PESTEL analysis of DD

Political factors:

1       1)    Bureaucracy and bribery. Russia is famous for its bureaucratic structure, before opening the business in Russia the firm should learn in prior about the details of entering the market. It is also normal to give bribes despite the fact that it is unethical and illegal, however the business may have a chance not to be opened due to bureaucratic structure and to make the process faster bribes are welcomed by the governmental workers.

2)    Changes in the tax regulations. The law of tax regulation is developing and new changes may be implemented which will seriously affect the business profit. Especially it concerns foreign companies for which may be special tax conditions.

3)    Trade restrictions and tariffs (WTO). Due to the fact that Russia entered WTO recently the system of restrictions and tariffs is constantly changing and becoming more advantageous for foreign business.  

4)    Openness to foreign investments. Since entering WTO Russian government changed its politics in the way of being open for the foreign investment. So for foreign business there may be special benefits which Russian companies do not get.

5)    Political stability. Despite some riots in the middle of the previous year Russia is positioned as a politically stable country since there is a previous president for the next 6 years who will not radically change his policies and who is supported by the major of Russians.

Economic factors:

1)    Market growth. Russian market is developing market and there is much room for growth since its GDP is significantly growing every year. Moreover, the consumption of ice cream in the industry is growing and the market is not saturated so there are a lot of opportunities to increase ice cream supply.

2)    Level of disposable income. Income for every family is growing every year and now people can afford more than they could earlier, that is why they are ready to pay for the pleasure.

3)    Global economic instability. Despite the above economic benefits, the global financial markets are instable and that could affect Russian market as well. There could be problems with dealing with the banks, people will stop spending their money on such things as premium ice cream and will start saving money.

Social factors:

1)    Attitudes towards the American culture. With the spread of American TV shows, movies, language and culture Russians are interested in every think that America invents and consumes so people are ready to buy things that are popular in America.

2)    More independent children. Children nowadays have more opportunities, rights and money; they make their own decisions how to spend pocket money which can be spent on the Dippin’ Dots.

3)    Health consciousness. With the popularity of health life style people started thinking of better way to replace tasty unhealthy snacks and ice cream which is based on natural components could be the best replacement.

4)    Elder generation looks for new tastes. With the development of Russia people get used to everything that they found new and interesting after USSR disintegration so our product will be popular since it offers an opportunity to try something new and tasty.

Technological factors:

1)    Product technology innovation. With new technologies there possibility that our potential Russian competitors will invent some new attractive products is high. That is why we should enter the market as early as possible to have first mover advantage with such a unique product.

2)    Efficient transportation. There is a possibility to decrease transportation costs due to logistics innovations.

3)    New distribution channels. This factor allows using a big variety of distribution channels in order to increase the sales.

4)    Internet as a way to increase brand awareness. Internet is one of the new marketing channels which should be considered in marketing plan.

Environmental factors:

1)   Weather conditions. Ice cream is a season product and it is important to consider all weather conditions which affect the consumers desire to purchase the product.

2)    Climate change. It concerns changing of the weather conditions: late winter and so on. Since sales of the products are connected to the weather conditions.

3)    Recycling issues. As a seller of the ice cream the company should find out about environmental concerns of the society and find out the ways (if needed) to recycle used packages of the ice cream.

 Legal factors:

1)   New labeling and packaging requirements. Russia is a specific country with its own rules and regulations which should be studied in prior. The management of the business should know how to label and pack the product in order to fit the requirements.

2)    Quality control. The same is here. In order to pass the Russian quality control ice cream should be produced in exactly specified by the Russian government way.

3)    Consumer law. Not knowing this kind of law may cause a consumer right violation what will become the cause of the lawsuits.

4)    Franchise/Patent regulations. If the company chooses this method of market penetration it should learn about Russian regulations in order to meet all conditions.