External economy that can bring many impacts for a

External
environment analysis (PESTEL) is a tool that business used to obtain
information about a company circumstances and what external factors will influences
their business. The external factors include Political, Economic, Social,
Technological, Legal and Environmental. All of these factors are tend to affect
and influence the company in conducting their business.

The
first external environment factor that affects MINISO in carrying their
business is political factor. There are many political factors that can affect
the business organizations such as tariff, trade control, employment law and
tax policy. But the main four factors such as political stability, changes in
regulation, mitigation risk and impact on economy that can bring many impacts
for a company when they have negotiation in business with foreign country.
Especially MINISO has operated their business in over 60 countries and regions,
therefore it is very important for them to consider about these factor in their
partner’s country. Every country government established many rules and
regulations to guide the business operation, so every organization have to keep
updated and alert to the change of rules and regulations of the country.

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MINISO
has involved in the intellectual property issue with Guangzhou-based vendor, he
accused MINISO is stealing his original design of stickers which he found on
the smartphone cases sold in MINISO store. By this, it can affect the MINISO
reputation in business market. Luckily, the MINISO’s Hong Kong regional manager
able to state that MINISO has no intention to infringing other’s intellectual
property since it is easy to get license for register the brand name from Hong
Kong government. 

Furthermore,
most of the countries that MINISO expand to are having stability in their
politic. For example, South Africa is not remained unaffected by the turmoil in
emerging economies completely but they are able to weather this storm
successfully. South Africa stable and favorable transition and democracy has
recognized as one of the major achievements of the 20th Century (Jacobs D 2017). This
becomes a guarantee for future stability since the political stability is the key
to investor confidence. Therefore, MINISO has confident to invest in South Africa
and they have planned to inject new vitality to the development of South
Africa’s retail industry and they wish to open more stores at there.

Second
external environmental factor is Economic which refers to all the elements of
economic conditions and issues. The determinants of economic may include
inflation rate, monetary or fiscal policies, interest rates, economic growth,
currency rate and business cycle of the country. Through all these factors,
organization will examine how the economic factors bound to have an impact
towards their business. Therefore, MINISO has to base on each of the country
environment that they collaborate as to build the strategies that can comply
with the changes occur at any time.

One
of the famous issues in economic factor is inflation, inflation happen in a
country when there is too much in supply of money while availability of goods
and services is not equally supplied. 
Thus, the business has to increase the price of goods and services so
the production cost will increase as well due to the growing price in raw
materials. This surge in the cost of raw materials obviously translates to the
retail price. Then, the costs of production will increase but MINISO still
sustain in notion of low price and high quality product so it may decreases the
revenue of MINISO. In addition, when inflation, the purchasing power of
consumers will decrease because of the price of goods shoot up and their income
still remain constant. Therefore, this definitely affects the demand of goods from
consumers and vendors to MINISO.

On
the other hand, the transactions of import and export activities are the main
operation of MINISO, they have to import their product from suppliers and
export the products to different country. In every economic situation, the
currency rate is changing day by day and the fluctuation of currency may bring
gains and losses to the company. For example, MINISO sells their products to
different subsidiaries company such as in United State, then MINISO typically
required payment in RMB, hence the foreign entity will have to convert its
currency from dollar into RMB for payments. When the currency is relatively
strong against the dollar then it could be the advantages for MINISO. On the
other hand, if the currency is weak, then it brings drawback to MINISO since
the foreign company pay less than the actual amount compare to RMB. 

Next external environmental factor is Social factor.
 Every country has different and unique
mindset and there is no doubt that the society is changing continually. These
mindset and changes have an impact to the business and sales of the products
and services. For example, the taste and preference of society towards the
fashion needs are keep on changing, if the business cannot grab the wants of
the society then they unable to meet or fulfill what society recently wants. The
determinants of the social factors such as the growth rate of population, gender
and demographics of the citizen, cultural implications, social lifestyles and
domestic structures are studied by the companies in order to understand better
about the market and consumers.

MINISO
able to expand their business internationally into multi countries and open
over 1000 stores within 3 years which mean MINISO has successfully fulfils and
meets the needs and wants of the consumers throughout the world. For example,
the facts that cannot deny is most of the consumers from different country such
as Hong Kong, China, Singapore, United State and Malaysia are trust MINISO products
than their homegrown offerings (HKEJ 2016). MINISO able to consider the social
factors such as the consumer’s attitudes towards imported and exported products
and attitudes towards the customer’s services and product quality around the
world. They know the social trend nowadays are consumers more likely to
purchase things at lower price, high quality products, one stop service
and  durable goods.

Hence,
MINISO is willing to pay on their production cost but still persist in offering
the low price products. The products that MINISO offers are mass-oriented,
practical and functional. They not only focus on certain groups of buyers and
they will launch new products once a week in order to follow the step of the
consumers. But the most disappointed for MINISO is they are not welcome by
Japanese, they point out that MINISO present themselves as Japanese brand and
even hiring the Japanese designer and models to project the image but used
Chinese word in Hong Kong branches stores. In addition, Japanese criticizes
that MINISO copied the Japan well-known household brand which is Daiso, Uniqlo
and Muji. For Japanese citizen, ‘copycat’ is a way to lower down the standard
of themselves, therefore, some of the Japanese citizens are calling for a
boycott of the MINISO products.

Moreover, the external
environmental factor is Technological factor. In this era of globalization,
technology changes rapidly every minute and it influences the business
directly. Therefore, the company needs to keep updated and stay connected along
the way and integrate as when needed. It might be unclear how the technological
factor affect the business but if you take a look at the technology changes
recently and you will realize that technology had bring much impact to the
business. Some technological factors such as technological advancements,
lifecycle of technologies and the role of the Internet may affect the business.

 Due to the technology advancement, most of the
big companies have their official website to introduce their products or let
the world wide people to know more about them including MINISO. MINISO has
their official website in introducing their company background, what products
they sold, location of the stores and their contact number. Consumers can
access to MINISO’s website to find the products they want and search for.
Although MINISO does not have official website for online buying, but they have
collaborate with many of the e-commerce company in different country such as
11Street.my, Ximiso.com, Buyee.com and iPrice group Sdn. Bhd in order to ease
the consumers that are not convenient to go for shopping. The consumers just
have to access into the website that available in their country, click on what
they want to purchase and clear their payments. Then the parcels will deliver
to their house after the payment. After they received their goods, they can
comment on the website and MINISO will take concern about it in order to make
any improvement.

Apart from this, MINISO also using
technology system in handling their inventory control, delivery and shipment,
and supply chain. The system helps MINISO in saving time and cost since they
have to deal with worldwide suppliers, vendors and consumers. For the
production of MINISO, they have implemented the latest machine to automate the
process in their warehouse so they can cut down the cost of hiring. Changes of
technology bring advantages for MINISO in operating their business globally.