Research Paper: PEST Analysis of Cape Town, South Africa, as well as the State of California

The Manufacturing Industry in Cape Town

Cape Town is rated as among the best manufacturing town in South Africa. Statistic South Africa indicated that the total income in the industry has improved by a percentage of 9.4 annually wherein 2011; 1.68 to 2.20 trillion South Africa Rand by 2014. The contribution by Cape Town has been 17.3 % of the total income in the manufacturing industry. The large contribution has been due to processing transport industries, coke, chemical products, plastic, rubber, petroleum, food products and beverages. Rooibos is mostly placed among the beverages since it is manufactured to produce bush tea. The large manufacturing industry is advantageous considering that it will ensure the Rooibos plant will be manufactured before transporting it to California to make the Rooibos skin products. Since manufacturing will be done in the same nation, it will help reduce the cost of transporting bulky Rooibos plant and manufacturing since the plant is got from South Africa.

The Skincare Industry of California

The cosmetic industry in California deals with skincare, make-up, toilet deodorant, hair care, perfumes and oral cosmetics. The cosmetic industry is valued a lot in America as it has contributed to the growth of the nation. The cosmetic market in the United States is large to the extent of being able to generate large returns when one invests in the beauty products. Most customers believe that herbal products are the best as they can be able to maintain a natural skin without experiencing side effects. Using the Rooibos plant will assure the potential customers of natural skins care thus attracting a large number of consumers. Since beauty products are among the largest industries in California, there will be stiff competition which can be dealt with through producing quality products. The market is growing rapidly which means that I may not only distribute in California but in also other states.

Sephora and Skincare Customer Demographics

Sephora is one of the most recognized beauty stores in the world which has both black and white exteriors. There are more than 250 beauty skin care products, fragrance, hair care and accessories all under one roof which enables the shop to attract all type of clients depending on the beauty products they are interested in. The mission of Sephora is to build the best equipped and professional team of consultant depending on the products in the beauty industry. The beauty stores are guided by certain values, which made me consider working with them and they are passion, innovation, expertise, initiative, and teamwork. Since the stores are recognized internationally, distributing the Rooibos skin care products means having a wider market to work with, and the returns will be more.

The trends of consumers of beauty products have changed. There are lots of people looking for natural products which have no side effects on the skin. Skin awareness is one of the factors which have led to the development of the beauty industry. Individuals believe that when natural products are used, they reduce dryness and fast aging. Investing in this business will thus be advantages due to the return expected.

PEST Analysis of Cape Town, South Africa, as well as the State of California

Political

Corruption is one of the political vices affecting the manufacturing industry in Cape Town. There are lots of charges for the products being manufactured locally which makes it hard to acquire the products at a lower price. It will thus cost me when I ensure that the Rooibos plant is produced before transporting it to California to make the skin care products. However, the political system supports international trade, and thus I will not have to pay the excess amount for export. The political system in California promotes economic growth and start-up businesses, and thus I will not have any problems establishing the Rooibos skin care products and distributing them, as getting the permit will not take me long. There is political stability which will support the development of the business which will be an added advantage as I will reach to more potential customers.

Economical

Currency fluctuations will affect the business. There are times when the South African rand is low which means I will be spending more when I am in the country getting the low materials to make the skin care products. It means that the profit margins will be reduced as I cannot stop manufacturing the products when the rand is low due to fluctuations. The Cape Town economy, however, is strongly considering that it is the leading manufacturing town in the nation and it will create an opportunity to expand the business. The economy in California is stable which will make it better to conduct trade in the states. Since the beauty market is extensive and there are several distribution stores, I will be able to increase the profit margins by getting the more customers. The fluctuations of the American dollar will not affect the business as all transactions will involve the same currency.

Social

In South Africa, Rooibos plant is mostly used for consumption purposes such as the bush tea (South Africa, 1974). Purchasing the plant from the people will require educating them on what the plant can do and how it can be used in making skin care products. The unemployment levels are high in California which will affect the purchasing power of the people. It will require regulating the prices depending on the economic welfare of the customers, such as having higher prices in the regions which are well off and lowering the prices among the low-class people who require the herbal skin products from the Rooibos plant. The depleted rand currency will be an advantage when purchasing the Rooibos plants as I will not use lots of dollars to acquire enough raw materials for my business. It will thus be an opportunity to make more profits from the Rooibos skin care products.

Technological

The technological level in California and Cape Town are high. Cape Town is among the most industrialized towns in Africa which makes it possible to manufacture the skin care products from Rooibos plant. Through the technological know-how, it is possible to produce the requirements of making skin care products from the Rooibos plant (Vereinigung fur Angewandte Botanik and Deutsche Gesellschaft fur Qualitatsforschung (Pflanzliche Nahrungsmittel), 2004). Refinement is then done, and only the required end product is taken to California where I will be producing the Rooibos skin care products and distributing then to Sephora. The technological levels in California are high considering that technical know-how is very vast in America. The innovative approaches will be used for various purposes which are ensuring the quality of the Rooibos skin care products, branding and packaging the product and marketing to ensure that the potential customers are aware of the products I will be offering and the skin benefits associated with using the herbal products.

Conclusion

Opening a successful business will require studying the two environments California and Cape Town since they will play a major role in determining the levels of success. The Rooibos plant has to be affordable despite the fluctuations of exchange rate due to the difference in currency. The manufacturing cost in South Africa has to be favorable which will help reduce transporting bulky plants which may interfere with the quality of the end product. The market in California has to be favorable considering that there are other herbal products being sold in the state. Other business factors such as marketing, promotion, and competition are important to analyze as they also shape the venture.

References

Hampton, C. (2004). Passport to the best of Cape Town, South Africa. Cape Town: Passport Publications.

South Africa. (1974). South Africa. Pretoria: South African State Dept. of Information.

Vereinigung fur Angewandte Botanik., & Deutsche Gesellschaft fur Qualitatsforschung (Pflanzliche Nahrungsmittel). (2004). Journal of applied botany and food quality =: Angewandte Botanik. Gottingen: Liddy Halm.