Pest Analysis

PEST Analysis – Singapore
  1. Political Factors
Singapore is well known for its political stability in the region and the country applies a modified model of the Westminster Parliamentary system. Each parliament can sit up to five years maximum. High degree of freedom is enhanced due to political type of right-wing authoritarianism however there are some restricts on political aspect. It is essential to understand the politics to assess the penetration on the Singapore market. According to KPMG Corporate tax rates table 2014, Singapore corporate tax has been stable at 17% since 2008. It stands out as the lowest figure compared to the rest of ASEAN countries which can be seen as an opportunity for foreign investors as well as businesses. Moreover, foreign investors are possibly attracted by the fact that the country has no tariff barriers, more than 99% of all imports into Singapore enter the market duty-free ( Due to this import policy in Singapore, Dm-drogerie Markt can minimise the expenses when the company successfully makes it entry to one of the freest trading market in the world. According to Mahamoud Islam (2015), Singapore is rated at AA1 in terms of risk level. This means that the country is business environmental, economically, politically, financially safe therefore there will be a high attraction of level of FDI. Furthermore, Singapore was ranked 7th in the Transparency International’s Corruption Perceptions Index in 2014 amongst 175 countries, lowering the possibilities intervention as well as ethical challenges.
  2. Economical Factors
Singapore pursued outward-oriented strategy with free market (Singapore Government Securities 2014). An individual can freely start up his/her own business with minimum government intervention. According to Trading Economics (n.d), Singapore GDP per capita PPP was recorded at 78958, 09 USD in 2014 which is nearly double the GDP per capita PPP of Germany. Also, Singapore was ranked 2nd as one of the...