The Jamaican Business Environment

Published Date: 02 Nov 2017

Businesses are affected by an external environment as much as they are affected by the competitors. Global factors influencing business are legal, political, social, technological and economic. Understanding of these factors is important while developing a business strategy in Jamaica.

The business environment in Jamaica has seen an increase in the amount of micro, small and medium size enterprises carrying out operations that will help in the development of the country. The business environment has suffered to the recently ended recession and is now hoping to recover to a stable environment. There are several other environments which influence business organizations within the business environment, these include; the political environment, social environment, legal environment, technological environment and the competitive environment.

The Jamaican economy suffered major negative shocks during recent years, including a decline in tourism following the September 11 terrorist attacks, wide-scale flooding and other natural disasters, and an outbreak of domestic violence. However the Jamaican authorities have maintained macroeconomic stability through this difficult period, as evidenced by the low inflation and positive economic growth. Jamaica’s successful borrowing in the international bond market is also an encouraging sign of the credibility of the authorities ' economic policies.

To lay foundations for faster economic growth, the authorities are committed to maintain macroeconomic stability, take anti-crime measures to improve the business environment and maintain social order; improve infrastructure; strengthen the competitiveness of the economy including through adopting sector-specific growth-oriented policies; continue the effort to reduce labor market rigidities; and adopt further public sector reforms.

Economic environment

The Jamaican economy is heavily dependent on services, which now account for 70% of GDP. The country continues to derive most of its foreign exchange from tourism, remittances, and bauxite/alumina.

The global economic slowdown, particularly after the terrorist attacks in the US on 11 September 2002, stunted economic growth; the economy rebounded moderately in 2003, with one of the best tourist seasons on record. But the economy faces serious long-term problems: high interest rates; increased foreign competition; a pressured, sometimes sliding, exchange rate; a sizable merchandise trade deficit; large-scale unemployment; and a growing internal debt, the result of government.

As seen in an article on www .cia.gov/cia/publications/factbook/geos/jm.html Jamaica’s ratio of debt to GDP is close to 150%. Inflation, previously a bright spot, is expected to remain in the double digits. Depressed economic conditions have led to increased civil unrest, including gang violence fueled by the drug trade. In 2004, the government faces the difficult prospect of having to achieve fiscal discipline in order to maintain debt payments while simultaneously attacking a serious and growing crime problem that is hampering economic growth.

However in an article posted on the Gleaner website in 2010 Dr Gladston Hutchinson, managing director of the planning institute of Jamaica stated that now is the time for business to invest in Jamaica. "Many of the top business persons that I have spoken to, now tell me that the environment for doing business in Jamaica has never been better, they say this is the best macro-economic environment they have had to do business in. So now, I challenge them to go and do business."

New business and entrepnuer are encouraged to seize on the resulting opportunities for new investments, consequent on lower interest rates and the "incredible business environment" existing

Political environment

The political environment is the state, government and its institutions and legislations and the public and private stakeholders who operate and interact with or influence that system. The stability of the political environment and government will impact on the prioritization of economic and business policy. These policies and action may be on local, regional, national or international level. Business owners and managers pay close attention to the political environment to gauge how government actions will affect their company.

The political environment in Jamaica is influenced by the actions taken by the ruling party and even the opposing party. Their impact on business organizations comes through a fiscal policy, which enforces tax rates on all private companies within Jamaica. The level of the tax rate impose can strongly impact a business and cause negative effects; for example, if the tax rate that private businesses have to pay increases this force the business to increase the prices of its goods and services or even worse lay off workers. In making these decisions, government has to be careful not to trigger a negative impact, and since this year they have ensured that the environment will not be impacted by their policy in a negative way. According to an article in the Jamaica Observer, David Mullings quoted, "the reduction in corporate tax rate from 33.3% to 25% is a positive move because businesses can now allocate more capital to areas such as productivity improvement for staff, hiring additional staff, retooling and research and development, areas that contribute to economic growth".

Social environment

The social environment of a business can be integral to its success or failure. Employees are often influenced by the context in which they work and this can have implications for productivity. Some effects of the social environment are easier to measure than others. Employers who take the necessary strides to create a positive and harmonious social environment in the workplace can set themselves up for future success.

The social environment of a Jamaica determines the value system of the society which, in turn affects the functioning of the business. Sociological factors such as costs structure, customs and cultural heritage, view toward wealth and income have far-reaching impact on the business. These factors will help businesses determine the nature of goods and services to be produced, and how to price these goods or services and how to market them. Take for example Grace Kennedy who produces tin mackerel in two sizes, based on the society in which they operate they know that the class to which most of their target market belong to is the middle class, a class with its income lower than that of the upper class so therefore it would be wise to produce goods that they also can afford.

Socio-cultural environment determines the code of conduct the business should follow. The social groups such as trade unions or consumer forum will intervene if the business follows the unethical practices. For instance, if the firm is not paying fair wages to its business in indulging in black marketing or adulteration, consumer’s forums and various government agencies will take action against the business.

legal environment

Legal environment includes flexibility and adaptability of law and other legal rules governing the business. It may include the exact rulings and decision of the courts. These affect the business and its managers to a great extent in that if they operate by the law they can be closed from operating in Jamaica or be fined. In an article from the Jamaica Observer dated Wednesday October 10, 2012, it was reported that SAM Isaacs and Son Funeral Home was ordered to close its doors after the environmental regulatory agency (NEPA) found that the funeral home was operating in an area zoned for residential purposes only.

Technological environment

The businesses in Jamaica are greatly influenced by the technological development happenings in the country. The technology adopted by the industries determines the type and quality of goods and services to be produced and the type and quality of plant and equipment to be used. Technological environment influences the business in terms of investment in technology, consistent application of technology and the effects of technology on markets, but one of the most important influence element that technology has an impact on is energy. If Jamaica businesses invest more in solar technology the energy cost of all business could reduce and greater revenue earned. The minister of Energy, Mining and Telecommunications Phillip Paulwell has stressed the importance of diversifying fuel sources and has personally signaled his commitment to this by employing solar technology at his own domestic residence. He is of the view that all the fuel sources should contend, including liquefied natural gas. He also sees a future for coal in Jamaica as well as petcoke and in time to come, probably in ten years, nuclear energy can become a realistic option.

Competiveness environment

The competitive environment, also known as the market structure, is the dynamic system in which your business competes. The state of the system as a whole limits the flexibility of your business. World economic conditions, for example, might increase the prices of raw materials, forcing companies that supply your industry to charge more, raising your overhead costs. At the other end of the scale, local events, such as regional labor shortages or natural disasters, also affect the competitive environment.

Business plan

Executive summary

A feasibility study conducted pior to 2012 London Olympic revealed several potential target market segments that will be explored. The general love for "Bolt" and Shelly-Ann will persuade the internal and external consumers to buy "Brand" attires clothing, footwear and accessories. With this in mind I have decided to sell these items internal, external, local and international with the assistance of online services to capture the wider environment.

The study was discussed with both Bolt and Shelly-Ann and their management team. It was agreed I could start the business and they would sign off on the items. It was also agreed that 10% shares will be sold to each one of them. The proprietor will own 51% of the business. 10% shares will be sold to PSOJ and JHTA each. The remaining 20% will be for advertising on the international market via the net. It was also agreed that 9% profit of each stakeholder will go to the JAAA fund. The study also shows that there was no existing company which offers this type of quality of goods and services. Therefore it gives me strong confidence in organizing this business.

Vibe’s Fashion Jamaica is a Sole trading entity. The entrepreneurial genius responsible for the creation of this fashion house is kimani Thomas. Vibe’s Fashion Jamaica provides "Brand" attires Footwear, Clothing, accessories for male and female at affordable prices. We are central located in main street Ocho Rios in comfortable surroundings, on the web at www.VFJlcom, on face book page and yahoo mail at vibe’[email protected] labour force varying in terms of qualification, but well trained. The starting Capital sourced from personal sources, loan from banks at low interest rate, money gain from shares sold to the stakeholders. The sum of one hundred (100) million dollars is to be shared between fixed and working capital.

The managing director kimani Thomas will surround herself with high performance industrious, individual who will work together for VFJ to grow and expand further in the clothing industry. Extending to provide financial services is also in the plans for the future. While developing we will endeavor to follow the rules and regulations set forth by the government, and maintain good ethical practices throughout. Vibe’s Fashion Jamaica provides customer friendly service and high qualities goods. Fashion is our heart and our customer will no doubt develop a passion for our fashion.

Vibe’s Fashion Jamaica will be duly registered with register of companies. We will have all the technological advances which will be, work rewarding for our staff and shopping enjoyable for the consumers. High qualities goods will be purchase from both local and overseas designer to meet the needs of our customers.

It is projected to realize greater revenue in the next three to five years and beyond, with the intended expansion of the business. VFJ management team wishes to advise you that our record and plans will persuade you, that the team offers good products and investment in the company can only result in additional profit for all our investors.

Mission Statement

Vibe’s Fashion Jamaica provides Bolt and Shelly-Ann "Brand" attires of footwear, clothing and accessories, internal and external, local and international online services at affordable prices. This will be achieved through dedication, team work and cooperation of all stakeholders both local and international.

Objective

To capture customers of all gender, age, religion and financial background both local and international.

Specific: Clothes size range from small to medium to large and extra large. Various size in footwear for both male and female. The latest fashion and bran will be available.

Measures: A targets of 30% income in sale every 3months.

Achieved: Personal work excellent interpersonal skills will be employed. Sales representative with at least two years of experience in the field and is computer literate. Excellent technician team to ensure the online data base.

Realistic: marketing resources are in place to ensure that there is enough supply for demand and also to ensure staffs effectively carry out their responsibilities.

Time Specific: The target of 30% in sale is to be achieved in 3 months a progress update will be taken every month to track the level of success.

STRATEGIES

The strategies taken within Vibe’s Fashion Jamaica are:

Product Strategy – the company will constantly present new product and services to keep up with changes in consumer demand.

Pricing Strategy- employing affordable prices to gain industry dominance.

Marketing Strategy- seeks to target customers with messages that will draw their attention.

Operational Strategy- lowering cost to produce greater profit.

TACTICS

The tactics of Vibe’s Fashion Jamaica are:

Form partnership with the other athlete and the and the JAAA to gain the opportunity in using them to brand other items to meet the demands of the customers.

High quality items will be sold at affordable prices. There will also be seasonal sale and promotions

Involves seasonal advertising and special promotions to achieve market ascendency.

Acquiring loans at low interest.

MILESTONE

DUTIES AND RESPONSIBILITIES

At Vibe’s Fashion Jamaica there will be the following department:

≈ Administrative Department- In this department the employees are:

Managing Director

Marketing Manager

Public Relations Manager

Accountant &Assistant

Personnel Manager

Human resource officer/Business Administrator

≈ Clothing Department

Supervisor of department

6 Sales clerk

1 Cashier

≈ Footwear department

Supervisor of department

6 Sales Clerk

1 Cashier

≈ Ancillary Department

Supervisor of department

4 Ancillary Staff Members

Organizational Chart

The organization structure is a design of business or organization which specifies its formal planned relationship between its personnel and the functions they perform in relation to each other. At Vibe’s Fashion Jamaica the line or organization structure will be in place. In this there is a direct flow of authority, and responsibilities dispersed from top to bottom. The managing director will instruct the departmental managers. The in turn will instruct those directly below them on the organization chart. This is known as a narrow span of control. This is when the number of subordinate’s manager supervisors is small or manageable size-doing similar task. At Vibe’s Fashion Jamaica the chain of command will flow from the managing director at the top through department managers, supervisors then subordinate. The lower the individual on the organization chart the less authority he/she will have in terms of making commands at Vibe’s fashion Jamaica.

Community within the fashion house will be both formal and informal. All important instructions and decision will be communicated to the departments through written memos. This doesn’t mean that all other lines of communication are closed. If any member of staff should need to discuss a matter with the managing director he/ she don’t have to go through the immediate supervisor before going to the managing director. Once the proprietor is available employee can seek attendance.

Vibe’s Fashion Jamaica intends to start a new era in the fashion industry in the rural area with service that is customer centered and where each employee feels important to the general stability of the business.

Monitoring and evaluation techniques

Bring in audit firm every three months to do comprehensive audit of the business.

Carry out annual study to see if any competition develops in the market environment. If any develops the managing team will alter the pricing tactics to capture the consumers.

Evaluate workers to summit progress report to higher authorities.

Progress update will be taken every month to track the level of success.

Marketing Objectives

Establish my business in the business world making customers fully aware of the products and services offer.

To have an effective up running online systems where online shipping can be done easily.

To increase sale at least 30% every three months.

To have a good delivery service so customers can receive their goods within the shortest and possible time.

MARKETING STRATEGY

Vibe’s Fashion Jamaica seeks to target customers with messages that will draw their attention .We involves seasonal advertising and special promotions both local and international to achieve market ascendency.

To partner with an excellent deliver service e.g. TARA so goods can reach customers in the shortest possible time both local and international.

Used of highly skilled workers.

Marketing manager will visit every big meet and championship that Usain and Shelly-Ann would be a part of to advertise the company using pamphlet brochure and sampling products.

COMMUNICATION OBJECTIVES

To have effective, hardworking PRO (Public Relations Officer) who communicates any happening, misshapen to customers and business.

To have an effective communication system between state owner and the business.

To have an effective communication system with the business that is communicating with managers, head of departmental supervisors and other workers.

Aims to provide customers both local and international with information about what Vibe’s Fashion Jamaica is about and what we offer.

COMMUNICATION STRATEGY

Vibe’s Fashion Jamaica involves internal and external communication channels to ensure effective communication at all times. These include:

Consultations- managers, stakeholders, supervisors, and workers consult with each other for advice or opinion on matters and meeting and exchanging views on matters.

Suggestion Box- to require feedback from both internal and external customers for comments on services offered.

Meetings- provide opportunity for face-face contact with workers and stakeholders.

Bulletins- keep staff members and stakeholders abreast of what happens in the organization and for announcements.

Memorandums- to convey written information to staff members of the organization.

Electronic Media- Use Bolt and Shelly-Ann to advertise products both local and international.

Printed Media- Use Bolt and Shelly-Ann to advertise products both local and international.

Telephone- use for communicating in the organization.

Electronic Mail (email)- systems are in place so that persons in various sections of the organization can communicate with each other using the computer network system.

Records- represent the memories of the organization.

Finance and Budgeting.

Capital to be start and operate not in excess of 100 million dollars. 40 million in Fixed Capital and 60 million in working capital. Example: Land, building, machinery, furniture, vehicles, etc.

Fixed Capital- These are the durable (long-term) assets of a business which are used over a long period of time and are tied up in permanent use.

Circulated Capital (Working Capital) is capital which is continually changing in quality, total value or nature. Examples include Stocks, cash and bank Balance.

Capital will be raise from the following sources:

40 million will be taken from my trust fund which is for 25 million dollars (15 million dollar in cash and 10 million in assets). The trust fund was left to me by my grandfather and has been made available to me since I turned 25 years old.

As I don’t want to deplete the trust fund completely, my mother has allow me to use the family home as collateral to obtain 20 million dollars loan.

The remain 40 million dollars will be obtain from members

25 million from my father

10 million from my aunt jenny

5 million from my cousin James

The remaining $500 000 will be taken from my personal saving account which I have accumulated over the past years.

Two year income statement for this plan

ACKNOWLEDGEMENT

The managing director and team members of Vibe’s Fashion Jamaica wishes to thank the following for their invaluable advice and assistance in making this research a success.

First I would like to thank my tutor Mrs. Johnson for giving me this research to expand my knowledge on the Jamaican business environment and the impact of these environments on business organizations.

Economic

Political

Social

Legal

Technological

Competitive environments

And how to develop business plan with the gains in sports.

I would like to thank Bolt and Shelly-Ann and their management team for allowing me to use them to brand my products.

Next I would like to thank the stakeholder for their valuable time and effort that was given during the consultation, I would also like to thank them for their confidence in investing in my business.

I would also like to thank all the analysis (political, economical, social, environmental, legal and technological).

I would also like to thank the shipping company for partnering with my business.

Next I would like to thank the publishers and authors of the materials use to obtain information to make the research complete.

I would also be ungrateful not to thank my mother, aunt for without them this research would not be a success.

Last but not least I would like to thank "God" the Supreme Being for without him I would not achieve my goal.

Thanks to all great and small who have contributed to make this a success.

Thank You

Kimani Thomas

INTRODUCTION

Welcome to this new line of fashion and design brand "Bolt and Shelly-Ann" attires of footwear, clothing and accessories which are available at Vibe’s Fashion Jamaica.

It is also shown clearly:

Mission Statement

Objectives ( SMART)

Strategies

Tactics

Milestones

Duties and responsibilities

Monitoring and evaluation techniques

Marketing objectives

Marketing strategies

Communication objectives

Communication strategies

How will this plan be financed?

Two year income statement for this plan of the business

You will also find out how the Jamaican business environment is analyzed and the impact of these environments on business organizations:

Economic,

political,

social,

legal,

technological and

competitive environment

CONCLUSION

After the feasibility study it was concluded that the use of top athletes to brand items in your business, it will generate a lot of interest and investors.

It was also concluded that the internal and external environment is business friendly if the marketing and communication strategies and tactics are use effectively.