Political, Governamental, and Legal Forces
Political forces affect and organization because of the different changes produced in the laws and policies.
1. GOVERNMENT REGULATIONS AND DEREGULATIONS
By Davoren, (2016) “Regulation refers to controlling business through laws passed by the government. To protect the interests of consumers, government institutes regulatory laws. Conversely, deregulation deals with the elimination of government laws and rules. These laws, or removal of them, impact consumer and business activities such as obtaining loans, importing supplies and selling products. So, understanding the meaning of regulation and deregulation is crucial.”
For all companies included BottleFit is important to know the government regulations ans deregulation, because it is going to affect in good and bad aspects. For example the regulation helos to protect the interest of the consumer and the dereulation impact the importing supplies ans selling products.
Reference – Davoren. J. (2016). What Is Regulation & Deregulation?. Available in: http://everydaylife.globalpost.com/regulation-deregulation-6089.html
2. Changes in tax laws
Colombia was a high tax law compared to other countries and its taxes have been increasing in the last years, according to the chart above we can see how the big difference between to the collection of taxes in 2005 to the year 2015, without overwhelms the fiscal deficit is growing and the government is been force to increase the taxes rates so they can be able to work in a hard economic situation like it was been for the country this first mouths of the 2016.The taxi IVA is assumed to increase from it regular rate of 16% to 19%The tax 4 x 100 is going to continuo working until 2019There are other taxes laws announced to change in this 2016, but until know we don’t have exact numbers of how this one is going to be, but of course the increment of taxes is going to have a huge impact on the company because it affect the prices we have to pay and the Price of the bottle we are selling.
2016). Retrieved 18 February 2016, fromhttp://www.elpais.com.co/elpais/economia/noticias/prepare-su-bolsillo-viene-revolcon-impuestos-2016
3. SPECIAL TARIFFS:
According to recommendations of the Committee of Experts Tax increased rate of this tax is necessary. This report is an input for the 2016 tax reform.
After several months of study and analysis firm was the proposal to an increase in the overall tax to many of the products in the basket, the current rate is 16 percent. (http://www.portafolio.co, 2016)
Colombians would have to pay higher taxes next year if Congress approves the proposal of the Committee of Experts Tax to increase the VAT rate by three points, going from 16% to 19%.
According to the analysis of the commission of tax experts, the tax increase will affect the prices of products in the basket at a very challenging time for the economy, since inflation is already above 6%. (http://www.dinero.com, 2015)
Given that Bottlefit is a company that does not manufacture its products, as would be expensive, we prefer to buy from importers. Looking at the above, it can be concluded that the special rate affect us in the price of the bottles we buy and affects the price of what we are going to sell.
4. POLITICAL ACTION COMMITTEES:
Political Action Committees are the new figure through which will be defined in all regions, the issuance of guarantees to candidates, conducting or not internal consultation and strategies Party with a view to elections.
These committees could affect our organization because they are quite related with the policies of every mandatary, like social policies, environmental policies, industrial policies, transport policies, etc.
5. VOTER PARTICIPATION RATES:
In the municipal elections , abstention rose from 42.7 percent in 2011 to 40.69 . And in the department , it fell from 41.2 to 39.73 percent. Bogota also declined , going from 52.59 percent in 2011 to 48.45 in trading yesterday . In other words, participation in the capital increased by 4.14 percentage points.
Participation in regional elections yesterday was higher than in the presidential elections.
References: Diario El Tiempo. http://www.eltiempo.com/politica/partidos-politicos/abstencion-en-elecciones-2015-y-voto-en-blanco/16413181
6. NUMBER, SEVERITY, AND LOCATION OF GOVERNMENT PROTESTS
Colombia has been confronted in various government conflicts that Colombia has been faced several conflicts in which the population wants to end through protests or strikes. This conflics come from the reforms that the government makes in which the people do not agree.
According to Colombia Reports (2013), “2013 has been the year of an unprecedented number of protests in Colombia. Though, this year might not be the last one to see such an increase in the multiplicity of actors and the number of protest participants. 2013 may just be the beginning of deep and widespread democratic practices.”
Reference - Colombia Reports (2013). 2013: The year of social protest and repression in Colombia (Pt 1). Available in: http://colombiareports.com/2013-year-social-protest-repression-colombia-pt-1/
7. ENVIRONMENTAL PROTECTION LAWS:
According the Political Constitution of the Republic of Colombia, the general direction of the economy will be in charge of the State. This will intervene, by rule of law, in the exploitation of natural resources, land use, in production, distribution, use and consumption of goods, and public and private services. In order to guarantee the proper use of natural resources.
There are also laws about the chemical substances that can be used in order to protect the environment and human’s health. An example of this are the Polychlorinated biphenyls that are being forbidden all around the world because of its toxicity and environmental damage.
There must be environmental evaluations in order to guarantee a cleaner or eco-friendly production of goods and services.
It must be a regulation in the use of water and energy in the production processes and in the organization itself.
In case that the organization break any law, it will have to pay a fine according to the severity of the damage, and it will be exposed to the public, harming its organizational image.
This environmental laws affect our organization because they define in a high percentage the way in which we must act and use the natural resources. It is important to follow this laws in order to get the different production licenses that, have a good organizational image and help the environment.
8. LEVEL OF DEFENSE EXPENDITURES:
It is commonly considered that military spending in Colombia is too tall. However , when viewing in a regional context and compared with other countries facing some kind of internal threat , that finding lost strength.
For comparison purposes , the figures are taken from Stockholm International Peace Research Institute - SIPRI , as this a source widely used and recognized internationally
and have series covering periods longer,which facilitate the development of comparative exercises .
Reference: Gasto de defensa y seguridad. 1998-201. https://www.mindefensa.gov.co/irj/go/km/docs/Mindefensa/Documentos/descargas/estudios%20sectoriales/Serie%20Prospectiva/Gasto%20en%20defensa%20y%20Seguridad%201998-2011.pdf
9. LEGISLATION ON EQUAL EMPLOYMENT
Acording to the Embassy of the United States (2016), “The US Mission in Colombia provides equal employment opportunity and fair and equitable treatment to all people without regard to race, color, religion, sex, national origin, age, disability, political affiliation, marital status, or sexual orientation.”
Its positive to BottleFit that Colombia has legislations of equal employment, this help to increase the number of people that what to work and has the opportunity to have better employees.
Reference - Embassy of the United States (2016). Job opportunities. Available in: http://bogota.usembassy.gov/hr.html
10.Level of government subside
The government subside in the country is growing with higher investments in industries like the coffee industry that has been growing in a 42%in the last years, while the subsides to agriculture and livestock are higher than 9 billion pesos, and subsides to credits was of 6,70 billions said president Santos, while he explain how he is hardly investing on different industries and in people opportunities looking forward to have a better economic with internal sustainability and a brighter future.
The government clamed the have been also investing over 4.9 million pesos on architecture, increasing the quality of life of citizen, the government has and president have announced that they believe and want to support our country inner economy.
There is not a specific subside in for our industry that Benedict our company.
Colombiareports.com, (2014). Government subsidies generate employment in Colombia's coffee region: Santos. [online] Available at: http://colombiareports.com/government-subsidies-generate-employment-colombias-coffee-region-santos/ [Accessed 18 Feb. 2016].
http://colombiareports.com/government-subsidies-generate-employment-colombias-coffee-region-santos/
ElEspectador, (2016). Subsidios del Gobierno a agricultores y ganaderos superan $9 billones. [online] Available at: http://www.elespectador.com/noticias/economia/subsidios-del-gobierno-agricultores-y-ganaderos-superan-articulo-403851 [Accessed 18 Feb. 2016].
11. ANTITRUST LEGISLATION:
The protection of consumers, who have many rules are not met, will start to become a reality this year. For this, the Government is preparing a new antitrust status and control all unfair practices that occur in the production and marketing of goods and services.
The new statute will prohibit agreements that limit the production or distribution of any product. Restrict the chains which are formed with some products from being manufactured until they reach the consumer. Regulate the merger, price manipulation and unfair advertising and extend quality programs.
In this process the principles that defend the rights of consumers, according to the guidelines adopted by the UN are taken into account. An old statute that is about to turn 32-year-enacted as a basis for taking control mechanisms to unfair commercial practices, which are many in the country, affecting both consumers and the same productive sector.
The idea is to implement prohibitive norms ranging from product sales tied to monopoly agreements to fix prices. And of course avoid unfair advertising that often make the competitors through the media. (www.eltiempo.com, 2013)
According to the above, the antitrust statute must take into account in our company since it represents the quality of our final product and also plays an important role in selling and promoting of our product.
12. COLOMBIA’S FTAS:
Colombia noticed that one of the ways to improve its economy is to create FTA’s with different countries or organizations. Actually, Colombia has 13 agreements that are with: CAN, México, Chile, Mercosur, Triángulo Norte, EE.UU, Canada, EFTA (Iceland, Switzerland, Liechtenstein and Norway) European Union, Cuba, Panamá, CARICOM and Venezuela.
This Free Trade Agreements affect our organization because it means that we have more potential costumer, but also, it means that our competition could increase.
13. TRADE PARTNERS:
According to MinCIT , although foreign sales in 2013 to US 's main trading partner , exports of non- energy mining to this North American country fell by 15.5 % between January and July 2014 , they presented an increase of 10.1 % compared to that reported in the same period of the previous year , while energy mining products decreased by 38.1 %.
From August 2013 , the date on which the agreement between Colombia and the European Union (EU ) came into force , until the same period of this year a surplus trade balance showed USD2.610 million . The development of sales outside Colombia to the EU from August 2012 to July 2013 totaled USD8.673 million and August 2013 to July 2014 totaled USD9.922 billion , this variation represents an increase of 14 , 4 %, according to analysis by Legiscomex.com based on figures published by the National Administrative Department of Statistics ( DANE ) .
DANE also noted that Colombian imports from the EU from August 2012 to July 2013 totaled USD7.615 million and August 2013 to July 2014 were USD7.312 million, showing a decrease of 4 %.
As for the Andean Community (CAN ) third country trading partner , Colombian exports to this policy regional economic organization and also presented in 2013 a reduction of 6.2% , while in the previous year rose 7.6 % . During the period from January to July 2014 , exports of non- energy mineral products decreased by 8.5 % compared to 2013 , meanwhile energy mining products fell by 23.9 %.
References: Legiscomex. Colombia y sus principales socios comerciales. http://www.legiscomex.com/BancoConocimiento/C/colombia-principales-socios-comerciales-actualizacion/colombia-principales-socios-comerciales-actualizacion.asp?CodSubseccion=389&numarticulo=&CodSeccion=190
14. IMPORT – EXPORT REGULATIONS
By Global Trade Solutions (2016), “Import duty and taxes are due when importing goods into Colombia whether by a private individual or a commercial entity. The valuation method is CIF (Cost, Insurance and Freight), which means that the import duty and taxes payable are calculated on the complete shipping value, which includes the cost of the imported goods, the cost of freight, and the cost of insurance. In addition to duty, imports are also subject to sales tax, and in some cases to excise.”
For the company BttleFit operation its important the import regulations in wich Colombia are involved, because are laws that them have to follow to import in a correct way, and avoid problems with the government of the country.
Reference - Global Trade Solutions (2016). Import duty & taxes when importing into Colombia. Available in: http://www.dutycalculator.com/country-guides/Import-duty-taxes-when-importing-into-Colombia/
15. GOVERNMENT AND FISCAL AND MONETARY POLICY CHANGES
deficit will pressure the government to look for higher incomes; the BID recommends the same therefore new taxes may occur. The Republic Bank will try to continue to maintain as low as possible the interest rate; it has been able to keep it from the last seven months, intervention rate bank 4,5%. These will allow companies to get cheaper loans and be able to invest in business, this is an opportunity for our company to do so, but inflation may continue to increase as it happens in January.
Countrystudies.us, (2016). Colombia - Fiscal and Monetary Policy. [online] Available at: http://countrystudies.us/colombia/66.htm
[Accessed 18 Feb. 2016].http://countrystudies.us/colombia/66.htm Portafolio.com.co, (2016). Colombia mantendría tasa estable hasta enero de 2016. [online] Available at: http://www.portafolio.co/economia/colombia-tasa-interes-mayo [Accessed 18 Feb. 2016].http://www.portafolio.co/economia/colombia-tasa-interes-mayo
16. POLITICAL CONDITIONS IN FOREING COUNTRIES:
Geopolitically throughout our history we have told us that the position of Colombia is privileged. We really are at the center of the planet and we are destined to be a major player in the global context, for better or worse. We are the gateway to South America and the geographic point between southern and northern Europe. In terms of east and west, we are in the center of the Western Hemisphere. Always it defined this as a strength or geopolitical advantage.
Politically, Colombia where it belongs? Currently we are part of the Latin American right, pro-American and pro-West. Is this the right way? Suffice to say the following: Colombia has become the center of the Latin American democratic right. Along with Mexico, Peru and some Central American nations, it is still convinced of the benefits of free trade and integration with the United States and Europe, but is working more actively than the rest of the nations mentioned in its integration with the rest of the continent. The reason is basically that Colombia wants to become one of the political and economic centers of the region, in order to influence decisions in the north and lead the political and economic debate in the south. Integration with Europe and the rest of the Western nations will serve to further strengthen the position of regional leadership and become the door of South America to the world. (blogs.eltiempo.com, 2007)
17. SIZE OF GOVERNMENT BUDGETS
According to Trading Economics (2016), “Colombia recorded a Government Budget deficit equal to 2.40 percent of the country's Gross Domestic Product in 2014. Government Budget in Colombia averaged -3.63 percent of GDP from 2001 until 2014, reaching an all time high of 0.23 percent of GDP in 2005 and a record low of -8.47 percent of GDP in 2004.”
Reference - Trading Economics (2016). Colombian Government Budget. Available in: http://www.tradingeconomics.com/colombia/government-budget
18. World oil and labor markets
Colombians economy depends very much in oil, as its price continue to be very low around u$30 the government must look for new ways to get incomes, as taxation, this will affect most of Colombians companies that are having problems due to the fact that the demand is very low, as our product is expensive and taxation may impact this kind ofProducts, competition may be much difficult. The dollar price is at the moment in the higher moments ever, therefore is an opportunity to look for exports, our industries are not ready but we need to invest and be prepare for globalization market, specialize products at reasonable prices may be an important opportunity. The global recovery continues, but growth remains modest and uneven overall. The US national unemployment rate for the month of November 2015 registered at 5 percent, a record low in this recovery and half its peak of 10 percent in October 2009.In Europe the unemployment rate has been improve slow but it is getting more stable, there for a world economy recovery is going on and exports opportunities may be a better option.
name, (2016). The State of the U.S. Labor Market: Pre-January 2016 Jobs Release. [online] Available at: https://www.americanprogress.org/issues/economy/news/2016/01/07/128377/the-state-of-the-u-s-labor-market-pre-january-2016-jobs-release/ [Accessed 18 Feb. 2016]. https://www.americanprogress.org/issues/economy/news/2016/01/07/128377/the-state-of-the-u-s-labor-market-pre-january-2016-jobs-release/ Oil-price.net, (2016). Crude Oil Price, Oil, Energy, Petroleum, Oil Price, WTI & Brent Oil, Oil Price Charts and Oil Price Forecast. [online] Available at: http://www.oil-price.net [Accessed 18 Feb. 2016].http://www.oil-price.net
19. LOCATION AND SEVERITY OF TERRORRIST ACTIVITIES:
The political conflict in Colombia dates back to the nineteenth century when they begin to see the rivalry between the traditional parties that grew stronger during the Thousand Days' War and began a long period of violence in Colombia. As for the current political conflict, beginning in the early 60s with the emergence of the guerrillas (mainly the Revolutionary Armed Forces of Colombia and the National Liberation Army), the result of social and political exclusion, unequal land distribution , and social injustice. In Colombia there are approximately around 140 groups of which the majority are being financed by drug trafficking.
Between 1948 and 1965 there was such a bloody war that this period is known as the "era of violence." In 1958, power is distributed between the two powerful traditional parties and other pressure groups are not able to participate in political processes. That meant that, in the mid-sixties, the two most important guerrillas left until today were formed: The Revolutionary Armed Forces of Colombia (FARC) and National Liberation Army (ELN). These two guerrillas together control about today, with more than fifteen thousand guerrillas, half of the area of Colombia.
After 40 years of conflict, both the state or armed groups have achieved their objectives and violence has led to the transformation of the country's economic system and the militarization of society with paramilitary groups as new actors. An important element is that the Colombian civil society, the main victims of armed conflict, is actively involved in the peace process with promising proposals to end violence and create a dynamic that could be germ social integration into the that coexistence is imposed to confrontation and violence. (www.colombia.com, 2015)
20. LOCAL, STATE, AND NATIONAL ELECTIONS:
Colombian democracy system says that the presidents and majors have to be elected every 4 years. It means that is the current president is not re-elected, the politics will be involved in constant changes and this affect our organization.
During the last years, the presidents have been: 1990-1994 – César Gaviria Trujillo, 1994-1998 – Ernesto Samper Pizano, 1998-2002 – Andrés Pastrana Arango, 2002- 2010 – Álvaro Uribe Vélez, 2010-Unitil now – Juan Manuel Santos Calderón.
Bogotá’s last majors have been: Samuel Moreno Rojas (2008-2011), Gustavo Petro (2012-2015), and Enrique Peñalosa Londoño (2016-2020).
Medellin’s last majors have been: Alonso Salazar Jaramillo, (2008-2011), Aníbal Gaviria Correa, (2012-2015), Federico Gutiérrez (2016-2020).
This majors changes affect our organization as well because it means that the policies for the city’s development could change. For example, changes in the transport system of the city that could affect our deliveries.
