending practices and strong capitalization that made Canada’s major banks among the most stable in the world. According to the Forbes Global 2000 list of the world’s largest companies in 2008, Canada had 69 companies in the list, ranking 5th next to France. As of 2008, Canada’s total government debt burden is the lowest in the G8.[7]

Canada’s political Environment:

Canadian political culture is in some ways part of a greater North American andE uropean political culture, which emphasizes constitutional law, freedom of religion, personal liberty, and regional autonomy; these ideas stemming in various degrees from the British common law and French civil law traditions, North American aboriginal government, and English civic traditions, among others.

Peace, order, and good government are the stated goals of the Canadian government. These words reveal much about the history of Canadian political culture. There is a strong tradition of loyalty, compromise and tolerance in Canadian political culture. In general, Canadian politics have not operated through revolutionary, swift changes. Instead, change is typically slow and worked out through compromise between interest groups, regional consultations, and the government of the day.

Canada also has a tradition of liberalism. Individual rights have risen to the forefront of political and legal importance for most Canadians, as demonstrated through support for the Charter of Rights and Freedoms, a relatively free economy, and social liberal attitudes toward homosexuality, women’s rights, and other egalitarian movements. However, there is also a sense of collective responsibility in Canadian political culture, as is demonstrated in general support for universal health care, gun control, foreign aid, and other social programs.[8]

Canada’s Social Environment:

Canada has seen a gradual change in the social life. Canada is a young and a very rapidly growing country that has seen the transition in its social life. The social life is emerging at a very quick pace. Canada is a land of diversity both historically and ethically, it does not follow one single culture. The distinctive mixture of hundreds of cultures makes up a large Canadian culture. French and English are both the official languages of Canada. The particular regions culture is reflected from language of the people there.

Canada’s aboriginal people maintain their own distinctive culture, and immigrants here have integrated both Canadian culture and also maintained their unique cultural elements of their home country. Despite of so many diversities Canadian still celebrate Canada Day (July 1).

You can feel British and American influences very strongly here in Canada’s lifestyle especially in English speaking portions of the country. With change in area there is a change of food and its varieties. The social environment gives an image about the lifestyle of people, their involvement in the social activity within their own committee and groups. This may include social opportunity, recreation, education, health services, etc.

The quality of life in Canada is quite better than any other country. Even the job opportunities in Canada are quite good. Immigrants come to Canada with the hope that they would get a better quality of life. Many immigrants seeking for job opportunities in Canada are professionals with professional degrees and have extensive skills. Companies need to participate in such programs which are dedicated to hiring such professional who can immediately contribute in raising country’s economy. South Asians will definitely feel that their life has become better that what they used have in their home country.

Talking about the facilities out here. Canada has a far- reaching and a very reliable transport network which comprises of buses, street cars, interconnects subway system. The buses used here are hybrid electrics which reduce air population.

Canada is also known for its arts, sporting events, nightlife, restaurants, bistros and various cuisines. Canada has six major sports Hockey, Basketball, Baseball, Football, Soccer and Lacrosse. Canada is one of the multicultural country and famous for its diversity in every field of art, festival ,food, etc.[9]

Canada’s cultural Environment:

Historical influences

For tens of thousands of years Canada was inhabited by Aboriginal peoples from a variety of different cultures and of several major linguistic groupings. The legacies of these peoples, especially noticeable in food, sports, and place-names, remained strong throughout the colonial period and continue to be important in contemporary Canada. Although not without conflict and bloodshed, early European interactions with First Nations and Inuit populations in what is now Canada were relatively peaceful, compared to the experience of native peoples in the United States. Combined with late economic development in many regions, this comparably nonbelligerent history has allowed Aboriginal Canadians to have a lasting influence on the national culture while preserving their own identity (see: The Canadian Crown and Aboriginal peoples). Over the course of three centuries countless North American Indigenous words, inventions, concepts, and games have become an everyday part of Canadian language and use. Many places in Canada, both natural features and human habitations, use indigenous names. The name “Canada” itself derives from the St. Lawrence Iroquoian word meaning “village” or “settlement”. Canada’s capital city Ottawa comes from the Algonquin language term “adawe” meaning “to trade”.

Most of Canada’s territory was inhabited by European settlers later than other European colonies in the Americas, with the result that themes and symbols of pioneers, trappers, and traders played an important part in the early development of modern Canadian culture. The French originally settled New France along the shores of the Atlantic Ocean and Saint Lawrence River, during the early part of the 17th century. The British conquest of Canada and subsequent immigration, during the mid 18th century brought the large Francophone population under British rule, creating a need for compromise and accommodation, while the migration of 46,000 United Empire Loyalists from the Thirteen Colonies brought American influences which gave the Canadian provinces a distinct American flavor until the Great Migration of Canada (1815 to 1850) from the British Isles. Canada until the 1940s saw itself in terms of English and French cultural, linguistic and political identities, and to some extent aboriginal.[10]

Economic environment in UK

The unit of currency is the pound sterling (ÂŁGBP). The UK has been a member of the European Union (EU) since 1973. The UK has kept its own currency and controls its own economy.

The UK economy is the fifth largest in the world and the second largest in Europe. London is the financial centre for the UK and the City of London is the home of the London Stock Exchange (LSE), one of the largest stock exchanges in the world. The LSE is made up of three (primary) markets – Main Market, Alternative Investment Market (AIM) and PLUS.

The UK has an open economy where international trade plays a very important role. It has a gross domestic product (GDP) of US$2,345 billion and is forecast to have the strongest business environment of all major European economies for the period 2007 to 2011.

With a population of 61.4 million, according to the National Statistics Office, the UK has a strong workforce of approximately 28 million, to support the economy. Over the last 20 years there have been massive changes in employment patterns allowing an increase in part-time work, self-employment and employment by small firms which account for 46% of employees. The public sector is a significant part of the economy.[11]

Political environment in UK

The United Kingdom is made up of four nations; England, Northern Ireland, Scotland and Wales. It is governed by a democratic parliamentary system with its seat of Government in the UK’s capital, London, but with three devolved national administrations in Belfast, Edinburgh and Cardiff, the capitals of Northern Ireland, Scotland and Wales respectively.

The Monarch, currently Queen Elizabeth II, is head of state but she has no personal political involvement in the administration of the country. The role of the Monarch is ceremonial rather than constitutional and, although the Queen has many symbolic political duties, she has very little political power. Parliament

The parliament is the UK’s legislative body and consists of the Queen and the two Houses of Parliament, the House of Commons and the House of Lords.

The House of Commons is a representative body consisting of 646 Members of Parliament (MPs) who are elected regionally.

The House of Lords is not elected and is not allowed to amend or change most bills passed by the House of Commons. Scotland and Wales
Have regional bodies (The Scottish Regional Parliament and the Welsh Assembly). They have powers over regional issues but the UK Parliament has power over all matters relating to defence and economy. International relations

The UK plays a prominent role in international relations and associations as one of the five permanent members of the United Nations (UN) Security Council, a member state of the EU and the progenitor of the British Commonwealth of Nations. It is a member of international bodies such as the UN and its special forces and missions, the organisation for Economic Cooperation and Development, the Council of Europe, the Commonwealth Secretariat, the North Atlantic Treaty Organisation and the North Atlantic Assembly. The United Kingdom is also a signatory to the General Agreement on Tariffs and Trade (GATT) and a member of the World Trade Organisation (WTO), the international trade liberalisation agency headquartered in Geneva.

The United Kingdom maintains diplomatic and consular relations with 184 countries and has 220 diplomatic posts worldwide. The Foreign and Commonwealth Office also administers Britain’s 15 overseas territories.

The United Kingdom has also taken a leading role in international discussions on climate change. Climate change and sustainable environmental policies have become an important governmental focus, with increased legislation around waste, use of resources, building and construction and wildlife. Social environment in UK

The population at the most recent census in 2001 was 58.8 million but is thought to now be over 61.4 million (according to the National Statistics Office).

The main language is English but there are also four Celtic languages still in use in the UK today; Welsh, Irish, Gaelic and Cornish.

There are no adverse cultural or religious influences or prohibitions on the way business is conducted.

The country operates on the metric system.

Generally business hours are from 9am to 5.30pm. Offices do not tend to shut for a break at lunchtime. A typical working week is 37.5 hours long. Shops can stay open 24 hours a day, apart from Sundays. Most shops in cities and towns still shut by 6pm but supermarkets and grocery shops have extended their opening hours.

Statutory holidays in the UK are known as Bank Holidays – the name taken from their establishment in 1871 when it was decreed no bank trading could take place. Now shops continue trading, usually with reduced opening hours, similar to Sunday.

The media sector in the UK is privately owned with the notable exception of the state-funded British Broadcasting Corporation (BBC).

The Royal Mail is the dominant postal service provider in the UK. However its monopoly ceased at the beginning of 2006 and there is now competition from a number of private organisations. Courier services are supplied by independent companies.[12]

cultural environment in UK

English culture tends to dominate the formal cultural life of the United Kingdom, but Scotland, Wales, and Northern Ireland have also made important contributions, as have the cultures that British colonialism brought into contact with the homeland. Scotland, Wales, and Northern Ireland share fully in the common culture but also preserve lively traditions that predate political union with England. Widespread changes in the United Kingdom’s cultural life occurred after 1945. The most remarkable was perhaps the emergence first of Liverpool and then of London in the 1960s as a world centre of popular culture. The Beatles were only the first and best-known of the many British rock groups to win a world following. British clothing designers for a time led the world as innovators of new styles of dress for both men and women, and the brightly coloured outfits sold in London’s Carnaby Street and King’s Road shops briefly became more symbolic of Britain than the traditionally staid tailoring of Savile Row.

Underlying both this development and a similar if less-remarked renewal of vigour in more traditional fields were several important social developments in the decades after World War II. Most evident was the rising standard of education. The number of pupils going on to higher education increased dramatically after World War II and was matched by a major expansion in the number of universities and other institutions of higher education. In society in general there was a marked increase in leisure. Furthermore, immigration, particularly from the West Indies and South Asia, introduced new cultural currents to the United Kingdom and contributed to innovation in music, film, literature, and other arts.

Daily life and social customs
The United Kingdom’s cultural traditions are reflective of the country’s heterogeneity and its central importance in world affairs over the past several centuries. Each constituent part of the United Kingdom—England, Scotland, Wales, and Northern Ireland—maintains its own unique customs, traditions, cuisine, and festivals. Moreover, as Britain’s empire spanned the globe, it became a focal point of immigration, especially after the independence of its colonies, from its colonial possessions. As a result, immigrants from all corners of the world have entered the United Kingdom and settled throughout the country, leaving indelible imprints on British culture. Thus, at the beginning of the 21st century, age-old English, Irish, Scottish, and Welsh customs stood alongside the rich traditions of Afro-Caribbean, Asian, and Muslim immigrants, placing the United Kingdom among the world’s most cosmopolitan and diverse countries.[13]

b. Identify any technological and e-commerce factors which may impact the opportunity or organisation. If an organisation is considering expansion into another country, the business must consider the extensive range of factors that will significantly affect the marketing opportunities, approaches and structures that may be required to operate successfully, as we have covered so far, these factors include the complex nature of the international business environment, differences in politics, legislation, standards, the various cultural issues, and not least the technological environment. Technology and e-commerce advancements have had an incredible impact on international marketing. World Trade Organisation: drew up the Declaration on Global Electronic Commerce to apply to e-commerce transactions. International Organisation for Standardisation: develops& maintains a variety of international standards. International Electrotechnical Commission: prepares and publishes international standards for all electronic and related technologies International Telcommunication Union: is the dominant world standards organisation for telecommunications, including internet, multimedia, and modems World wide web consortium: concentrates on web interfaces, next generation internet protocols and social impact issues.


[1] http://www.winecompanion.com.au/wines/international-wine-tasting-notes/international-tasting-notes-october-2011

[2] http://www.commbank.com.au/corporate/research/publications/commodities/agricultural-insights/2011/160611-International_Wine.pdf

[3] http://www.commbank.com.au/corporate/research/publications/commodities/agricultural-insights/2011/160611-International_Wine.pdf

[4] http://style.time.com/2013/03/07/the-world-of-wine-whats-trending-this-spring/

[5] http://www.pir.sa.gov.au/__data/assets/pdf_file/0011/165980/mi_langhornewine_report.pdf

[6] http://www.pir.sa.gov.au/__data/assets/pdf_file/0011/165980/mi_langhornewine_

[7] http://canada-brittanyleefries.blogspot.com.au/2009/11/canadas-economic-environment.html

[8] http://en.wikipedia.org/wiki/Political_culture_of_Canada

[9] http://www.kampuslanding.com/social-life.html

[10] http://en.wikipedia.org/wiki/Culture_of_Canada#See_also

[11] http://www.rsmtenon.com/Markets/Clients/International-clients/Doing-business-in-the-UK/Trading-in-the-UK/Economic-environment.aspx

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