Political Factors that Impact Kentucky Fried Chicken (Japan) Ltd.
- Judiciary Independence - In the matter of commercial and business decisions, judiciary of
the country is independent to a large extent. Business do face problem when the conflict is
between public interest and proprietary technology similar to ruling in South Africa where
government & judiciary allowed generic AIDS drug irrespective of patents of global
companies.
- Democracy & Other Democratic Institutions - According to Christopher A. Bartlett, U.
Srinivasa Rangan the democratic institutions are needed to be strengthened further so that
business such as Kfc's Weston can thrive in an open, transparent and stable political
environment. Strengthening of democratic institution will foster greater transparency and
reduce the level of corruption in the country.
- Political Governance System - Based on the information provided in the Kentucky Fried
Chicken (Japan) Ltd. case study, it seems that the country has a stable political system. Kfc's
Weston can make strategies based on the stable political environment.
- Threat of Terrorist Attacks - We believe in the world of post 9/11, corporations such as
Kfc's Weston have to live with operating under the shadow of a terrorist attack. The prudent
policy should be to take insurance and other types of hedging instruments to mitigate the
losses Success because of the terrorist attacks.
- Regulatory Practices - The regulatory practices are streamlined with global norms which
have helped the country to improve its "ease of doing business" ranking.
- Government Regulations and Deregulations - The government is adhering to all the rules
and regulations under World Trade Organization norms. There is consistency in both policy
making and implementations of those policies.
- International Trade & Other Treaties - The country has a good record of adhering to
international treaties it has done with various global partners. The government of each
party has adhered to the treaties done by previous governments, so there is a consistency in
both rule of law and regulations.
- Transition of Government and Changes in Policy - There is consistency in policy making
from one government to another. Secondly governments from all parties adhere to the
treaties made by the previous governments.
Political Factors
- Political and Legal Structure – The political system seems stable and there is consistency in
both economic policies and foreign policies.
- Political consensus among various parties regarding taxation rate and investment policies.
Over the years the country has progressively worked to lower the entry of barrier and
streamline the tax structure.
- Role Local Governments Play – Local governments are highly influential in the policy
making process and implementation as most of the policies and regulations are
implemented by the local government as enforcement agencies mostly report to local
government in their own states regarding various laws.
- Regulatory Practices - The regulatory practices are streamlined with global norms which
have helped the country to improve its “ease of doing business” ranking.
- Government Regulations and Deregulations – The government is adhering to all the rules
and regulations under World Trade Organization norms. There is consistency in both policy
making and implementations of those policies.
- Likelihood of Entering into an Armed Conflict – From the information in the Kentucky Fried
Chicken (Japan) Ltd. case study, I don’t think there is a likelihood of country entering into an
armed conflict with a neighboring country.
- Political Governance System – Based on the information provided in the Kentucky Fried
Chicken (Japan) Ltd. case study, it seems that the country have a stable political system.
Kfc's Weston can make strategies based on the stable political environment.
- Size of Government Budgets – both Local Governments and National Government – The
government at both national level and local levels are running deficit budgets which is
boosting growth in the short term but may lead to increase in inflation over medium term.
The bond rating of national government is investment grade.
- Unrest within the Country & Chances of Civil Unrest – We don’t think that Kfc's Weston
business operations are facing any dangers from any kind of civil unrest or internal militant
operations in the country.
