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Business Organisations and Environments in a Global Context; RBI Grade 81
RBI Grade 81 was first introduced to offer a more safe, efficient and cost effective approach to stabilize soils in a wide spectrum. It is also known as Road Building International Grade-81. It reacts with different soil types, also it works in different conditions. RBI Grade-81 has various qualities that show that it is an effective product (RBI Grade 81, 2017). For instance, it does not dissolve in water, it is not UV degradable and its chemical are stable. It was first introduced in 1990 by South African scientists (Dangi and Sharma, 2017). They aimed at introducing a unique and environmentally friendly soil stabilizer. It was later offered a South African patent in 1998. The technique continued to expand in other countries among the Israel where the first production facility was introduced. It has environmental benefits that have enabled it to receive an award from the Standard Institute of Israel and the ministry of environment. In 2003, it was offered an International patent. RBI Grade 81 is considered a new and unique technology. In 2005, Portugal specified RBI Grade 81 in the government tender.
Portugal is found in the extreme southwest of Europe. It has the continental territory and two Autonomous Regions. It is divided into eighteen districts. The country is one of the oldest states in Europe (Spiller, 2014). It is part of different international organizations such as United Nations and OECD. Additionally, Portugal joined the European Union in 1986. RBI Grade-81 is an inorganic soil stabilizer as well as pavement material (Dangi and Sharma, 2017). The construction industry plays a huge part in the Portuguese economy. It has highly contributed to the economy. Over the past decade, the Portuguese government has focused on enhancing the road sector in the country (Rosmaninho, 2010). The level of construction has continued to develop over the years.
The government has partnered with the private sector to ensure that they enhance the construction industry (Branco et al., 2007). There are various stakeholders in the Portuguese road sector, they are divided into public and private sectors. The state is tasked with managing the contract and monitor as well as regulate the link between private and public parties. Various public sectors are also involved in monitoring and regulating the links between private and public entities (Rosmaninho, 2010). At times there can be disagreements between the different public stakeholders concerning renegotiation, measurement of the value for money. Also, there can be disagreements on issues pertaining information asymmetry matters. Portuguese road construction sector is highly regulated. Both the government and public sector ensure that there are no irregularities in the construction process.
Today, transport and mobility are the major aspects of the society. Roads need to durable and safe (Rosmaninho, 2010). Lack of maintaining these qualities may present danger to their users as well as the environment. Poor road quality may also increase the costs for repair. Nevertheless, it is not easy to construct and maintain strong and durable roads as they are exposed to different and extreme conditions. In Portugal, companies use aggregates as raw materials in the construction of roads.
Background to business environment in Portugal
Currently, the business environment in Portugal has returned to growth. Nevertheless, in 2016, the economy slowed down because of the decrease in investment. The year was also marked with the slowdown in private consumption as well as exports. Growth was reported at 1% GDP (Wise, 2017). The investment in the construction industry has highly dropped thus affecting the economic growth. However, in 2017, the country experienced economic revival six years following 2011 financial bailout.
First, quarter on quarter domestic product increased by 1% in the first three months. It increased the year on year growth to 2.8% (Wise, 2017). Its economic performance puts the country on the same level with Spain which is considered as the Eurozone’s leading performer. Initially, the country was affected by a deep recession due to the Eurozone debt crisis. However, it began its slow recovery in 2014. Currently, Portugal’s GDP growth is at 1.8% from 1.4% in 2016. The GDP growth is expected to rise more than 3% in the second quarter.
Also, the country experienced a growth in export which raised to 9.7% year on year in the initial three months. In the previous quarter, export was reported to be 6.6%. Imports increased from 7.7% to 8%. However, the domestic demand decreased from 2.5% to 2.2% (Wise, 2017). The economic growth has led to an increase in employment rate (Frayer, 2017). In 2013 the unemployment rate was almost 18%. Nevertheless, today it has decreased to about 10%. Although the country has experienced growth it is vulnerable to shock. The development in local demand is influenced by high private consumption (Wise, 2017). The investment condition is difficult and hinder the process of growth. Nevertheless, the support from EU funds is expected to revive the investment. The recovery of the investment will assist in rebalancing the economy by raising the shares for sectors that can be traded. Portugal has made great strides in minimizing public deficits from 2010 when it was 11.2%. However, the country has continued to make great strides to support the ongoing economic growth.
In the particular paper, we will use PESTLE analysis to assess the market for RBI 81 Grade in Portugal.
PESTLE analysis will assist in understanding the aspects of the context by utilizing the political, economic, sociological, technological, legal as well as environmental aspects (Marmol et al., 2015). The technique allows a wide analysis of the business environment and potential factors that may affect an organization’s operations.
The particular aspects control the level to which the government may control a particular industry (Marmol et al., 2015). The government has implemented processes to ease organizations financing requirements. However, the small and medium-sized organizations have difficulty accessing finance. The government is implementing an outline for evaluating the governing pressure of new law on capitalists. Nevertheless, there are flaws in the judicial procedures, transport as well as the innovation structure. Also, there are obstructions to the access of particular controlled professions (Deloitte, 2017). Moreover, the organizations may have a hard time accessing more simplified authorization processes. The standard corporate tax rate in Portugal is 21% (European Commission, 2017). A reduced rate of seventeen percent to the initial EUR 15,000 of taxable profits of small and medium-sized organizations. The taxable income includes corporate tax which is charged on the organization’s profit. The profits that are taxed include trading revenue, inactive revenue, and capital achievements. The small organizations are qualified for a simplified tax regime. Some of the political issues that RBI 81 Grade may face include a corporate tax rate of 21%. The corporate tax will be deducted from the organization’s profits.
The particular factors determine the performance of the economy that directly affects an organization (Marmol et al., 2015). Also, they have continuing long-term impacts. For instance, the organization may be affected by a rise in the inflation rate. The company may be forced to increase prices of their products as well as services (European Commission, 2017). Some of the economic aspects include interest rates, economic expansion outlines as well as the inflation rate. Currently, Portugal has been experiencing economic growth, its GDP is reported to be 1.8% from 1.4% in 2016 (Wise, 2017). It is good news for RBI 81 Grade in its expansion in Portugal. Nevertheless, the domestic demand has reduced due to the decreasing investment. Investment in Portugal has been weak compared to other European nations. It is influenced by the strong dependence on private consumption. In this case, the investment conditions for RBI 81 Grade are challenging. The country’s economy is vulnerable to shocks that may affect the expansion of the organization.
However, the support from EU funds is expected to revive the investment. The recovery of the investment will assist in rebalancing the economy through raising the share of sectors that can be traded sectors. The Portuguese government has increased the overall monthly minimum wage. Currently, it has increased by 5.1% to EUR 557 (European Commission, 2017). Therefore, it shows that to invest in the country, RBI 81 Grade should consider the minimum wage for its workers. Also, Portugal faces the issue of a huge number of public debt which influences a reduced economic margin to enable to engross hostile macroeconomic surprises. It also affects the ability to deal with high-interest rates. In 2016, the country’s interest rate was 4.3% compared to 2.2% standard to the euro zone (European Commission, 2017). The high-interest rate hinders scope for public investment expenditure. Additionally, they may affect the expansion process of RBI 81 Grade.
The factors assess the social setting of the business environment. They measure elements such as demographics, and populace assessments among others (Marmol et al., 2015). Portugal is positioned in West Coast of Europe. It is near Spain to the North and East. Also, the Atlantic Ocean is in the West and South. Its populace is estimated to be 11 million (Croissant, 2017). Out of the entire population, most of the people are economically active. Hence, Portugal is a great investment hub for RBI 81 Grade. The country is ranked 16th out of one hundred and thirty-eight states in terms of the quality of its roads (Aicep Portugal Global, 2017). It has created road network that includes motorways, main roads, secondary roads as well as municipal routes. In Portugal, accountabilities are shared and managed between the central government and the local government. The two work together to ensure that they manage all the facilities in the country. The cultural policies of the country are not affected by social cohesion. Instead, the National Plan for Growth and Employment makes a prior outline of the priorities every year. The social factors may affect the expansion process of RBI 81 Grade in Portugal.
The technological aspects relate to advances in technology that might impact the procedures of the company (Marmol et al., 2015). For instance, the technological awareness of the country may have an impact on a new organization. Technological environment is significant for the organization as it impacts the type of conversion procedure that it should be utilized for its purpose. Technology influences a company’s productivity. Currently, Portugal has been experiencing a rise in technological development (European Commission, 2017). They combine new skills with other innovations as well as creativity to come up with new products. There are various systematic and technological investigation activities that are led within a system of R&D units. Currently, the country is facing a drop in public R & D intensity. The fall of the R&D investment has a negative impact on productivity and growth.
Portugal has highly focused on enhancing its human resource sector in technology. It produces a huge number of graduates in the sector. Also, it has a high number of investigators in the labor force compared to other European countries. Therefore, it means that RBI 81 Grade will have a readily available workforce in its expansion in Portugal (European Commission, 2017). Despite having a readily available workforce, the country occupies a very low position when it comes to innovation output indicator. It shows that information concerning innovation is likely to take time before they reach the market. The particular aspects may hinder the transition towards an economy that is innovation driven. Being a new technology, RBI 81 Grade may face difficulties in its expansion in Portugal. The country also has issues meeting the demand for ICT professions. Additionally, it faces poorly structured harmonization between different motivations for commercializing research outputs. The particular aspects may have a huge impact on the investment process of RBI 81 Grade.
There are external and internal legal factors that may affect an organization’s operations. Various laws in a country may affect the business environment (Marmol et al., 2015). Also, there are certain company policies that affect business operations. Legal assessment focuses the company policies as well as a country laws that may affect the organization operations. For instance, Portugal has different environmental laws that they may affect the operations of RBI 81 Grade. The Ministry of Environment is accountable for implementing environmental policies (Pereira et al., 2017). Organizations are required to send diverse information to Portuguese Environment Agency throughout the year concerning their operations. They need to inform the agency concerning their use of natural resources. Companies need to ensure that they monitor pollutants and waste produced. It is also significant for the organizations to inform the agency about the wastes produced.
IGAMAOT is the major environmental inspection agency. It is responsible for inspecting all premises. It is allowed by the law to enter all the premises and inspect if necessary. Therefore, RBI 81 Grade will be inspected by IGAMAOT (Pereira et al., 2017). It is common for the agency to inspect the companies’ installations at least once in every three years. The public prosecutor is notified about any environmental crime. Therefore, the company has to ensure that it follows all environmental laws to avoid being prosecuted.
RBI 81 Grade is required to apply for an operation permit for its expansion in Portugal. It is issued by the Co-ordinating licensing Authority depending on the environment (Pereira et al., 2017). Also, the company should apply for an environmental license which is given by the Portuguese Environment Agency. A company is first given an environmental permit before being issued the operation permit. A company can apply for an environmental permit that has a term of ten years. However, it needs to be renewed six months prior the expiry date. RBI 81 Grade should consider all environmental laws in its expansion in Portugal.
They include factors that influence the surrounding environment. They are important for certain business sectors. They include climate, geographical location as well as global climate changes. Although Portugal is a small country it has various landforms, climatic conditions, and soils. There are mountainous regions in the north. Also, there are the plains in the south (Donnelly, 2016). The company needs to consider the country’s demographics when expanding their operations in Portugal. The mountainous regions are considered colder compared to the south. There are also other areas that experience winter snows in the Serra da Estrela. Portugal has different types of soils, that is, sandy, arid and acid. In the north, the soil can be rocky, while the Northern side experiences a lot of rain which makes it suitable for farming. RBI 81 Grade is a new technology that operates in any weather condition and it is suitable for any soils. Therefore, it will be suitable for the different types of soils in Portugal. Nevertheless, it is important to keep in mind that almost one-fourth of Portugal is occupied by forests.
RBI Grade 81 was first introduced to offer a more safe, efficient and cost effective approach to stabilize soils in a wide spectrum. RBI Grade 81 is considered a new and unique technology. In 2005, Portugal specified RBI Grade 81 in a government tender. The paper used PESTLE analysis to assess the market for RBI 81 Grade in Portugal. Political factors include weaknesses in the judicial system, energy sector, transport as well as the innovation structure. Also, there are obstacles to the access of particular controlled professions. The economic factors that may impact the organization include taxes as well as economic growth. In turn, the expansion process may be affected by high-interest rates. There are also the technological factors that may affect the expansion. For instance, currently, the country is facing a drop in public R & D intensity. The fall of the R&D investment has a negative impact on productivity and growth.
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