Introduction and assess the environment they’re operating in

Introduction

One
of the vital influencers of the global growth of ecommerce has arguably been
the rise and success of ALIBABA the Chinese ecommerce frim and the surge of
mobile Technology and, within South-East Asia sees internet and mobile usage
continuing to surge.

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At
the same time, online shopping is relatively growing against a backdrop of
relatively weaker physical infrastructure and distribution networks in some of
the South-East Asian countries, creating unique opportunities as well as
challenges for the growth of these underdeveloped and fragmented ecommerce markets.

Singapore
has always been hailed as the innovative and modern up to the standard of
quality of technological advancements and usage in their daily activities.  Singapore government were able to take full
advantage and use of the technological advancement globally and also at the
same time nationally uprising standard of living and quality. The nation has a corruption
free and stable business environment while neighbouring countries like Malaysia
and Indonesia which makes it easier in terms of distribution of items for a
business operating in Singapore. Also been part of the ASEAN region, any firm
operating would adhere to benefits of low costs and taxation amongst them.

PEST analysis

PEST
is a concept used as a tool by organisations across the world to track and
assess the environment they’re operating in or are planning to launch a new
project/product/service.

It
basically overlooks the macroeconomic factors that would come into play while
operating a business in the particular country.

 

Political

Singapore
is a democratic country with a minimal political risk. According to the
Political and Economic Risk Consultancy (PERC), Singapore has the lowest
political risk in the whole of Asia. Also, there has never been any
interference of army in the civilian matters and the political system has been quiet
steady and stable. According to Alesina in 1992, and also other various
researches, countries with unstable governments have chances of having a lower
economic growth. This stability has resulted into peace and a better standard
of living and quality which are the essential factors in attracting multinational
firms to Singapore.

The
government encourages both the public and private sectors to partake in the
growth of e-government in the nation by introducing certain schemes and
policies. The introduction of e-government which provides the public with the
means to utilise and access their day to day activities in order to adopt to
e-services. The nation’s government has a good understanding of how to motivate
and mobilize all the required people or stakeholders to partake in e-services.

At
the same time the willingness of political leaders across ASEAN countries to
link them in the region through the means of cyber highways creates an
opportunity for technological advancements. With the support of different
government such as resources whether it be human, capital or physical capital
it may lead to better planning, implementation and modification of G2G
interactions amongst countries.

.

 

Economic

Regarding
economics, Singapore has implemented radical economic policies to assist
businesses and firms to initiate the schemes and benefits that await them by
adopting e-commerce initiatives” (Ravindran 2003). The Singapore Quality Class
assists to identify businesses that have the potential to expand
internationally. The government then provides incentives to these firms to
encourage and assist them to reach overseas markets. However, political
stability and appropriate policies are not enough to create an awareness of
e-Government. It needs sufficient funds to finance and enhance the system. The
government has allocated $1.5 billion to push for eServices (Tee 2000).

In
the year 2005, the Singaporean government initiated a plan in order to face
security issues. $38 million was invested in this plan in order to ensure a
thorough and secure online environment. (Yu 2005). A strong financial backing
helps improve the whole e-government in both physical and social infrastructure
manner. The physical aspect refers to the resources required for the
development of the e-portals and operations. Social infrastructure on the other
hand refers to the resources needed in order to train the internet workforce.
The knowledge and skills of IT would further empower e-users in order to tackle
online obstacles. The low costs of internet subscription in the nation and low
phone calls further encourages and thus reduces the burden for e-users. At the
same time more people can now afford and connect to the internet and network as
a whole. The nation’s economy I dominated by the tertiary or service sector,
which contributed around75.5% to the total GDP in 2016. Government also plans
on launching a new industry transformation programme in order to take the
country to the next phase of development and innovative growth,

 

 

 

Social

 Singapore is like any other Eastern country.
It still follows traditional family values. It is true that the younger
generation has the tendency to follow western culture and values. The residents
work hard and fulfil the materialism desire. This urge to do well has increased
nation productivity. The business sectors can, therefore, expect higher
purchasing power from customers. Reports suggest that most Singaporeans dislike
blue collar jobs like construction. This would encourage firms and business
with e-commerce oriented plans to pursue their goals in this nation. Literacy
rate in the country is very high. Primary schooling is compulsory in Singapore.
Good command of English and Chinese languages gives Singaporeans an advantage. The
current population is about 5.6 million with Singapore ethnic mix of Chinese
(75.2%) and Malay (13.6%) and Indians (8.8%). Most of Singaporean residents
dislike or look down upon blue collar jobs such as handy work in the
construction sites or any other hard working environment. (Channel NewsAsia,
2017)

The
social strengths of Singapore have been demonstrated by an educational system
that produces a well-educated workforce to attract foreign direct investment
(FDI). Not only developing its own pool of local talents, Singapore also
recruits foreign talents to work in both the public and private sectors.
(Ha and Coghill, 2008)  In
the end these corporations would engage in e-services in order to cut down on
costs and improve efficiency in operations. In order to achieve that, they need
to acquire IT skill based employees who can adapt and learn fast to the change
of process. Singapore been a tech savy population can adhere to these changes
and thus can participate in the egovernment projects and thus make the most
efficient use of it. The government has also introduced a program in which
homemakers and senior citizens are equipped with basic computer and internet
skills. It is known as the national IT literacy program. (Imda.gov.sg, 2017)

 

Technology

Technology
is a key player in shaping any countries economy. Singapore accepted technology
40 years back but embraced it in a way that they have world class research
facilities. Recently government has committed $19 billion to the research and
development. Internet is vital to seek information and it has played its part
in Singapore’s economy as well. Moving from Paper to internet saves lot of time
and makes documentation super effecient. It is readily accessible and makes the
business transactions super-fast and safe.

Technologically,
Singapore has a high-tech based economy. Well-prepared infrastructure and the
latest technology contribute to the rapid development and deployment of
e-Services. Government agencies can share resources and services such as
“payment, authentication and data exchange” that are “built-once, reuse-always”
by employing available IT applications (Faculty of Business and Economics –
Research Committee 2004: 2). As mentioned previously, security issues are also
received much attention from the government.

According
to a report, the penetration rate for household broadband internet is nearly
70%. The average internet connection speed is 12.5 Mb/s but Singapore has the
highest Average Peak Connection speed in the world which is 135.7 Mb/s.
E-economy is flourishing at a fast pace and is attracting successful companies
in the world. The increase in foreign direct investment is helping the nation
grow and attract further investments and funds into the country.

Conclusion

As a
conclusion deriving from the factors discussed above, it can be concluded that
Singapore’s business success in both the domestic and international levels are
much benefited from the policies outlined by the government making it more
enterprise friendly. With the combination of tertiary education, up to the
levels of innovative technological advancements and a productive workforce from
its citizens, any business willing to invest and operate in the nation would
benefit vastly. Given the stable and well regulated political and financial system
in the nation, many MNCs are looking to to locate themselves in Singapore.
While Singapore maintains an open and welcoming environment, it is getting
dominated by foreign firms which are owned completely or partially by the
government. The government initiates a proactive approach in order to gain
foreign investors with favourable tax rates and breaks. But at the same time it
should be kept in mind that due to its high level standard of living and
quality, the business would be expected to perform and operate at that level or
would fail drastically. Due to its already known innovative and efficient work
environment, business willing to work at their most efficient and potential
should decide to enter this nation for prevailing in their business activities.