abhishreshthaa
Abhijeet S
Pest Analysis On Ace Hardware Corporation : Ace Hardware Corporation is a hardware cooperative based in Oak Brook, Illinois, United States. Ace Hardware was founded in 1924 by Richard Hesse, E. Gunnard Lindquist, Frank Burke and Oscar Fisher in Chicago, Illinois.
Ace Hardware, incorporated in 1928 as Ace Stores Inc., was founded to provide a centralized purchasing organization to supply the founders' and members' stores. Its retail network expanded to hundreds of dealers by 1949, when annual sales reached about $10 million.
After Hesse retired in 1973, Ace was sold to its retailers, becoming a cooperative[1], and the headquarters moved to suburban Oak Brook. Independent owners became dealer-owners and shareholders in the company. Because it's a co-op and not a franchise, each Ace store looks different. Ace has placed a focus on Ace stores exhibiting some similar characteristics, such as signaled and core product lines. The Vision 21 program, as this is called, is aimed to make all stores look recognizable as an Ace Hardware.
1 Political
One of the important factors to consider is the presence of AFTA or ASEAN Free Trade Area. Currently, most of ASEAN region are free trade or 96% of the entire ASEAN trade. AFTA was established in January of 1992 in order to eliminate tariff barriers among the Southeast Asian countries. It planned to reduce tariffs to zero to 5% in 15 years among the six nations through a common effective preferential tariff (Ghani & Zainuddin 2008). Because Malaysia has two national carmakers which are Proton and Perodua, and the government wants to protect their interests. Unfortunately, the said development could prove to be a temporary solution. If we are going to check on the high selling prices of the national cars of Malaysia because of high production costs and lack of vendor efficiency, there is a big possibility that the local market will be ruled by imported cars. As a result, there will be increase in the number of the vehicles on the road and there will be a glut of used cars in the market, because people will tend to trade their cars for cheaper and imported brands (Frost & Sullivan 2002). On the other hand, the issue regarding the environment is vital because it is considered as one of the most talk about topics in the world. The environmental regulation in Malaysia can be traced back during the colonialism of British which introduced the environmental standards about the mineral and agricultural resources to Europe.
3.2 Economic
The vehicle sales in the country is expected to fall by 12.4% in 2009 due to different economic aspect, primarily the issue of global financial crisis, which affected the local financial status of the country (AseanOneMonitoring 2009). As a result, the government of the country is expecting a slow economic growth for the country, which can affect the buying behavior of the customers. Furthermore, due to the AFTA, it had increased the competition, which will impact the performance of Proton. However, the performance of the automobile industry will be maintained and managed due to the huge total labor force. Despite of the slower economic growth in 2003, the unemployment rate was only 3.5%, which shows an almost full employment (PriceWaterHouseCooper 2005).
3.3 Social
The growing population in the country is one of the factors which can affect the automobile industry. In 2008, the country has a total of 27.5 million citizens (US Department of State n.d.). This will give a greater number of markets. Furthermore, the ratio of car ownership in the country is somewhat high or total of 1:5, which signifies that people are considering cars as important things in their lives. Furthermore, people will also set on big-ticket items or consumers are expected to put off buying different motor vehicles because of the employment market uncertainty because of the global and local financial crisis (AseanOneMonitoring 2009). Another factor to consider is the growing knowledge and concern of the people regarding different environmental issues. Furthermore, the impact of the image to the loyalty of the customer is also another factor.
3.4 Technological
Technology is considered as one of the most important factor in the automotive industry. Due to the increasing competition, the development in technology is growing and affecting the performance and position of each and every company in the automobile industry. It is also important to consider the maturity of technology, together with the maturity and capacity of manufacturing, which affect the innovation process of any company. The intellectual property is also important factor, because it is considered as a sign of authenticity and uniqueness. Due to the different technologies, primarily the help of computer and the Internet, the potential for innovation and development is increasing.
Ace Hardware, incorporated in 1928 as Ace Stores Inc., was founded to provide a centralized purchasing organization to supply the founders' and members' stores. Its retail network expanded to hundreds of dealers by 1949, when annual sales reached about $10 million.
After Hesse retired in 1973, Ace was sold to its retailers, becoming a cooperative[1], and the headquarters moved to suburban Oak Brook. Independent owners became dealer-owners and shareholders in the company. Because it's a co-op and not a franchise, each Ace store looks different. Ace has placed a focus on Ace stores exhibiting some similar characteristics, such as signaled and core product lines. The Vision 21 program, as this is called, is aimed to make all stores look recognizable as an Ace Hardware.
1 Political
One of the important factors to consider is the presence of AFTA or ASEAN Free Trade Area. Currently, most of ASEAN region are free trade or 96% of the entire ASEAN trade. AFTA was established in January of 1992 in order to eliminate tariff barriers among the Southeast Asian countries. It planned to reduce tariffs to zero to 5% in 15 years among the six nations through a common effective preferential tariff (Ghani & Zainuddin 2008). Because Malaysia has two national carmakers which are Proton and Perodua, and the government wants to protect their interests. Unfortunately, the said development could prove to be a temporary solution. If we are going to check on the high selling prices of the national cars of Malaysia because of high production costs and lack of vendor efficiency, there is a big possibility that the local market will be ruled by imported cars. As a result, there will be increase in the number of the vehicles on the road and there will be a glut of used cars in the market, because people will tend to trade their cars for cheaper and imported brands (Frost & Sullivan 2002). On the other hand, the issue regarding the environment is vital because it is considered as one of the most talk about topics in the world. The environmental regulation in Malaysia can be traced back during the colonialism of British which introduced the environmental standards about the mineral and agricultural resources to Europe.
3.2 Economic
The vehicle sales in the country is expected to fall by 12.4% in 2009 due to different economic aspect, primarily the issue of global financial crisis, which affected the local financial status of the country (AseanOneMonitoring 2009). As a result, the government of the country is expecting a slow economic growth for the country, which can affect the buying behavior of the customers. Furthermore, due to the AFTA, it had increased the competition, which will impact the performance of Proton. However, the performance of the automobile industry will be maintained and managed due to the huge total labor force. Despite of the slower economic growth in 2003, the unemployment rate was only 3.5%, which shows an almost full employment (PriceWaterHouseCooper 2005).
3.3 Social
The growing population in the country is one of the factors which can affect the automobile industry. In 2008, the country has a total of 27.5 million citizens (US Department of State n.d.). This will give a greater number of markets. Furthermore, the ratio of car ownership in the country is somewhat high or total of 1:5, which signifies that people are considering cars as important things in their lives. Furthermore, people will also set on big-ticket items or consumers are expected to put off buying different motor vehicles because of the employment market uncertainty because of the global and local financial crisis (AseanOneMonitoring 2009). Another factor to consider is the growing knowledge and concern of the people regarding different environmental issues. Furthermore, the impact of the image to the loyalty of the customer is also another factor.
3.4 Technological
Technology is considered as one of the most important factor in the automotive industry. Due to the increasing competition, the development in technology is growing and affecting the performance and position of each and every company in the automobile industry. It is also important to consider the maturity of technology, together with the maturity and capacity of manufacturing, which affect the innovation process of any company. The intellectual property is also important factor, because it is considered as a sign of authenticity and uniqueness. Due to the different technologies, primarily the help of computer and the Internet, the potential for innovation and development is increasing.
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