Global Trend in Logistic Sector Essay example

575 Words Apr 30th, 2011 3 Pages
We will be using PEST analysis & Porter’s Five Forces framework to further illustrate the identified trend in the chosen sector, Logistics.
PEST
Political factors are the level of government intervention in the economy that include such as Antitrust regulations, tax policy, special incentives, foreign trade regulations, environmental and labor law, trade embargo, tariffs, political stability, industrial relations and others. In the context of logistics M&A, these will be important especially for firms that are operating in China, India, Vietnam. Using India as example, apart from the non-uniform tax structure, logistic companies in India have to pay numerous other taxes, octrois, and face multiple check posts and police harassment.
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Deregulation in the air transportation industry has lowered prices for shippers, stimulated growth in air freight, and virtually doubled labor productivity. It also has spurred dedicated air-freight carriers, like passenger airlines, to develop hub and spoke operations.

Globalization trend means that Shippers are increasingly likely to source and sell goods outside their own home countries and exporting them across international across continents which are more complex compared domestically. They are likely to turn to international or global logistics companies to solve their challenges that could extend beyond the conventional warehousing and transportation in their newly identified markets. With M&A in Logistics sector, they are able to focus and develop a niche to compete, providing shipper with a much better pricing, solutionings, technological advancements and services. Big companies, big providers are the belief that they can serve their customers base much better as what economies of scale usually does.
Sociocultural (Demographic) factors include the cultural aspects, population growth rate, age distribution, career attitudes, consumer activism and emphasis on safety. Trends in social factors affect the demand for a company's products and how that company operates.
Technological factors include

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