Business
It is crucial for management to do a PESTEL study whenever a nation seeks to expand into another due to the different political and legal dangers that the corporation may face. A thorough grasp of the macroenvironment in which the firm is anticipated to operate is provided through PESTEL analysis. Given that it has been perceived as being in instability for many years, Turkey is hardly exceptional (Kayumi, p46).
Political and Legal Environment
Numerous coups d'états and terrorist attacks have been recorded in Turkey, given the country's political and legal climate. Additionally, corruption has an impact on government, making it challenging for it to advance in any way. This country is considered to be at political risk which has been assessed to be at 38% due to serious political changes that the country has undergone in the recent times as a result of the collective turmoil resulting to freedom being considered as partly free. Most of the changes are as a result of the political negligence which has been to seen to be coming from their justice and political party.Moreover, corruption, nepotism, and cronyism this government and also the community have also increased the risks and costs of carrying out business. The legal framework in the country is also defenceless to the political impact and also fairly prejudiced against those who come from other countries. There has been increasing freedom resulting to easier ways of opening a new private business, though the ineffective execution of the country's regulations makes it difficult for entrepreneurship. There are also private rights that the government has not been protecting including the labour freedom which makes labour cheaper than other countries like the US.
Trade Policies
The trade policies in Turkey are viewed positive which even lead to the country the European Union. The country has also been a member of the Euro-Mediterranean Partnership which has focused on creating mutual trading terms for its partners. Turkey has also lacked common restrictions against international control or ownership. They also have a belief that entity should be treated equally which favours investors from outside.
Risks and Benefits
Considering most of the political issues raised above, it is clear that the risks that are associated with venturing in Turkey are higher than even the benefits that may be realized. These are some of the political issues that are even difficult to insure which can even drag down the returns on investment or even they can go ahead to removing the ability to withdraw capital from any investment.As discussed above, this country has trade policies which are more favourable making it easy to venture into the country. Despite that some of their tariffs are not good when compared to other countries; they remain attractive to many investors due to them partnering with many international organizations whose work is to protect the member countries.Another advantage that businesses can leap from this country is cheap labour. Despite that this is a disadvantage to the citizens of the country; it remains an advantage to many firms for they will have to pay cheap wages to the employees thus reducing their cost of production. This eventually boosts their profits.Most of the risk observed from the above discussion; it is clear that they are notorious and also hard to quantify. This is because they have limited sample sizes. It is important for any business which wants to venture in such a country to carry out an evaluation and see whether the risks associated can be insured against via international agencies. If the cost is lower than the profit to be made, it becomes possible for the firm to venture into the country. But if the cost is higher, then the business should shun from operating in the country.
Work Cited
Kayumi, Belal. “PESTEL Analysis for Turkey.” (2014).
