How UK Government Policy Affects Company Profit And Success

PEST ANALYSIS

POLITICAL

This factor reflects how UK government policy effects our company profit and success. Team Pulse needs to consider these followings political factors:

• Tax o VAT: We need to pay 20% VAT on goods imported from outside the EU. (GOV.UK, 2016) o Corporation tax: We pay 20% corporation tax if our profits under £300,000 and 21% if our profits over £300,000. (GOV.UK, 2016)

• Employment rights o According to UK government, these rates are for the National Minimum Wage from 1 April 2016: £5.3 for workers from 18-20 years old and £6.7 for those from 21-24 years old and £7.2 for 25 years old and over. o European Working Time Directive:

♣ 11 hours rest a day and a right to a day off each

ECONOMICAL

• Economic growth

The UK economic growth estimate for 2015 was at 2.2% (BBC, 2016). The BCC forecast for 2017 to 2.3% from 2.5%, and expects growth of 2.4% in 2018. The economic growth will increase the income of the UK citizens and their standard of living as well.

• Interest rate

Interest is the reward for lending and the cost of borrowing. The interest rate is the percentage rate charged on a loan or paid on savings. An increase in interest rates can affect our company in two ways (BBC, 2016). Firstly, customers with debts have less income to spend because they are paying more interest to lenders and our sales fall as a result. Secondly, our company with overdrafts will have higher costs because we must now pay more interest.

• Exchange rate

The Pound is experiencing a decrease in its value. As a result, Robotic maid must pay more on imported goods from China which increases the price of our services. If there is an appreciation in the value of the Pound, imports will be cheaper which leads to a lower price of our services.

The Swiss Knight is a company that sells robotic maids, which make this segmentation method all the more appropriate. Target Marketing

After great consideration, niche marketing seems to be the most suitable for The Swiss Knight. The resources are limited to the company and we would rather be a large share of a small market. Undifferentiated marketing does not seem suitable as it is mass marketing and targets a large market ignoring differences, however, we can’t do so as we target the upper class. It would also be very costly to the company to keep no differences in the market. Niche Marketing, on the other hand, would be able to target the couples or single man or women who have the money to pay for the robotic maid, so as they are busy at work their house will be cleaned by their instructions and there is no headache of going back home to a dirty house.

Price