Executive Summary
In this paper, Flirtey, a drone delivery solutions provider is considering coming to Singapore and setting up business. As part of this paper, external environment of Singapore with regards to the attractiveness of that country to the company is provided. At the beginning of the paper, the theoretical implication of the PESTLE analysis is given along with advantages and disadvantages. PESTLE analysis is helpful to gain the idea of the external environment when an organisation strives to visit another country. On the other side, PESTLE analysis may not help the company as the analysis solely depends on the assumptions. The political condition of Singapore is stable and Singapore government allows using of drone for commercial purposes. Tax rate for doing business in Singapore is also low and the security is high. Economic condition is Singapore is also good and drone delivery industry is flourishing and in the next five years, Singapore will reach record high in drone delivery. In Singapore, many of the technology giants have their offices and whole Asia-Pacific region is managed in Singapore. Technological development is subtle and developed in Singapore. Therefore, Flirtey should consider drone regulation in Singapore, Flirtey can register the business as sole-proprietorship under FDI and Flirtey needs to take the strategy of differentiation in order to have a competitive advantage.
PESTLE Analysis and its Advantages and Disadvantages
PESTLE analysis plays the role of analytical tool to do the strategic business planning. PESTLE analysis helps to analyse the macro-environment factors which may affect the strategic planning. Macro-environmental factors influence on the organisation and the organisations do not have the direct control over it (Team 2013). Macro-environmental factors have the long-term impact on the organisation and the influence of the certain external factors can cause the severe consequences for the organisation. PESTLE analysis also helps to clarify changes needed within the organisation and recognise the potential options (Zelengera et al. 2014). PESTLE analysis is the acronym of six different factors, political, economic, social, technological, legal and environmental factors. The organisations do PESTLE analysis to have the decisions on understanding of the changes which may be happening in the industry. The organisations get to know about the changes helps them in making the better decisions for the business. Above all, management of the organisation analyses the external environmental factors of the chosen country in which the management is planning to expand the business. PESTLE analysis helps to scan the strengths and weaknesses of the six different external factors of the industry. According to Makos (2015) PESTLE analysis helps in making the decision on the new markets whether or not this particular market holds potential for making a profitable business.
Advantages of PESTLE analysis:
PESTLE analysis provides an easy-to-use and simple framework for analysis of the external environment of the industry. In addition, PESTLE analysis involves in the cross-functional expertise and skills which provides the idea of buyers’ socio-cultural perspectives and the economic conditions of the industry. As opined by Team (2013), PESTLE analysis assists to reduce the effects and impacts of potential threats to the organisation and the management does the external environmental analysis on timely basis. Moreover, PESTLE analysis encourages and aids the development of the strategic planning of the organisation and it also provides the mechanism for how the organisation would exploit the identified opportunities. PESTLE analysis also enables the management to assess the implications of penetrating the new market both globally and nationally.
Disadvantages of PESTLE analysis:
PESTLE analysis is the process which needs to be conducted on regular basis and the organisation does not make investment on doing the PESTLE analysis. The management sometimes oversimplifies the ideas which are to be used for decision-making. In addition, as stated by Makos (2015), PESTLE analysis succumbs too much on stating about information on external analysis, rather than identifying the issues which have to be taken into consideration. The management sometimes faces issue regarding the quality of information which is necessary for the external analysis as information is often restricted due to time and cost. The management takes the decision mostly on the assumption in PESTLE analysis as the external environment can be changed anytime and decisions taken based on subjective data.
External environmental analysis of Singapore
Flirtey is one of the premier independent drone delivery service providers in the world. Flirtey assists businesses to unlock new market, pioneer instant delivery and drive sales and replace costly and cumbersome logistics network (Flirtey.com 2018). Flirtey helps the organisations to make a partnership with them in order to have the future-proof delivery system. Flirtey is planning to come to Singapore and set up the business of drone delivery.
Political factors of Singapore
Singapore has a parliamentary representative democratic republic where President of Singapore is the head of the country and Prime Minister is the head of the government. Average value of political stability index of Singapore is 1.2 during the period between 1996 and 2016 and the maximum value index of Singapore is 1.88 which signifies the strong political stability (Mauzy and Milne 2017). In the report of World Bank, Singapore got the percentile rank of 99.52% in the year 2016 in absence of violence and terrorism. Singapore has an ethnically mixed population and 61% of the citizens are from Singapore and rest are from the foreign workers and residents. Singapore got the independence from the UK as part of the Malaysia and Singapore follows the modified version of the Parliamentary system of Westminster. People’s Action Party always dominates in the Political system and The Worker’s Party is the main opposition party in Singapore (Kong 2017). Flirtey has chosen to expand the drone delivery business to Singapore as Singapore is ranked second in the ease-of-doing-business in the world. Singapore government provides enough help to foreign companies to do the business as, under the Companies Act, just one representative is required for registering branch. Singapore provides advantages of integration with global markets, low tax facility, productive educated workforce, premier geographic location and many foreign cheap labours are also found (Pennycook 2017).
Flirtey will have the help of doing drone delivery business in Singapore as the drone is allowed in Singapore; however, the organisation has to follow the drone laws when flying in Singapore. In Singapore, the government has imposed a law that drones must not be flown above 200 feet. The drones are not to be flown within 5km of any airport. The drones must not drop anything and drones must not carry dangerous materials like biochemical, radioactive material and weapons (UAVsystemsinternational.com 2018). In Singapore, Flirtey cannot fly a drone over the crowds and drones must be flown in the good visibility and weather. Through drone delivery, the management of the company cannot take photos of Parliamentary House, Changi Airport and Supreme Court (Zwickle et al. 2018). Flirtey needs permission for commercial drone use in Singapore as per the instruction of Government of Singapore.
Economic factors of Singapore
Singapore is a highly developed country and it provides a free-market economy. Singapore provides most-open economy, least-corrupt with low tax rate and most-pro business environment (Goh 2017). Singapore has GDP of US$ 349 billion and GDP growth of the country is3.6% (Tremewan 2016). In Singapore, GDP per capita is $61,766 and the inflation rate in Singapore is 0.4%. Singapore provides the labour force of 3.661 million and only 2% people are unemployed in Singapore. Highly structured economy, good infrastructure and lower tax rate in Singapore provide the perfect place for doing the business. As stated by Robinson and Choy (2016), Government-linked companies in Singapore play a vital role in the economy of Singapore. Singapore has the economic freedom score of 88.6 and it makes Singapore economy the 2nd freest in the year 2018. The economy of Singapore is free and integrates one because of the government’s decision, poverty rights, labour freedom and fiscal health indicators. The government of Singapore is a prudent one and it always takes active industrial policy and economic development programmes so that the foreign companies and domestic companies can do business easily (Tremwan 2016). The economy of Singapore always helps in promoting the entrepreneurship vision with well-secured property rights. FDI inflows in 2017 in Singapore were $66 billion (Singstat.gov.sg 2018).
In drone delivery industry, Singapore has the projection to be worth of US$90 billion in the decade (Singstat.gov.sg 2018). In Singapore, Unmanned Aerial Vehicles (UAV) and Drones are operated by remote control and companies’ spending in Singapore over drone will be doubled over the next ten years. Several start-up companies in Singapore are trying to getting into the game as the current worldwide expenditure will grow up in drone delivery from US$ 5.2 billion to US$ 11.6 billion (Goh 2017).
Technological factors of Singapore
Singapore is the most digitally competitive nation in the world and the reports showed that Singapore is able to explore digital technologies leading to government practices and leading transformation. Singapore has improved considerably in the digital technology field as it took the first place as this country provides the scientific and technological infrastructure including the overall ranking to the overall digital competitiveness (Irizarry et al. 2017). In Singapore, information and communication technologies increase the competitiveness by increasing the productivity and transforming the process of business. Many of the multinational companies have their branches in Singapore to control the business in the South-Asian region. As opined by Lee and Win (2014), Singapore has become the information and technological hub in Asia-Pacific region as it gives the global data management system due to the hub connected to 15 active submarine cables. Many of the multinationals like Oracle, Google, Amazon, Microsoft and Web Service providers are there in Singapore; these companies can provide help to drone delivery industry. Product delivery companies are embracing the drone delivery technology and Flirtey has already experience working with the 7-Eleven and Domino. Flirtey has its experience in working in Australia, New Zealand and in the US. In Singapore, many of the e-commerce like E-Bay, Amazon and Taobao are there and drone delivery helps these e-commerce companies to provide faster service delivery. In drone delivery, Singapore based companies can improve the technology for Flirtey to penetrate in the untapped potential of Singapore. As published in Koh et al. (2015), in Singapore, Ministry of Transport has been doing their technological experiment with National Environmental Agency (NEA) and Land Transport Authority (LTA). Singapore government has taken the initiative to make Smart Nation provide support for a better living, create more advantages for the residents and stronger communities (Todayonline.com 2018).
Recommendations and Conclusion
It has been noted that drone delivery is possible in Singapore as Singapore government provides provision to use a drone for commercial purposes. Flirtey is a drone delivery solutions provider and it is working closely with regulators around the world and it is helping to shape the regulations and systems which will make the drone delivery the most effective, personal and frictionless delivery method in the market. Economic development of Singapore is also helpful to establish new company over there and drone delivery in Singapore has the bright future in coming years. Singapore also technologically developed country and Flirtey is providing unparallel focus on security, safety and privacy. Singapore government supports policies of drone and it does the innovation along with nurture the culture experiment, risk-taking and eventual adoption of new ideas.
Flirtey management needs to consider Singapore’s laws regarding drone delivery. As this business is going to do on a commercial basis; a permit is required for commercial drone use in Singapore. Flirtey needs to avoid having the drone confiscated at the airport and letter of authorisation is needed for commercial use in the country. Flirtey management needs to speak to the customer service agent for the information of the companies on multi-country and annual subscription.
In Singapore, having the registration is easy; however, Flirtey should follow the relatively simple procedure in Singapore to gain the approval. Singapore government is strict and Flirtey can follow simple and flexible business structure, Sole-Proprietorship. Sole-proprietorship is needed to register with ACRA before starting the business.
In Singapore, Flirtey needs to emphasis strongly on the relationship of the employees which means that process of doing business must be unrushed and based on personal development at first rather than just the corporate life. In Singapore, working people come from China, Malaysia and from India.
Flirtey may face competition in drone delivery service solutions providing a market in coming years. Flirtey must be ready with the strategies to compete with competitors as the competitors will be Amazon or Google or other technological giants. Therefore, differentiation of services will be the strategy for Flirtey.
Reference List
Goh, C.B., 2017. Education and the Making of the Singapore Economy. In Lee Kuan Yew’s Educational Legacy (pp. 117-125). Springer, Singapore.
Irizarry, J., Gheisari, M. and Walker, B.N., 2017. Usability assessment of drone technology as safety inspection tools. Journal of Information Technology in Construction (ITcon), 17(12), pp.194-212.
Koh, F.C., Koh, W.T. and Tschang, F.T., 2015. An analytical framework for science parks and technology districts with an application to Singapore. Journal of business venturing, 20(2), pp.217-239.
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Kong, L., 2017. Music and cultural politics: ideology and resistance in Singapore. In Non-Western Popular Music (pp. 63-75). Routledge.
Lee, J. and Win, H.N., 2014. Technology transfer between university research centres and industry in Singapore. Technovation, 24(5), pp.433-442.
Makos, J., 2015. An Overview of the PESTEL Framework. PESTLE Analysis, 18.
Mauzy, D.K. and Milne, R.S., 2017. Singapore politics under the People’s Action Party. Routledge.
Pennycook, A., 2017. The cultural politics of English as an international language. Routledge.
Robinson, E. and Choy, K.M., 2016. The Singapore Economy in 2065: Returning to Our Roots. In SINGAPORE 2065: Leading Insights on Economy and Environment from 50 Singapore Icons and Beyond (pp. 199-204).
Team, F.M.E., 2013. PESTLE Analysis. Strategy Skills. Free management ebooks, p.15.
Tremewan, C., 2016. The political economy of social control in Singapore. Springer.
Zalengera, C., Blanchard, R.E., Eames, P.C., Juma, A.M., Chitawo, M.L. and Gondwe, K.T., 2014. Overview of the Malawi energy situation and A PESTLE analysis for sustainable development of renewable energy. Renewable and Sustainable Energy Reviews, 38, pp.335-347.
Zwickle, A., Farber, H.B. and Hamm, J.A., 2018. Comparing public concern and support for drone regulation to the current legal framework. Behavioural sciences & the law. 9(3), pp.23-34.
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