PESTEL model analysis of Nepal

1. PESTEL Analysis of Nepal
• Presented by:
Amish Dhungel

2. • PESTEL analysis describes a framework of macro-environmental
factors used in the environmental scanning
component of strategic management. (wiki)
• The relevance of PESTEL model for a country analysis
is to audit its contemporary environment and assess
potential changes and prepare accordingly so that the
country will be better positioned than its competitors to
respond to changes.
PESTEL Analysis

3. Political Environment
Analysis of Nepal
• Presented by:
Amish Dhungel

4. • Federal Democratic Republic of Nepal
• Government: Parliamentary republic
• Absolute Monarchy:
• 1726-1950 (Shah Dynasty, unification)
• Rana rule
• Democracy in Nepal:
• Tri-party agreement in New Delhi (1950), Dawn of Democracy
• End of democratic practice in 1960 by King Mahendra
• Constitutional monarchy installed on 1990 by King Birendra
• Maoist insurgency from 1996 to install Republic in Nepal
• Royal Massacre in 2001
• Dismissal of democratic experiment in 2005 by King Gyanendra
• 2006 April revolution jointly by Seven party coalition together with
Maoist, reinstate of Parliament
• May 8, 2008 Nepal was declared as Federal Democratic Republic
Political Environment
Analysis of Nepal

5. • Was never colonized.
• Instable government. No government since 1991 have
survived for more than two years.
• 23 governments over last 23 years.
• Ease of doing business: 105 (World Bank)
• Corruption Perception Index: 116/176(Transparency
International)
• Women representation in Parliament: 33.33%
Political Environment
Analysis of Nepal

6. • Executive power vested in government headed by Prime
minister.
• Head of state is President.
• Legislative power is vested in Government and the
parliament.
• Independent judiciary.
• Nepali congress (socialist-democracy), UML, UCPN-Maoist
as major political parties. 139 political parties
registered for 2nd CA election
Political Environment
Analysis of Nepal

7. • Commission of Investigation for Abuse of Authority
(CIAA) in practice since 2007
Political Environment
Analysis of Nepal

8. • Constitution drafting on its way
• Government strong commitment for optimum growth of national
production
• More liberal economic policies in line to free market
• Fine-tuning of monetary policy
• Recognized the role of private sector
• Government investment only in infrastructure
• One window policy for FDI via Investment Board
• Trade policies promoting exports and reducing of trade imbalance
• Quantitative restriction and import licensing system abolished
• Simplified export procedures
• Rapid financial reforms, enabling JV Banks etc
Things are Changing…

9. Socio-Cultural Environment Analysis of
Nepal

11. • Area: 147,181 sq. km. ; world's 93rd largest country by land mass and the
41st most populous country.
• Located in the Himalayas and bordered to the north by of China, and to the
south, east, and west by the Republic of India.
 Kathmandu is the nation's capital and largest metropolis. Renowned for its
splendid Himalayas.

12.  Total Population: 26,494,504 (2011 census)
 Gender distribution:
Male Composition: 49%
Female Composition: 51%
 Age groups: 0-14 (39.35%
15-59 (54.15%
60+ (6.5%)
 Geographical regions: Mountain: 6.73%
Hill: 43%
Terai: 50.27%
 Population growth rate: 1.35
Demographic status

13. • Religion: Hindu 81%, Buddhist 9%, Muslim 4.4%, Kirat 3.1%,
Christian 1.4%, other 0.5%, unspecified 0.2%
• 123 mother tongues, Nepali being the national language is
spoken by 44.6%.
• Literacy rate:75.10%
• Staple food: Rice, vegetables, lentils and pickles, dhido (
traditional food)

14. Deep rooted caste system still prevailing in some parts of
country
• Upper class
• Middle class
• Lower class
• Brahmin
• Chhetri
• Baisya and,
• Sudra
• Nepal is a melting pot of many races and tribes.
• There are around 101 ethnic and caste groups.
Class & caste structure

15. • The ethno-cultural groups maintain their unique life style,
language, customs, and rituals, food habits, dresses,
jewelry or ornaments and festivals.
• The culture of Nepal is a assemblage of music,
architecture, religion and literature.
• Music is associated with every event in Nepal, then be it
birth, marriage, festivals or national events.

16. • Business practices are influenced by traditional values.
• Any business that is conducted against the cultural values may
not sustain.
• Family patronage of business is wide spread.
• Modernization and growth in information technology are
helping to break cultural barriers in Nepal.
• With the growing literacy rate traditional way of doing business
is being gradually replaced.
 Huge impact of tradition and culture in businesses. (eg. beef
products are not allowed).
 Tourism industry is highly influenced by socio structure,
culture and traditions.

17. • 89.2 percent are reported to be living in their own
dwelling units and 9.2 percent in rented dwellings
• Majority (68.4 percent) of the households used wood as
fuel for cooking. Liquefied Petroleum Gas (LPG) use
was 12.3 percent
• (25.4 percent) of households has a modern flushing toilet
and 23.4 percent have an ordinary toilet.
• (28.3) percent have a mobile phone, 9.8 percent have a
fixed line telephone and 3.1 percent have a computer

18. • Median age of country's population: 21.6 years
• People of all ages living with HIV (thousands) 2012,
estimate 49,000
• Crude fertility rate: 2.4
• Urbanized Population: 17.3 %
• School enrollment rate: 135% (highest in South Asia)
• Life expectancy at birth: 68 (highest in South Asia)
Socio-Cultural facts

19. TECHNOLOGICAL
ENVIRONMENT Analysis of Nepal

20. • Modern science entered with the introduction of
intermediate science education in Tri Chandra College in
1919.
• Bachelors of science : Tri Chandra College, 1948
• Masters of Science : Tribhuwan University, 1965
• Institutions of Medicines, Engineering, Forestry,
Agriculture :TU, 1973
• The 6th Five Year Plan(1980-1985), linked science and
technology activities with economic development
• National Council of Science and Technology (NCST),
1976, now dismantled
A SHORT HISTORY OF
SCIENCE AND TECHNOLOGY

21. • Foreign Investment and Technology Transfer Act, 1992
(FITTA):
FITTA governs all matters relating to foreign investment and
technology transfer. This act states provision regarding
settlement of disputes related to investment among the
stakeholders.
It also clarifies the potential are where foreign investment
and technology transfer can be made. Similarly it also states
mentions the area where foreign involvement is restricted.
Like: cottage industry, arms industries, motion pictures
business, security printing etc.

22. • Science and Technology Policy, 2005
It focuses on Infrastructure development, human resource
development, R & D, etc. Furthermore it vision to build Nepal as
a developed, dynamic and prosperous state by raising the living
standards through the appropriate development and use of science
and technology.
• National Policy on Technical Education and Vocational
Education, 1999
• Information Technology Policy, 2002

23. • Research Centre for Applied Science and Technology
(RECAST), 1977
• Nepal Academy of Science and Technology (NAST), 1982
• Ministry of Science and Technology, 1995
• B.P. Koirala Institute of Health Science
• National Academy of Medical Sciences, Bir Hospital
• National Agriculture Research Centre, 1991
• Department of Forest Survey and Research, 1963
• Department of Irrigation, Hydrology and Meteorology, 1967
• Department of Plant Resources, 1957

24. TECHNOLOGY OF NEPAL AT GLANCE
• RADIO
Government Owned FM- 1 (Radio Nepal)
Private Owned FM- 50
• NEWSPAPER
Number of National Daily- 14
• Government- Gorkhapatra and The Rising Nepal
• Private- Kantipur Daily, THT, TKP
• Number ofWeekly Newspaper-15

25. • TELEVISION
Commenced in 1985 with Nepal Television
Government- 2 (Nepali TV and NTV Plus)
Private- 20 (Most preferred are Kantipur, Image Channel,
Avenues)
• TELECOMMUNICATION
As per 15th July 2013
Population-26,494,504
User population-21,332,275 (80.51%)

26. 5.84%
71.46%
3.21%
PENETRATION RATIO
MOBILE
FIXED LANDLINE
OTHERS

27. Column1
49%
43%
1%
4% 3%
Market Share of Major
Players
NCELL
NTC
Smart tel
UTL
Others

28. 0%
Column1
94%
1% 0%
2%
3%
GPRS
CDMA
ADSL
WIRELESS
CABLE MODEM
WIMAX
• INTERNET USERS IN NEPAL- 26.1%

29. • Rich in many traditional technologies
• Dominant in rural areas
• Nepal possesses good technical know-how of traditional technologies
in the following fields-
1. Metallurgy, pottery
2. Architecture and construction
3. Textile manufacture, dyeing and printing
4. Paper manufacture
5. Food technology
6. Agriculture and water management
7. Medicines
STATUS OF TRADITIONAL
TECHNOLOGY

30. • Commencement of modern technology in Nepal
from 1936 through Biratnagar Jute Mills
• Second World War led to establishment of sugar,
match, cotton, plywood, and cigarette industries.
Most declined after the war.
• The current status is indicated by the following
scenario-
1. Growing use of modern technology
2. Skill base for modern technology
3. R and D spending
4. Transfer of technology
STATUS OF MODERN
TECHNOLOGY IN NEPALESE
INDUSTRY

31. • Low R and D for traditional technologies: Nepal
spends .34 % of GDP in Science and
Technological based research.
• Entered internet revolution in 1993 when
Mercantile Office Systems introduced e-mail
services
• Enacted Electronic Transaction Act, 2007
INFORMATION TECHNOLOGY IN
NEPAL

32. • Japan , World Bank, China, Switzerland, Britain, Australia etc.
have been major donor of technological equipment to Nepal.
Uses of information technology in Nepal
• Information Management
• Planning and control
• E-commerce
• E-education
• E-banking

33. Ecological Environment of
Nepal

34. Outline of Presentation:
5.1 Natural/Geographical profile of Nepal:
• Physical profile
• Mineral Resources
• Flora and Fauna
• Water resources
• Agriculture
5.2 Ecological Factors Impacting Business:
• Physical inputs
• Transportation
• Communication
• Availability of Labor forces
• Energy availability and Cost
5.3 Impact of Business on Ecology:
• Waste materials disposal
• Ecological consequences

35. Natural/Geographical profile of
Nepal
Physical profile
• Area: 147, 181 Sq. km
• Seasons and Temperature
• Geographical Regions of Nepal Geographical division of
Nepal
Himalayan
Hilly
Terai
Geographical
Regions
Percentage (%)
Himalayan
Region
15
Hilly 68
Terai 17

36. Natural/Geographical profile of
Nepal
• Mineral Resources
• Flora and Fauna
• Water resources
• Agriculture

37. Ecological Factors Impacting
Business:
• Physical inputs
• Transportation
• Communication
• Availability of Labor forces
• Energy availability and Cost

38. Impact of Business on Ecology:
• Waste materials disposal
• Ecological consequences

39. Legal Environment Analysis
of Nepal

40. Legal
environment of
business
Court s of law
Business laws
Law administrators

41. Legal regulations
.
Partnership Act, 1964
• If two or more person want to establish a firm to initiate
business, partnership firm can be registered.
• Firm can be registered under Department of Commerce
(in Kathmandu valley) and Office of the Cottage and
Small Industries ( in outside the valley ) with the
recommendation letter of Chambers of Commerce.
• Tax law is applicable and the firm should be renewed
each five years where the firm has been registered.

42. Private Firm Registration Act, 1958 (2014)
• Recommendation letter is required from the Chambers of
Commerce or District branch of FNCCI to register the Private
Firm.
• The license is issued for five years and should be renewed
after that period.
• Trading business are registered under this act.

43. Company Act ,2006
The company must be incorporated in office of register
according to law.
 It must include two to seven member
The MOA and AOA guides the operation of overall
company .

44. LabourAct,1992
• Employment and job security, firing of employee
• Working hours
• Remuneration and yearly pay increment
• Health and safety
• Welfare provision
Labour related legislation

45. • Bonus Act ,1974
The bonus shall not exceed ten percent of net profit
The amount of bonus to an individual will depend on the
amount of monthly salaries and wages paid

46. • Mines and Minerals Act, 1985
(2042)
 All mineral products found inside the Nepal are the property of Government of
Nepal.
 These are classified in two category – Metal and Non Metal
 Right to extraction of mineral product is with government. Permission can be
given to the private company as per their qualification and previous experience.
 License shall be issued for a year and can be renewed. Government can cancel the
license if found the licensee doesn't work as per the law.