PESTEL Analysis and Porter’s Five Forces Framework of Lyft Vietnam

Lyft Vietnam Environmental Analysis
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Lyft Vietnam Environmental Analysis
Contemporary business firms must conduct effective market environment research to identify potential challenges to their expansion activities. Additionally, it helps identify potential opportunities the company may tap into. Lyft, a United States web-based cab application firm offering ridesharing services, motorized scooters, and food delivery systems in the United States, is aiming to expand its services to Southeast Asia in Vietnam. The company currently ranks second in the United States after Uber services, with a 30% market share. After the Covid-19 pandemic, the company has identified the need to diversify its markets and identified Vietnam as an ideal market for expansion. The report will conduct a PESTEL analysis to identify potential challenges. Additionally, it will outline Porter’s five forces to determine the market’s attractiveness and highlight the company’s integration –responsiveness in the country.
PESTEL Analysis
In the Lyft scenario, the company aims to penetrate South East Asia, particularly Vietnam. It is critical to conduct a PESTEL analysis to identify potential political, economic, social, technological, legal, and environmental factors that may affect its activities and growth rate in the country.
Source: (Overseas Business Risk, 2021).
Political Environment
Government Stability of the country - Vietnam is a single-party state. Thus its political and security environment is stable. Civil unrests, protests, labor, and political injustices are rare in the country hence ideal for Lyft expansion. However, human rights violation in the country remains a major problem, according to a Human Right Watch Organization report. The problem is censored and controlled by the government hence may pose a problem to the company’s foreign and domestic workers (Overseas Business Risk, 2021).
Bureaucracy and Corruption - both issues are rampant in the country despite the government introducing various accountability and restriction measures to mitigate the problem. According to the Transparency International corruption perception index of 2021, Vietnam ranks 87th among 180 nations on corruption levels (Vietnam, 2021). The country managed a score of 39/100, implying that its economy is one of the worst to invest in.
Economic Environment
The country has a relatively welcoming foreign direct investment for foreign companies implemented to attract more investors to the country (Rahman, 2020). The country has introduced new free trade agreements and economic reforms and offers cheap labor costs making it viable for Lyft to expand its activities in the country. The country remains low in the Global Competitiveness Index despite a high FDI of $143 billion over the last ten years (United States Department of State, 2022). The country’s weak currency poses a major problem for the company’s expansion; 1VND = $0.000043. Regarding business facilitation, the company lags behind other Southeast Asian countries, with companies taking about 384 hours to pay their taxes compared to 64 hours in other...